Generative AI has an anglophone twang. English is believed to make up around 97% of data learning by the Microsoft-backed chatbot ChatGPT. This means that GAI options are currently limited in non-English-speaking countries and local alternatives are necessary.
The chatbots ChatGPT and Google’s Bard have been experimenting with Korean, and users report that Bard is the most fluent. However, local tech groups may have an advantage.
Google chose Korean and Japanese to expand Bard’s proficiency because it sees South Korea and Japan as safe environments for research on large language models. Furthermore, the mobile sectors in both countries are ahead of their western counterparts, but this also means there is a lot of competition from local companies like Naver, South Korea’s largest online company, and Kakao.
In July, Naver plans to launch its own chatbots and along with Kakao, both companies will offer AI models that are customized to suit local preferences, in contrast to the more universal models developed by Microsoft and Google. Custom-made models and onshore servers are more likely to gain the trust of users and governments concerned about superpower surveillance. It also puts tech businesses based in the US or China at a disadvantage.
There will be a strong demand for localized GAI in the Middle East due to the region’s political complexities. Naver signed a deal with Saudi Arabia earlier this year to develop several digital services, including AI tools, which should provide years of stable revenue and a stepping stone to partnerships in other regions. As a result, Naver’s shares are up 14% this year and trade at 30 times forward earnings, with a market capitalization of Won31tn ($24bn), which is more than LG Electronics, a much more international company.
Naver is in a great position to tap into more foreign sales, and if it succeeds, the stock should rise accordingly. Compounding growth is good news regardless of the language in which it is expressed.
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