Online portal Naver to release AI-powered search chatbot in H1

South Korean online portal giant Naver Corp. is set to launch a beta version of Search GPT, an artificial intelligence-powered search service, in the local market during the first half of this year.

The company is preparing for a future cash cow as generative AI emerges as a new trend in the global search engine industry, said Naver CEO Choi Soo-yeon on Friday during the fourth quarter 2022 earnings conference.

Generative AI works based on algorithms, which are used to create content such as audio, videos, images and texts. 

Search GPT has been named after ChatGPT, a popular chatbot launched by US tech firm OpenAI last November. GPT stands for generative pre-trained transformer, a language model based on deep learning that can generate human-like texts.

Naver’s Search GPT is set to offer the latest, summarized information with sources to simple questions like subway fares in Seoul. The service will use various types of content to answer questions seeking advice, such as how to purchase cheap laptops, to enhance the quality of search results and user experiences.

TO PROVIDE MORE UP-TO-DATE, RELIABLE AND ACCURATE DATA

“We are closely reviewing the ChatGPT’s impact on the global search engine industry. It needs to be more reliable, provide more up-to-date information and improve cost efficiency,” said Choi during the conference call.

“We are sure that we can address the issues and improve the accuracy of translations between English- and Korean-based models, with our world-class search engine technologies and the largest search engine data sets in Korea,” she added.

The portal giant has developed its AI-based language models through Hyperclova, a Korean-based language model system that generates and summarizes meeting notes and creates e-commerce promotion content. Naver also supplies Clova Studio, a no-code tool that assists in using Hyperclova without writing codes, to local startups.

“AI services are increasing for business-to-business (B2B) solutions. Naver will spur investment in Hyperclova to generate profits in the future," Choi added.

At the conference call, Naver posted 2.27 trillion won ($1.8 billion) in the last quarter revenue, up 17.8% from a year ago. The quarterly operating profit reached 336.5 billion won, down 4.2% compared with the same quarter of 2021.

During the whole year, its revenue rose 20.6% to 8.22 trillion won and the profits slid 1.6% to 1.3 trillion won, compared with 2021. 

Its search platform business achieved 3.57 trillion won in revenue last year, while commerce, fintech and content respectively earned 1.8 trillion won, 1.19 trillion won and 1.26 trillion won. Cloud business revenue was 402.9 billion. 

Naver said the content business revenue grew 91.3% in 2022, backed by growing attention from Japanese paying users – the number of the users increased 25% in the last quarter. 

To strengthen its AI services, the portal giant will incorporate AI and B2B businesses into its cloud division. Naver also aims to expand its presence in fintech and enterprise solutions, the software applications for work efficiencies at companies. 

Write to Seung-Woo Lee at leeswoo@hankyung.com
Jihyun Kim edited this article.