Kakao Brain to launch investment fund for AI startups

Kakao Brain, a South Korean artificial intelligence (AI) company owned by Kakao Corp., said on Sunday it plans to set up a fund of up to 10 billion won ($7.6 million) in the first half of this year to invest in startups that use its image-generation technology.

The fund, Karlo 100X Project, will target companies that can leverage Kakao Brain’s “Karlo,” an AI tool that can generate high-quality images from text descriptions. The name reflects the company’s ambition to create more than 100 times the value for its partners through Karlo.

The company said it will select four startups to join the fund as early as March and work with them to commercialize Karlo.

The move reflects Kakao’s plans to boost its AI capabilities and ecosystem, a key strategy for the Internet giant that operates popular messaging, e-commerce and fintech services in South Korea.

“Contents created by AI will be competitive in the future,” Kakao Chief Executive Hong Eun-taek said on a conference call earlier this month. “We will introduce AI-based vertical services quickly this year and enhance our AI competence in a cost-efficient way.”

A Kakao spokesman said the size and operation of the fund are still under discussion and will be finalized next month.

Write to Han-Gyeol Seon at always@hankyung.com