S.Korea's KT invests in domestic startups Upstage, Qanda

South Korea's KT Corp. has invested 20 billion won ($15 million) in two domestic artificial intelligence (AI) startups. 

For the second time in this year's second half, KT has plunked down tens of billions of won in startups in a bid to quickly secure competitiveness in hyperscale AI.

The company on Sunday announced equity investment of 10 billion won each in Upstage and Qanda to raise its competitiveness by forming ties with companies possessing extraordinary AI technologies.

Dubbed a "hidden tech power" in open large language models (LLM), Upstage ranks first in fine-tuning generative AI performance, beating out the ChatGPT-based model GPT-3.5. Qanda is a noted education app in which a user uploads a photo of a math or science problem and AI provides the correct answer or solution.

KT will expand its hyperscale AI portfolio through this investment and partnership. It joined hands with Upstage to develop an LLM solution exclusively for companies and one for the business-to-business domain. Qanda will develop an LLM specifically for education and an educational AI service for consumers.

The convergence of each startup's strengths with KT's AI infrastructure and application services is expected to bring big results. In July, KT invested 15 billion won in the domestic AI infrastructure software company Moreh.

Voices in and out of KT say the latter's fate depends on securing hyperscale AI competitiveness because of limited growth prospects in the saturated communications sector. KT will launch its self-developed hyperscale AI Mi:dm next month.

The investments in Upstage and Qanta also attracted industry attention as the first under KT CEO Kim Young-shub, who took office on Aug. 30. At his first news conference on Thursday, he named partnerships with capable companies as one of his main strategies.

Write to Ji-Eun Jeong at jeong@hankyung.com