Naver eyes global market with new LLM HyperCLOVA X

Naver Corp., the South Korean online platform giant, has finally debuted its upgraded large language model (LLM) HyperCLOVA X, its new pillar business that is expected to foster the company's future growth in the artificial intelligence era and heat up the LLM race at home and abroad.

“We are ready to fully embrace a new era ushered in by generative AI,” Naver Chief Executive Choi Soo-yeon said at Team Naver Conference Dan 23 where HyperCLOVA X was unveiled on Thursday. “We will lead innovation with HyperCLOVA X and new services powered by HyperCLOVA X.”

Naver CEO said the company invested more than 1 trillion won ($3.8 billion) in AI technology over the past five years to realize this latest achievement.

HyperCLOVA X is an upgraded version of its predecessor HyperCLOVA, which was introduced in 2021.

Naver’s LLM boasts better Korean language skills than global sensation ChatGPT, the generative AI chatbot developed by Microsoft-backed OpenAI, the Korean platform giant said.

Because HyperCLOVA X is trained with news articles published over the past five decades and blog data accumulated over nine years, it can communicate with a deep understanding of Korean systems and cultural context, the company explained.

HyperCLOVA X is also backed by 204 billion parameters, more than GPT-3’s 175 billion parameters, according to the company.

To support the seamless operation of its LLM, Naver will open a hyperscale data center that can house more than 600,000 servers, Asia’s largest, in November, the company said.

CONVERSATIONAL AND GENERATIVE AI SERVICES

Naver will integrate HyperCLOVA X across a wide range of its services, including search engine, shopping, booking, review, user-generated content (UGC), mapping and video functions. 

It opened the beta service of its conversational AI service CLOVA X today and plans to roll out the generative AI search engine CUE next month. Both services are powered by HyperCLOVA X.

Generative AI collects data from a training set and then generates new data based on the patterns and characteristics of the training set, while conversational AI is designed to engage in back-and-forth interactions with humans or other machines, using natural language processing (NLP) machine learning.

CLOVA X is a conversational AI service that can aid creation, summarization, induction, translation and coding. It is capable of multi-turn conversations, more than one turn in an interaction.

Naver plans to improve AI responses by adopting a system skill function that interconnects various internal and external service application programming interfaces (APIs).

CUE is a generative AI search advisor that will completely revamp Naver’s search engine interface.

It can analyze the latest data from multiple sources to answer a complex question, the company said. It significantly reduces hallucination, by 72%, the company said.

Following the release of its beta service in September, CUE will be integrated into Naver’s search engine in phases from November, the company said.

Naver also introduced business-to-business programs backed by HyperCLOVA X, such as office suite Project CONNECT X and hybrid cloud service Neurocloud for HyperCLOVA X.

FIERCE RIVALRY AMONG KOREAN GENERATIVE AIS

HyperCLOVA X’s debut is expected to tip the balance in Korea’s generative AI market currently dominated by foreign Big Tech services such as ChatGPT and Bard, a conversational generative AI chatbot developed by Google.

Following suit, other Korean tech companies are set to debut their own LLMs.

NCSOFT Corp. and Konan Technology Inc. also unveiled their self-developed LLMs Varco and Konan, respectively, this month.

SK Telecom Co. and LG Group have rolled out LLMs A dot, or A., and EXAON, respectively. 

Naver’s archrival Kakao Corp. and another Korean telecom major KT Corp. plan to roll out KoGPT 2.0 and MI:DEUM this year. Their LLMs are, however, powered by OpenAI’s GPT.

Other local AI startups such as Upstage also plan to join the generative AI race with their proprietary language models.

VENTURE INTO OVERSEAS MARKET

Naver CEO hinted at the company’s global ambition today, saying that the Korean internet giant is considering HyperCLOVA X’s foray into overseas markets with foreign partners.

“We have already secured the technology to develop a region-tailored language model with specific regional data training,” said Choi.

Competition to lead the global generative AI market is intensifying as Google is set to roll out its new LLM Gemini this fall, and Meta’s new open-source coding tool Code LlaMA is due to debut soon.

S&P Global Market Intelligence forecasts the global generative AI market will expand to $36.4 billion in 2028 from $3.7 billion in 2023.

To stay competitive against global tech giants, Naver CEO called for the Korean government’s support in developing legal grounds for self-regulation.

“The generative AI market is a borderless battleground,” said Choi. “Because Naver competes against global players in the generative AI market, it is important to allow us to create and innovate under self-regulation.”

However, the Korean Fair Trade Commission is currently seeking to regulate online platform companies with a law that is similar to the EU’s Digital Markets Act, which has met strong opposition from global tech companies.

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

Sookyung Seo edited this article.