S.Korea’s Naver to launch Silicon Valley venture arm in aggressive AI push

Naver Corp., South Korea’s top internet portal operator, plans to set up a dedicated venture capital arm in Silicon Valley in a move seen as a high-stakes bid to shore up its artificial intelligence capabilities amid intensifying global competition.

The new subsidiary, Naver Ventures, will focus on sourcing AI talent and investing in cutting-edge AI technologies and startups in the US, to integrate them into Naver’s broader AI strategy, people familiar with the matter said on Friday.

The move marks the most aggressive overseas expansion of the tech giant’s AI ambitions to date and underscores founder Lee Hae-jin’s resolve to break through what analysts describe as a strategic bottleneck.

Lee, who returned as chairman of Naver’s board in March after stepping back from day-to-day management, will visit Silicon Valley next month to meet with startup founders, AI engineers and venture capital executives.

The trip will be his first official overseas engagement since resuming the board chairman role. He will be accompanied by Naver Chief Executive Choi Soo-yeon and Kim Nam-sun, head of Naver’s strategic investment division.

EVOLVING FROM IN-HOUSE STARTUP ACCELERATOR D2SF

The launch of Naver Ventures signals a shift from the group’s AI tech approach, which has been primarily led by its in-house startup accelerator D2 Startup Factory (D2SF).

While D2SF has made small inroads into US AI startups, Naver Ventures will act as a more aggressive and autonomous vehicle, focusing exclusively on the highly competitive US market, sources said.

“The world’s AI investment capital is increasingly consolidating in Silicon Valley,” said a Seoul-based venture capital executive familiar with the launch of Naver Ventures. “Naver seems to be determined to move beyond its incremental approach and fully commit to AI investments on a global scale.”

Having developed its large language model, HyperCLOVA X, Naver has struggled to match the capabilities and scale of bigger rivals such as OpenAI, the US developer of ChatGPT, and China’s DeepSeek.

Industry watchers said Naver’s LLM has lagged behind its peers in terms of both performance and cost-efficiency, while it has yet to publicly launch its own inference AI models – foundations for next-generation AI agents.

According to invitations circulated before its upcoming event in Silicon Valley, Naver has framed the launch of Naver Ventures as an “expanded venture investment initiative” with a mandate to seek “global opportunities that provide strategic and technological value” to the company.

D2SF’S INVESTMENTS IN US STARTUPS

While Naver, through D2SF, made a handful of investments in US startups – including Rembrand, an ad tech startup focused on AI-powered video advertising, Claythis, a generative AI-based 3D content creator, and YesPlz, a fashion-focused multimodal AI developer – the group’s AI investments to date have been modest compared to global peers.

Naver is also eyeing the current turbulence in the US tech labor market as an opportunity.

“With tech giants such as Microsoft and Meta laying off software engineers in droves, and with Trump-era funding cuts to research institutions, this could be a golden window for Korean companies to recruit top talent,” said another Korean venture capital executive.

Naver’s bid to stake a claim in the fiercely competitive Silicon Valley ecosystem faces steep hurdles, however.

Some executives in Seoul’s startup community are concerned that Naver’s move could signal a pivot from supporting the domestic startup scene, which has been struggling to attract capital amid the AI gold rush.

Analysts said how Naver’s US investment strategy unfolds may also have broader implications for Korea’s ambitions to foster what some have dubbed a “sovereign AI” strategy, as the country seeks to chart its own course in the race for next-generation technologies.

Write to Eun-Yi Ko at koko@hankyung.com

In-Soo Nam edited this article.