South Korea

Intelligence for Better Decision Making

Kakao Accelerates Corporate Streamlining and AI-Centric Reforms Amid Governance and Market Challenges
Oct. 14, 2025 | Firms

Kakao is overhauling its corporate structure and technological strategy to enhance governance, streamline operations and drive growth.

**Kakao cut its group affiliates by roughly 30 percent over two years, reducing the number from 142 in September 2023 to 99 as of October 2025.**
Under CEO Chung Shin-a’s leadership, the company aims to shrink its affiliate count further to about 80 by year-end. This consolidation supports a broader strategy to strengthen governance, improve operational efficiency and concentrate resources on core business areas.

**Alongside the affiliate reduction, Kakao has implemented governance and operational reforms in response to criticism over unfair business practices and executive misconduct.**
Regulators fined Kakao Mobility for allegedly inflating sales figures and abusing its market position in ride-hailing, and founder Kim Beom-su faced indictment for alleged stock-price manipulation linked to Kakao Entertainment’s acquisition of SM Entertainment. At the same time, a major redesign of KakaoTalk triggered strong user backlash, prompting the company to roll back Instagram-style feeds and reinforce transparent, responsive communication with its user base.

**Despite broader economic headwinds, Kakao reported an operating profit of 185.9 billion won in the second quarter of 2025—a 39 percent increase year on year and its highest quarterly profit on record.**
Steady growth on the KakaoTalk platform, improved profitability across its remaining affiliates and deliberate efforts to build a stable financial structure independent of one-off gains all contributed to this performance.

**Looking ahead, Kakao plans to place artificial intelligence at the center of its growth strategy.**
By the end of October 2025, the company will launch “ChatGPT for Kakao,” developed in partnership with OpenAI, allowing users to access ChatGPT directly within the KakaoTalk interface. It will also introduce “Kanana in KakaoTalk,” an on-device AI feature that runs lightweight models locally on smartphones. Additional AI ecosystem efforts include the Context Protocol (MCP) and an agentic AI platform designed to connect external services, all intended to deliver personalized AI experiences to more than 50 million users.

**To support these strategic and technological initiatives, Kakao expanded its total shareholder return–linked compensation program to include all executives and established a five-year, 50 billion won AI education program in collaboration with leading Korean science and technology institutes.**
The company also launched a Small Business Integrated Support Task Force to provide customized consulting for small business owners, reflecting its commitment to responsible management and stakeholder engagement.
Pentagon Launches $1 Billion Mineral Stockpile Drive Amid Supply Chain Concerns
Oct. 14, 2025 | Energy & Natural Resources

The US Department of Defense is expanding its reserves of essential minerals to strengthen national defense capabilities.

**The Defense Logistics Agency has launched a procurement initiative of up to $1 billion to build strategic stockpiles of critical minerals for defense applications.**
It plans to purchase $500 million of cobalt, $245 million of antimony, $100 million of tantalum, and $45 million of scandium. The agency is also exploring acquisitions of rare earth elements, tungsten, bismuth, and indium, with some of those metals included for the first time under this program.

**These minerals serve as vital components in advanced weaponry, radar installations, and missile detection and guidance systems.**
As of 2023, the DLA’s existing inventory stood at approximately $1.3 billion in mineral assets. This new procurement push stems from provisions in the Trump administration’s tax-cut legislation (the Bipartisan Budget Act), which allocates $7.5 billion for critical mineral initiatives: $2 billion for Department of Defense stockpiling between late 2026 and early 2027, $5 billion for broader domestic supply chain investments, and $500 million for a credit facility to spur private‐sector participation.

**A key driver of the initiative is concern over China’s dominance in critical mineral markets and its recent tightening of export controls.**
The Pentagon aims to reduce reliance on a single supplier and improve resilience in its supply chains. Legal and policy analysts warn that any delays or shortfalls in securing these materials could leave gaps in the production and deployment of key defense systems, and they note that the sheer scale of the proposed acquisitions presents significant logistical and financial challenges.

**Market analysts question the feasibility of meeting these targets within the proposed timeframe.**
For example, the planned purchase of 222 tonnes of indium nearly equals US annual consumption of roughly 250 tonnes, and many of the quantities exceed current domestic production and import levels. Observers also caution that large‐scale government buying could drive global mineral prices higher, creating volatility that may complicate procurement for both defense and commercial users if producers cannot rapidly scale output.

Monitored Intelligence for South Korea - Oct. 14, 2025


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Erudite Risk takes an all risks approach to intelligence reporting. We categorize key intelligence into one of 40 different risk intelligence categories.

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트럼프 “푸틴에 ‘우크라 토마호크 지원’ 경고할수도”…러 “극단적 우려”

Trump says he may warn Putin about supporting Ukraine with Tomahawks… Russia expresses extreme concern

Maekyung | Local Language | News | Oct. 14, 2025 | Geopolitical Conflict and Disputes

U.S. President Donald Trump indicated that he may supply Ukraine with Tomahawk long-range cruise missiles, which have a range of 2,500 km and could potentially strike Moscow from Ukrainian territory. He made these remarks on October 12 while en route to Israel, stating that if the war in Ukraine does not get settled, he plans to send the "incredibly" and "very aggressive" Tomahawk missiles to Ukraine.

This is the first time President Trump has publicly suggested providing Tomahawks to Ukraine, following Ukrainian President Volodymyr Zelensky's earlier request for the missiles. Currently, the U.S. has supplied Ukraine with shorter-range ATACMS missiles (about 300 km), and European countries have provided Storm Shadow missiles with a range of 250 km. U.S. Vice President J.D. Vance confirmed the Trump administration is reviewing Ukraine’s request, with the final decision resting with President Trump.

Russian President Vladimir Putin has expressed serious concern about the potential delivery of Tomahawk missiles to Ukraine, warning on October 2 that such a move could cause a "completely new and qualitatively new level of deterioration" in Russia-U.S. relations.

Government criticized for rushed approval of Starlink Korea agreement

Joongang Ilbo | English | News | Oct. 14, 2025 | Regulation

The South Korean government faces criticism for swiftly approving a cross-border service agreement between Starlink Korea and its U.S. parent company SpaceX without conducting thorough evaluations of the market impact, service stability, and data protection. The Ministry of Science and ICT approved the agreement in May 2025, but only commissioned a related research project in September aimed at assessing LEO satellite communication services and regulatory measures. This gap has raised concerns about inadequate preparatory work despite satellite communications being classified as critical infrastructure.

The ministry defended its decision, asserting the approval was based on the absence of technical issues and emphasizing the need to accelerate adoption of non-terrestrial networks, which facilitate direct satellite-to-device communication and support future technologies such as 6G. The ministry also revised regulations in April 2025 to simplify procedures for satellite terminal approvals, expediting Starlink’s entry into Korea.

Starlink's LEO satellites offer faster connectivity and lower latency compared to traditional geostationary satellites, positioning the service as foundational for emerging industries like urban air mobility and autonomous vehicles. In Korea, Starlink aims to initially cover connectivity gaps in maritime and aviation sectors, while the government plans to invest approximately $209 million to launch two domestic LEO satellites by 2030. Starlink already operates about 7,000 satellites globally, placing Korea behind in this technology sector.

Concerns persist over data privacy and national security risks linked to foreign LEO operators, as highlighted in a September 2025 National Assembly Research Service report. Foreign operators process data overseas, limiting government access to security audits, which could result in defense data vulnerabilities. Defense industry representatives warn that dependence on foreign LEO providers like SpaceX could create strategic risks in emergencies, while others suggest early adoption of LEO services is necessary for Korea to gain technological experience and competency.

공정위, 쿠팡이츠·배민 불공정 약관 시정권고

Fair Trade Commission Recommends Correction of Unfair Terms in Coupang Eats and Baemin Contracts

ZD Net Korea | Local Language | News | Oct. 14, 2025 | Regulation

The Fair Trade Commission (FTC) reviewed merchant service terms on the delivery apps Coupang Eats and Baemin, recommending corrections to 10 unfair contract terms. The FTC identified that Coupang Eats charged brokerage fees based on pre-discount prices rather than the actual consumer payment, resulting in merchants incurring commissions on discount amounts they absorbed themselves. The FTC deemed it reasonable to charge commissions on the post-discount transaction amount and recommended amending or deleting the relevant provision.

Both Coupang Eats and Baemin faced criticism for allowing unilateral restrictions on delivery distance and store exposure without prior merchant notification or predictable procedures. The FTC also highlighted issues in payment settlement withholding or changes without clear reasons, excessive exemptions of operator liability, inadequate review deletion procedures, and refund restrictions on advertising fees. The two companies have revised terms on these 10 points in response.

Coupang Eats stated that their brokerage fee method has been consistent and clearly communicated to merchants since the service's inception and promised detailed explanations during FTC procedures. Baemin’s operator, Woowa Brothers, committed to ongoing review and improvement of terms and systems to protect merchants' rights and support stable service operations.

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