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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배경훈 부총리 "AI 딥페이크, 기술로 막겠다"…'투트랙' 대응 원칙 재확인

Deputy Prime Minister Bae Kyung-hoon Reaffirms Two-Track Response Principle to Block AI Deepfakes with Technology

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

Deputy Prime Minister Bae Kyung-hoon of South Korea's Ministry of Science and ICT emphasized the importance of developing foundational technologies to prevent the political misuse of AI deepfake technology. During a state audit held by the National Assembly's Science, ICT, Broadcasting and Communications Committee on October 13, 2025, Bae articulated a "two-track" strategy that combines institutional measures against AI misuse with the advancement of AI technology to combat deepfake threats effectively.

The audit session featured a demonstration by People Power Party lawmaker Lee Sang-hwi, who presented a manipulated deepfake video involving KBS President Park Jang-beom. Lee criticized the government's lax response to manipulated content amid AI industry growth and warned that AI could become a tool for widespread misinformation, likening it to a "digital Goebbels." Deputy Prime Minister Bae acknowledged these concerns, agreeing on the urgent need for preventive measures while stressing that deepfake defense technology must be supported by advanced AI capabilities to keep pace with rapidly evolving misuse technologies.

Bae also highlighted South Korea's global lag in multimodal AI technologies that handle video, compared to advancements in language models. He announced ongoing efforts, including the incorporation of safety and reliability provisions in the AI Basic Act and research and development on deepfake prevention through the AI Safety Research Institute. He reiterated that simultaneous actions on institutional and technological fronts are crucial to effectively counteract AI misuse.

소닉월 장비 침해사고…100여개 계정 공격당해

SonicWall Device Breach... Over 100 Accounts Attacked

ZD Net Korea | Local Language | News | Oct. 14, 2025 | Cyber Attacks and Data Loss

More than 100 accounts were attacked in a breach involving SonicWall SSL VPN devices, affecting over 16 customer accounts. The attacks began on October 4, 2025, and involved network scanning and attempts to access multiple local Windows accounts. Cybersecurity company Huntress confirmed these attacks and warned that the attackers appeared to have control of valid credentials rather than using brute-force methods.

The breach occurred shortly after SonicWall acknowledged unauthorized exposure of firewall configuration backup files stored in MySonicWall accounts. Although Huntress found no evidence directly linking the two incidents, it emphasized the need to reset credentials on active firewall devices to prevent further unauthorized access, given that sensitive information is stored within these configurations.

Huntress also recommended restricting WAN management and remote access where possible, revoking external API keys connected to firewalls or management systems, and closely monitoring login activity for suspicious behavior. The application of multi-factor authentication (MFA) for all administrator and remote accounts was highlighted as essential to enhance security.

Additionally, the ransomware group Akira has been actively exploiting vulnerabilities in SonicWall devices, increasing the risk of continued ransomware attacks. Ongoing vigilance is advised to mitigate these threats.

China ready to strengthen strategic cooperation with North Korea on international issues, Xi tells Kim

Joongang Ilbo | English | News | Oct. 14, 2025 | North Korea

Chinese President Xi Jinping has expressed readiness to strengthen strategic cooperation with North Korean leader Kim Jong-un on international and regional issues. This was conveyed in a message responding to Kim's congratulatory telegram for the 76th founding anniversary of the People's Republic of China, reported by North Korea's state media.

Xi emphasized the longstanding friendship and close ties between China and North Korea, describing them as "great neighbors, friends and comrades" whose traditional friendship is growing stronger. He highlighted China's commitment to deepen friendly exchanges and mutually beneficial cooperation with North Korea.

Furthermore, Xi stated that China aims to work with North Korea to enhance the welfare of both peoples, safeguard peace, stability, and promote international equity and justice in the region. This message follows Kim and Xi's first talks in over six years during Kim's recent Beijing visit for a military parade, signaling a reset in relations previously strained by North Korea's alignment with Russia.

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