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.

The goal is to provide intelligence that allows decision makers to avoid being blindsided by what they may have missed, while informing them to make better decisions as well.

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Different roles and functions within the organization can monitor different key issue areas. HR may monitor employment, wages, regulations, labor and management relations, etc., while P&L leaders may monitor overall developing trends.

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Defense ministry aims to complete counterintelligence command reform by next year

Yonhap | English | News | Oct. 14, 2025 | Geopolitical Conflict and Disputes

South Korea's defense ministry announced plans to complete the reform and relocation of the Defense Counterintelligence Command by 2026. This move follows the command's suspected involvement in the failed martial law imposition in December 2024, linked to former President Yoon Suk Yeol. The command's former leader is accused of deploying troops to the National Assembly and the National Election Commission during the incident.

The ministry criticized the command for holding excessive powers, including intelligence security and investigation, and proposed that it should focus solely on counterintelligence activities. To facilitate this, a ministerial advisory committee involving government, military, and civilian experts has been established and will operate until the end of 2025 to develop detailed reform measures.

Defense Minister Ahn Gyu-back pledged to build a military that respects civilian authority and resists external influence. He emphasized strengthening military capabilities with advanced technology to address complex security threats, including North Korea's evolving nuclear and missile arsenal.

“미사일로 거리를 도배했다”…북한이 꺼내든 ‘비장의 무기’ 뭐길래

Covered the area with missiles… What is North Korea’s ‘secret weapon’ they pulled out

Maekyung | Local Language | News | Oct. 14, 2025 | North Korea

On October 10, 2025, North Korea held a military parade in Pyongyang showcasing a wide array of nuclear and conventional weapons, with a particular focus on the newly unveiled intercontinental ballistic missile (ICBM) Hwasong-20. This missile is presumed to have multi-warhead capabilities and a range exceeding 15,000 km, positioning it as a significant strategic threat capable of striking major U.S. cities. The Hwasong-20 is mounted on an 11-axle mobile launcher and is considered an advancement over the previous Hwasong-19, incorporating a more powerful engine with carbon fiber composite materials that improve thrust by over 40%. However, it has yet to be officially tested.

In addition to the Hwasong-20, North Korea displayed hypersonic missile variants, including the medium-to-long-range Hwasong-16 and short-range Hwasong-11ma, both potentially nuclear-capable and targeting U.S. bases and forces in the region. The parade also highlighted North Korea’s development of swarm drone tactics using containerized mobile launchers for suicide drones, aiming to overwhelm South Korean and U.S. air defenses through mass deployments. This marks a shift from single suicide drones to an offensive unmanned aircraft combat strategy.

Alongside these advanced missile systems, the parade introduced the new Cheonma-20 tank, indicating expansion of North Korea’s conventional military arsenal. While Chairman Kim Jong Un's speech avoided direct threats to the U.S. or South Korea—reflecting the parade’s diplomatic context attended by officials from China, Russia, and Vietnam—the broadcasted narration underscored hostility toward South Korea, emphasizing the readiness of front-line forces.

The demonstration represents a comprehensive display of integrated military capabilities intended to bolster deterrence against both the U.S. homeland and regional allies like South Korea and Japan, while enhancing North Korea’s leverage in future negotiations. Concurrently, China pledged to strengthen strategic cooperation with North Korea, with Premier Li Qiang’s visit to Pyongyang and Xi Jinping’s message emphasizing the close bilateral relationship and mutual support on international and regional issues.

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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