South Korea

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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. 15, 2025

News
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313

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11

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40

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2

Foreign
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0

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1

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Videos
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Social
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0

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2

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강남3구·성동·광진·과천 아파트값, 집값 급등기때보다 더 올랐다

Apartment Prices in Gangnam 3 Districts, Seongdong, Gwangjin, and Gwacheon Have Risen More Than During the Peak Housing Price Surge

Newsis | Local Language | News | Oct. 15, 2025 | UndeterminedReal Estate

Apartment prices in Seoul's Gangnam 3 districts (Gangnam, Seocho, Songpa), Seongdong, Gwangjin, and Gwacheon in Gyeonggi Province have risen in 2025 at rates exceeding those seen during the 2020–2021 housing price surge period. Specifically, prices in the Gangnam 3 districts increased by 14.59%, 12.41%, and 13.71%, respectively, outpacing their surge period growth. Gwangjin and Seongdong districts also surpassed their previous peak rates, with Gwacheon showing a sharp rise of 13.89% this year compared to lower increases in past years.

Additionally, areas along the Han River, including Mapo, Gangdong, Dongjak, and Bundang in Seongnam, have seen a price increase close to their surge period growth rates, with Gangdong rising 9.24% and other districts showing similar gains above the overall Seoul increase rate of 6.49% for January to September 2025. This trend suggests renewed heating in the housing market despite government mortgage loan restrictions introduced in June 2025.

In response to signs of a housing price surge recurrence, the South Korean government plans to announce further real estate regulations within the week. Potential measures include expanding regulated areas, tightening loan limits, and increasing property holding taxes. Land, Infrastructure and Transport Minister Kim Yoon-duk has confirmed that additional regulated area designations are likely and that detailed plans are being formulated with related ministries.

(LEAD) Finance chief vows efforts to stabilize housing market amid rising home prices in Seoul

Yonhap | English | News | Oct. 15, 2025 | UndeterminedReal Estate

Finance Minister Koo Yun-cheol announced on October 13, 2025, that the South Korean government will prioritize stabilizing the housing market amid rising home prices in Seoul and surrounding Gyeonggi Province. He emphasized managing real estate supply and demand to ensure residential stability for the public. A new set of housing market measures, the third under President Lee Jae Myung’s administration, is expected to be announced soon, including plans related to real estate taxation and efforts to address supply-demand imbalances.

Koo highlighted that the government aims to accelerate housing supply while implementing effective demand-side policies. In addition to housing market concerns, he noted signs of economic recovery with improving consumer sentiment and retail sales in the second half of 2025, marking a turnaround from sluggish growth since mid-2024. The government’s broader economic strategy includes revitalizing the economy and stabilizing livelihoods amid these developments.

North Korean Embassy in Russia hosts banquet marking ruling party anniversary

Joongang Ilbo | English | News | Oct. 15, 2025 | North Korea

The North Korean Embassy in Russia held a banquet on October 9, 2025, to commemorate the 80th anniversary of the founding of the Workers' Party of Korea (WPK). The event was attended by North Korean Ambassador Sin Hong-chol and several prominent Russian officials, including Gennady Zyuganov, leader of the Communist Party of the Russian Federation; Ivan Melnikov, first vice chairman of the State Duma; and Deputy Defense Minister Andrey Bulyga. The gathering also featured an exhibition titled "Shoulder to Shoulder," which highlighted the history of allied relations between Russia (USSR) and North Korea from 1945 to the present.

At the banquet, Ambassador Sin praised the WPK's achievements in developing powerful national defense capabilities and safeguarding North Korea's sovereignty amidst global tensions. Zyuganov underscored the strategic nature of Russia-North Korea relations, emphasizing their significance to both nations and honoring North Korean soldiers who fought alongside Russia in the Kursk region during the conflict in Ukraine. Deputy Defense Minister Bulyga highlighted the growing friendly ties between the two countries and expressed optimism about continuing mutual cooperation and militant friendship.

The celebrations coincided with North Korea's national events marking the party anniversary, including a military parade attended by Dmitry Medvedev, deputy chairman of the Russian Security Council, representing Russia at the highest level. This series of events reflects the strengthening political and military ties between Russia and North Korea.

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