Naver to introduce search GPT in first half of year

South Korean internet giant Naver said Friday it will launch its own generative pretrained transformer, or GPT, for search functions by the end of June, as OpenAI's artificial intelligence chatbot ChatGPT has been taking the tech world by storm.

“We are gearing up to handle new search trends, such as the generative AI that is gaining a lot of attention now. And we plan to introduce our own upgraded version of SearchGPT in the first half of this year,” Chief Executive Officer Choi Soo-yeon said during the earnings call for the fourth quarter 2022.

Naver will not be applying the search GPT straight to its current search engine, but will launch a pilot program, the CEO said.

"Our objective is not to apply the program for immediate gain of overall traffic or for user engagement, but for research and development to this new and upcoming search technology," Choi said.

GPT refers to a neural network learning model that enables machines to perform natural language processing tasks.

Choi expressed confidence that Naver would be able to overcome the cons of generative AI, of how it lacks credibility and recency. With its ample user data and technological know-how, Naver will also be able to overcome the problem with degradation in accuracy when English-based models are translated into Korean, Choi added.

Choi viewed the company would be able to profit with its GPT as well.

“Naver’s hyper artificial intelligence HyperClova -- hyperscale AI model -- is developing, and on the foundation of this technology, many B2B (business-to-business) solutions on paying platforms keep opening,” Choi said.

To raise the quality of the search results, the company is experimenting with its program to search inquiries such as purchasing laptops at cheap prices and subway fees.

The Korean IT giant said it has also begun discussing possible business cooperation with construction companies regarding the Neom city project in Saudi Arabia.

"In regards to the Neom city project, we are in discussions with construction companies to come up with a smart building and smart city solution utilizing various future technologies, such as robotics, digital twin, autonomous driving and artificial intelligence," Choi said.

"We are currently preparing the Request for Information document for some of the projects. With the solution, we expect to integrate various online services of commerce and the metaverse to the real-world environment."

Earlier in the day, Naver reported its annual revenue logged 8.2 trillion won ($6.67 billion) in 2022, increasing 20.6 percent from the previous year. While its sales grew, the company's operating profit edged down by 1.6 percent on-year to stand at 1.3 trillion won.

For the loss in profit, the company attributed it to poor performance in its commerce and advertisements business on expectations of a global economic recession.

In the fourth quarter of 2022, the company posted 2.27 trillion won in sales, down 17.8 percent on-year. The company logged an operating profit of 336.5 billion won in the quarter, which is a decline of 4.2 percent on-year.

By business division, the company's search platform business achieved 916.4 billion won in sales, while commerce earned 486.8 billion won and financial technology earned 319.9 billion won in the fourth quarter. Its content business and cloud business posted sales of 437.5 billion won and 111.1 billion won, respectively.

"The year 2022 was a time for Naver to secure internal stability to take a leap forward as a global company. We will maintain the growth momentum by stable management of existing businesses and seek for new business opportunities, and become a platform most favored by users," Choi said.