Naver to unveil its answer to ChatGPT this summer

South Korean internet giant Naver will unveil HyperClova X, its hyperscale artificial intelligence platform, which boasts greater Korean language skills than its US rival, OpenAI's ChatGPT, this summer to upgrade its services overall.

“Based on HyperClova, which has the third-largest Korean language training volume in the world and the first in Korea, we’ll unveil a HyperClova X service that is comparable to GPT-4 (the successor of ChatGPT),” Naver CEO Choi Soo-yeon said during the company’s first-quarter earnings call on Monday.

“While the paradigm is shifting dramatically, as commercialized AI services are being released rapidly, Naver aims to raise user experience to a higher level by applying HyperClova X to all of our services,” she said.

Naver plans to introduce the hyperscale AI service in the local business-to-business sector to solve customization and data protection-related issues that global firms cannot solve better. It will also launch the service in combination with productivity tools such as Line Works and Naver Works in Japan within this year, Choi said.

When asked about HyperClova X’s competitiveness, the CEO said: “We’ve been investing in AI technology since 2017. … Particularly in the Korean language, we believe that we have a competitive edge that outperforms global Big Tech AI models. It is our responsibility to continue to do so.”

Earlier in February, Naver said it would launch its own generative pre-trained transformer, or GPT, for search functions by the end of June. At that time, Choi expressed confidence that Naver would be able to overcome the problem of the deterioration of accuracy when English-based models are translated into Korean.

During Monday’s earnings call, the Korean IT giant also announced that it will upgrade its search screen and app for user convenience in the latter half of this year.

The new versions will quickly identify users' search intentions to lead to the desired search results. A service that can explore more content based on AI recommendations from search results is also on the way. The upcoming new Naver app will include new tabs to link to short-form content and one's home feed, the CEO explained.

“We’re advancing our services. … Naver is also developing an innovative AI service demo linked with various services to handle the new generative AI trends,” she said.

Before the earnings call, the tech behemoth released its first quarter earnings report before the Korea Exchange opened.

Naver said its operating income rose 9.5 percent from the same period a year before to 330.5 billion won ($250.5 million).

“It was due to the effect of changing the depreciation period of infrastructure assets such as servers to better align with domestic and global trends and actual years of use,” the company said. “It was like saving costs via a change in accounting standards.”

The company’s sales rose 23.6 percent on-year to 2.28 trillion won, but its net profit nosedived 71.2 percent on-year to 43.7 billion won over the three months, the company said in a regulatory filing.

“The weakened Korean currency expanded the loss due to the exchange rate of debt in foreign currency, and the decrease in equity-method net profit attributed to the decline in net income,” Naver CFO Kim Nam-sun said in the company’s earnings call.

As Naver posted an earnings surprise in the first quarter, shares of the IT giant ended trading at 207,000 won on Monday, adding 5.56 percent from the previous session's close.