KT, Microsoft to invest $1.8 bn in Korea’s AI, cloud sectors over 5 yrs

CEO Kim Young-shub

KT Corp. announced on Thursday that it has teamed up with Microsoft Corp. to invest 2.4 trillion won ($1.77 billion) in South Korea’s artificial intelligence (AI) and cloud infrastructure.

“Microsoft is a global leader in software, cloud, data, and AI, with extensive collaboration experience across European Union nations, which were among the first to implement AI regulations,” KT CEO Kim Young-shub said on Thursday in Seoul.

Under the partnership, the two companies plan to invest in data centers, infrastructure, research and development (R&D), and AI talent cultivation, with a goal to launch a Korean-language AI model based on GPT-4o by the first half of next year.

They will also introduce sector-specific AI models tailored to public and financial industries, leveraging Microsoft’s Phi 3.5 small language model.

KT also plans to integrate Microsoft’s conversational AI tool, Copilot, into its services.

The two companies will also jointly develop cloud services designed to meet Korea’s regulatory and security standards, with a focus on the public and financial sectors.

The launch of these services is slated for the first quarter of next year.

KT will continue to provide customized language models for businesses, including its own AI model Mi:dm, which it aims to further develop.

The company will also launch an AI transformation (AX) specialist firm focused on AI and cloud transformation in the first quarter of next year and establish a joint Innovation Center later in the year.

In collaboration with Microsoft’s research center, KT will explore advancements in network modernization, 6G technology, and AI applications across industries like healthcare and mobility.

The two companies also plan to conduct joint R&D in AI hardware, including GPU and NPU technologies.

To further bolster the AX ecosystem, KT and Microsoft will create an AX Strategic Fund to foster partnerships with various companies.

KT projects that the partnership with Microsoft will generate 4.6 trillion won in cumulative revenue by 2029.

The company expects to see initial revenue of 269 billion won next year, growing to 610 billion won in 2026, 1.1 trillion won in 2027, 1.29 trillion won in 2028, and 1.37 trillion won in 2029.