OpenAI clinches deal with Kakao, talks with SoftBank and Samsung about Stargate

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Summary

  • Kakao deal follows unveiling of Japan partnership with SoftBank
  • Altman says Korean firms to be important to Stargate ecosystem
  • OpenAI looking at joining South Korean AI computer centre project
  • SoftBank’s Son: potential Stargate cooperation with Samsung discussed
  • Altman due to visit India on Wednesday, sources say

SEOUL, Feb 4 (Reuters) – OpenAI said on Tuesday it will develop artificial intelligence products for South Korea with chat app operator Kakao (035720.KS), opens new tab, unveiling a second major alliance with a high-profile Asian partner this week.

OpenAI Chief Executive Sam Altman also separately sat down with the leaders of Samsung Electronics (005930.KS), opens new tab, SoftBank (9984.T), opens new tab and Arm Holdings in Seoul. SoftBank chief Masayoshi Son told reporters the Stargate AI data centre project in the United States had been discussed.

On a whirlwind tour through Asia, Altman announced a partnership with SoftBank for AI services in Japan on Monday and is, according to sources, scheduled to visit India on Wednesday where he is seeking to meet Prime Minister Narendra Modi.

Like SoftBank, Kakao said it would be using technology developed by the ChatGPT creator for its products.

Kakao operates South Korea’s dominant messaging app KakaoTalk, which has a whopping 97% domestic market share and has expanded into areas such as e-commerce, payments and gaming. It has positioned AI as a new engine of growth but analysts say it has lagged behind local rival Naver (035420.KS), opens new tab in the AI race.

“We are particularly interested in AI and messaging,” Altman told a joint press conference with Kakao CEO Chung Shina in Seoul.

He added that Korea’s energy, semiconductor and internet companies made the country an important market for OpenAI, with demand for AI products growing rapidly.

STARGATE, KOREA COMPUTING CENTRE

Altman also said many Korean companies will be important contributors to the Stargate data centre project, a venture between OpenAI and Oracle (ORCL.N), opens new tab to build AI capacity in the United States that has been backed by U.S. President Donald Trump. Altman declined to elaborate, saying he wants to keep partnership conversations confidential.

Speaking to reporters before the meeting on Stargate at Samsung’s offices, SoftBank’s Son said potential cooperation with Samsung would be discussed. Later pressed on whether Samsung was asked to join the project, he said: “We had a very good discussion,” but did not elaborate.

Rene Haas, the CEO of British chip designer Arm, which is majority-owned by SoftBank, said Samsung was “a great partner”.

Samsung declined to comment on the meeting.

Altman also met with SK Group Chairman Chey Tae-won earlier on Tuesday. Both SK Hynix (000660.KS), opens new tab and Samsung Electronics produce high bandwidth memory chips used in AI processors.

SK Hynix said discussions with Altman covered comprehensive cooperation plans for AI chips and the AI ecosystem.

Son declined to answer when asked by reporters if SK Hynix would join the Stargate initiative, saying only that no details have been decided.

Separately, asked whether OpenAI was looking at joining and investing in South Korea’s AI computing centre project, Altman said the U.S. company was “actively considering” such a move.

Last month, the South Korean government said it planned to build a national AI computing centre that would draw on investment from the public and private sectors worth up to 2 trillion won ($1.4 billion).

Kakao shares fell 2% on Tuesday after surging 9% a day earlier.

Reporting by Hyunjoo Jin and Jack Kim in Seoul, Additional reporting by Jeffrey Dastin in San Francisco and Sam Nussey in Tokyo; Editing by Edwina Gibbs

Samsung chief Jay Y. Lee found not guilty in merger case

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SEOUL, Feb 3 (Reuters) – Samsung Electronics Chairman Jay Y. Lee was found not guilty of accounting fraud and stock manipulation by a Seoul appeals court on Monday, in a ruling that could remove long-running legal risks that he has faced from criminal cases.

The Seoul High Court upheld the lower court’s ruling dismissing all the charges from a case involving a 2015 merger that prosecutors said was designed to cement Lee’s control of the tech giant.

The legal battles have been a distraction for Lee, who faced growing questions about his ability to lead Samsung Electronics – the world’s top memory chip and smartphone maker – as it grapples with growing competition and lacklustre stock prices.

“It took a long time. We hope with the latest ruling, the defendants would be able to focus on their work,” Lee’s lawyer Kim You-jin said after the ruling.

For nearly a decade, Lee has faced legal challenges, including those from the merger that paved the way for his succession after his father, Lee Kun-hee, had a heart attack in 2014 that left him in a coma.

A lower court last year cleared Lee of all charges related to the $8 billion merger in 2015 between two Samsung affiliates, Samsung C&T (028260.KS), opens new tab and Cheil Industries.

Prosecutors later appealed to the Seoul High Court, seeking a five-year jail term, citing a separate ruling in August that said Samsung BioLogics, an affiliate of Cheil Industries, breached accounting standards by overstating its assets to justify the merger.

The judge said even as the BioLogics accounting practices involved “inappropriate acts” such as the manipulation of documents, the outcomes reflected financial realities and were based on rational reasons and processes.

The court dismissed prosecutors’ claims that the merger caused financial losses to Samsung C&T shareholders.

Lee did not answer questions from reporters when he was leaving court on Monday.

He has denied wrongdoing, saying in court last November, “I never intended to deceive or damage investors for personal gain”.

It was not immediately clear whether the prosecution would appeal the decision to the Supreme Court.

Samsung shares closed down 2.7% following the ruling.

LENIENCY

A civic group condemned the court’s decision because it argued it showed leniency to Lee, who was charged with tightening his grip over his company at the expense of the country’s pension fund and other investors.

The People’s Solidarity for Participatory Democracy said the court disregarded other court rulings related to the merger case.

Lee served a combined 18 months in jail on bribery charges before he was released in 2021 as part of a scandal that led to massive protests and ultimately brought down then-President Park Geun-hye in 2017. Park also served a nearly five-year jail term.

In 2022, South Korea’s now impeached President Yoon Suk Yeol pardoned Lee, with the justice ministry saying the business leader was needed to help overcome a “national economic crisis”.

The controversial merger sparked a backlash from investors such as U.S. hedge fund Elliott and raised questions about the corporate governance of Korea’s family-owned conglomerates, which are often criticised for putting the interests of family members ahead of other shareholders.

In 2023, the South Korean government was ordered to pay around $108.5 million to Elliott, which sued it over the role played by the country’s pension fund in approving the merger.

Last year, the National Pension Service, formerly the biggest shareholder in Samsung C&T, filed a lawsuit against Lee, seeking damages from the merger that allegedly undervalued the key unit.

“This is positive news for Samsung, which has been having business difficulties,” said Park Ju-gun, head of corporate analysis firm Leaders Index.

“But the ruling will be a burden on Lee, who has to prove his management capability now that he is free from legal risks,” he said.

The conglomerate’s crown jewel Samsung Electronics warned on Friday of sluggish sales of its artificial intelligence chips in the current quarter.

Samsung Electronics has lost out to smaller competitor SK Hynix in supplying high-bandwidth memory (HBM) chips to Nvidia’s AI graphics processing units and is seen missing much of the profits generated by the current AI boom.

Reporting by Joyce Lee and Hyunjoo Jin; Editing by Sam Holmes, Ed Davies, Gerry Doyle and Kate Mayberry