Korea Internet AI: Sooner or Later, Not Just One AI Moment
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Artificial intelligence is fundamentally reshaping the Korean internet landscape, though the pace of disruption varies significantly across subsectors. Bernstein explores where ultimate pricing power will reside in an AI-saturated world by examining two extremes. At the fast-moving end, bargaining power in search and digital advertising is already shifting. Kakao has emerged as a core application-layer beneficiary of agentic AI, capitalizing on the exceptionally high frequency of user engagement within its ecosystem. Partnerships with OpenAI and Google are expected to expand into concrete global use cases, such as food delivery and e-commerce, by 2026. Additionally, Kakao's new short-video tab has amassed roughly 8 million daily active users, creating a fresh monetization pillar.
Conversely, in slower-moving verticals, AI is not flattening content markets but rather concentrating value among established leaders. Market fears surrounding AI's disruption of the gaming sector appear overblown. Instead, K-pop is positioned as a safe haven due to its deep emotional lock-in and high production barriers. The report argues that AI will likely amplify, rather than replace, existing intellectual property. Consequently, the incremental economic benefits of AI integration will primarily flow to companies that control foundational IP, such as Hybe, Studio Dragon, and Krafton. By generating more fan touchpoints and higher per-fan ARPU without altering underlying IP ownership, AI reinforces the dominance of these premier content owners.