Naver Bets on Localized AI to Fend Off Google's Gemini Offensive

As Google intensifies its offensive with generative artificial intelligence "Gemini," a sense of crisis is spreading not only to ChatGPT developer OpenAI but across Korea's entire tech industry. Among Korean tech companies, Naver (035420.KS) is responding most sensitively to Google's moves. Naver is strengthening competitiveness by applying AI across its existing services including search, blogs, commerce, maps, and advertising, while focusing on creating a virtuous cycle of developing AI specialized for the Korean market based on accumulated data. The goal is to defend the AI market just as it won the Korean search market competition against global Big Tech companies 20 years ago.

**Google's All-Out Offensive with Gemini; Image-Generating AI Gains Popularity**

According to MobileIndex on January 17, Google app's monthly active users reached an estimated 42.72 million last month, a 16.0% increase from 36.82 million a year earlier. This closely trails Naver app's 45.04 million users. Google's Chrome browser and Gmail service also exceeded 10 million monthly users each, at 39.99 million and 16.57 million respectively.

Google is increasing its domestic market dominance by integrating its self-developed AI "Gemini" into its apps. The large language model Gemini 3 Pro and image generation/editing AI "Nano Banana," released on December 18, are drawing attention for their outstanding performance. OpenAI CEO Sam Altman reportedly issued a code red alert internally after Gemini 3 Pro's launch, ordering top priority on improving ChatGPT's performance and usability.

In September this year, Google integrated video-generating AI "Veo 3" into YouTube Shorts, enabling users to create short videos by entering text. This aims to strengthen the influence of YouTube, Korea's most-used app with 48.49 million users. Google has appointed approximately 340 Korean university students as "Gemini College Ambassadors" to spread Google AI culture and has offered free 12-month Gemini AI Pro benefits to Korean university and graduate students.

**Naver Defended Search Market with Knowledge Service and Blogs**

Naver has launched a strong counteroffensive, aiming to defend its home turf by offering AI services tailored to the Korean market. This strategy is backed by Naver's successful experience in securing dominance in past search market competition. Naver, which began official service as a separate corporation Navercom in 1999, merged with Hangame founded by Kim Beom-su, now Kakao's Future Initiative Center head, in 2000. It then introduced community services including Knowledge iN, blogs, and cafes, bringing revolutionary change to Korea's IT industry.

The user-participatory knowledge search service Knowledge iN particularly caused a seismic shift. In April 2003, Naver ranked first in search service visitors for the first time, surpassing multinational portal company Yahoo. In 2005, it overtook Daum to claim the top spot in weekly and monthly unique visitor rankings by major market research firms Korean Click and Rankey.com. Yahoo Korea eventually withdrew from the Korean market in 2012. In this context, Naver Board Chairman Lee Hae-jin said at the Dunamu M&A press conference on December 27, "Naver is the only company in the world defending its domestic search engine market. I believe we have been competing so hard that we worry about survival every year."

Han Sung-sook, Minister of SMEs and Startups (former Naver CEO), and Choi Hwi-young, Minister of Culture, Sports and Tourism (former NHN (181710.KS) CEO), joined the inaugural cabinet of the Lee Jae-myung government in recognition of their contributions to Naver's growth. Ha Jung-woo, Presidential Office AI Future Planning Secretary (former Naver Cloud AI Innovation Center head), also contributed to Naver's AI development and now leads the new government's AI blueprint.

**Naver Equips All Services with AI, Evolving into AI Agent Platform**

Naver is strengthening competitiveness by equipping all services with AI. It will soon reorganize blog recommendation feeds into AI-based discovery feeds. Like Instagram, it plans to offer discovery-focused feeds on blogs that precisely reflect individual users' interests and preferences. The existing recommendation feed operated as a space displaying posts based on topics preferred by many users. Testing began on January 15 for some users.

Naver aims to evolve into a hyper-personalized AI agent platform. Next year, it plans to link its services including search, shopping, finance, and content with external services through "Agent N." Agent N is an AI that understands user context, predicts behavior, and suggests and executes appropriate decisions. Naver plans to deploy a shopping agent in "Naver Plus Store" in the first quarter of next year and launch an evolved "AI Tab" based on integrated search AI agent in the second quarter.

**High-Quality Data Available for AI Training**

Naver has also established a strategy to maximize the use of data accumulated over 20 years as a core corporate asset in the AI era. Naver can analyze service logs from various platforms including the Naver app with over 45 million monthly active users and Naver Maps with over 28.5 million users. The plan is to develop AI optimized for the Korean market by combining Korean-language content data generated from blogs and cafes with commercial data from shopping and payments.

Naver COO Kim Beom-jun said at the annual technology and strategy conference "DAN" held at COEX in Samseong-dong, Seoul on December 6, "We leveraged Naver's unique advantage of securing various types of metadata. Google and ChatGPT, which don't directly operate shopping services, can only crawl and display data, but Naver can help at the appropriate moment."

**Developing Vertical AI with Hanwha, Hyundai Motor and Others**

Above all, Naver is focusing on developing Korea-specialized AI. It is currently developing vertical AI with major Korean companies including Hanwha (000880.KS), Hyundai Motor (005380.KS), HD Hyundai (267250.KS), LS Electric, Lotte, and Daedong (000490.KS).

Naver was named as a first-round support target company in the "Independent AI Foundation Model" development project to select Korea's national AI model. To realize AI for all Koreans, it is developing an "Omnimodality" AI model that integrates understanding and generation of heterogeneous data including text, images, audio, and video. Naver CEO Choi Soo-yeon said, "We will accelerate AI transformation and innovation across Korean industries by adding Naver's unrivaled AI software capabilities to the solid competitiveness of Korea's core manufacturing industries including semiconductors, automobiles, and shipbuilding. Based on full-stack AI technology capabilities, we will contribute to Korea's leap to become one of the top three AI powers." Naver Cloud CEO Kim Yu-won also said, "As a company that most deeply understands our country's language, data, and industrial structure, we are building industry-specific vertical AI models based on 'Sovereign AI 2.0.'"

Naver recently partnered with Seoul National University Hospital to release medical-specialized LLM "Kmed.ai," which scored an average of 96.4 points on this year's Korean Medical Licensing Examination. The strategy is to win the AI territorial war by strengthening Korea industry-specialized AI competitiveness that Google finds difficult to access.

**Global Expansion Accelerating; ThingsBook to Launch Next Year**

Meanwhile, Naver is making all-out efforts to secure data needed for AI training not only in Korea but around the world to expand its global territory. It plans to launch social network service platform "ThingsBook" targeting the North American and global markets next year. By applying operational know-how from "Band," an SNS with over 10 million subscribers in North America, Naver is expected to create another successful overseas service while securing English-language data for AI advancement.