Naver has chosen defense artificial intelligence (AI) as its next-generation growth business. The company is launching a dedicated defense AI organization and deploying on-site personnel to fully enter the AI transformation (AX) business in the defense sector. The plan is to seize the defense AI market by building an AI platform for military data analysis and decision support. Some analysts say Naver identified the defense sector as a key customer base while searching for new markets to leverage its AI capabilities, after failing to participate in the government's "Independent AI Foundation Model" (Dokpamo) project.
According to the IT industry on Wednesday, Naver Cloud is establishing a "Defense AX (AI Transformation) Dedicated Organization" the same day. This is the first time Naver has set up a separate organization solely dedicated to defense AI business.
The new organization will feature Forward Deployed Engineers (FDEs), who will be directly deployed to defense sites to design and build customized AI solutions. FDEs are responsible for supporting AI system construction and operation on-site for defense and intelligence agency clients. This is the same role that U.S. AI defense company Palantir leveraged as a core competitive strength during its growth. The move signals that Naver intends to focus on actual military field applications and commercialization, beyond simple technology development.
Naver is staffing the organization with personnel from AI model development, business development, and PR and marketing to simultaneously pursue the development and commercialization of defense-specialized AI models. Notably, Kim You-won, CEO of Naver Cloud, who oversees Naver's overall AI business, will lead the organization directly. The industry views this as Naver concentrating its company-wide capabilities, from R&D to commercialization, to nurture defense AI as a future growth engine. With government orders for defense AI projects expected to gain momentum this year, Naver is seen as moving to secure early market leadership through the dedicated organization.
Naver is paying attention to the defense sector because defense AI is emerging as a new battleground for AI technology. According to market research firm Grand View Research, the global defense AI market is projected to expand from $9.31 billion (about 14 trillion won) in 2024 to $19.29 billion (about 29 trillion won) by 2030. As the importance of AI-based drones, reconnaissance, and command and control systems has grown through the Ukraine war and Middle East conflicts, investment by governments and defense companies worldwide is rapidly increasing. In the United States, big tech companies such as OpenAI and Google, along with AI defense firms like Palantir and Anduril, are expanding their entry into the defense AI market.
In particular, defense AI is considered a leading area where Naver can apply its omnimodal AI technology, which the company touts as a key strength. In defense environments, various types of information must be analyzed simultaneously, including not only text but also reconnaissance footage, voice, satellite information, and sensor data. Naver views this as a next-generation application area for omnimodal AI.
Sung Nako, Hyperscale AI Technology Head at Naver Cloud, said in April at the "Naver Cloud Public AX Strategy Seminar" held in Sejong City: "Naver Cloud is the only company in Korea with omnimodal AI technology capable of reasoning and generating by combining various forms of data such as text, images, and voice." He added, "We will focus our capabilities on analyzing complex battlefield situations and supporting the military's strategic decision-making."
According to Naver, omnimodal AI can integrate and analyze various heterogeneous information such as battlefield maps, reconnaissance footage, operational communications, and sensor data to provide commanders with real-time battle situations and threat factors. Unlike conventional methods that required separate analysis of vast information, this technology can comprehensively understand battlefield situations and support decision-making. The industry expects Naver to use this as a basis to build a defense AI platform that integrates and analyzes massive battlefield data in real time. Some forecasts suggest it could evolve into an AI-based command and control system that supports not only information analysis but also target identification, threat assessment, and operational planning.
The market interprets the new organization as a move to find a fresh breakthrough for Naver's independent AI business. Naver has continued massive investment in developing its own AI models, but it also faces the challenge of converting these investments into actual revenue. In particular, the defense sector is a representative sovereign AI market, where dependence on foreign AI or overseas cloud services must be minimized due to the nature of handling military secrets and security data. Naver, which possesses proprietary technology spanning from AI models to cloud infrastructure, is seen as well-positioned to demonstrate competitiveness in this field.
"Following the failure to participate in the Dokpamo project, Naver needs to expand markets where it can convert AI technology into actual revenue," an industry official said. "Since the public and defense sectors have the highest demand for sovereign AI, Naver is highly likely to actively target these areas."
