SK Telecom sets $3.55bn sales target for new AI ‘CIC’

• SK Telecom is forming an AI ‘company in company’ (CIC) to consolidate its AI operations
• The South Korean operator’s CEO will also head up the AI CIC
• The unit is aiming for revenues of more than $3.55bn by 2030

Keen to put this year’s cybersecurity disaster in the rear-view mirror, South Korea’s SK Telecom (SKT) has announced the formation of an artificial intelligence (AI) ‘company in company’ (CIC) that will be headed up by Ryu Young-sang, the telco’s CEO, and is targeting annual revenues of more than 5tn won (KRW) (US$3.55bn) by 2030. 

The telco has long been describing itself as an AI company and, to fit that identity, has been evolving its corporate strategy as well as investing in its own AI infrastructure, applications and operations: Late last year SKT revamped its operations, portfolio and structure to reflect its planned future as a provider of communications and AI services. 

Now it is launching the AI CIC, which the CEO described in this announcement (in Korean) as “an elite organisation that brings together the company’s AI capabilities.”

At a corporate town hall meeting for all SKT staff, Ryu noted: “To not miss the AI ​​golden time, where crises and opportunities coexist due to the rapidly changing AI environment, we need internal AI innovation” in order to improve internal systems, organisational culture and employee AI capabilities, “and AI business innovation.”

SKT will invest KRW5tn (US$3.55bn) in the AI CIC over the next five years and aims to achieve annual revenues of more than KRW5tn by 2030. 

For the full year 2024, SK Telecom reported revenues of KRW12.77tn ($9bn).

The CIC will take on responsibility for: SKT’s Adot (or A.) personal assistant service and the A. Biz function developed for enterprises; the AI datacentre business; global AI partner investments; AI R&D; and SKT’s messaging and authentication operations. The internal reorganisation to create the CIC is due to be completed by the end of October this year. 

SKT noted that by “integrating and consolidating dispersed AI technology assets, we plan to strengthen the role of the ‘AI platform’ to support AI technology/operations across the entire SK Group, including SKT, and also pursue a strategy to secure a flexible ‘AI model’ to respond to the diverse AI needs of the government, industry and private sectors.” 

The CEO stated: “SKT AI CIC will establish itself as Korea’s leading AI business across all AI fields, including services, platforms, AI DC [AI datacentres] and independent foundation models. Through this, we will play a central role in building the domestic AI ecosystem and become a company that contributes to the success of the national AI strategy.”

Notably, Ryu urged SKT’s employees to help the company “regain customer trust” by focusing on innovation in AI, security and operational improvement. 

That customer trust needs a lot of rebuilding after the disastrous data breach that affected more than 23 million SKT customers and led to the imposition of financial penalties. The company has already announced a $514m investment in new security systems and processes as part of its Accountability and Commitment Program, which was launched specifically to “rebuild customer trust”. 

Now Ryu wants to move on and focus on how SKT can build on its already formidable AI foundations. He stated: “SK Telecom has secured various achievements, such as securing 10 million Adot subscribers, selecting an independent AI foundation model, launching the Ulsan AI DC, and establishing global partnerships through its transformation into an AI company over the past three years… We will achieve another AI innovation centred on the AI ​​CIC to restore the trust of customers and the market, and advance into a global AI company.”

- Ray Le Maistre, Editorial Director, TelecomTV