Kakao Corp is reportedly preparing to offload its ownership stake in Starship Entertainment.

According to media reports, Kakao is gearing up to increase its investment in research and development (R&D) to generate funds for the corporation's artificial intelligence (AI) expansion. In a tactical move, the company proposes to sell the shares of Starship Entertainment, one of its music label subsidiaries. 

In recent years, Kakao has found itself in direct competition with Naver, which is currently the largest investor in the AI industry in South Korea.

In 2022, Kakao committed over 1 trillion won (~754 million USD) to the AI R&D for the first time, aiming to boost its competitive edge in the AI segment. However, this investment still falls significantly short of the funding leveled by Naver, which invested nearly twice that amount last year alone.

This year, Kakao plans further investment of around 1 trillion won. If the liquidation of Starship's shares proceeds successfully, the company is projected to amass approximately 100 billion won (~75.4 million USD) in funds.

Meanwhile, Kakao is also poised to launch its highly anticipated Korean language model AI, KoGPT 2.0, in October of this year. This follows close on the heels of Naver's launch of its language model AI, 'HyperCLOVA X', and its conversational AI service, 'CLOVA X', earlier this year in August.

In related news, Starship Entertainment is home to artists such as IVE, MONSTA X, CRAVITY, and WJSN.