KT, Microsoft make big push for AI innovation in South Korea

KT, a leading company in South Korea’s telecommunications and ICT industries, and Microsoft have unveiled a five-year multibillion-dollar partnership.

This includes an investment from KT in the areas of AI, cloud technologies, and IT business, and a resource commitment from Microsoft in the areas of infrastructure and people. 

Through this partnership, the companies will propel KT’s AI and ICT (AICT) transformation, and accelerate the advancement of AI services and innovation in Korea. 

Following the agreement in June, KT and Microsoft have engaged in ongoing discussions to strengthen ties and outline key areas of collaboration and support. 

This strategic partnership is expected to drive progress in five pivotal areas — development of customized AI solutions for South Korea, delivering Korean sovereign cloud solutions, the establishment of an AI transformation (AX)-specialised service company, AI R&D capabilities advancement across Korea and KT’s AICT transformation. 

KT and Microsoft will engage in engineering collaboration to develop a customized version of GPT-4o and explore developing a customised version of Microsoft’s Phi family of small language models, with KT’s extensive set of high-quality data around Korean culture and industries. 

These models will be used for both KT’s internal and consumer-facing applications such as customer service chatbots, and also for building industry-specific AI solutions for B2B customers across industry verticals to best serve the needs of Korean consumers and businesses.

Also, KT and Microsoft are partnering to develop and launch Secure Public Cloud services, which is KT’s sovereign cloud solution built on Microsoft Cloud for Sovereignty for Korean-regulated industries. 

KT will drive its Secure Public Cloud business with support from Microsoft, enabling public sector and regulated industry customers to use new platform capabilities for securing data and workloads, providing access to the latest cloud and AI features available on Azure and helping them comply with local privacy and regulatory requirements. 

Further, KT will establish a new AX-specialized service company to help businesses in Korea transform with the latest AI innovation. The forthcoming KT’s AX-specialized service company will provide advanced Microsoft Cloud and AI expertise and solutions to the Korean market, with plans to expand to broader markets, including ASEAN. 

In addition, Microsoft will support KT in establishing a co-innovation center aimed at accelerating Microsoft technology-driven AI transformation in the Korean market. This center will help businesses build, develop and prototype new AI solutions with Microsoft technology and KT’s AI specialists. 

KT will migrate and modernize existing IT workloads including mission-critical applications, to Microsoft Azure while developing a new data platform and AI services powered by Microsoft Fabric and Azure OpenAI Service.

“The partnership with Microsoft presents a pivotal opportunity, not only for technological collaboration but also for expanding Korea’s AI foundation and driving transformative innovation across industries and daily life,” said KT CEO Young-Shub Kim. 

Satya Nadella, chairman and CEO of Microsoft, said that together, the two companies will help accelerate the AI transformation of Korean organisations across the private and public sector and build new AI-powered experiences for millions of consumers.”