KT, Microsoft take ‘giant step’ to speed AI adoption in Korea

The two announced a five-year, multibillion-dollar partnership that includes Korea’s largest operator investing in AI, cloud and IT business and a ‘resource commitment’ from Microsoft

KT Corporation and Microsoft announced a five-year multibillion-dollar partnership, which 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. The plan is to propel KT’s AI and ICT (AICT) transformation, and accelerate the advancement of AI services and innovation in Korea. 

This follows an announcement that KT had agreed a strategic partnership with Microsoft for close cooperation in the areas of AI, cloud, and IT in June.

Of late, KT’s smaller rival, SK Telecom has stolen much of the thunder around AI as a founding member of the Global Telco AI Alliance, announced at in February at MWC. Co-founders of the Alliance are Deutsche Telekom, e&, Singtel, and SoftBank. The Alliance announced a joint venture (JV) agreement to develop and launch a multi-lingual large language model (LLM) for telcos in June.

More flesh on the bones

Now KT as former incumbent is playing the national champion card as it and Microsoft outline key areas of collaboration and support for their strategic partnership: Development of customised AI solutions for 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 customised version of GPT-4o and explore developing a customised version of Microsoft’s Phi family of small language models, with KT’s set of data around Korean culture and industries. These models will be used for 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.

KT will leverage Microsoft Copilot Studio and Azure AI Studio to develop custom AI agents aimed at differentiating customer experiences. KT plans to expand the development and use of KT-custom AI agents for consumer use cases in education, healthcare, and in-vehicle infotainment, and for business applications.

The two will collaborate closely on evolving KT’s Responsible AI framework to help ensure the delivery of safe AI services for the Korea market. 

“We are delighted with the partnership between KT and Microsoft, which presents a valuable opportunity to enhance our digital competitiveness,” said Shinhan Bank, a leading financial group in Korea, cited in the press release. “By utilizing the KT GPT model, specialized in Korean language and financial services, we aim to deliver innovative AI-driven services to the domestic financial consumers.” 

Korean sovereign cloud solutions
KT and Microsoft will develop and launch Secure Public Cloud services, which is KT’s sovereign cloud solution built on Microsoft Cloud for Sovereignty for Korean-regulated industries. K

Accelerating AI transformation
KT will establish a new AX-specialised service company to help businesses in Korea transform with the latest AI innovation. KT’s AX-specialised service company will provide Microsoft Cloud and AI expertise and solutions to the Korean market, with plans to expand to broader markets, including ASEAN. Microsoft will support this initiative over the next three years with professional consulting resources to build core practices and capabilities for the new entity. 

Advancing AI R&D capabilities across Korea
Microsoft will support KT in establishing a co-innovation centre aimed at accelerating Microsoft technology-driven AI transformation in the Korean market. It will help businesses build, develop and prototype new AI solutions with Microsoft technology and KT’s AI specialists. Furthermore, KT will invest in fostering new AI startups and developing a partner ecosystem to support nationwide AI transformation.

KT’s AICT Transformation
KT will migrate and modernise 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. This collaboration should enhance KT’s overall IT infrastructure, making it more agile, resilient, and secure, driving innovation and elevating the customer experience through intelligent automation, they say.

Also, KT intends to deploy Microsoft 365 Copilot and GitHub Copilot, for all KT employees and developers to supercharge productivity of the entire business. Microsoft will assist KT in equipping more than 19,000 employees with cloud and AI skills and enabling more than 5,800 AX specialists to lead a successful transformation through KT group-wide skilling and co-engineering support. 

“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 (pictured above, left). “Leveraging this strategic partnership, we aim to rapidly evolve into an AICT company with unparalleled competitiveness in domestic and global markets.”  

“Our strategic partnership brings together KT’s industry expertise with the power of our entire tech stack, from Azure AI to Microsoft 365 Copilot,” said Satya Nadella, Chairman and CEO of Microsoft (pictured above right). “Together, we 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.”