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By Kim Hyun-bin
LG Group Chairman Koo Kwang-mo has decided that artificial intelligence (AI) technology will be the next growth engine for his conglomerate. Koo, who will be entering his fourth year as LG Group head, plans to invest heavily into research and development of AI, or possibly seek acquisitions in the sector.
The move comes after his uncle Koo Bon-joon determined he would split off several LG Group affiliates including LG International and Hausys next year, while Koo Kwang-mo plans to change the group's corporate structure to suit his vision.
After the split-off, LG will focus on its main businesses including LG Electronics, LG Chem and the group's telecommunications units to maintain its current profitability structure, but Koo is also seeking to establish an AI business to fuel future growth.
Koo has been interested in AI ever since he took the helm of the group and has been busy recruiting talented individuals in the sector and investing in R&D. Many industry watchers believe it is only a matter of time until LG decides to conduct large-scale acquisitions to strengthen its AI infrastructure.
LG Group launched its AI think tank, LG AI Research, Monday, which is responsible for securing the latest original technologies and resolving problems surrounding the AI sector.
Some 200 billion won will be invested into the newly established unit by 16 LG Group affiliates including LG Electronics, LG Display, LG Chem and LG Uplus.
Industry watchers believe the new research center reinforces Koo's vision for the future. In a congratulatory message, Koo emphasized the need to use diverse means to enter the AI sector and vowed to provide abundant opportunities to tackle challenges through the research center.
"What LG seeks to achieve from AI is more than technology. Most importantly it must help enhance our customers' lifestyles," Koo said. "With the best talent and partners we plan to fully challenge the problems at hand and to develop into a company at the center of the global AI stage."
Koo started to invest in innovative AI companies through the group's venture investment affiliate LG Technology Ventures and LG Electronics' venture investment fund. LG Technology Ventures invested, along with five key group affiliates ― LG Electronics, LG Display, LG Chem, LG Uplus and LG CNS ― into the robotics, mobility and AI sectors.
LG has established R&D hubs around the world, building LG Science Parks in Seoul, Silicon Valley in the U.S. and in Tokyo, Japan, showing Koo's determination to seize new business opportunities when they present themselves, putting an emphasis on securing global experts in the field.
Through the establishment of LG AI Research, LG will focus on future growth engines and engage in big deals. Koo has not made any large-scale acquisitions since he took over LG Group in 2018, and many believe his first big deal will be in the AI sector. Currently, LG Group is contemplating a range of acquisitions with its holding company, and analysts are focused on whether any deals could be sealed next year.
