Generative AI has an anglophone twang. English is thought to account for about 97 per cent of data learning by ChatGPT, the ballyhooed chatbot backed by Microsoft. GAI options are currently limited in countries where English is not spoken. Local alternatives are needed.

ChatGPT and Google chatbot Bard have been experimenting with Korean. Users report that Bard is the most fluent. But local tech groups may come out ahead.

Google chose Korean and Japanese to extend Bard’s proficiency because it sees South Korea and Japan as safe environments for research in large language models. Moreover, the mobile sectors of both countries are ahead of western alternatives.

That also means there is abundant local competition. Naver, South Korea’s largest online company, is launching its own chatbots in July. Peer Kakao will follow suit in coming months.

The pair plan to offer artificial intelligence models that are highly customised to suit local preferences. These will contrast with the more universal models developed by Microsoft and Google.

Custom-made models and onshore servers are more likely to pass muster with users and governments afraid of superpower surveillance. Tech businesses based in the US or China may be at a disadvantage here.

Demand for localised GAI will be strong in the Middle East, given the region’s political complexities. Naver struck a deal with Saudi Arabia earlier this year to develop a range of digital services, including AI tools. This should produce years of stable revenue and a stepping stone to partnerships elsewhere.

Naver shares are up 14 per cent this year and trade at 30 times forward earnings. This puts them on a small discount to Microsoft stock. Naver’s market capitalisation of Won31tn ($24bn) is higher than that of LG Electronics, a much more international company.

Naver is well-placed to tap more foreign sales. If it succeeds, the stock should rise accordingly. Compounding growth is good news whatever language you express it in.

The Lex team is interested in hearing more from readers. Please tell us what you think of local GAI in the comments section below.

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