KT Strengthens AI and Cloud Strategy with Microsoft Partnership and European Insights

KT fundamentally shifted its AI business strategy by partnering with Microsoft (MS) in June, a move that has set the stage for significant developments in the company’s digital transformation efforts. On July 28, Kim Young-seop, CEO of KT, boarded a flight to Europe, embarking on a business trip aimed at examining cases of sovereign cloud implementation in advanced countries and concretizing AI business strategies.

According to KT’s announcement on July 31, Kim’s trip will last about a week and marks his first global business trip in two months since signing the AI business agreement with MS. During his visit, Kim plans to explore sites in Italy and the Netherlands where Microsoft’s sovereign cloud solutions have been successfully implemented. This initiative is part of KT’s broader strategy to adapt MS’s sovereign cloud technology to the Korean digital market.

KT’s partnership with MS represents a fundamental change in its AI business strategy. The company is prioritizing the development of sovereign AI and cloud services using its own infrastructure and data. Sovereign AI refers to an independent AI that safeguards digital sovereignty, free from reliance on big tech companies. MS has established sovereign clouds in key countries such as Italy, the Netherlands, Belgium, and Sweden, equipped with data protection measures compliant with the General Data Protection Regulation (GDPR).

KT plans to unveil a Korean version of the sovereign cloud in September, a move that underscores its commitment to enhancing digital sovereignty and security. However, some in the telecommunications industry caution against relying on foreign systems, citing recent disruptions caused by MS. There are also suggestions that KT should upgrade its large language model (LLM) ‘Faith,’ developed with significant investment, to gain a competitive edge in the global AI market.

Young-seop Kim’s business trip to Europe is a critical step in KT’s efforts to concretize its AI business strategies and examine successful implementations of sovereign cloud solutions. By visiting sites in Italy and the Netherlands, Kim aims to gather insights and devise ways to adapt MS’s sovereign cloud technology to meet the specific needs of the Korean market.

KT Corporation, formerly known as Korea Telecom, is a prominent South Korean telecommunications company providing a wide range of services, including mobile, internet, and cloud solutions. The company’s role in South Korea’s digital infrastructure is crucial, and its focus on AI and digital transformation reflects the broader industry trend towards integrating digital technology into all areas of business.

The concept of a sovereign cloud is particularly significant in this context. A sovereign cloud is a cloud computing environment subject to the laws and regulations of a specific country, ensuring data sovereignty and compliance with local data protection laws. The GDPR, a regulation in EU law on data protection and privacy, is a key factor in the implementation of sovereign clouds in Europe, and KT’s efforts to develop a Korean version of the sovereign cloud align with these principles.

Microsoft’s position in the global cloud services market, including its development and implementation of sovereign cloud solutions in various countries, provides context for KT’s partnership with MS. This collaboration is expected to enhance KT’s digital transformation efforts and strengthen its position in the competitive telecommunications industry.

Understanding the broader concerns around digital sovereignty, which involves a nation’s control over its digital infrastructure and data, free from foreign influence or control, is essential. This context explains why KT is focusing on developing sovereign AI and cloud services. Additionally, the specific security needs of public and financial sector clients, who are often the primary users of sovereign cloud solutions, highlight the importance of KT’s focus on enhancing security services for these sectors.

As KT prepares to unveil its Korean version of the sovereign cloud in September, the insights gained from Kim’s business trip to Europe will be instrumental in shaping the company’s AI business strategies. The telecommunications industry will be closely watching KT’s next steps, as the company navigates the challenges and opportunities of digital transformation and AI innovation.