South Korean mobile carrier KT Corp. said Thursday it will team up with US tech giant Microsoft to develop a new artificial intelligence model tailored to the Korean language and culture within the first half of next year.

KT CEO Kim Young-shub presented its vision at the event and announced the goal of jointly developing a Korea-specific AI and cloud model aligned with Microsoft’s objectives.

“Microsoft is well aware of Korea's significance in the global information and communication industry. … KT’s domestic status and aspects like evaluation, experience, competency and potential were likely taken into consideration,” Kim said in a press conference in Seoul.

Under the five-year partnership agreement, the two firms plan to develop the AI model using GPT-4o and introduce a specialized model for industries such as the public sector and financial services based on the small language model known as Phi 3.5.

The aim is to optimize data, laws, regulations, culture and language for domestic circumstances while applying trustworthy AI principles and processes throughout the research and development process to expand the base for AI adoption in Korea.

To achieve this, KT has secured data in various fields such as education, history and culture and has already begun the learning process. Additionally, KT plans to integrate Microsoft’s conversational AI Copilot into its services.

Both companies are also working on jointly developing cloud services for the public and financial sectors that take Korean regulations and security into account, aiming for commercialization in the first quarter of next year.

KT further plans to launch a new company specializing in AI transformation in the first quarter of next year to offer customized services to corporate clients and expand into the global market.

Through this, KT aims to evolve into a total cloud operator that functions as both a cloud service provider and a managed service provider.

KT and Microsoft also plan to jointly create an AI transformation strategic fund to expand the relevant ecosystem here.

The telecom carrier chief believes that its cooperation with the US tech giant will strengthen its competitiveness as a comprehensive AI and IT firm and further help Korea make the leap to become a global hub for AI and cloud technology.

"Our partnership with Microsoft is not just a technical collaboration, but a significant opportunity to expand the AI base in Korea and advance breakthrough innovations in all industries and daily life," Kim said.

KT will also provide $450 million worth of network and data center infrastructure to Microsoft over the next 15 years as part of their partnership for AI, a regulatory filing showed the same day.