Is AI investment slowing Naver's profits?

The outlook for internet giant Naver’s third-quarter earnings is turning gloomy, with analysts expecting operating profit to decline by double digits, citing spending on artificial intelligence (AI) infrastructure and the slow monetization of AI services. According to market tracker FnGuide, the brokerage consensus estimate for Naver's third-quarter operating profit stood at 500 billion won ($377.5 million), down 12.4 percent from 570.66 billion won a year earlier, as of Wednesday. This contrasts with the projected 12 percent increase in revenue to 3.51 trillion won from 3.14 trillion won over the same period. Among the various factors, rising costs appear to be the biggest contributor to the decline. These include increased marketing expenses for Naver's commerce business, World Cup broadcasting rights costs reflected in the third-quarter results and higher depreciation expenses stemming from investments in graphics processing units (GPUs). Naver categorizes its operating expenses into development, operations, partnership, infrastructure and marketing costs. Of these, infrastructure e