South Korean Tech Giants Accelerate Middle East Expansion: Naver Leads the Charge

In recent years, the Middle East has emerged as a focal point for global technology expansion, and South Korean tech giants are seizing the opportunity to establish a significant presence in this dynamic region. With a particular emphasis on artificial intelligence (AI), cloud computing, and cybersecurity, these companies are not only looking to tap into new markets but also to collaborate on groundbreaking initiatives that align with the Middle East’s ambitious economic diversification goals.

Naver’s Strategic Move: Establishing NAVER Arabia

Leading the charge is Naver, South Korea’s foremost IT platform company. On September 23, Naver announced its plans to establish "NAVER Arabia," its Middle East headquarters in Saudi Arabia, by the end of 2023. This strategic move is designed to facilitate collaboration with the Saudi government on major national technology projects, including the development of digital twin platforms—an innovative technology that creates virtual replicas of physical systems.

Naver’s expansion into the Middle East is not merely about establishing a physical presence; it represents a broader ambition to enhance its B2B operations globally, particularly in the realms of digital twin technology and sovereign AI development. By leveraging the region’s growing demand for advanced technology solutions, Naver aims to position itself as a key player in the Middle Eastern tech landscape.

Collaborative Ventures and Partnerships

Naver’s commitment to the region was further solidified through a memorandum of understanding (MOU) signed with the Saudi Data and Artificial Intelligence Authority (SDAIA) during the Global AI Summit in Riyadh. This partnership focuses on cooperation in AI, cloud computing, data centers, and robotics, with a notable goal of developing a Large Language Model (LLM) tailored to the Arabic language. Such initiatives underscore the importance of localizing technology to meet the specific needs of the region.

The momentum is not limited to Naver alone; mid-sized companies and startups from South Korea are also making their mark in the Middle East. For instance, on October 13, representatives from the Korea Software Industry Association (KOSA), including leaders from Megazone Cloud, Upstage, and Wrtn Technologies, visited Saudi Aramco’s headquarters in Dhahran. During this visit, Megazone Cloud signed an MOU with Aramco to collaborate on AI cloud research and operations, further exemplifying the growing ties between South Korean tech firms and Saudi Arabia’s energy sector.

Recognition of Korean AI Competitiveness

The partnerships formed between South Korean companies and Saudi entities reflect a growing recognition of Korea’s technological capabilities, particularly in AI. Saudi Aramco has also engaged with Korean AI semiconductor startups like Rebellions and FuriosaAI, signaling a positive assessment of Korean technology. According to Tortoise Media’s "2024 Global AI Index," South Korea ranks sixth globally in AI competitiveness, trailing only behind tech powerhouses such as the United States and China.

Industry insiders note that Saudi Arabia views Korean services and products as more cost-effective alternatives to offerings from larger U.S. tech firms. This perception is likely to drive further collaboration and investment in the region, as both parties seek to capitalize on their respective strengths.

Expanding Cybersecurity Initiatives

As the Middle East seeks to diversify its economy away from oil dependency, investments in digital transformation have become a priority. This shift has created a fertile ground for cybersecurity initiatives, with South Korean firms actively participating in this burgeoning market. AhnLab recently established Rakeen, a joint venture with Saudi cybersecurity and cloud provider SITE, while Genians opened a new office in Dubai, aiming to expand its footprint through IT security exhibitions and roadshows across the region.

The Middle East cybersecurity market is projected to grow at an annual rate of 9.6%, reaching an estimated $23.4 billion by 2028, according to MarketsandMarkets. This growth presents significant opportunities for South Korean cybersecurity firms to contribute to the region’s digital security landscape.

Conclusion: A New Era of Collaboration

The expansion of South Korean tech giants into the Middle East marks the beginning of a new era of collaboration and innovation. With Naver leading the way and a host of other companies following suit, the region is poised to benefit from advanced technologies that align with its economic diversification goals. As these partnerships flourish, they not only enhance the technological landscape of the Middle East but also strengthen the ties between South Korea and its Middle Eastern partners, paving the way for a prosperous future in the global tech arena.