Naver founder Lee Hae-jin, left, and CEO Choi Soo-yeon, right, pose with Nvidia CEO Jensen Huang at Nvidia's headquarters in Santa Clara, Calif. in this June 25, 2024, photo. Captured from Naver's official Instagram

Naver founder Lee Hae-jin is set to return as chairman of the company's board of directors next month to lead its artificial intelligence (AI) initiatives, as AI emerges as a key battleground for major tech firms globally, the company said Friday.

This marks the first time in seven years that Lee has made a surprising comeback to top management of the internet portal operator. Lee left the position in 2017 to take on a new role as the firm's global investment officer and supervise its overall overseas business.

Naver CEO Choi Soo-yeon, whose term ends in March, will also extend her presidency for another three years. Both agendas will be put up for vote at the firm's upcoming regular shareholders' meeting on March 26.

Lee's return raises hope for Naver to build its own AI identity and find the next revenue streams as more and more companies adopt advanced AI tools for business efficiency. He founded Naver in 1999 and is considered one of the most influential internet gurus in Korea.

"The year 2025 is crucial for us, as our on-device AI strategy will be in full swing in our overall services," Choi told investors during its earnings conference call.

The on-device AI refers to the idea that smart devices are capable of carrying out AI tasks without a server or cloud.

"We will keep working on making our AI tech platforms more sophisticated and create new values and business opportunities, thereby sharpening Naver's own competitive edges there," she said.

On the same day, Naver surprised the market by chalking up record sales of 10.73 trillion won ($7.41 billion) in 2024, up 11 percent from the previous year. Its operating profit also soared to 1.97 trillion won, up 32.9 percent during the same period.

The solid earnings performance was driven by its search platform and e-commerce business, both of which are considered cash cows for the internet giant.

The firm's search platform business generated 3.94 trillion won last year, up 9.9 percent from a year earlier. Naver also achieved 13.2 trillion won in transaction volume for its commerce business only in the fourth quarter.

The Naver chief spoke highly of the rapid rise of China's DeepSeek, which launched a large language model (LLM) AI service, as it displayed how late movers can still pose a threat to market leaders. She also left open the possibility of forging partnerships with overseas LLMs.

"We are open to dialogues for potential partnerships with a number of LLMs from overseas big tech firms," Choi said.

Naver operates its own LLM, HyperCLOVA X, and is on track to creating a more sophisticated version of the platform. The company said it plans to introduce what it calls the "AI briefing" service sometime in the first half of 2025. The AI-powered service will help deliver prompt responses to users' questions.

To strengthen Naver's network with overseas partners, Choi will embark on a business trip to Paris next week to participate in the AI Action Summit for two days, starting Monday.

A group of influential AI entrepreneurs across the globe — such as OpenAI CEO Sam Altman — will attend the event. Science and ICT Minister Yoo Sang-im also plans to fly to Paris as the Korean government's representative.