Is AI paying off? Korea's top conglomerates face moment of truth.

The key challenge for major conglomerates next year will be turning their AI investments into tangible business results, with profitability and investment efficiency emerging as top priorities.

LG Group began its annual business reviews on Monday, led by Chairman Koo Kwang-mo, according to industry sources on Wednesday. The reviews will run for about a month, starting with electronics affiliates including LG Electronics, LG Display and LG Innotek and move on to chemical, telecommunications and service affiliates. Each company will review its performance this year and business plans for next year.

Samsung, SK and Hyundai Motor Group are also stepping up preparations for their 2027 business strategies.

SK Group plans to discuss the competitiveness of its major businesses and future growth strategies at a CEO seminar next month. Samsung Electronics is expected to draw up detailed plans for each business division at its global strategy meeting in December, following its annual executive reshuffle.

The central question for the groups is whether their AI investments are paying off.

As spending increases on semiconductor manufacturing facilities, data centers, robotics and software, companies must determine when and how they can recoup their investments. Beyond revenue growth, improvements in productivity and cost reductions will also serve as measures of success.

Even successful technological breakthroughs may not be enough to offset rising costs unless companies can attract customers and turn their innovations into commercially viable products and services.

Each group faces different challenges.

Samsung Electronics must strengthen its competitiveness in AI semiconductors, including high-bandwidth memory. It also needs to ensure that AI features integrated into its smartphones and home appliances translate into higher sales and service revenue.

SK Group faces the challenge of expanding its infrastructure businesses, including data centers, by building on SK hynix's strength in AI memory chips while maintaining investment efficiency.

For Hyundai Motor Group, the key will be commercializing its robotics, autonomous driving and physical AI technologies. The company must turn these technologies into products and services that customers are willing to pay for.

LG Group is seeking growth opportunities in AI-driven manufacturing innovation and data center cooling systems. Its ability to turn partnerships with global tech giants into new customers and contracts will also be put to the test.

The results of these assessments are also likely to influence executive appointments and organizational restructuring. Hanwha and HD Hyundai announced executive appointments earlier than usual in early October, but other major conglomerates are preparing for their year-end reshuffles.

Attention is expected to focus not only on key talent in AI and semiconductors but also on executives capable of leading new businesses. Divisions with weak profitability or uncertain commercialization prospects could face pressure to undergo restructuring.

But some caution that emerging businesses requiring long-term investment cannot be judged solely on immediate profits. Companies must also assess whether they are meeting milestones in technological development, customer testing and mass production.

This makes prioritizing investments particularly important in next year's business plans. Companies are expected to focus on strengthening profitable businesses while adjusting how much and how quickly they invest in emerging areas based on progress and potential returns.

"In the past, what mattered was how much AI technology companies had secured and how much they had invested, but going forward, their competitiveness will depend on how much profit they can generate from those investments," said Lee Seong-soo, a professor at Soongsil University's School of Electronic Engineering.

"Now that investing simply because something involves AI is becoming harder to justify, companies that can demonstrate actual commercialization and profitability, rather than merely acquiring technology, will gain a competitive edge," Lee said.

BY PARK YOUNG-WOO [[email protected]]