Korean Conglomerate LG To Invest $74 Billion In AI, Biotech, Cleantech And Other Growth Areas

LG Corp., one of South Korea’s largest conglomerates, announced Wednesday it plans to invest 100 trillion won ($74 billion) in the country over the next five years to diversify its business portfolio.

At the company’s annual shareholder meeting in Seoul, LG said it will allocate half of the domestic investment in future technologies, including artificial intelligence, biotech and cleantech, as well as in other growth areas such as batteries, automobile parts and next-generation displays.

LG didn’t specify how it will assign the remaining half of the investment. The conglomerate also didn’t provide a breakdown of the investment by affiliate companies, which include consumer electronics manufacturer LG Electronics, petrochemicals supplier LG Chem and electric vehicle battery maker LG Energy Solution.

The capital injection in high-growth technologies accounts for 65% LG’s global investment, the company said. It is part of LG’s efforts to expand its business portfolio, which makes most of its money from its flagship petrochemicals affiliate, followed by its household goods and electronics units.

Among LG’s diversification strategies is to pour resources into AI development. The conglomerate established an AI research unit, called LG AI Research, in 2020. Since then, it has launched a series of products, including an AI chatbot for chemical and pharmaceutical professionals, an AI-powered new materials and drug discovery platform, as well as a text-to-image generation tool.

In recent years, LG, controlled by billionaire Koo Kwang-mo, has also ventured into the biotech and sustainable technology space. LG Chem acquired Nasdaq-listed AVEO Pharmaceuticals for roughly $571 million in 2023 to expand into the development of new medicines for diseases including cancer. And in 2020, LG Energy Solution was spun off from LG Chem to focus on making batteries for electric vehicles. Two years later, LG Energy Solution debuted on the Korea Exchange in the country’s largest initial public offering that raised $10.7 billion.

LG’s business diversification efforts are led by Koo, who took over the reins as the conglomerate’s chairman in 2018 after the death of his adoptive father, Koo Bon-Moo.