Korean Palantir 'Makinas' Leads Closed AI from Factories to National Defense

Makinas is a leading physical AI company that creates AI designed to operate in the harshest and most unpredictable environments, from factories to battlefields. They develop AI specialized for closed environments, running AI on-device (locally) rather than through a cloud system.

This means operating independently without external network connections, providing an optimized solution for industries and defense sectors that require high security.

Makinas's closed AI solution prioritizes data security and asset protection. AI operates within a closed system without internet connection to prevent sensitive customer data from being leaked externally.

To achieve this, AI is run on-device using GPUs and a proprietary OS program, which provides significantly higher security compared to cloud systems.

Makinas's stock recorded a 'quadruple' immediately after listing but then declined, only to rebound recently as the 3-month lockup period ended. Yesterday, even with the lockup release volume, the stock showed an upward trend.

This stock movement reflects market expectations for the company's narrative and technology, and further upside potential is anticipated with liquidity injection in the second half of the year.

SK Hynix's share buyback, part of its shareholder return policy, has become a hot market topic. Yesterday, 650,000 shares were purchased, and an announcement indicated the same volume would be bought today.

Share buybacks must be executed at lower bids, not higher, and orders are placed before 3 PM. This purchasing method is expected to help establish a market floor.

Rising interest rates signal a lack of buyers for bonds. Despite continuous US debt issuance, there aren't enough entities to absorb it. In this market environment, stablecoins are gaining attention as a new alternative.

Stablecoin issuers purchase US Treasury bonds to match demand, which are perceived as the only assets that can provide both safety and interest rate spread profit. This has led to increased interest in the stock performance of related companies like Circle.

With the growth of the stablecoin market, companies like Circle and Coinbase are emerging as promising investment opportunities. These companies are key players in the digital asset market with high growth potential.

In Korea, Naver is anticipated to merge with Dunamu, raising the possibility of becoming a 'K-Circle.' Naver is also attracting attention as an AI data center related stock.

Despite recent corrections in the Nix and crypto markets, customers are aware of the market situation and are even showing a strong desire to make additional purchases of leading stocks. This reflects a move to seize the correction as an opportunity to secure leading stocks, as seen in past EcoPro cases.

Investors view the current market downturn as a temporary correction and tend to increase their investments in leading stocks they trust.

Makinas started as an in-house SKT venture and has now grown into an independent closed AI company. It has attracted a large-scale investment of 53 billion won from major strategic investors, including foreign semiconductor companies like Applied Materials.

Domestic conglomerates and SI (System Integration) companies like GS, SK, and Hanwha Systems are also strategically involved with Makinas. This background validates Makinas's technology and market potential, raising expectations for a Q4 turnaround to profit.

Makinas receives numerous inquiries from domestic defense organizations like the Agency for Defense Development and has already established a Japanese subsidiary after being courted by Mitsubishi Heavy Industries, proving its technological prowess. It demonstrated unrivaled technological superiority in the Joint Chiefs of Staff AI platform demonstration project, scoring 15 points higher than the second-place company.

These achievements solidify Makinas's position as 'K-Palantir' in the closed AI market, especially in the defense sector.

Makinas's core business model is providing 'Runway,' an operating system (OS) for closed AI environments. Similar to Windows for regular PCs, it solves complex problems that companies face when running AI in closed networks, such as managing GPU resources, processing facility data, and implementing necessary software.

Runway provides AI model operation solutions and supports the entire process of building a closed AI system, including installing programs for manufacturing process optimization.

Makinas currently shows high growth potential, with its order backlog exceeding its revenue. This indicates significant potential for future revenue growth.

Despite being a service-oriented business, it records high-profit margins of 20-30%. The vast 2.5TB (terabyte) of data accumulated over seven years acts as Makinas's strong competitive advantage, securing profitability based on proprietary technology.

Makinas is pursuing an efficient management strategy, aiming for 9x revenue growth by 2030 while only increasing its workforce by 1.5x. This effort aims to minimize fixed cost increases by applying algorithms based on accumulated data.

Furthermore, it plans to gradually reduce the proportion of service contracts and shift to an OS (operating system) provision model to secure even higher profitability.

Makinas is currently reporting a consolidated loss, but the company projects a turnaround to profit in Q4 of this year or next year. Whether the company can achieve profitability and turn a profit in Q4 as communicated will be a key point of observation.

Such a turnaround will be a catalyst for Makinas's sustainable growth and further strengthen its market position.

Makinas is estimated to possess about 70% of Palantir's technological capability in terms of closed AI functions. While Palantir focuses on high-difficulty performance like C-level decision-making, Makinas emphasizes providing a general-purpose closed AI operating system.

This results in customer preferences dividing, for example, Hyundai Heavy Industries preferring Palantir and Korea Shipbuilding & Offshore Engineering favoring Makinas, thus differentiating their strategies.

Makinas has a strategy to provide customized programs that are compatible with the systems of conglomerates like Samsung SDI, even if they develop their own AI. This is a way to maintain and expand competitiveness in the large enterprise market.

Additionally, by continuously attracting strategic investments, it aims to secure a unique technological position and enhance interoperability with internal AI systems of large companies, preparing for future business environments.

On Fridays, there is a tendency for strong selling pressure for cash conversion ahead of the weekend. The current market shows downward support due to foreign buying reversals and shareholder return policies from Samsung Electronics and SK Hynix.

However, interest rate factors limiting the upside must be closely monitored. Therefore, maintaining the current position and watching interest rate trends is considered the safest strategy.