The South Korean multinational corporation has made a significant investment in advanced technologies as part of its commitment to delivering long-term value for its shareholders and consumers.
For the past five years, LG has quietly, but with great purpose, been laying the foundation for its future growth strategy, placing big bets on three key industries at the heart of the future global economy: AI, bio and cleantech.
The bold approach is led by the conglomerate’s Chairman and CEO of LG Corporation, Koo Kwang-mo, who took the helm in June 2018 and immediately sparked a transformative shift by calling on the company to build its future business portfolio with a proactive look to the future. Urging the company’s leaders to continue thinking long term, he pointed out that previous bases for the company’s industry-leading success in electronics, batteries and OLED displays were built on a solid foundation of innovation and planning.
“Throughout our journey, LG has always been a pioneer, thinking decades ahead,” Koo says. “The investments we’re making in AI, bio, and cleantech are the building blocks of our future success, provided we stay dedicated to innovation and challenges.”
The Path To AI, Bio And Cleantech
Koo’s moves serve as a testament to LG’s focus on enhancing shareholder value in the long term. He has led investment in three business lines with strong growth potential that also undergird LG’s commitment to delivering strong value to consumers and long-term environmental sustainability.
All three areas call for strategic, long-term patience. The drive toward becoming a key player in AI is a nod to the forthcoming industrial transformations, as technology continues to redefine business paradigms in nearly every sector. In bio, LG seeks to deliver a brighter future for humanity, with investments aimed at developing treatments and cures for a range of diseases and conditions, including cancer, obesity and diabetes.
The company’s cleantech investments go beyond corporate responsibility, as LG looks to develop and leverage technologies designed to help companies and organizations achieve key sustainability goals, such as decarbonization and building a circular economy.
Laying The Groundwork For Future Growth With AI
LG has earmarked a substantial R&D investment of nearly US$3 billion in AI over the next five years. The LG AI Research, opened in 2020, is an AI hub for bringing the company’s vision to life. In July, scientists and engineers at the LG AI Research initiated EXAONE 2.0, a large-scale multimodal AI designed to work jointly with human intelligence in learning from some 45 million professional documents, including patents and papers, and 350 million pieces of image-text data. This will help LG to create new customer value by using AI to solve key challenges in various industries.
EXAONE 2.0’s three platforms—Universe, Atelier and Discovery—contribute significantly to research. Discovery, for example, incorporates molecular structures, formulas, charts, tables and images, aiming to reduce development time for various innovations, from new materials to new medications. This will significantly reduce trial and error during R&D.
LG has also formed strategic research alliances with top-tier institutions, such as the University of Michigan, Seoul National University and the University of Toronto, all with the aim of accelerating investments in large-scale AI and discovering blue ocean technologies. It is also partnering with leading players in IT, finance, manufacturing, telecommunications and healthcare. A recent tie-up with Qraft Technologies, a fintech startup, will release an innovative AI-based ETF on the New York Stock Exchange.
Blazing A Trail Toward A Transformative Bio Business
Following Koo’s appointment in 2018, the company moved quickly to strengthen its R&D capacity for new drug development, and the hard work is already paying off with an expanding pipeline of treatments in a variety of important areas such as cancer and diabetes. From a modest 10 candidates in 2018 to over 40 today, with half targeting cancer, LG’s researchers are already finding success.
The acquisition of AVEO Pharmaceuticals, a prominent player in the U.S. anti-cancer field, further highlights LG’s determination to be at the forefront of pharmaceutical innovation.
LG aims to achieve top-tier status in the global pharmaceutical industry by 2030. Cancer treatments are a crucial component of this strategy, and the company has established a task force with specialized researchers to spearhead the development of cell therapies.
Pioneering Cleantech Initiatives For A Sustainable Tomorrow
LG’s vision in cleantech encompasses three strategic pillars: developing eco-friendly plastics with biomaterials, harnessing recycling technologies for waste plastics and batteries, and bolstering carbon reduction technologies using renewable energy sources like solar and hydrogen. LG Energy Solution, a prominent player in the global EV battery market, is capitalizing on the surging global demand for electric vehicles.
LG Energy Solution currently operates a plant in Michigan and recently announced another standalone facility in Arizona. The company is also running a joint operation with GM in Ohio, and is building new plants with GM in Tennessee and Michigan. Additionally, LG Energy Solution has joint ventures with Honda in Ohio, Hyundai Motor Group in Georgia, and Stellantis in Ontario, Canada, and is rapidly strengthening its global supply chain for critical raw materials.
It has demonstrated its commitment to sustainability by working on investments in recycling and reusing waste batteries, including an innovative battery-as-a-service (BaaS) business to help customers manage their batteries efficiently.
The circular economy is another key part of the picture, as LG ventures into chemical recycling to boost sustainability. LG Chem will build South Korea’s first plant for pyrolysis oil, a renewable fuel extracted from used plastics, with an annual capacity of 20,000 tons by the first quarter of 2024. It also announced a US$2.3 billion investment in sustainability businesses centered on eco-friendly materials by 2050 to build the renewable energy industry into a future growth pillar.
The next chapter in the company’s history is currently unfolding, with AI, bio and cleantech taking center stage as the new stars. The story looks set to play out over the next two decades, and it promises to be a fascinating journey to witness.
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