Samsung SDS, the IT service arm of Samsung Group, disclosed a significant decline in its first-quarter net profit, plunging nearly 60% compared to the previous year, primarily attributed to a one-time factor. The net profit for the January-March period stood at 91.8 billion won (US$62.1 million), marking a substantial decrease from 217.7 billion won a year earlier. Operating profit also experienced a sharp decline of 70.8% year-on-year, amounting to 78.3 billion won, while sales saw a 3.9% decrease, totaling 3.35 trillion won.
The operating profit reported by Samsung SDS fell short of expectations, standing 55.4% below the average estimate based on a survey conducted by Yonhap Infomax, the financial data firm of Yonhap News Agency. The company cited a provision of over 100 billion won for retirement benefits, following a revision in the severance pay calculation method, as the primary reason for the lower-than-anticipated profit.
In a strategic move, Samsung SDS revealed its intention to invest a substantial amount of 10 trillion won in artificial intelligence (AI) infrastructure, as well as mergers and acquisitions (M&As) by the year 2031. Additionally, the company recently entered into a strategic partnership with global investment firm KKR & Co. Meanwhile, Samsung SDS announced a collaboration with Google Cloud to enhance cooperation in AI, cloud computing, and security domains.
The partnership between Samsung SDS and Google Cloud, formalized during Google Cloud Next 2026 in Las Vegas, aims to expand joint efforts in generative AI and cloud computing. Both companies plan to explore new business prospects in sectors with stringent security and regulatory requirements, such as the public and financial industries. Samsung SDS intends to reinforce this collaboration by utilizing Google Distributed Cloud (GDC) to penetrate high-security and heavily regulated markets, offering enterprise customers integrated access to Google’s Gemini Enterprise and agentic AI solutions through its cloud platform, Samsung Cloud Platform.
