SM Entertainment
As SM Entertainment moves beyond its 30th anniversary, the K-pop powerhouse is charting an ambitious new path forward. Co-CEOs Daniel Jang and Dmitry YJ Tak, alongside Chief A&R Officer Chris Lee, have introduced “SM NEXT 3.0,” a growth strategy centered on artificial intelligence, increased mergers and acquisitions, and a more global, artist-driven creative structure. The plan signals a major evolution for the company behind global acts like NCT 127, EXO, RIIZE, and aespa.
AI and M&A Drive the Next Phase of Growth
At the heart of SM NEXT 3.0 is a push to integrate AI across creative and business operations. SM plans to use AI to analyze tens of thousands of songs from its 30-year catalog to better match tracks with artists and personalize music discovery for fans. Jang said the company sees “strong potential for meaningful synergy at the intersection of a rapidly evolving K-pop landscape and AI,” especially given its access to the technological capabilities of majority shareholder Kakao Entertainment.
Alongside AI, SM is also ramping up acquisition efforts. Jang confirmed the company will pursue M&A opportunities within music and related industries more actively than in recent years, increasing capital investment to accelerate expansion and diversify its business portfolio.
Building a Global Publishing and IP Powerhouse
Publishing and intellectual property are another major pillar of the strategy. Through its subsidiary Kreation Music Rights (KMR), SM aims to build Asia’s largest and most respected publishing company within the next five years. KMR has already expanded from Korea and Europe into the United States in 2025, managing a catalog of more than 7,000 songs and working with over 370 composers worldwide.
Chris Lee described the long-term goal as growing beyond traditional publishing into a broader IP hub, strengthening SM’s ability to monetize and develop creative assets across music, media, and emerging digital platforms.
Local Partnerships and Artist-Centered Creativity
Globally, SM is strengthening its presence through localized partnerships while preserving its creative identity. The company is working with Tencent Music Entertainment in China and True in Thailand, and is currently in discussions with partners in Japan. Tak emphasized that the focus is on creating locally resonant IP while maintaining SM’s signature sound and production values.
Internally, SM is rolling out an enhanced “Multi-Creative” structure that places artists at the center of production, allowing flexible, project-specific creative teams instead of rigid hierarchies. Beyond music, SM is also expanding fan engagement through concerts, lifestyle merchandise, and digital platforms like Bubble, operated by subsidiary DearU.
SM’s strategy appears to be paying off financially, with the company reporting a 261.6% year-over-year increase in operating profit in Q3 2025, driven by hit releases, concert growth, and fan platform revenue. With SM NEXT 3.0, the company is positioning itself as a technology-integrated, globally focused entertainment powerhouse, signaling that the future of K-pop will be shaped by AI, localized IP, and deeper investment in artist-centered creative ecosystems.
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