The role of investor relations extends beyond communicating a company’s financial and operating performance. It also involves articulating the new opportunities the company is positioned to capture amid shifts across industries and clearly explaining how it plans to translate those opportunities into tangible business results. Through this work, IR helps enhance enterprise value.
As the head of the Investor Relations (IR) Division at LG Electronics, I have met with global investors and analysts and observed a clear shift in how they view LG Electronics. Early in our business transformation, discussions focused largely on demand and profitability in traditional businesses such as home appliances. More recently, as attention to physical AI has increased, interest has turned toward our growth areas: AI Data Center (AIDC) cooling, smart factories, robotics and vehicle solutions.
Morgan Stanley’s recently published report, LG Trio: Next Growth Chapter, reflects this evolving market perspective. Rather than assessing LG affiliates by individual industries – home appliances, displays and optical components – the report frames LG in the context of physical AI and AI’s expansion into the physical world.
Building Physical AI on Decades of Experience
At LG, we see physical AI as a natural extension of the capabilities we have built over decades and a significant opportunity to turn those capabilities into new drivers of growth.
In the physical AI era, AI model performance is only part of the equation. Success will also depend on the ability to deploy and operate AI reliably across diverse environments. From this perspective, LG Electronics’ 70 years of business experience spanning homes, commercial environments and industrial sites, combined with the real-world data accumulated across these spaces, provide a powerful foundation for turning physical AI into practical, scalable solutions.
Across these businesses, we are already extending our capabilities into new applications. Our manufacturing expertise supports smart factory and robotics solutions, while more than 60 years of compressor and motor technology informs robotic actuators, and our heating, ventilation and air conditioning (HVAC) thermal management capabilities contribute to AIDC cooling.
Building on these capabilities, Morgan Stanley sees LG Electronics as playing the role of a “Physical AI Orchestrator” within the broader One LG ecosystem. In this role, we bring together LG Innotek’s sensing technologies, LG Display’s visual experience expertise, LG Energy Solution’s battery technologies, LG CNS’s systems integration capabilities and LG AI Research’s foundational AI technologies to create AI business synergies across the LG Group.
The Next Phase of Our Physical AI Strategy
However, strong technology and large addressable markets alone are insufficient. What capital markets ultimately assess is a company’s ability to commercialize those strengths and generate sustainable earnings. Our physical AI roadmap spans both current business opportunities and the capabilities required for future applications.
In the home, we are strengthening our AI Home business leadership through AI-enabled appliances and subscription and care services. In industrial settings, we are expanding the smart factory solutions order pipeline by combining AI and robotics. We are also applying our HVAC expertise to grow our AIDC cooling business and expect to begin full-scale actuator production within the year for use in humanoid robots.
The LG Data Factory, currently under construction, is being built to support the next phases of this strategy. It will serve as a hub for our physical AI data flywheel, training and refining our Robot Foundation Model (RFM) with real-world data and validating it in robot applications. This cycle of data, model and robot-performance improvement is intended to expand our robot business from industrial and commercial solutions into residential applications.
Turning Transformation Into Value
We have always looked to evolve our portfolio with changing market conditions. Alongside our core home appliance competitiveness, we have expanded our B2B presence through vehicle solutions and HVAC, while developing non-hardware businesses including subscriptions and webOS. B2B accounted for 36 percent of our revenue mix as of Q2 2026, and we aim to increase this share to approximately 45 percent by 2030.
As AI reshapes industries, physical AI represents the next phase of our portfolio evolution. At LG, we are ready to meet the challenge by building on our established capabilities and investing in emerging business areas that can support long-term growth.
Morgan Stanley’s report is significant because it illustrates the market’s view of our transformation and growth potential. Going forward, we will continue to use our IR activities to show how our business innovation and tangible results strengthen LG’s long-term investment case.
By Park Won-jae, head of IR Division at LG Electronics
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