Hybe is liquidating artificial intelligence audio company Supertone after concluding that keeping the business operational would be difficult.
Supertone approved its dissolution at an extraordinary general meeting on July 15. A liquidator has since been appointed and formal closure proceedings have begun. Hybe is seeking buyers for selected services, including the voice-modulation and noise-removal products Shift, Clear and Air. Other parts of the company are expected to be phased out.
The decision closes a short but expensive chapter in Hybe’s effort to expand beyond music production and artist management.
Hybe invested 49 billion won in Supertone
Hybe’s relationship with Supertone began in 2021, when it invested 4 billion won, approximately $2.7 million, for an 18.2 per cent stake.
By January 2023, Hybe had invested another 45 billion won, bringing its total commitment to 49 billion won, approximately $33.4 million. The additional investment gave Hybe a 56.56 per cent holding and turned Supertone into a subsidiary.
Founded in 2020, Supertone developed technology capable of producing and transforming voices by combining different elements of human speech. Its products included Supertone Shift, a voice-conversion tool, and Supertone Air, a spatial-audio service.
The technology found uses across entertainment. Supertone launched the virtual girl group Syndiate in 2024, supported concert video production for Tomorrow X Together, and supplied voice-conversion technology for Netflix’s Mask Girl and Disney+’s Casino.
Those projects demonstrated the company’s technical reach. They did not, however, produce the financial turnaround Hybe needed.
Revenue remained limited as losses widened
Supertone’s annual revenue stayed at roughly 2 billion won, while its operating losses increased for three consecutive years.
The company recorded an operating loss of 8.9 billion won in 2023. That figure rose to 12.2 billion won in 2024 and 15.4 billion won, approximately $10.5 million, in 2025. Combined operating losses for the three-year period reached 36.5 billion won, approximately $24.9 million.
Business generated within the wider Hybe group also declined. Revenue from internal transactions with Hybe fell from 200 million won in 2023 to 61 million won in 2024.
Hybe continued providing operating funds through three capital increases, with the final round completed by March 2025. Discussions about liquidating the company began in earnest in December that year.
Hybe described the closure as part of a broader review of its artificial intelligence operations.
“This was determined as part of an AI business strategy realignment,” the company said. “We reviewed various options regarding the possibility of maintaining the corporate entity, but concluded that continued operations would be difficult and decided on liquidation.”
Supertone closure adds to scrutiny of Hybe’s dealmaking
The liquidation comes at a time when Hybe is already facing questions over the returns generated by several major acquisitions and investments.
In August 2024, Hybe acquired 34.7 billion won, equal to $23.7 million, worth of a 51 per cent interest in American PR firm The Agency Group PR. Hybe sold the business after one year. The selling price remains undisclosed, but the consolidation financial statements reported a loss of 809 million won from disposal of subsidiary share investments in the period.
A much larger commitment came in 2021, when Hybe acquired Ithaca Holdings through Hybe America for approximately 1.5 trillion won, or about $1 billion. The business was associated with artists including Justin Bieber and Ariana Grande.
Hybe America later reported revenue of 312.9 billion won, up 30 per cent, but its net loss rose from 140 billion won to 323.1 billion won. Impairment losses linked to Hybe America reached 279.6 billion won, accounting for most of the 333.2 billion won in investment-equity impairment losses recorded by Hybe for the year.
Hybe also spent 555 billion won in 2023 to acquire a stake in SM Entertainment. It did not secure management control after competing with Kakao, and the investment’s overall return was estimated at below 1 per cent at the time.
Financial pressure is becoming harder to ignore
Hybe’s consolidated revenue reached 2.6499 trillion won, approximately $1.8 billion, but operating profit declined by about 140 billion won to 49.3 billion won. The company recorded a net loss of 254.4 billion won.
Against that backdrop, Supertone’s closure appears less like a rejection of AI audio technology and more like a decision to stop funding a business that had not developed a sustainable commercial base.
The company built products, worked with recognised entertainment platforms and demonstrated that its technology could be applied to music, video and virtual performers. What it did not achieve was enough recurring revenue to offset rapidly increasing operating costs.
For Hybe, the immediate task will be completing the liquidation, finding possible buyers for Supertone’s transferable services and deciding whether any of its underlying technology still has a place elsewhere in the group.
The larger question is whether the company will now adopt a more cautious approach to acquisitions after several high-value deals produced weaker returns than expected.
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