Krafton and Hanwha form joint venture to advance physical AI for defense
Krafton, the Seoul-based game and entertainment company, and Hanwha Aerospace, a leading Korean defense and aerospace contractor, announced a pact to jointly develop and commercialize physical artificial intelligence technology for defense and industrial uses. The two firms signed a memorandum of understanding to establish a joint venture aimed at rapid field deployment.
The collaboration envisions combining Krafton’s AI research and software development capabilities with Hanwha’s industrial and defense manufacturing infrastructure. The partners plan to advance physical AI through co-research, real-world demonstrations, and the creation of operating and technical frameworks, with the goal of validating AI in actual environments and accelerating commercialization.
Under the agreement, the two companies will pursue phased activities, including core technology development for physical AI, demonstration scenarios, and the establishment of a program and governance structures. The eventual joint venture would link research outcomes to on-the-ground deployment and scaled business opportunities.
Krafton will also invest in a fund managed by Hanwha Asset Management, focusing on AI, robotics, and defense. The fund targets up to $1 billion in assets and aims to back high-potential technologies and companies, expanding the physical AI ecosystem and strengthening competitive capabilities. The fund’s strategy is to identify partners across the value chain and connect them to joint development and commercialization opportunities.
In commenting on the plan, Krafton CEO Kim Chang-han said the collaboration would fuse Krafton’s AI and software-operating strengths with Hanwha’s on-site industrial capabilities to speed up real-world technology deployment. He added that a future joint venture could grow into a global defense-tech company on a par with leading players in the field.
Hanwha Aerospace CEO Son Jae-il described AI as rapidly moving from industry-wide applications to defense, emphasizing that the joint effort with Krafton could set new standards for physical AI and future defense technologies.
Krafton has been building its presence in physical AI beyond its gaming roots. The company established Ludo Robotics in the United States last year to pursue robotics research and, in February this year, opened a Korean subsidiary led by Krafton’s Chief AI Officer, I Gang-wook. The current collaboration aligns Krafton’s AI strategy with Hanwha’s manufacturing and defense strengths to create a broader ecosystem for commercialization.
For U.S. readers, the agreement signals growing cross-border collaboration at the intersection of AI, robotics, and defense technology. It highlights how South Korea is leveraging its tech and manufacturing capabilities to accelerate field-ready AI solutions, with potential implications for global supply chains, defense tech partnerships, and investment flows in AI and robotics. The involvement of a major U.S.-connected robotics effort via Ludo Robotics also points to potential future links with American partners and markets as these technologies mature.