Hanwha Aerospace and Krafton to develop AI for physical systems, seek JV
Hanwha Aerospace and Krafton have signed a memorandum of understanding to jointly develop AI technology for physical systems and to explore establishing a joint venture. The agreement covers core research and development of physical AI, feasibility testing, and building technical and operational structures, with the goal of eventually commercializing the成果 and creating a long-term cooperation framework.
The collaboration aims to merge Hanwha Aerospace’s defense manufacturing and unmanned-system capabilities with Krafton’s AI research and software development strengths. The parties plan to advance physical AI that can operate in real-world environments, using staged demonstrations to verify practicality and scalability.
Krafton’s experience in data management and virtual-environment simulations from the gaming industry is expected to play a key role in training and validating the AI models, helping to bridge laboratory work and field deployment.
In the long term, the partners intend to broaden their collaboration into space and aerospace applications, signaling ambitions that span defense, commercial technology, and beyond.
Both companies will also participate as investors in a fund managed by Hanwha Asset Management. The fund targets about $1 billion and will focus on investments in AI, robotics, and the defense sector, aiming to nurture the physical AI ecosystem and reinforce technological competitiveness.
The fund is expected to back technologies and companies across the core value chain, identify strong partners, and link co-development with commercialization efforts, leveraging the alliance between Hanwha Asset Management and Krafton to accelerate opportunities.
Krafton CEO Kim Chang-han said the collaboration would accelerate real-environment technology development by combining Krafton’s AI and software-operating capabilities with Hanwha’s field-based expertise, with an eye toward forming a JV that could scale into a global defense-technology company akin to Anduril.
Hanwha Aerospace CEO Son Jae-il emphasized that AI is rapidly evolving into “physical AI” that extends beyond traditional industry use, and that the Krafton partnership could help establish a new technological paradigm for future defense applications.
Context for non-Korean readers: Krafton is a major South Korean video game developer and publisher known for popular titles such as PUBG. Hanwha Aerospace supplies defense and aerospace manufacturing and unmanned systems, and is part of the Hanwha Group, a large South Korean conglomerate. Hanwha Asset Management manages investments and recently launched a fund focused on AI, robotics, and defense tech. The deal illustrates Korea’s push to fuse advanced AI with defense and space capabilities and could have implications for international supply chains, technology competition, and potential collaborations with global defense firms.