Hanwha Aerospace, Krafton to co-develop Physical AI, plan joint venture.
Hanwha Aerospace announced on the 13th that it will jointly develop Physical AI with Krafton, the maker of PUBG: Battlegrounds. The two firms signed a memorandum of understanding to pursue AI collaboration and establish a joint venture in the future. The agreement covers core research and development, validation scenarios, and the establishment of the technical and operating framework needed to industrialize the technology.
Under the pact, the companies plan to advance Physical AI technology in stages, including joint R&D and real-world demonstrations. They said the goal is to connect R&D成果 with commercial applications through a future joint venture, while building a long-term cooperation framework that could extend into space and aerospace fields.
The collaboration leverages Hanwha Aerospace’s defense and manufacturing infrastructure and unmanned systems know-how with Krafton’s AI research capability and software development expertise. Hanwha Aerospace said the aim is to raise the maturity of AI technologies that operate in actual environments and to verify their applicability through phased field tests.
Krafton’s strengths in data operations accumulated through the gaming industry and its virtual environment-based simulation technology are expected to play a crucial role in training and validating Physical AI. The companies say these capabilities could help accelerate the learning process and the reliability of AI in physical settings.
Separately, the two firms are investors in a Hanwha Asset Management fund focused on AI, robotics, and the defense sector, with a target size of about $1 billion. The fund seeks to identify partners across the value chain and to connect joint development with commercialization opportunities, supported by the fund’s investments.
Hanwha Aerospace CEO Son Jae-il said that AI technologies are rapidly expanding beyond civilian industries into defense, with Physical AI taking on increasing importance. He added that collaborating with Krafton could help establish a new technology paradigm in Physical AI and contribute to future defense capabilities.
Why this matters beyond Korea for U.S. readers: the deal highlights growing convergence between AI research, defense applications, and cross-industry collaboration. Progress here could influence unmanned systems, autonomous operations, and advanced manufacturing—areas with substantial implications for U.S. defense contractors, supply chains, and technology standards. The involvement of a major game developer in AI training and simulation also underscores the growing role of large-scale data and virtual environments in training robust AI systems that could be deployed in real-world, possibly security-related, applications.