Krafton and Hanwha sign MOU to develop Physical AI and joint venture
Hanwha Aerospace and Krafton, the developer of PUBG: Battlegrounds, have signed a memorandum of understanding to jointly develop what they call “Physical AI” and to explore setting up a joint venture to commercialize the work. The announcement was made on the 13th.
The MOU outlines a staged plan: joint research and development of core Physical AI technologies, evaluation of proof-of-concept demonstrations and real‑world scenarios, and the building of technical and operating systems to support deployment. The two companies said they expect to establish a joint venture in the future to translate research results into marketable products and to deepen long-term cooperation.
The collaboration combines Hanwha Aerospace’s defense, manufacturing, and unmanned-systems capabilities with Krafton’s AI research and software development strengths. Hanwha Aerospace will bring field experience and system integration know-how, while Krafton is expected to contribute data-management practices and simulation expertise drawn from its gaming and virtual environment work. The partners say ongoing demonstrations will test the practicality of Physical AI in real environments.
In the long run, the companies said they aim to extend their collaboration into space and aerospace sectors, signaling a broader ambition beyond terrestrial defense applications. Krafton’s data operations and simulation technology are highlighted as key assets for training and validating Physical AI in controlled and complex settings.
The two firms are also investors in a fund launched by Hanwha Asset Management. The fund targets investments in AI, robotics, and the defense sector, aiming to raise about $1 billion. The strategy is to back technologies and companies that can feed into the Physical AI ecosystem and strengthen overall competitive capabilities, with partners identified across the value chain for potential joint development and commercialization.
Krafton CEO Kim Chang-han said the partnership would fuse Krafton’s AI and software-operating strengths with Hanwha’s on-the-ground capabilities to accelerate real-world technology development. He added that a future joint venture could grow into a global defense technology company akin to Anduril, the U.S.-based defense tech firm.
Hanwha Aerospace CEO Son Jae-il welcomed the collaboration, noting that AI-enabled Defense, or Physical AI, is expanding rapidly beyond traditional industries. He said the Krafton partnership would help propose a new technology paradigm for future defense and related applications.
For readers outside Korea, this signals a broader push by South Korean industry to fuse advanced AI with dual-use defense capabilities. The arrangement could influence cross-border supply chains, defense technology development, and potential collaborations with U.S. and other international partners as Korea scales its AI and unmanned‑systems activities toward commercial markets and strategic defense applications. Krafton’s and Hanwha’s moves reflect ongoing efforts in Asia to build robust AI ecosystems that connect research, manufacturing, and national security objectives, with implications for global technology competition and defense partnerships.