Krafton, Hanwha form joint venture to advance physical AI for defense and industry
Krafton, the South Korean game publisher behind titles such as PUBG, announced on March 13 that it will form a strategic alliance with Hanwha Aerospace to advance physical AI across multiple sectors, including defense. The two companies signed a memorandum of understanding to pursue joint development and commercialization of physical AI technologies.
The collaboration aims to fuse Krafton’s AI research and software development capabilities with Hanwha Group’s strong industrial base in defense and manufacturing. The partners plan to establish a joint venture and to conduct joint core technology development, field demonstrations, and scaling of the technology for real-world use.
Under the agreement, Krafton and Hanwha will work on core physical AI research and development, validation scenarios, and the creation of technical and operational frameworks. The joint venture is intended to accelerate the transition from lab results to on-site deployment and commercial products, strengthening long-term collaboration.
Krafton will also participate as an investor 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 to broaden the physical AI ecosystem and reinforce technical competitiveness. The fund will seek partners across the value chain to support joint development and commercialization.
Krafton has been expanding beyond gaming into long-term business areas centered on physical AI. The company established a robotics research arm in the United States last year, Ludo Robotics, and set up a Korean subsidiary this February. The Korean unit is led by Krafton’s Chief AI Officer, Lee Kang-wook (CAIO).
The plan envisions Ludo Robotics handling robotics R&D while the Hanwha-led JV conducts field validation and commercialization, creating a two-track approach to scale physical AI technologies. Krafton aims to leverage data operations and simulation capabilities to accelerate development and real-world applicability.
Kim Chang-han, Krafton’s CEO, said the partnership will blend Krafton’s AI and software-operational strengths with Hanwha’s on-site capabilities to speed up the delivery of technologies that work in real environments. He added that the JV would be developed into a global defense technology enterprise comparable to Anduril Industries, a U.S. defense tech firm.
For U.S. readers, the arrangement signals continued cross-border collaboration on advanced AI, robotics, and defense technologies that could influence supply chains, procurement, and partnerships in allied markets. The project underscores growing Korea-U.S. alignment in cutting-edge tech development, with potential implications for defense innovation ecosystems and international investment flows.