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By Ian Werther in News —

Krafton and Hanwha form joint venture for physical AI

Krafton, the South Korean game developer behind PUBG, and Hanwha Aerospace, a unit of the Hanwha Group with strengths in robotics, manufacturing and defense-related technologies, are planning to form a joint venture to pursue the so-called “physical AI” market. The two companies are expected to sign a memorandum of understanding to set up the venture in the near term.

The term “physical AI” refers to AI-powered systems that operate in the real world, integrating software with hardware to control robots, autonomous devices, and industrial automation. By combining Krafton’s software expertise in artificial intelligence, VR and related fields with Hanwha’s hardware and manufacturing capabilities, the collaboration aims to position the pair as a leading player in this emerging field.

DAEJEON – About 100 members of the Humphreys Garrison traveled here to watch the Korean Professional Baseball League’s Hanwha Eagles play against the LG Twins at Daejeon Baseball Stadium, June 26. For many attendees, the game gave them a unique cultural experience and an entertaining afternoon. Prior to the game, the Humphreys community was invited by the Eagles to come onto the field. They played catch, threw a Frisbee around, and took pictures with the Eagles mascots and some players. Once the game started, and people took their seats, some of the first time attendees probably did not anticipate seeing such a lively crowd. In the United States, watching a baseball game is usually a mellow experience in comparison to watching a football, basketball, or hockey game. People typically sit back and cheer when their team scores. In Korean baseball and other sporting events, however, audience participation is highly encouraged. Korean baseball fans stand up, hit thunder clappers, and dance – even when their team does not score any runs. Some fans even waved flags and brought their own drums and noisemakers to play during the game. The crowd is directed by a cheer instructor and cheerleaders. They entertained the crowd throughout the night by dancing and instructing fans when to clap and cheer. To say the least, the cheer instructor, cheerleaders, and audience members put on their own show. U.S. Army photos by Jessica Ryan For more information on U.S. Army Garrison Humphreys and living and working in Korea visit: <a href="http://humphreys.korea.army.mil" rel="nofollow">USAG-Humphreys' official web site</a> or <a href="https://www.youtube.com/usaghumphreys" rel="nofollow">check out our online videos</a>.
Representative image for context; not directly related to the specific event in this article. License: CC BY 2.0. Source: Wikimedia Commons.

Industry sources say the alliance aligns the two firms’ interests and addresses a common concern that pursuing AI breakthroughs through software alone may not be enough to compete with global tech giants. The partners view the merger of software know‑how and tangible manufacturing strength as creating substantial synergies in physical AI.

Separately, Krafton is also weighing a financial role in Hanwha Asset Management’s large corporate investment vehicle. Hanwha plans to form a private equity fund in the first quarter of this year with a target size of 670 billion won. Krafton is considering participating as a financial investor in that fund.

The fund is expected to invest in AI and robotics startups worldwide, including in the United States, using capital raised by Hanwha Asset Management. The arrangement highlights Korea’s growing cross-border venture activity and the willingness of Korean conglomerates to couple strategic alliances with external investment.

DAEJEON – About 100 members of the Humphreys Garrison traveled here to watch the Korean Professional Baseball League’s Hanwha Eagles play against the LG Twins at Daejeon Baseball Stadium, June 26. For many attendees, the game gave them a unique cultural experience and an entertaining afternoon. Prior to the game, the Humphreys community was invited by the Eagles to come onto the field. They played catch, threw a Frisbee around, and took pictures with the Eagles mascots and some players. Once the game started, and people took their seats, some of the first time attendees probably did not anticipate seeing such a lively crowd. In the United States, watching a baseball game is usually a mellow experience in comparison to watching a football, basketball, or hockey game. People typically sit back and cheer when their team scores. In Korean baseball and other sporting events, however, audience participation is highly encouraged. Korean baseball fans stand up, hit thunder clappers, and dance – even when their team does not score any runs. Some fans even waved flags and brought their own drums and noisemakers to play during the game. The crowd is directed by a cheer instructor and cheerleaders. They entertained the crowd throughout the night by dancing and instructing fans when to clap and cheer. To say the least, the cheer instructor, cheerleaders, and audience members put on their own show. U.S. Army photos by Jessica Ryan For more information on U.S. Army Garrison Humphreys and living and working in Korea visit: USAG-Humphreys' official web site or check out our online videos.
Representative image for context; not directly related to the specific event in this article. License: CC BY 2.0. Source: Wikimedia Commons.

Industry observers say Krafton’s software-centric AI capabilities, when paired with Hanwha Aerospace’s robust manufacturing and defense-adjacent capabilities, could yield meaningful advances in physical AI and related supply chains. The collaboration illustrates a broader trend of Korea building an integrated tecnologial ecosystem that spans games, AI, robotics and advanced manufacturing.

For U.S. readers, the development matters because it signals potential shifts in global AI hardware development, cross-border investment flows, and the sourcing of advanced automation technologies. If successful, the partnership could influence partnerships, supply chains, and investment opportunities linking the United States with Korean AI and manufacturing ecosystems.

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