South Korea's Krafton, Hanwha Aerospace Form Joint AI-Driven Defense Venture
Krafton, the South Korean game developer, and Hanwha Aerospace have formed a strategic alliance centered on physical artificial intelligence. The two companies signed a memorandum of understanding on the 13th to pursue joint development and eventual commercialization across defense and other sectors.
Under the agreement, Krafton and Hanwha Aerospace will jointly research and develop core physical AI technologies, review testing scenarios, and build technical and operational frameworks. They plan to conduct phased work that includes pilots and real-world applications.
The partners also intend to establish a joint venture to rapidly translate joint development成果 into field deployments and business opportunities, while strengthening a long-term cooperation framework.
Krafton will participate as an investor in a Hanwha Asset Management fund focused on AI, robotics, and defense, with a target size of up to $1 billion. The JV and the fund are expected to work in tandem to identify high-potential partners along the value chain and to link development with commercialization.
Krafton CEO Kim Chang-han said the collaboration aims to combine Krafton’s AI and software-ops capabilities with Hanwha’s on-the-ground execution to accelerate real-world technology deployment. He added that the eventual JV would be developed into a global defense technology company on a scale comparable to leading international firms.
Hanwha Aerospace CEO Son Jae-il noted that AI technology is quickly expanding from industry into defense as “physical AI,” and he said the Krafton partnership would help establish a new technology paradigm in future defense applications.
Krafton has been expanding its robotics footprint. It established a U.S.-based robotics research subsidiary, Rudo Robotics, late last year, and recently set up a Korean subsidiary. Krafton’s involvement with Rudo Robotics will complement the JV’s testing and commercialization efforts, according to the company, creating synergies across its robot AI research and defense-focused collaboration with Hanwha.
The deal underscores growing global interest in integrating advanced AI with defense and industrial applications. For U.S. readers, the arrangement signals potential shifts in cross-border tech collaboration, investment flows, and supply-chain partnerships as East Asian firms increasingly align AI, robotics, and defense capabilities with commercial pathways. It also highlights how U.S. tech ecosystems—through partnerships and foreign investments—could influence the future of next-generation defense and AI-enabled industries.