Krafton and Hanwha Launch Joint Venture in Physical AI for Defense Tech

Krafton, the South Korean game maker behind Battlegrounds, and Hanwha Aerospace have signed a memorandum of understanding to jointly develop physical AI technologies and to establish a joint venture that will test and commercialize these innovations across defense and other sectors.

Under the arrangement, Krafton will apply its expertise in data operations and virtual-environment simulations—skills honed in game development—to train and validate physical AI systems. Hanwha Aerospace will provide real-world environments in defense and manufacturing settings to support practical testing.

The companies said the joint venture will serve as a core hub for technology demonstrations and scenario testing, facilitating a staged approach to development and commercialization and enabling broader collaboration in the mid- to long term.

Krafton chief executive Kim Chang-han said the venture would connect shared development成果 to commercialization and push the joint venture toward becoming a global defense technology company on par with Anduril Industries.

The collaboration extends beyond research and development to ecosystem investment. Krafton will participate as an investor in a fund managed by Hanwha Asset Management, which aims to raise up to $1 billion and focus on AI, robotics, and defense opportunities, with the goal of identifying and supporting partners across the core value chain.

This move follows Krafton’s broader push into AI and robotics. Last year the company established a robotics research subsidiary in the United States, Rudo Robotics, to pursue universal robotic intelligence. In February, Krafton opened a Korea-based subsidiary led by its chief AI officer, signaling a push to translate gaming AI and virtual-simulation capabilities into real-world robotics.

For U.S. readers, the partnership matters because it illustrates accelerating global investment and collaboration in defense-relevant AI and robotics, including cross-border funding, technology transfer, and potential supply-chain implications. The deal also signals a growing convergence between entertainment-tech firms and defense tech, with implications for international competition, export controls, and strategic sourcing.