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By Ian Werther in News —

Krafton, Hanwha Sign MOU to Pursue Joint Venture in Physical AI for Defense

Krafton, the South Korean game developer best known for PUBG, and Hanwha Aerospace announced on the 13th that they have signed a memorandum of understanding to pursue strategic cooperation in the field of physical AI and to establish a joint venture. The agreement marks a formal step toward integrating gaming-era AI and software capabilities with defense-oriented engineering.

The collaboration aims to fuse Krafton’s AI research and software development strengths with Hanwha’s defense and manufacturing infrastructure. The companies said they would advance core physical AI technology, assess proof-of-concept demonstrations and deployment scenarios, and build the necessary technology and operating systems, with the goal of translating results into field use through a future joint venture.

In a phased approach, the partners plan to jointly research and develop key physical AI technologies, validate realtime applications, and create scalable operational frameworks. They emphasized that establishing a joint venture would help link development outcomes to on-the-ground deployment and speed up commercialization, while reinforcing long-term cooperation.

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.

Krafton would apply its data management experience and virtual-environment simulation capabilities—developed in the gaming industry—to AI learning and verification processes. Hanwha Aerospace would contribute its military systems-operating know-how to enhance the practical viability of physical AI solutions and to conduct incremental field trials for real-world testing.

The two firms said they would also participate in a fund launched by Hanwha Asset Management, aiming to raise about $1 billion (roughly 1 trillion won) with a focus on AI, robotics, and defense. The fund is intended to expand the physical AI ecosystem, strengthen competitive capabilities, and identify partners across the value chain for joint development and commercialization.

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.

Kim Chang-han, Krafton’s chief executive, said the partnership would accelerate real-world technology development by combining Krafton’s AI and software operations with Hanwha’s on-site, field-oriented capabilities, and that a joint venture could help the company become a global defense technology player akin to Anduril.

Son Jae-il, head of Hanwha Aerospace, stated that the collaboration would help set new technology standards in physical AI and future defense applications, underscoring the project’s potential to reshape the sector.

Why this matters to the United States: the deal signals growing convergence between entertainment-tech firms and defense contractors in Asia, with capital backing and strategic intent to move advanced AI from theory to field-ready systems. If the venture progresses toward deployment, it could affect regional supply chains, dual-use AI development, and opportunities for U.S. firms to participate through partnerships or funding channels, similar in spirit to other U.S.-style defense-tech ecosystems. The reference to Anduril highlights a benchmark for private defense tech scale and rapid commercialization that U.S. readers will recognize as a model for cross-border collaboration and investment in this sector.

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