South Korea expands cross-border AI push with Hanwha-Krafton JV and Kakao Mobility
South Korea’s tech scene this week highlighted deeper cross-border AI collaboration and a push to apply artificial intelligence to physical systems. Hanwha Aerospace is teaming with Krafton to form a joint venture focused on developing physical AI that operates in real-world environments. The arrangement includes Krafton joining an AI, robotics and defense-focused fund being assembled by Hanwha Asset Management, with a target size of about $1 billion and Krafton as an investor.
The two companies say the joint venture will fuse Hanwha’s defense and manufacturing capabilities with Krafton’s expertise in virtual environments and simulation developed through game-era technology. The goal is to accelerate the training and validation of physical AI technologies. In the long term, the partners envision expanding cooperation into space and aerospace and identifying other promising firms to bring into the collaboration.
Separately, Kakao Mobility chief executive Ryoo Geun-seon has publicly declared the company’s ambition to become a “physical AI-based future mobility” player. In a letter to all employees, Ryoo identified four core assets: refined movement data, real-time road and network data, standardized operations, and hub infrastructure. He said Kakao Mobility plans to internalize the technology from software to hardware, aiming to strengthen its competitive edge in AI-driven mobility.
On the hardware and AI-chip front, Cambricon, a Chinese AI chip designer, posted a 453% year-on-year revenue jump to about 6.5 billion yuan and achieved its first annual profit in nine years. The surge is linked to U.S. export controls on Chinese semiconductors and Beijing’s emphasis on using domestic AI chips, alongside broader government support. Nvidia’s pause on China shipments has added to market dynamics, and Cambricon plans to triple shipments this year, though production bottlenecks persist due to foundry yields at SMIC and access to high-bandwidth memory.
Regulatory developments outside Korea also drew attention. The European Union formally published a relaxed version of the Corporate Sustainability Reporting Directive, known as the Omnibus Regulation, which exempts smaller firms and delays requirements for non-listed large EU companies from 2026 to 2028. Officials estimate that roughly 80% of CSRD-targeted firms would be excluded under the new framework, signaling a significant shift in multinational reporting obligations.
These moves illustrate a broader global trend in balancing innovation with disclosure and governance requirements. In the United States, climate-related disclosure rules have faced legal and policy challenges, echoing a sense that regulatory timelines are shifting. The EU’s adjustment to CSRD expectations could influence how American investors and multinational firms allocate capital and manage compliance across Asia and Europe.
For U.S. readers, the developments matter because they signal potential shifts in collaboration opportunities, supply-chain resilience, and regulatory environments affecting American tech and finance players. Korean companies are expanding into AI-enabled hardware, autonomous mobility, and defense-linked technologies, while China and Europe adjust policies that shape global markets, investment flows, and the competitive landscape for semiconductors, AI, and smart mobility.