South Korea's Hanwha Aerospace and Krafton to co-develop physical AI for defense
South Korea’s Hanwha Aerospace has announced a strategic collaboration with Krafton, the Korean game developer behind PUBG, to jointly develop “physical AI” technologies. The two companies signed a memorandum of understanding on the 13th to pursue research and development, testing scenarios, and the creation of an initial joint venture, with plans to commercialize the results and establish a long-term cooperation framework.
The collaboration aims to combine Hanwha Aerospace’s defense and manufacturing capabilities and unmanned-systems know-how with Krafton’s artificial intelligence research and software development expertise. The partners expect to advance AI that can operate in real-world environments, using staged demonstrations to verify applicability and performance before wider deployment.
Krafton brings experience in data management and virtual-environment simulations, which the partners say will play a key role in training and validating the physical AI systems. By leveraging Krafton’s digital-domain capabilities, the joint effort intends to improve the learning and validation loop for AI that interacts with real equipment and settings.
Longer term, the two companies envision expanding their collaboration into aerospace and space-related applications, extending the scope of their joint work beyond terrestrial defense and unmanned systems.
Investors are also in play. Hanwha Asset Management is organizing a fund with a target of about $1 billion focused on artificial intelligence, robotics and defense technologies, with Krafton and Hanwha Aerospace as investors. The fund aims to back promising technologies and companies to grow the physical AI ecosystem and strengthen competitive advantages across the value chain, while seeking partners for co-development and commercialization.
Krafton’s CEO Kim Chang-han said the collaboration seeks to accelerate the development of field-ready AI by tying Krafton’s software and AI capabilities to Hanwha’s on-site expertise, and to eventually form a joint venture that could commercialize results and grow into a global defense-tech firm akin to Anduril. Hanwha Aerospace’s CEO, Son Jae-il, noted that AI-enabled physical AI is advancing into the defense sector, and the Krafton partnership could introduce a new technology paradigm for future defense applications.
For U.S. readers, the deal signals growing convergence between commercial AI, gaming-era data and simulation capabilities with national-security technologies in Asia. It highlights a broader trend of defense firms partnering with software and data firms to develop field-ready autonomous and unmanned systems. If successful, the venture could influence supply chains, technology licensing, and potential collaborations with allied firms in the United States as defense and AI ecosystems increasingly intertwine.