South Korea's Krafton, Hanwha sign MOU to pursue joint physical AI for defense
Krafton, the South Korean game developer best known for PUBG, and Hanwha Aerospace have signed a memorandum of understanding to pursue joint research and development in core physics-based AI technologies and to establish a joint venture. The agreement aims to combine Krafton’s AI research capabilities with Hanwha’s defense-industrial and manufacturing infrastructure.
The collaboration centers on physical AI, which enables interactions in virtual environments to be informed by real-world physics. Krafton intends to use its data operations experience from online games and its simulations technologies to advance the learning and validation of physical AI in practical applications.
Under the MOU, the two companies will conduct joint R&D on core physical AI technologies, review proof-of-concept and deployment scenarios, and build the technical and operational systems needed to scale the work. The plan also includes establishing a joint venture to apply the jointly developed technologies on the ground and to connect research outcomes with commercial deployment, strengthening long-term cooperation.
Krafton Chief Executive Kim Chang-han said the joint venture could grow into a global defense-tech enterprise, likening its potential to Anduril, a U.S.-based defense technology company. The statement signals an ambition to move beyond gaming into dual-use technologies with defense and industrial applications.
Krafton has publicly positioned physical AI as a mid- to long-term strategic business, leveraging strengths from its gaming heritage. In recent years, the company set up a U.S.-based robotics research entity, Ludo Robotics, last year and established a Korean subsidiary this year, with Chief AI Officer Lee Kang-wook leading the Korean operation.
Hanwha Aerospace, a major Korean defense contractor, brings manufacturing and systems integration capabilities to the alliance, while Krafton contributes its data analytics, machine learning, and simulation know-how. The arrangement reflects Korea’s broader push to translate advanced AI and robotics research into defense and industrial technologies.
For U.S. readers, the deal underscores increasing cross-border collaboration in AI and defense tech between Korean tech firms and U.S.-linked capabilities. It could influence supply chains, technology transfer, and future procurement in sectors where automated systems and advanced simulations are becoming central, ranging from national security to commercial manufacturing. The collaboration will be watched for its execution, regulatory considerations, and potential impact on global AI and defense tech markets.