Hanwha Aerospace has partnered with game developer Krafton to jointly develop “Physical AI” technologies that can operate in real-world environments, combining defense industry infrastructure with advanced artificial intelligence capabilities.
The two companies announced on March 13 that they have signed a memorandum of understanding (MOU) to conduct joint research and development in AI technologies and to explore the establishment of a joint venture. The collaboration will focus on developing core Physical AI technologies, conducting proof-of-concept testing, and building the necessary technical and operational frameworks.
Under the agreement, Hanwha Aerospace and Krafton plan to gradually advance the partnership through joint research, technology validation, and application scenario development. In the long term, the companies intend to establish a joint venture that will commercialize the research outcomes and create a structured framework for ongoing collaboration.
The partnership combines Hanwha Aerospace’s defense and manufacturing infrastructure with Krafton’s expertise in AI research and software development. Hanwha Aerospace plans to leverage its experience in operating weapon systems and unmanned platforms to refine Physical AI technologies that can function effectively in real-world environments. The company will also conduct phased testing to verify practical deployment capabilities.
Krafton will contribute its AI development capabilities and software engineering expertise. The company will support AI training and validation processes using data management know-how and simulation technologies developed through its flagship game PUBG: Battlegrounds.
The two companies are also considering expanding the scope of their collaboration into aerospace and space-related fields in the future.
In addition, both companies will participate as investors in a new fund being established by Hanwha Asset Management. The fund will focus on investments in artificial intelligence, robotics, and defense technology, with a target size of $1 billion. The initiative aims to accelerate investment in promising technologies and companies while strengthening the Physical AI ecosystem.
Krafton CEO Kim Chang-han said the partnership will combine Krafton’s AI technologies and software capabilities with Hanwha’s field-proven defense technologies to accelerate the development of AI systems capable of operating in real-world environments.
“We aim to commercialize the outcomes of our joint research through the planned joint venture and grow into a global defense technology company similar to Anduril,” Kim said.
Hanwha Aerospace CEO Son Jae-il said AI technology is rapidly evolving beyond traditional software applications into Physical AI that can be applied across industries, including defense.
“Through cooperation with Krafton, we aim to present a new technological paradigm for the future defense industry,” Son said.
