Hanwha Aerospace, led by Hanwha Group Vice Chairman Kim Dong-kwan, and Krafton, headed by Chairman Chang Byung-gyu—known as a "legend in the gaming industry"—have joined forces to lead the physical artificial intelligence market in defense and aerospace sectors.
The partnership aims to rapidly advance physical AI technology by leveraging the gaming company's simulation expertise for commercialization, as modern warfare has become inseparable from AI technology. (See related coverage in the March 13 edition, pages 1 and 14)
Krafton and Hanwha Aerospace announced on March 13 that they signed a memorandum of understanding for joint development of physical AI technology and establishment of a joint venture.
The two companies determined that combining Hanwha Aerospace's defense and manufacturing infrastructure with Krafton's AI research and software development capabilities would generate substantial synergies in the physical AI sector.
Krafton has been actively expanding in this field, establishing a "Physical AI Team" under its AI division last year and founding Ludo Robotics, a robotics research subsidiary in the United States. The company's data operations experience and virtual environment-based simulation technology accumulated through developing games like Battlegrounds prove useful for rapidly training and validating physical AI systems.
Hanwha Aerospace has also been integrating AI technology into unmanned ground vehicles such as Arion SMET and Grunt, as well as weapons systems, in line with the trend of AI weapons emerging as core military assets.
Under the agreement, both companies will conduct joint research and development of core physical AI technologies and review demonstration scenarios. The partnership is particularly notable for the planned joint venture to pursue field application and commercialization of development outcomes. Long-term plans include expanding cooperation into aerospace sectors.
Furthermore, Krafton and Hanwha Aerospace plan to jointly identify promising companies through Krafton's participation as an investor in a fund organized by Hanwha Asset Management. The fund will focus on investments in AI, robotics, and defense industries, with a target size of $1 billion (approximately 1.492 trillion won).
"The investment in promising technologies and companies aims to expand the physical AI ecosystem and strengthen technological competitiveness," a Krafton spokesperson said.
"We will establish a joint venture with Hanwha and grow it into a global defense technology company like Anduril," said Kim Chang-han, CEO of Krafton.
"Through cooperation with Krafton, we will set new technological paradigm standards in physical AI and future defense sectors," said Son Jae-il, CEO of Hanwha Aerospace.
