Highlights
- Krafton signs MoU with Hanwha Aerospace for physical AI deal.
- The investment allocates up to $1 billion to AI, robotics, and defense.
- The joint venture is planned for development and commercialization.
Krafton has signed a strategic agreement with Hanwha Aerospace to co-develop physical AI technologies. The company will invest up to $1 billion USD in AI, robotics, and defense initiatives. The Memorandum of Understanding (MoU) outlines a long-term partnership that includes joint research and validation. It also covers commercialization through a planned joint venture and was announced on March 13, 2026.
The collaboration brings together Krafton’s AI research and software development with Hanwha’s defense manufacturing capabilities. These span air, cyber, land, sea, and space domains.
Hanwha develops systems such as the K9 self-propelled howitzer and precision-guided munitions. In 2024, it expanded its global role by securing U.S. Navy maintenance, repair, and overhaul contracts, including work on the USNS Wally Schirra.
The announcement comes days after Krafton lost a legal dispute with Unknown Worlds’ co-founders.
Krafton’s Investment Focuses on Physical AI Deployment
The companies identified three initial focus areas. These cover joint development of core physical AI technologies, validation of real-world implementation scenarios, and the establishment of technical and operational systems.
Krafton stated its experience with large-scale game data and physics-based environments will train and verify AI for real-world use.
A joint venture will be formed to move development outcomes into commercialization. In parallel, Krafton will invest in funds managed by Hanwha Asset Management with a target size of $1B. These funds aim to support companies across the AI, robotics, and defense value chain.
Krafton CEO, CH Kim, said the partnership combines the company’s “AI technology and software expertise” with Hanwha’s industrial strengths. He added it could evolve into a global defense technology player similar to Anduril.
Meanwhile, Hanwha Aerospace President and CEO, Jae-il Son, noted the collaboration will set a new standard for applying physical AI in defense. Altogether, it places the deal within a broader period of transition as the company expands beyond gaming into applied AI systems.
