Video Games

Krafton’s $1 Billion Investment in US Navy Defense Contractor

Published

5 hours ago

March 19, 2026

Krafton Invests $1 Billion in Hanwha Aerospace for Physical AI Development

The realm of ethical gaming faces new challenges as Krafton, the publisher behind popular titles like PUBG and The Callisto Protocol, announces a staggering $1 billion investment in Hanwha Aerospace. This partnership aims to delve into the realm of “Physical AI,” as stated on Krafton’s official website.

The collaboration between Krafton and Hanwha Group is set to leverage Krafton’s expertise in AI research and software development alongside Hanwha Group’s industrial infrastructure in defense and manufacturing. The joint effort will focus on exploring the applications of physical AI in real-world scenarios.

Krafton’s proficiency in managing large-scale game data and creating physics-based virtual worlds will serve as a solid foundation for training and validating physical AI software. This strategic move by Krafton signifies a significant step towards integrating AI technology into various sectors, particularly in defense.

Hanwha Aerospace’s President and CEO, Jae-il Son, emphasizes the potential of this partnership to set a new standard in physical AI applications and future defense initiatives. With Hanwha Aerospace’s track record in servicing US Navy warships and manufacturing precision-guided munitions, the collaboration holds promise for groundbreaking advancements in AI technology.

In a recent legal battle, Krafton faced a setback in a lawsuit against three executives from Unknown Worlds, the team responsible for creating the popular game Subnautica. The lawsuit alleged that Krafton had forcibly removed the executives to avoid a substantial $250 million payout.

The court decision shed light on Krafton CEO Changhan Kim’s motives, revealing that he sought to avoid being perceived as weak by allowing the payout to proceed. This ironic turn of events underscores the complexities of ethical decision-making even within a tech-savvy company like Krafton.

Source: Krafton / GameDeveloper