South Korean defense companies are ramping up investments in artificial intelligence (AI) software technology to boost unmanned warfare capabilities. The growing role of AI-powered autonomous weapon systems in warfare, particularly highlighted by the Russia-Ukraine war, has made them decisive in determining victory or defeat. Defense firms are making strategic equity investments in AI-focused technology companies to accelerate development.
Hanwha Aerospace recently invested in Shield AI, a U.S. defense technology startup specializing in AI-powered military systems. Shield AI announced on March 6 that it had raised $240 million in a new funding round and now has a valuation of $5.3 billion. The round’s investors included Hanwha Aerospace and L3 Harris.
Shield AI develops AI-powered software that enables drones and fighter jets to fly autonomously. The software can be applied to various hardware applications, including aircraft and self-driving robots. Hanwha Aerospace is reportedly considering integrating Shield AI’s technology into the unmanned weapon systems it is currently developing.
Hanwha Group is actively developing AI-powered autonomous weapon systems through its defense subsidiaries Hanwha Aerospace, Hanwha Systems, and Hanwha Ocean.
Hanwha Aerospace plans to acquire multiple types of unmanned ground vehicles (UGVs) by 2028, including Arion-SMET, a wheeled multipurpose unmanned vehicle, GRUNT (Ground Uncrewed Transport), a next-generation autonomous vehicle, and explosive detection and removal robots, scheduled for full deployment this year. The company also partnered with Estonia’s Milrem Robotics to jointly develop the Tracked-Robotic Combat Vehicle (T-RCV) and expand into global defense markets.
Meanwhile, Korea Aerospace Industries (KAI) is building an AI technology ecosystem through investments and collaborations with AI software companies. These efforts aim to advance its AI pilot and software development capabilities for the Next Generation Aerial Combat System (NACS), one of KAI’s six key future projects. KAI is on track to develop a fully autonomous AI-piloted combat system by 2030. Recently, it introduced KAILOT, the AI pilot system designed to control unmanned fighter jets remotely.
Earlier this month, KAI invested 60 billion won ($4.1 million) in GenGenAI, a company specializing in AI-based synthetic data solutions for defense, becoming its second-largest shareholder with a 9.87% stake. GenGenAI specializes in synthetic data generation that can replicate real-world battlefield conditions. KAI uses synthetic data from GenGenAI to enhance its AI pilot’s automatic target identification, which enables the system to recognize, track, and analyze targets based on pre-trained image data.
Last November, KAI also invested 133 billion won in Funzin, a robotics and defense AI company, acquiring a 20.27% stake and becoming its second-largest shareholder. Funzin developed an AI-powered command and control system in 2023, which assists in strategic decision-making for autonomous military operations.
“Integrating AI pilots with multi-purpose unmanned aerial vehicles and fighter jets will significantly enhance operational success rates in manned-unmanned coordinated warfare,” said a KAI official.
HD Hyundai is strengthening its ties with U.S. defense software company Palantir Technologies to boost its naval defense capabilities. HD Hyundai Executive Vice Chairman Chung Kisun met with Palantir CEO Alex Karp to discuss defense cooperation on March 6. Since September, HD Hyundai has been working with Palantir to co-develop TENEBRIS, an unmanned surface vessel (USV) designed for advanced maritime operations. The company aims to complete the vessel’s development by next year.
