South Korea’s defense industry has entered a new era. With nearly $69 billion in order backlogs as of late 2024 and rapidly growing security ties with Europe, the country has become a global force in military manufacturing. Seoul is now the second-largest arms supplier to European NATO members, driven by exports of vehicles, artillery systems, and advanced weapons.
Yet behind this industrial success lies a surprising gap: South Korea has very few defense-tech startups. Despite its massive manufacturing base, early-stage innovation in defense robotics, AI, and autonomous systems remains minimal. That gap is precisely what Bone AI, a new startup operating out of Seoul and Palo Alto, aims to close.
A New “Physical AI” Company With Global Ambitions
Founded in early 2024 by DK Lee, co-founder of MarqVision, Bone AI is building a fully unified platform that integrates AI, robotics, hardware engineering, and next-generation manufacturing. The company focuses on autonomous air (UAV), ground (UGV), and marine (USV) vehicles, primarily for defense and government clients.
Although Bone plans to operate across all three domains, it is beginning with defense-focused aerial drones designed for missions such as logistics, wildfire detection, ISR support, and anti-drone operations.
Lee describes Bone not as a traditional defense startup but as a “physical AI company,” combining AI models, autonomy software, embedded systems, and industrial manufacturing under one roof.
Rapid Growth
Bone AI recently raised a $12 million seed round led by Third Prime, with participation from Kolon Group, a South Korean conglomerate known for advanced materials and manufacturing. Kolon’s involvement positions Bone to blend cutting-edge robotics with industrial-scale production.
Notably, Lee personally invested over 10% of the round ($1.5M) to demonstrate his commitment.
The startup is already gaining significant traction:
- Closed a seven-figure B2G contract
- Generated $3 million in revenue in its first year
- Selected for a major government-backed logistics program deploying Bone’s UAV and UGV systems
- Acquired the South Korean drone company D-Makers, integrating both its engineering talent and IP
More acquisitions are planned as Bone continues executing its “buy-versus-build” strategy, accelerating product development and market entry.
Lee argues that the next frontier of AI is physical machines, not software. But AI and hardware innovation have been progressing separately.
“No one is building the industrial backbone that intelligent machines require at scale,” he told TechCrunch.
He points to South Korea’s unique strengths:
- World-class manufacturing
- Competitive cost structures
- Deep expertise in heavy industry, semiconductors, shipbuilding, and automotive engineering
Countries like the U.S. (Anduril), Europe (Helsing), and Israel (Kela Technologies) already have billion-dollar defense-AI startups. Asia, however, has not yet seen the same boom.
That is why investors see Bone as perfectly positioned.
Michael Kim of Third Prime described the company as sitting “at the intersection of sovereign AI, multipolarity, and reindustrialization.” Bone’s model acquiring niche hardware players and integrating them into a unified AI robotics ecosystem could make South Korea a global hub for autonomous systems.
Building the Supply Chain for Physical AI
Bone AI’s long-term mission is bold:
Build the world’s most advanced supply chain for Physical AI in South Korea, then scale it to the U.S., Europe, and allied nations.
As global defense demand increases and nations pursue sovereign manufacturing, Bone AI is positioning itself at the center of a major geopolitical and technological shift.
If South Korea becomes a leader in AI-driven robotics and autonomous defense systems, Bone AI may be the company that accelerates that transformation.
