Bone AI: $69B Defense Boom 🚀🔥

Tech & Science

South Korea’s defense industry is currently experiencing a significant boom, with major companies holding a substantial order backlog of approximately $69 billion as of late 2024. This growth is driving significant government investment in advanced weapons and strengthening security partnerships, most notably through the newly established EU–South Korea Security and Defence Partnership, rapidly positioning South Korea as the second-largest supplier of arms to European members of NATO. Despite this established manufacturing strength, South Korea’s defense-tech startup scene remains surprisingly young. A promising newcomer, Bone AI, launched just months ago and is already generating considerable attention. Based in Seoul and Palo Alto, the company is developing a fully integrated AI platform encompassing software, hardware, and manufacturing – specifically targeting next-generation autonomous drones, ground vehicles, and unmanned surface vehicles for defense and government clients. Bone AI’s initial focus is on aerial drones, designed to streamline tasks such as logistics support, wildfire detection, and anti-drone defense. Founded by DK Lee, who previously co-founded MarqVision, Bone AI secured a $12 million seed round led by Third Prime with backing from Kolon Group, a strategic investor known for its expertise in advanced materials and manufacturing. Lee emphasized the ideal synergy between Kolon’s strengths – encompassing AI, robotics, and next-generation manufacturing – and Bone’s ambitions. Remarkably, Bone is already generating revenue, having secured a significant B2G contract and pulling in $3 million in its first year, and winning a spot in a South Korean government-backed program focused on deploying these autonomous vehicles. To fuel its growth, Bone strategically acquired a South Korean drone company, D-Makers, and its intellectual property just six months after launch. Lee anticipates further acquisitions as they build out their capabilities. He personally committed a substantial portion of the seed round – $1.5 million – demonstrating his deep commitment to the venture. Lee’s previous experience building AI products at MarqVision has given him a unique perspective, leading him to believe the next stage of AI is increasingly intertwined with the physical world. He’s cultivated this perspective through extensive networking – attending conferences like ICRA, directly engaging with engineers at companies like Google’s RT-1 and RT-2, and even informal discussions with leaders such as Jim Keller, the CEO of tenstorrent. He believes Bone AI shouldn’t be limited to defense technology, instead focusing on “physical AI,” bringing together advanced AI simulation, autonomous algorithms, embedded engineering, hardware design, and large-scale manufacturing – all under one roof. Recognizing the need for foundational infrastructure, he references Nvidia’s reliance on a global network of manufacturers. Drawing inspiration from South Korea’s history of successful hardware companies – Hyundai, Samsung, and LG – Lee argues that this provides a strong foundation for emerging robotics companies. Bone AI’s ultimate goal is to establish the entire supply chain for “physical AI” within South Korea, with plans to expand that capability across the U.S., Europe, and other key countries. Companies like Anduril in the U.S. and Helsing in Europe have already gained significant recognition – Anduril is valued at over $30 billion, and Helsing recently secured around $13 billion in funding. Smaller companies, such as Kela Technologies in Israel, are also beginning to make waves. Michael Kim, a partner at Third Prime, highlights that as countries prioritize reindustrialization, Bone AI is uniquely positioned at the intersection of sovereign AI, shifting global power dynamics, and a renewed focus on manufacturing. Bone AI’s strategy – focusing on acquiring and integrating specialized hardware companies – is designed to quickly mature its products and gain a strong foothold in the market.