South Korea’s major defense manufacturers have accumulated nearly $69 billion in backlogs as of late 2024, but despite the country’s booming military exports, especially to Europe, its defense-tech startup scene remains surprisingly thin. A new entrant, Bone AI, is stepping into that gap with ambitions far beyond ordinary drone development.
Launched earlier this year in Seoul and Palo Alto, Bone AI is building what founder DK Lee describes as a “fully unified physical AI platform” combining software, hardware, autonomous systems, and manufacturing. The company develops next-generation UAVs, UGVs, and USVs for government and defense clients, with its first focus on advanced aerial drones for logistics, wildfire detection, and anti-drone missions.
Bone AI has already raised a $12 million seed round led by Third Prime, with participation from South Korea’s Kolon Group, known for its material science and manufacturing capabilities. Lee personally invested over 10% of the round, roughly $1.5 million, to signal his commitment.
Despite being less than a year old, Bone is already generating revenue. The company secured a seven-figure B2G contract, bringing in $3 million in its first year, and was selected for a government-backed national logistics program deploying its UAVs and UGVs.
A key reason for the early traction: Bone acquired the South Korean drone maker D-Makers and its entire IP portfolio just six months after launching. The acquisition now forms the hardware backbone of Bone’s “physical AI” strategy, which combines robotics, autonomy algorithms, AI simulation, embedded engineering, and mass manufacturing.
Lee, who previously co-founded MarqVision, said the next era of AI will be defined not just by digital models but by intelligent machines operating in the real world. He described a fragmented landscape where AI and hardware evolve separately, leaving a gap Bone intends to fill.
South Korea already excels in global hardware manufacturing through companies like Hyundai, Samsung and LG. Bone aims to extend that heritage to next-generation robotics, building a domestic supply chain for physical AI that can later expand into the U.S. and Europe.
Investors see Bone’s timing as strategic. With global reindustrialization, rising geopolitical tensions, and the rapid growth of sovereign AI initiatives, the company is positioned at the intersection of AI, defense, and advanced manufacturing.
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“Bone has a strong ‘buy-versus-build’ strategy,” said Third Prime’s Michael Kim, noting the abundance of under-recognized hardware talent in South Korea. “They represent what’s next as countries rethink autonomy and industrial capacity.”
While companies like Anduril, Helsing, and Israel’s emerging defense-tech players dominate headlines in the West, Asia has yet to produce an equivalent giant. Bone AI aims to change that, by building the industrial foundation for “physical AI” from the ground up.
