Bone AI Secures $12M to Take on Asia’s Defense Giants with AI Robotics

South Korea’s defense industry is experiencing a period of significant expansion, with major corporations holding an estimated $69 billion in order backlogs as of 2024. The nation is actively increasing its investment in sophisticated weapons systems and strengthening its defense partnerships, especially with European allies. Following the establishment of the EU–South Korea Security and Defence Partnership in 2024 and a surge in exports of military vehicles and artillery, South Korea has now positioned itself as the second-largest arms supplier to European NATO members.

Despite this impressive industrial scale, the defense-tech startup ecosystem in the country remains underdeveloped. A noticeable gap exists between South Korea’s established manufacturing prowess and the level of early-stage innovation, with very few new companies emerging to compete with or challenge the dominant industry players.

Enter Bone AI, a startup with dual headquarters in Seoul and Palo Alto, California. Launched earlier this year, the company has set out to create a fully unified AI platform that seamlessly integrates software, hardware, and manufacturing processes. Its core business involves developing next-generation autonomous vehicles for defense and government clients, including unmanned aerial vehicles (UAVs), unmanned ground vehicles (UGVs), and unmanned surface vessels (USVs). While the long-term vision encompasses all three domains, Bone AI is initially concentrating on its defense-oriented aerial drones. These drones are engineered to enhance missions like logistics support, wildfire detection, and anti-drone defense operations.

The company recently secured a $12 million seed funding round. The investment was led by Third Prime and included participation from the Kolon Group, a South Korean strategic investor renowned for its expertise in advanced materials and manufacturing. According to Bone AI’s founder, DK Lee, Kolon represents an ideal strategic partner for a company operating at the intersection of AI, robotics, and next-generation manufacturing.

Remarkably, Bone AI is already a revenue-generating enterprise. The startup landed a seven-figure business-to-government (B2G) contract and generated $3 million in its first year of operation. It has also been chosen as a winner in a government-backed, end-to-end logistics program that will deploy UAVs and UGVs powered by Bone’s proprietary autonomy stack.

When questioned about how such a young company achieved these milestones so quickly, Lee explained that Bone AI acquired a South Korean drone company named D-Makers, along with its intellectual property, just six months after its own launch. Originally focused on AI models for robotics, Bone is now integrating its AI division with the newly acquired assets. Lee also hinted that further acquisitions are being planned.

Demonstrating his commitment, Lee personally invested over 10% of the seed round, approximately $1.5 million. He stated that this significant personal financial commitment was crucial to show both his team and investors that he is fully dedicated to the company’s mission, both emotionally and financially.

Bone AI represents Lee’s second entrepreneurial venture. His prior experience co-founding MarqVision provided him with invaluable insights into building and scaling AI products on a global level. That journey also convinced him that the next major frontier for artificial intelligence extends beyond the digital realm into the physical world. After departing from MarqVision, Lee immersed himself in the robotics field, attending conferences and proactively connecting with leading engineers to build the foundational knowledge for his new company.

Lee is careful to frame Bone AI not merely as a defense tech company, but as a “physical AI” firm. He envisions it as an entity that brings together advanced AI simulation, autonomy algorithms, embedded engineering, hardware design, and large-scale manufacturing capabilities under a single roof. During the planning stages for Bone, Lee observed that AI and hardware development were progressing in separate silos, with no one building the essential connective tissue required to produce intelligent machines at scale.

He points to the successful track record of South Korea in building global hardware manufacturing powerhouses like Hyundai, Samsung, and LG. Lee believes this established industrial base is precisely why more drone and small-robotics companies should emerge from the region, and why South Korea is fully capable of supporting them. The mission at Bone is to construct the supply chain for Physical AI within South Korea and subsequently expand that capability to the U.S., Europe, and other allied nations.

While companies like Anduril in the U.S. and Helsing in Europe have achieved multi-billion dollar valuations and become household names in defense tech, a comparable level of adoption has not yet been seen in Asia. Michael Kim, a General Partner at Third Prime, highlighted that as global economies focus on reindustrialization, Bone AI is uniquely positioned at the convergence of sovereign AI, multipolarity, and this industrial resurgence.

South Korea possesses high-quality, cost-competitive hardware manufacturing across several critical sectors, including heavy industry, shipbuilding, automobiles, and semiconductors. Kim noted that while many niche hardware players exist, they often lack access to venture capital from hubs like the Bay Area. Bone AI’s strategy involves a strong “buy versus build” approach, seeking to acquire and integrate these specialized assets to rapidly accelerate product maturity and commercial traction.

(Source: TechCrunch)