The robotics industry wants humanoids to become part of everyday life, taking on work in homes and offices. Billions of dollars are flowing toward machines capable of increasingly complex physical tasks. The humanoid robot maker Figure raised more than $1 billion last year at a $39 billion valuation, while the robotics software startup Skild AI secured $1.4 billion in January to develop artificial intelligence that can control different kinds of robots.

But working alongside people requires understanding incomplete instructions and adapting when someone changes their mind midway through a task. A robot that needs constant explanations could leave its owner supervising the very work they hoped to hand over.

Krafton believes its video game experience could help solve that problem. The South Korean developer behind PUBG: Battlegrounds has spent nearly two decades creating virtual worlds where software responds to unpredictable player decisions. Its Palo Alto subsidiary, Ludo Robotics, is now applying that expertise to AI that helps robots understand human requests and decide how to act.

CH Kim, CEO of both companies, sees Krafton’s experience developing AI teammates as a starting point. Developed with the chipmaker Nvidia, PUBG Ally is what the companies describe as “the world’s first voice-enabled coplayable character (CPC),” an AI teammate that goes beyond traditional nonplayable characters (NPCs) by cooperating with players, adapting to gameplay and remembering previous interactions.

Ludo Robotics hopes to bring those capabilities into the physical world.

“We’ve been developing AI in the form of nonplayer characters, or NPCs, for our video games even before the recent wave of interest in the [AI] sector. With the latest large language models and AI technologies, we’ve been able to give our in-game NPCs greater intelligence,” Kim tells Fast Company. “We reached a point where we started thinking about what would happen if we brought these AI characters out of virtual worlds and into the real world. That’s essentially physical AI, and that’s how we came to work on Ludi.”

Ludo Robotics is set to present Ludi 0.2, its latest experimental robotic intelligence system, at the Bay Area Robotics Symposium at the University of California, Berkeley. The new version aims to improve conversational memory and gesture recognition, though Kim acknowledges that Ludi remains a research demonstration, not yet reliable enough for everyday use.

What PUBG Can Teach a Humanoid Robot

During a limited beta in PUBG: Battlegrounds’ arcade mode, players could bring along Ella, a PUBG Ally companion that responded to voice commands. In a recent blog, Krafton’s AI chief described players joking with her and treating some mistakes as entertainment. Yet her usefulness as a teammate was less convincing. The gaming news outlet Inven Global, citing Krafton’s PUBG Ally report, put combat performance at 2.58 out of 5. Half of respondents viewed the character as a tool, while just 18.5% considered her a teammate.

“The foundational technology we’ve applied to PUBG Ally is very similar to the technology we’re applying to Ludi,” Kim explained. “We’re building on those capabilities as we move forward, and our longer-term goal is to expand this work into developing our own proprietary foundation model.”

Krafton believes its gaming expertise offers a competitive advantage in humanoid robotics. Game engines simulate how objects move and interact, providing virtual environments that can generate training data. Kim says Ludo is already using synthetic data from these worlds and plans to incorporate more real-world information as its research advances.

Ludi 0.1, introduced in August, uses an architecture combining several existing AI models. A vision-language model from Alibaba’s open-source Qwen family analyzes camera images and transcribed speech to decide what the robot should do next. Nvidia’s GR00T robotics foundation model, fine-tuned by Ludo, controls physical tasks such as picking up objects. The system runs on Unitree’s G1, a roughly $16,000 humanoid robot, with Ludo’s software coordinating the components.

The company trained its reasoning model on 14,432 computer-generated interaction sequences. The robot learned physical manipulation separately from recordings of people remotely controlling it in a mock household. Although Ludo’s technical report identifies PUBG Ally as a design precedent, it does not list player conversations among its training data.

Kim sees initial opportunities in homes, offices, and factories, where robots must work alongside people rather than simply perform repetitive tasks. “Everyone seems to be working on building a foundation model, but I think that’s an enormous challenge,” he says. “If you’re actually going to develop a foundation model, it needs to be highly generalized. It has to be capable of handling all kinds of different situations, and I think achieving that level of generalization is going to take time.”

For now, Ludo intends to develop the intelligence rather than manufacture robots, working with hardware makers to integrate its software into their machines.

Krafton’s Investment Strategy for Ludo Robotics

Krafton reported second quarter revenue of 1.29 trillion won, about $890 million, up 95% from a year earlier. Its broader AI investments include $70 million for a computing cluster and a reported $33 million inve

The robotics industry wants humanoids to become part of everyday life, taking on work in homes and offices. Billions of dollars are flowing toward machines capable of increasingly complex physical tasks. The humanoid robot maker Figure raised more than $1 billion last year at a $39 billion valuation, while the robotics software startup Skild AI secured $1.4 billion in January to develop artificial intelligence that can control different kinds of robots.

But working alongside people requires understanding incomplete instructions and adapting when someone changes their mind midway through a task. A robot that needs constant explanations could leave its owner supervising the very work they hoped to hand over.

Krafton believes its video game experience could help solve that problem. The South Korean developer behind PUBG: Battlegrounds has spent nearly two decades creating virtual worlds where software responds to unpredictable player decisions. Its Palo Alto subsidiary, Ludo Robotics, is now applying that expertise to AI that helps robots understand human requests and decide how to act.

CH Kim, CEO of both companies, sees Krafton’s experience developing AI teammates as a starting point. Developed with the chipmaker Nvidia, PUBG Ally is what the companies describe as “the world’s first voice-enabled coplayable character (CPC),” an AI teammate that goes beyond traditional nonplayable characters (NPCs) by cooperating with players, adapting to gameplay and remembering previous interactions.

Ludo Robotics hopes to bring those capabilities into the physical world.

“We’ve been developing AI in the form of nonplayer characters, or NPCs, for our video games even before the recent wave of interest in the [AI] sector. With the latest large language models and AI technologies, we’ve been able to give our in-game NPCs greater intelligence,” Kim tells Fast Company. “We reached a point where we started thinking about what would happen if we brought these AI characters out of virtual worlds and into the real world. That’s essentially physical AI, and that’s how we came to work on Ludi.”

Ludo Robotics is set to present Ludi 0.2, its latest experimental robotic intelligence system, at the Bay Area Robotics Symposium at the University of California, Berkeley. The new version aims to improve conversational memory and gesture recognition, though Kim acknowledges that Ludi remains a research demonstration, not yet reliable enough for everyday use.

What PUBG Can Teach a Humanoid Robot

During a limited beta in PUBG: Battlegrounds’ arcade mode, players could bring along Ella, a PUBG Ally companion that responded to voice commands. In a recent blog, Krafton’s AI chief described players joking with her and treating some mistakes as entertainment. Yet her usefulness as a teammate was less convincing. The gaming news outlet Inven Global, citing Krafton’s PUBG Ally report, put combat performance at 2.58 out of 5. Half of respondents viewed the character as a tool, while just 18.5% considered her a teammate.

“The foundational technology we’ve applied to PUBG Ally is very similar to the technology we’re applying to Ludi,” Kim explained. “We’re building on those capabilities as we move forward, and our longer-term goal is to expand this work into developing our own proprietary foundation model.”

Krafton believes its gaming expertise offers a competitive advantage in humanoid robotics. Game engines simulate how objects move and interact, providing virtual environments that can generate training data. Kim says Ludo is already using synthetic data from these worlds and plans to incorporate more real-world information as its research advances.

Ludi 0.1, introduced in August, uses an architecture combining several existing AI models. A vision-language model from Alibaba’s open-source Qwen family analyzes camera images and transcribed speech to decide what the robot should do next. Nvidia’s GR00T robotics foundation model, fine-tuned by Ludo, controls physical tasks such as picking up objects. The system runs on Unitree’s G1, a roughly $16,000 humanoid robot, with Ludo’s software coordinating the components.

The company trained its reasoning model on 14,432 computer-generated interaction sequences. The robot learned physical manipulation separately from recordings of people remotely controlling it in a mock household. Although Ludo’s technical report identifies PUBG Ally as a design precedent, it does not list player conversations among its training data.

Kim sees initial opportunities in homes, offices, and factories, where robots must work alongside people rather than simply perform repetitive tasks. “Everyone seems to be working on building a foundation model, but I think that’s an enormous challenge,” he says. “If you’re actually going to develop a foundation model, it needs to be highly generalized. It has to be capable of handling all kinds of different situations, and I think achieving that level of generalization is going to take time.”

For now, Ludo intends to develop the intelligence rather than manufacture robots, working with hardware makers to integrate its software into their machines.

Krafton’s Investment Strategy for Ludo Robotics

Krafton reported second quarter revenue of 1.29 trillion won, about $890 million, up 95% from a year earlier. Its broader AI investments include $70 million for a computing cluster and a reported $33 million inve