South Gyeongsang Province signs MOU to bring physical AI to manufacturing sites

South Gyeongsang Province has joined forces with policy finance institutions and a regional bank to integrate physical AI into its key manufacturing sectors, including machinery, shipbuilding and defense.

The province signed a multilateral MOU Tuesday at the Korea Development Bank headquarters in Seoul during the Physical AI Regional Hub Development Forum. Seven institutions signed the agreement, including Korea Development Bank, Industrial Bank of Korea, Korea Credit Guarantee Fund, Kyongnam Bank, North Gyeongsang Province and North Jeolla Province.

The MOU aims to embed a physical AI ecosystem — combining AI technology with actual machinery, equipment and robots — into regional manufacturing sites. No separate new fund will be created under the forum framework. Instead, the agreement will serve as a networking channel linking promising local companies to Korea Development Bank's existing National Growth Fund and other policy finance programs.

The three participating local governments will divide responsibilities according to their respective regional strengths. North Gyeongsang Province will handle hardware, leveraging its robot-specialized complex, while North Jeolla Province will focus on power and water supply — including wind and solar energy — using the Saemangeum site. South Gyeongsang Province, anchored by its major manufacturing facilities, will concentrate on collecting on-site validation data and serving as a hub for companies that need physical AI training data.

South Gyeongsang Province plans to work through its Advanced Industries Promotion Division to identify physical AI demand at local manufacturing sites and ensure policy finance support is connected at the right stages of technology validation and commercialization.

"South Gyeongsang Province is the birthplace of South Korea's manufacturing industry, having led it for more than 50 years, making it the place where physical AI technology is most needed and can be most actively applied," Governor Park Wan-su said. "We will take the lead in spreading the physical AI ecosystem, drawing on the vast data and testing environments our manufacturing sites provide."

Park also asked Deputy Prime Minister Bae Gyeong-hun to include a project to build an AI convergence technology innovation platform as part of efforts to establish regional AI technology hubs. He urged Financial Services Commission Chairman Lee Eok-won to add shipbuilding and nuclear power — including small modular reactors — to the list of sectors eligible for the National Growth Fund, lower preferential interest rates for non-metropolitan regions, and introduce a fast-track review system for refund guarantees issued to small and mid-sized shipbuilders.