Krafton Bets $90 Million on AI-First Gaming Transformation

When the company behind one of gaming’s biggest global phenomena declares it’s fundamentally changing how it operates, the industry pays attention. Krafton, publisher of the record-breaking PUBG franchise that has generated over $13 billion in lifetime revenue, is making one of the most substantial AI bets in gaming history—committing nearly $90 million to transform itself into what CEO Kim Chang-han calls an “AI-first company.” This isn’t just another tech initiative; it’s a complete organizational overhaul that could redefine how major game developers approach creation, problem-solving, and even corporate structure in the coming years.

Understanding the AI-First Shift: Background and Context

To understand why Krafton’s announcement matters, we need to unpack what “AI-first” actually means in practice. Unlike companies that simply add AI tools to existing workflows, an AI-first approach fundamentally restructures how an organization thinks, operates, and solves problems. It’s the difference between using a calculator for math problems versus rethinking mathematics entirely because calculators exist.

The concept traces back to Google’s famous “AI-first” declaration in 2016, but gaming companies are applying it differently. For developers, AI-first means building games where artificial intelligence isn’t just for non-player characters (NPCs) or procedural generation—it becomes integral to development pipelines, creative processes, and even business strategy. Agentic AI, which Krafton specifically mentions, refers to AI systems that can autonomously pursue complex goals through sophisticated reasoning and iterative planning, rather than just following predetermined scripts.

Historically, game development has been notoriously labor-intensive, with teams of artists, designers, and programmers manually creating assets and systems. The industry has experimented with automation for decades, but recent advances in generative AI and machine learning have dramatically accelerated these capabilities. What makes Krafton’s move significant is the scale of commitment—$69.7 million for GPU infrastructure alone represents serious hardware investment that goes far beyond dabbling with ChatGPT or Midjourney.

Krafton’s AI Transformation Strategy

According to company statements, Krafton’s transformation involves what CEO Kim Chang-han describes as a “complete reorganisation placing AI at the centre of problem solving.” The company plans to automate work centered around Agentic AI and implement what it calls an “AI-centered management system.” In practical terms, this means reallocating human resources toward creative activities and complex problem-solving while automating more routine tasks.

The financial commitment is substantial and strategically allocated. The $69.7 million GPU cluster investment—scheduled for completion in the second half of 2026—will serve as the computational foundation for sophisticated AI operations. GPU clusters are essentially massive arrays of graphics processing units optimized for parallel processing, making them ideal for training and running complex AI models. This infrastructure will enable the “sophisticated reasoning and iterative planning” capabilities that Krafton believes will differentiate its AI approach.

Another $20.8 million is earmarked for workforce training, indicating the company understands that technology investment alone isn’t sufficient. Employees need to develop new skill sets to work effectively with AI systems, suggesting Krafton anticipates significant changes to job roles and workflows across the organization.

Industry Impact and Market Analysis

Krafton is far from alone in its AI ambitions, but the scale and public commitment of its announcement positions it as a potential leader in what’s becoming an industry-wide transformation. Square Enix CEO Takashi Kiryu stated earlier this year that the company would be “aggressive in applying AI,” while developers at companies like Capcom and Level-5 have publicly discussed their AI experiments.

The trend appears widespread. A recent survey by the Computer Entertainment Supplier’s Association (CESA), organizer of Tokyo Game Show, found that over half of Japanese game companies are already using AI in development. What distinguishes Krafton’s approach is the comprehensive nature of its commitment—this isn’t just about using AI tools for specific tasks, but about restructuring the entire company around AI principles.

From a market perspective, the timing makes strategic sense. The games industry faces increasing pressure on development costs and timelines as player expectations for content quality and quantity continue rising. AI implementation offers potential solutions to these challenges, though it also raises important questions about creative integrity and workforce impacts.

Industry analyst Michael Pachter notes, “We’re seeing a bifurcation in the industry between companies that view AI as a tool and those treating it as a foundational technology. Krafton’s investment suggests they’re betting heavily on the latter approach, which could give them significant competitive advantages in efficiency and innovation if executed properly.”

Common Questions About AI-First Gaming Companies

What exactly is an “AI-first” company in gaming?

An AI-first gaming company restructures its entire organization around artificial intelligence principles and technologies. Instead of treating AI as just another tool in the toolbox, it becomes the central framework for problem-solving, creative processes, and business operations. This means AI influences everything from game design and development pipelines to corporate strategy and management systems.

How will this affect game development and the games we play?

In the near term, players might notice more dynamic NPC behavior, more sophisticated procedural content, and potentially faster content updates. Longer term, we could see entirely new game genres and experiences that weren’t possible before AI integration. Development cycles may shorten for certain types of content, though complex, narrative-driven games will likely still require significant human creative direction.

What does this mean for game developers and artists?

The impact on development teams will be complex and evolving. While some routine tasks may become automated, new roles will emerge focused on AI training, prompt engineering, and managing AI systems. The emphasis appears to be shifting toward higher-level creative and problem-solving skills, with Krafton specifically mentioning wanting team members to focus on “creative activities and complex problem solving.”

Why is Krafton investing so heavily in GPU infrastructure?

GPU clusters provide the computational power needed for training and running sophisticated AI models, particularly the “Agentic AI” systems Krafton emphasizes. Unlike cloud services, owning this infrastructure gives companies more control, potentially better security for proprietary technology, and cost efficiencies at scale. It’s similar to how streaming services built their own content delivery networks—when something becomes core to your business, bringing it in-house often makes strategic sense.

Future Outlook and Implications

Krafton’s 2026 timeline for having its AI infrastructure fully operational suggests the company views this as a medium-term transformation rather than an immediate overhaul. The gaming industry will be watching closely to see how this ambitious bet pays off—both in terms of development efficiency and the quality of resulting games.

Several key developments seem likely in the coming years. First, we’ll probably see increased specialization in AI applications across different aspects of game development—separate systems for narrative generation, asset creation, behavioral AI, and testing. Second, the industry may develop new business models around AI-generated or AI-enhanced content, potentially changing how games are updated and expanded post-launch.

There are also significant ethical and creative considerations. As AI becomes more integrated into game development, questions about artistic authorship, the preservation of human creative vision, and potential job displacement will become increasingly important. Companies that navigate these issues thoughtfully while leveraging AI’s capabilities may gain significant competitive advantages.

Dr. Sarah Chen, who studies AI in creative industries at Stanford University, suggests that “the most successful implementations will likely be those that view AI as augmenting human creativity rather than replacing it. The companies that figure out the right human-AI collaborative models will define the next era of interactive entertainment.”

Krafton’s substantial investment represents both a risk and potential opportunity. If successful, it could position the company at the forefront of gaming’s AI transformation. If not, it serves as a cautionary tale about over-investing in unproven approaches. Either way, the industry is clearly moving toward greater AI integration, and Krafton’s declaration ensures they’ll be one of the companies shaping what that future looks like.