[VC Now](27) "Physical AI Is Transforming Manufacturing Sites... Korea Has a Competitive Edge"

Maeng Doojin, President of Atinum Investment and Head of Deep Tech Division Interview
"Physical AI: Korea Has the Edge with Its Deep Understanding of Manufacturing Sites"
"Seeking Companies to Transform Industrial Sites... The Essence Is Discove

"The competition for large-scale artificial intelligence (AI) models is already over. Now, the key issue is how to apply AI to real industrial sites. With its rich manufacturing experience and skilled workforce, Korea has enough competitiveness to succeed in the global market."

What kind of future can Korea envision in the deep tech (advanced technology) market, which is dominated by economies of scale? In response to this question from The Asia Business Daily, Myeong Dujin, President of Atinum Investment and Head of the Deep Tech Division, whom we recently met at Atinum Investment's headquarters in Gangnam-gu, Seoul, said, "At the stage of competition in foundation models (general-purpose AI neural networks trained on extensive data), the ability to integrate AI into actual industries such as manufacturing sites and mobility is now important."

Myeong emphasized, "The recently spotlighted 'physical AI' (the combination of robots' physical functions and AI) is a field where Korea can excel, as it requires industry-specific expertise and on-site experience," adding, "We focus on technologies that have clear goals and can be immediately applied in the field."

Atinum, established in 1988 as a first-generation venture capital firm, currently manages five mega funds, including the 'Atinum Growth Investment Partnership 2023 Fund,' which boasts the largest formation amount in Korea at 860 billion won (860 billion KRW). Following its 'one-fund strategy,' Atinum introduced a sector representative system for four sectors-deep tech, service/platform, bio, and game/content-in 2023. Myeong leads the deep tech division, which accounts for about 30% of Atinum's approximately 2 trillion won (2 trillion KRW) in assets under management (AUM).

"Foundation Model Competition Concludes... Now Focus Should Be on 'Field Application'"

Myeong Dujin, President of Atinum Investment and Head of the Deep Tech Division, recently said in an interview with The Asia Business Daily, "At the stage of competition in foundation models, the ability to integrate AI into actual industries such as manufacturing sites and mobility is now important." Atinum

Myeong, who holds a doctorate in engineering, joined the venture capital industry in 2002 after working as a researcher at Samsung Electronics. When asked about his career change, he laughed and said, "Honestly, I didn't expect to be doing this for 25 years," but added, "I wanted to leverage my technical experience in business management. I found it fascinating to constantly meet new entrepreneurs and technologies."

Representative exit cases include Clobot and CMES in the robotics field. Both companies received continuous follow-up investments after the initial investment in 2019 and successfully went public last year. In the smart factory sector, companies such as TIRAYUTEC (now LS TIRAYUTEC), OpenEdge Technology in semiconductors, and BCN&C have also largely completed their exits.

Other notable investment cases include Daim Research (manufacturing efficiency based on reinforcement learning), RideFlux (autonomous driving software), and BOS Semiconductor (AI semiconductors for vehicles). Overseas, Atinum also invested in Apptronik, a robotics company collaborating with Google. Apptronik was recently valued at 5 billion dollars (about 7 trillion KRW).

Myeong stated, "For good technology to blossom, market demand and adoption are necessary. The challenge lies in the process of integrating technology," adding, "Many of the Atinum deep tech division's investment professionals are engineers with high domain expertise. Based on the 'field understanding' they have accumulated through interactions with various companies, they help new companies shorten the time it takes to connect their technology to the market."

"Next Year's Fundraising to Begin in Earnest... Timing Is What Determines VC Investment Performance"

The area drawing the most attention recently is physical AI. Myeong said, "So far, the competition in foundation models has been a 'game of scale' that requires massive capital. It is true that Korea found it difficult to be competitive in this area."

He continued, "However, in the field of physical AI, Korea's 'manufacturing experience' becomes a significant strength. In the United States, as manufacturing has declined, the ability to apply technology on site has also been lost. Since most big tech companies are software firms, the 'manufacturing DNA' has disappeared."

The company logo is displayed on the wall of the AtinumInve office in Gangnam-gu, Seoul. AtinumInve

Accordingly, Atinum has made consecutive investments in companies such as Holiday Robotics (humanoids) and Didin Robotics (bipedal walking robots). Regarding Holiday Robotics, Myeong explained, "It is an industrial humanoid robot optimized for external interactions, focusing on automating various assembly processes with lightweight arms and precise fingers." As for Didin Robotics, he said, "This company solves practical problems in shipbuilding sites through walking control. Although welding robot arms have already been introduced, the biggest inconvenience remains that people must move them to partitioned or high-altitude work areas. Didin Robotics' bipedal robots replace this very process."

Regarding the recent claims of an 'AI bubble,' Myeong was skeptical. He said, "It's unclear what exactly is being defined as a bubble. Of course, we need to look more closely at specific points of overheating, but AI is already on a predetermined path and will inevitably continue to be applied in the market as a tool for efficiency. There will be ups and downs, but ultimately, it is a mountain that must be climbed."

Atinum plans to begin fundraising for its next fund in earnest starting next year. The fund established in 2023 will enter its fourth year in the second half of next year, which is considered the time to complete portfolio construction. The size of the new fund and whether the one-fund strategy will be maintained are still undecided. Myeong emphasized, "Investing is always difficult, whether in a boom or a downturn, so I have never thought of a downturn as something separate," adding, "Atinum is a firm that formed an 860 billion won fund two years ago."

He particularly stressed the importance of investment timing. He said, "For fund performance, it is more important to focus on which sector at what time than which company you choose," adding, "Sectors like AI, robotics, and autonomous driving, which are booming now, should have already received investment." He further explained, "For venture capital investment, the key is how much capital to allocate to which sector and at what stage of a company's growth to invest. The timing of value creation differs for each sector."

He added, "Since a fund's lifespan is 8 to 10 years, the decisions made now will be reflected in future results. Deciding which seeds to plant is the most important task for next year."

This content was produced with the assistance of AI translation services.