The emergence of AI is rapidly reshaping the industrial landscape. The arrival of ChatGPT marked a turning point, demonstrating in tangible terms that AI could go beyond being a simple technological tool to broadly augment human intellectual activities. Since then, with the emergence of Gemini, Claude, and Copilot, AI has continued to weave itself into daily life more broadly, moving past basic task support to take on the role of a personal assistant. These developments have accelerated discussions around artificial general intelligence (AGI), drawing attention to the opportunities it could create for businesses and the changes companies may face as a new era unfolds. AI is no longer confined to software. By integrating with physical devices such as robots and machinery, it is evolving into "physical AI," capable of independently perceiving, making decisions, and taking actions in the real world. This evolution is expected to significantly boost productivity across a wide range of industries. HD Hyundai is also developing a variety of AI solutions by training AI on the world-class expertise and know-how it has accumulated across its core businesses. Looking ahead, the company plans to go further by deploying AI solutions in the field to enhance productivity while pursuing a differentiation strategy through products incorporating AI technology. ■ Driving Synergies and Securing a Lasting Competitive Edge Through AIX In 2022, as the need to rapidly and efficiently adopt AI technologies grew across its core businesses, including shipbuilding, construction equipment, electric systems, and energy, HD Hyundai established a dedicated AI organization within HD Korea Shipbuilding & Offshore Engineering to accelerate the development and application of AI technologies. In November 2025, to further accelerate its AI Transformation (AIX), the company reorganized the dedicated AI organization into the “AIX Promotion Office” and elevated it to report directly to the CEO. The AIX Promotion Office’s top priority is strengthening workforce capabilities by raising the overall level of AI proficiency across the organization, from senior executives to new employees. At the same time, it is focused on connecting AI solutions that were previously deployed independently at individual sites to generate company-wide synergies, while integrating AI technologies into a range of next-generation design and production platforms. In particular, HD Hyundai plans to fully integrate AI technologies into its manufacturing operations to address key challenges facing Korea’s shipbuilding industry, including a shrinking workforce, weakening price competitiveness against China, and a narrowing technological lead. Accordingly, HD Hyundai’s shipbuilding affiliates are pursuing significant productivity gains across design and production to shorten lead times and strengthen cost competitiveness, while improving operational efficiency through more streamlined operations. AI-based ship design and simulation using Siemens CAD/PLM, NVIDIA graphics technology, and HD Hyundai Samho’s 3D LNG carrier model rendering (Source: NVIDIA Blog) ■ Connecting Design and the Shop Floor Through AI HD Hyundai is focused on developing a range of capabilities to improve shipyard operating efficiency, including the “Shipbuilding AI Master Agent.” The Shipbuilding AI Master Agent aims to create an integrated system by capturing and connecting the expertise of design and production specialists at HD Hyundai Heavy Industries and HD Hyundai Samho. The goal is to develop an “action-oriented AI agent” that learns knowledge spanning the shipbuilding industry and, like a highly skilled master technician, makes optimal decisions at the right time and place across key value-chain processes, including design, production, quality, and safety. To achieve this, HD Hyundai is establishing standards for collecting and managing video data tailored to the characteristics of the industry, while continuously expanding its AI training datasets. The company plans to capture and codify production know-how using shop-floor video data, while building a system capable of comprehensive decision-making by seamlessly connecting design and production agents. In parallel, it is conducting research into key technologies that enable collaboration among agents, including MCP, a multi-agent collaboration platform, and A2A, which facilitates agent-to-agent communication. HD Hyundai is also concentrating its capabilities on bringing “physical AI” optimized for real-world industrial environments into full-scale application. A welding robot developed by HD Hyundai Robotics uses vision AI technology to capture images of completed welds, independently identify defective areas and defect types, and store the findings as data. This allows AI-generated data analysis to significantly reduce the resources required for quality inspections while improving inspection accuracy, eliminating the need for workers to visually check each weld across large-scale production sites. Similar welding robots are currently being introduced at shipbuilding production sites to validate their feasibility. Conventional robotic welding systems were limited in their ability to respond in real time as they operated only according to preset conditions. HD Hyundai, by contrast, has applied technology that integrates real-time images of the weld pool, the area where metal melts due to heat during welding, with robot data. AI-driven feedback can then immediately detect and correct defects, enabling the development of an automated quality management system. A robot working at the HD Hyundai shipyard HD Hyundai is also developing technologies to integrate physical AI into cranes used to handle large, heavy loads and other critical equipment across its manufacturing facilities, while significantly shortening the time required to deploy these technologies in the field. Shipyard cranes, in particular, are evolving beyond equipment used primarily for repetitive lifting tasks into critical systems capable of moving large loads of various shapes safely and quickly. Traditionally, these highly complex operations relied heavily on the experience of skilled workers to assess factors such as the shape of the load, rigging conditions, and crane characteristics. More recently, HD Hyundai has been capturing these expert decision-making processes and work instruction data as digital assets to create digital twin-based simulations. By modeling in real time the complex physical interactions among cranes, loads, wires, rigging conditions, and surrounding structures, the company is significantly improving operational precision and safety. Building on these capabilities, HD Hyundai is advancing toward an “intelligent operating system based on physical AI” that can interpret visual information from the worksite together with verbal instructions from operators and translate them into optimal crane operation plans. This technological advancement is expected to serve as a key foundation for HD Hyundai’s ultimate goal of building autonomous shipyards, the advanced shipyards of the future. In addition, HD Hyundai is introducing a new paradigm for the infrastructure construction market through the development of autonomous excavation equipment. HD Hyundai’s next-generation autonomous excavation technology is designed to integrate and interpret data from multiple sensors, with a single AI model independently managing the entire process, from work planning to equipment control. This enables human-like decision-making and precise operation even in complex, unstructured construction environments. In particular, the technology continuously learns from operational data collected in the field to improve its own performance. It is also expected to enhance both safety and productivity across a wide range of construction sites while helping address the industry’s challenges of an aging workforce and labor shortages. An unmanned autonomous excavator being demonstrated at CONEXPO 2026, a construction equipment trade show held in North America ■ In the Age of AI, What Is HD Hyundai’s Next AI Strategy? In the short term, HD Hyundai is working to raise AI capabilities across all its affiliates as part of its broader AI transformation. Notably, the company plans to apply AI technologies across all of the Group’s business areas to secure high-quality industrial data and use this foundation to strengthen its fundamental competitiveness in AI technology. HD Hyundai is also preparing to introduce industry-specific “physical AI” into key manufacturing processes, including welding and painting, as part of its efforts to build advanced shipyards of the future. At the same time, the company is integrating its proprietary AI technologies into unified production and design platforms, while focusing its capabilities on developing AI simulation technologies for digital manufacturing and building the necessary infrastructure. Beyond using AI simply as a tool to support day-to-day tasks, HD Hyundai continues to advance its AI development capabilities as it transforms into an “AI-native” company, placing AI at the core of its management and operational systems. Key examples include the development and demonstration of welding robots by HD Hyundai Robotics and autonomous excavation technology by HD Construction Equipment, as well as the implementation of smart factories. By turning its accumulated, distinctive production know-how into digital assets, HD Hyundai plans to build manufacturing operations that are ultimately driven entirely by AI and data. 

▶ HD Hyundai, TerraPower and Hyundai E&C held first executive-level meeting since signing MOU in May ▶ Chairman Chung Kisun says partnership will accelerate commercialization of Natrium reactors ▶ HD Hyundai aims to build capacity to produce 2-3 primary Natrium® components annually, deepening Korea-U.S. cooperation HD Hyundai is partnering with TerraPower and Hyundai E&C to accelerate its push into the U.S. small modular reactor (SMR) market. HD Hyundai said Chairman Chung Kisun, TerraPower Founder and Chairman Bill Gates, TerraPower President and CEO Chris Levesque, and Hyundai Engineering & Construction CEO Lee Han-woo met in Seoul on Aug. 14 to discuss the collaboration. This was the first meeting among the top executives of the three companies since HD Hyundai, TerraPower and Hyundai E&C signed a trilateral memorandum of understanding in May to cooperate on next-generation sodium reactor projects. At the meeting, Chairman Chung and the other executives held in-depth discussions on a range of cooperation opportunities to commercialize land-based reactors, building on progress made to date. “We expect this cooperative framework, which spans technology, manufacturing and EPC, to accelerate the commercialization of next-generation Natrium reactors,” Chairman Chung Kisun said. “We will actively respond to growing demand for SMR-based power generation through our own technology development and collaboration with global companies.” HD Hyundai has been refining the scope of its supply chain cooperation and plans to accelerate investment in production facilities ahead of commercialization, with the goal of eventually supplying two to three reactor vessels annually. The U.S. is the world’s largest nuclear power market, with approximately 95 gigawatts (GW) of installed capacity, accounting for about 25% of the global total. As a significant portion of the country’s nuclear power facilities began operations in the 1970s and are aging, demand to replace aging reactors is expected to increase substantially in the years ahead. In addition, rapidly growing electricity demand driven by the recent expansion of data centers in the U.S. is further increasing demand for nuclear power. The three companies previously signed an MOU in May to establish a collaboration framework for the commercialization of Natrium, a next-generation SMR based on sodium-cooled fast reactor (SFR) technology. Under the agreement, TerraPower will provide Natrium technology, HD Hyundai will manufacture major equipment, and Hyundai E&C will provide engineering, procurement and construction (EPC) support for selected projects. HD Hyundai joined TerraPower’s visionary investor base in 2022, followed by an order from TerraPower in December 2024 to manufacture cylindrical reactor vessels for the Natrium reactor. In March 2025, HD Hyundai signed a strategic agreement with TerraPower to expand the manufacturing supply chain for the commercialization of Natrium reactors and conducted a yearlong study on manufacturing feasibility, price competitiveness and delivery schedules. Building on these achievements, HD Hyundai was named the preferred bidder in May to manufacture and supply key equipment for TerraPower’s Natrium reactors.

▶ Highest Tier Certified by Leading Global Environmental Safety Science Organization ▶ Custom Recovery Solutions Turn Foundry Sand, Waste Synthetic Resins, Dust, and Cutting Fluids into New Resources ▶ Eco-Lubricants and Recycled Materials Drive Circularity Across Full Product Lifecycle HD Construction Equipment announced on the 12th that its Incheon Campus has received the highest Platinum rating for Zero Waste to Landfill (ZWTL) certification from UL Solutions, a global leader in safety science, for the second consecutive year. ZWTL is an international certification that assesses a facility's ability to manage resources in a circular manner. It verifies waste management practices, including recycling and energy recovery, based on the waste generated at business sites. Facilities are awarded ratings of Platinum (100%), Gold (95–99%), or Silver (90–94%) based on their recycling rates. After achieving a Gold rating for four consecutive years starting in 2021, the HD Construction Equipment Incheon Campus became the first facility in the construction machinery industry to reach a recycling rate of 99.54% last year, earning its first Platinum rating. By maintaining this top-tier status again this year, the plant has demonstrated its ongoing commitment to resource circularity. HD Construction Equipment is dedicated to developing resource recovery methods specifically designed for the unique characteristics of each type of waste. For example, foundry sand, which is used to mold products by pouring molten metal, and process dust are processed separately for recycling into raw materials. Waste synthetic resins and waste wood are shredded to create Solid Refuse Fuel (SRF), while cutting fluids used in metal machining are reused after impurities are removed. To reduce packaging waste from the delivery of raw materials and components, the company has replaced traditional wooden pallets and cardboard boxes with steel pallets and reusable Danpla (plastic) boxes. Additionally, it has implemented a resource circularity system to collect and reuse used packaging materials. HD Construction Equipment is enhancing its resource circularity initiatives beyond just managing waste on the shop floor. The company is now focusing on improving resource sustainability throughout the entire product lifecycle, which includes development, operation, maintenance, and disposal. To reduce the environmental impact at the end-of-life stage of its equipment, HD Construction Equipment has developed biodegradable lubricants that are suitable for hydraulic systems and engines in construction machinery. In addition, the company has developed parts made with 20% to 30% recycled materials and is currently validating their performance for use in both internal and external product components. "Earning the ZWTL Platinum rating for two consecutive years is a testament to the ongoing efforts of our executives and employees to establish a resource circularity framework and minimize waste," stated an official from HD Construction Equipment. "We will continue our resource circularity initiatives throughout all aspects of our operations, from plant management to product usage and disposal."