Seoul: South Korean battery maker SK On Co. is in talks with a U.S. defense firm to supply batteries for unmanned underwater vehicles powered by artificial intelligence (AI), industry sources said Wednesday, as part of efforts to expand its business portfolio into the defense sector.

According to Yonhap News Agency, the SK Group affiliate also recently approached a European defense company, expressing interest in supplying batteries for electric vertical take-off and landing (eVTOL) vehicles. The series of moves comes as SK On has been targeting defense-purpose batteries, which require operational stability and high energy density.

SK On is currently supplying battery cells for an unmanned vehicle development project led by Hyundai Rotem Co., the defense subsidiary of Hyundai Motor Group, with tests currently under way. Industry watchers said SK On is widely expected to focus on developing high-density ternary nickel-cobalt-manganese (NCM) batteries in the short term while reviewing all-solid-state batteries over the longer term for defense applications.

Considering the time required to verify the safety and stability of defense-purpose batteries, SK On's supply of related products is expected to materialize after 2028. "Given the rapid pace of technological advancement, the era of unmanned defense solutions and physical AI products is likely to arrive sooner than expected, and companies that secure next-generation battery technology are set to benefit," an industry official said.