From Spy Cockroaches To AI Robots; Germany Start-Up Plots Future of Warfare

For Gundbert Scherf - the co-founder of Germany's Helsing, Europe's most valuable defence startup - Russia's invasion of Ukraine changed everything.

- PT News

Scherf had to fight hard to attract investment after starting his company - which produces military strike drones and battlefield Al - four years ago. Now, that's the least of his problems. The Munich-based company more than doubled its valuation to $12 billion at a fundraising last month. "Europe this year, for the first time in decades, is spending more on defense technology acquisition than the US," said Scherf. The former partner at McKinsey & Company says Europe may be on the cusp of a transformation in defence innovation akin to the Manhattan Project - the scientific push that saw the US rapidly develop nuclear weapons during World War Two. "Europe is now coming to terms with defense.” Reuters spoke to two dozens executives, investors and policymakers to examine how Germany - Europe's largest economy - aims to play a central role in the rearming the continent. Chancellor Friedrich Merz's government views Al and startup technology as key to its defence plans and is slashing bureaucracy to connect startups directly to the upper echelons of its military, the sources told Reuters. Shaped by the trauma of Nazi militarism and a strong postwar pacifist ethos, Germany long maintained a relatively small and cautious defence sector, sheltered by US security guarantees. Germany's business model, shaped by a deep aversion to risk, has also favoured incremental improvements over disruptive innovation, No more. With US military support now more uncertain, Germany - one of the biggest backers of Ukraine - plans to nearly triple its regular defence budget to around 162 billion euros ($175 billion) per year by 2029. Much of that money will go into reinventing the nature of warfare, the sources said. Helsing is part of a wave of German defence startups developing cutting-edge technology, from tank-like Al robots and