German defense giants battle over military spending ramp-up

Defense giants are drawing battle lines as Germany rearms, with the old guard arguing for traditional heavy weaponry while startups push for more modern kit such as AI-enabled drones.

- 

Chancellor Friedrich Merz has vowed to create Europe’s strongest conventional army with outlays of hundreds of billions of euros, accelerating a buildup that began after Russia’s 2022 full-scale invasion of Ukraine.

The rush to rearm, mirrored across Europe, has been fuelled by pressure from US President Donald Trump for NATO allies to spend more on defense as well as worries about American commitment to the continent’s security. But where these funds should flow is hotly debated.

A crop of German tech defense startups argue the Ukraine war -- much of it now contested in the skies with unmanned aerial vehicles -- has shown that relatively inexpensive, mass-producible equipment like drones powered by artificial intelligence will be key for future conflicts.

So far, some argue, too much spending has focused on time-tested but expensive weaponry such as tanks and armored vehicles, which are vulnerable to being targeted by the new, cheaper airborne armaments.

“Clearly there's been an overly strong focus on traditional platforms,” Gundbert Scherf, one of the heads and founders of German defence technology company Helsing, told AFP.

“Spending patterns have to change as the world around us changes.”

Scherf, whose Munich-headquartered startup was founded in 2021 and supplies strike drones to the Ukraine military, sees signs that attitudes are shifting.