Europe needs tech-style finance for drone wars

FOR MANY YEARS, defence was seen as an unsavoury place for tech developers’ time and money. Alphabet’s Google explicitly banned its AI from being used to develop weapons and surveillance tools. Now the tide is turning thanks to the aggression of Vladimir Putin’s Russia.

- PARMY OLSON

Google has relaxed its ban, and defence tech is Europe’s fastest-growing sector for startups with venture capital funding projected to rise by 132% in 2025 from last year, according to Dealroom.co, a Dutch market-research firm. Defence tech now accounts for 6.2% of total European VC funding, up from less than 1% before 2020. Much of the new capital is going into startups focused on using Al in defence, robotics, and autonomous systems, according to Dealroom.

Venture capital firms across the board are investing in startups they wouldn’t have touched five or 10 years ago, back when they grouped anything related to “lethal technologies” along with other untouchables like gambling, porn, alcohol, and tobacco. Now European corporates like Deutsche Telekom and Porsche Automobil Holding are setting up defence-focused investment funds. But there’s a risk that the jump in financing could fade just as it did with clean tech, a boom driven in part by a moral imperative and more so by the prospect of a financial opportunity.