Europe at the Crossroads of DefTech: Rethinking the European Defense Innovation Ecosystem
“The way I look at Iron Dome is as the ultimate manifestation of the future of the United States’ role in future conflicts, which is not to be the world police, but to be the world gun store,” said Palmer Luckey in November 2023. Luckey is the founder of Anduril, one of the most prominent DefTech companies. The ambition is clear: to participate in global rearmament by capitalizing on the quality of American innovations and to dominate the arms market—at least in the West—through technological mastery.
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Key takeaways
In the United States, DefTech is thriving thanks to unprecedented investments and the openly embraced financialization of the defense apparatus, enabling the large-scale militarization of civilian technologies (commercial space, cloud computing, AI).
The Ukrainian theater is a testing ground for the wars of the future, where the line between hardware and software is increasingly blurred in favor of simple yet technologically impressive physical systems, enhanced by AI, whose operational use—now battle-tested—is bound to increase.
A new operational model is thus emerging, based on the interplay between “decision-making weapons” and “attrition weapons,” in a context where digital technology determines both effectiveness and resilience.
The European response must therefore be to orchestrate this hybridization, ensuring that the robustness of large industrial groups and the agility of startups are compatible through explicit governance.
As operations increasingly rely on data and artificial intelligence (AI) and weapons systems become “software-defined,” the advantage no longer lies solely in the design of platforms—fighter jets, tanks, submarines—but also in the mastery of information architecture—collection, fusion, computation (cloud/edge), interoperability—and in the ability to innovate very rapidly. War, in the age of AI, is therefore not solely the domain of states. It is an industrial and logistical matter, but also a financial one. In this post-Westphalian framework, sovereignty is expressed less in laws than in lines of code. Power is measured in APIs server latency, and the ability to fuse sensors and payloads.
The industrial partnership formed between Anduril and Palantir in December 2024 is emblematic of this shift. These two companies, whose CEOs come from the tech sector and have no roots in the United States (U.S.) defense industrial and technological base, are now at the forefront of AI applications for national security, placing them at the heart of U.S. operational power. This agreement comes at a time when tech companies are attempting to capture a larger share of the colossal U.S. defense budget—estimated at $900 billion for 2026, and which Donald Trump aims to increase to $1.5 trillion by 2027—at the expense of traditional industry players such as Lockheed Martin, Raytheon, or Boeing. Even more striking is that while the Anduril/Palantir consortium is open to “other industry players” such as SpaceX, OpenAI, or Scale AI, the “Primes” are not always invited.
Europe is experiencing a similar trend, driven by the rise of startups operating in the most advanced technology sectors. As in the U.S., however, collaboration between these new entrants and established companies in the European defense industrial base remains complex. The terms of the relationship between these two worlds—agile innovation based on data on one side, established, equipment-focused structures on the other—remain largely undefined, and models for partnership, governance, and industrial integration have yet to be devised. How, then, can these forces be brought together to build a credible European capability in defense AI?
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Europe at the Crossroads of DefTech: Rethinking the European Defense Innovation Ecosystem
Author(s)
Laure de ROUCY-ROCHEGONDE
Director, Center for Geopolitics of Technology, Ifri
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