Europe and NATO have announced a wave of drone-related investments over the past two weeks, reflecting a strategic shift in military planning driven by battlefield lessons from the Russia-Ukraine war. NATO Secretary General Mark Rutte unveiled a drone initiative with allies investing more than $40 billion in counter-drone capabilities over the next five years, while the UK committed £5 billion to a drone transformation program in late June and Germany moved to procure 50,000 drones for Ukraine through a 90-million-euro order. Defense tech startup Helsing secured an $18 billion valuation on Monday, underscoring the growing convergence of investment around autonomous systems. The developments follow observations from Ukraine and the Middle East showing how relatively inexpensive, AI-enabled drones have altered modern warfare by gathering intelligence, extending weapon reach, and operating autonomously.
NATO and European Nations Announce Major Drone Procurement Programs
Last week, NATO Secretary General Mark Rutte announced the military alliance would become "drone-ready" through an initiative in which allies would invest more than $40 billion in counter-drone capabilities over the next five years. Rutte stated that drones have "fundamentally altered" the character of modern warfare and have become a "decisive factor" on the battlefield, citing the Russia-Ukraine war as one example.
The UK published its Defence Investment Plan in late June, committing £5 billion ($6.7 billion) to a "UK drone transformation" program aimed at strengthening the country's armed forces. Germany expanded support for Ukraine through a 90-million-euro order for 50,000 drones equipped with Auterion's operating system, announced on Monday by defense software company Auterion and Ukrainian drone maker Skyfall. A source familiar with the matter confirmed to CNBC that the country was Germany.
Auterion CEO Lorenz Meier told CNBC that "this is the first war happening at a time where drones were prevalent enough that they started to play a role." Meier said Auterion's operating system enables drones to continue striking targets despite electronic jamming and allows them to strike targets below the radio horizon. The company plans to introduce software that allows operators to control coordinated swarms of drones rather than piloting each aircraft individually. While the latest order is intended for Ukraine, Meier said the technology is already attracting interest from armed forces including those of Germany, Norway, Britain, and France.
Defense Technology Ecosystem Expands Beyond Drone Manufacturing
The growing use of drones and autonomous systems is boosting demand for technology needed to coordinate drones in real time, according to Morningstar analyst Loredana Muharremi. That includes secure communications, battle management software, AI, satellite-based intelligence, sensors, and electronic warfare systems. "Future defence is moving towards a layered battlefield, where, for example, a tank will not simply fire shells; it will also launch drones, receive live targeting data from satellites and [unmanned aerial vehicles], share information across the battlefield, and operate as part of a networked force," Muharremi told CNBC.
Muharremi said that "as a result, companies with physical platform scale and exposure across autonomy, air defence, sensors, electronic warfare, software, and space are likely to capture a share of future defence spending." Low-cost drones are also increasingly being paired with high-end weapons to improve their effectiveness by distracting or overwhelming enemy air defenses.
Munich-based Helsing announced a funding round on Monday that valued it at $18 billion, cementing its position as one of Europe's best-funded defense technology startups. Helsing makes drones and underwater surveillance weapons, and builds AI and autonomous software to power these military applications.
European Defense Spending and Venture Capital Investment Surge
European core defense spending has doubled since 2019, according to McKinsey. Under NATO's 3.5% target for 2035, spending could reach about 800 billion euros by 2030 — roughly 2.9% of GDP — according to McKinsey projections.
Venture capital investment in defense technology accelerated sharply in 2025 on both sides of the Atlantic. Deal volumes more than doubled year on year, according to McKinsey, and European defense tech funding rose from around 200 million euros in 2021 to 2.6 billion euros in 2025.
FAQ
What did NATO announce regarding drone investments over the past two weeks?
NATO Secretary General Mark Rutte announced last week that the military alliance would invest more than $40 billion in counter-drone capabilities over the next five years through a new drone initiative. Rutte stated that drones have fundamentally altered modern warfare and become a decisive factor on the battlefield.
How much did the UK commit to its drone transformation program?
The UK committed £5 billion ($6.7 billion) to a "UK drone transformation" program under its Defence Investment Plan published in late June, aimed at strengthening the country's armed forces.
What is the value of Germany's recent drone order for Ukraine?
Germany placed a 90-million-euro order for 50,000 drones equipped with Auterion's operating system, announced on Monday by defense software company Auterion and Ukrainian drone maker Skyfall.
