German military seeks high-tech edge with AI and drones

The German Armed Forces (Bundeswehr), following the lead of the new US administration, want to direct their armament efforts towards new technologies such as artificial intelligence.

The new federal government must decide on new armament projects as soon as possible, focusing particularly on high-tech projects.

This demand is supported by the Bundeswehr and some parts of the arms industry, especially young startups focused on military equipment.

For example, the German Armed Forces are demanding the purchase of a satellite fleet consisting of hundreds of satellites, which could cost up to 10 billion euros.

Furthermore, the armed forces have initiated the procurement process for unmanned vehicles, including kamikaze drones controlled by artificial intelligence (AI) that enemy jammers cannot disable.

AI kamikaze drones: German startups financed by Silicon Valley

One of the first procurement projects to be financed by the new federal government will be the equipping of the German armed forces with combat drones.

According to reports in the German media, Berlin plans to purchase drones from two Munich-based startups, Helsing and Stark Defence.

Stark Defence, founded in 2024 by former military pilot Florian Seibel, produces combat drones with a range of up to 100 kilometers. According to their own statements, the company uses components only from German suppliers; however, its financing is provided by the US venture capital firm Sequoia and US right-wing tech billionaire and mentor to US Vice President JD Vance, Peter Thiel.

Helsing, founded in 2021 and initially focused on producing artificial intelligence (AI) for tanks, submarines, and fighter jets, primarily produces kamikaze drones that use their explosive payload to hit and destroy the target.

The HX-2 model unmanned aerial vehicles are autonomously controlled by artificial intelligence and can reach a target up to 100 kilometers away without external control after the target is entered. This means the drones cannot be stopped by jammers.

Helsing currently produces about 1,000 of these drones per month, and 6,000 units will be delivered to Ukraine.

NATO’s ‘Drone Wall’ plan on the eastern border

Helsing is also pursuing ambitious goals in connection with NATO’s plans to build a “drone wall” on the eastern border.

According to reports, the company signed a 40 million euro contract in 2024 to establish a surveillance system consisting of sensors and unmanned aerial vehicles on the Lithuanian border.

The experience gained from this project can be used for the “drone wall” that Helsing co-founder Gundbert Scherf said should be established based on satellite surveillance of NATO’s external borders and include reconnaissance-focused unmanned aerial vehicles and numerous suicide drones for defense against any attack. Helsing’s HX-2 model is a possible candidate for this purpose.

Helsing has received positive media reactions in Germany so far, but was recently subjected to a critical review by Bloomberg. According to the analysis, Ukrainian military personnel using Helsing products believe that the German drones are lower in quality compared to some competing models and also significantly more expensive.

Helsing is thought to have “extremely good connections”: The company’s co-founder Scherf is a former McKinsey employee who served as “Head of Strategic Armament Control” in Ursula von der Leyen’s Ministry of Defence between 2014 and 2016.

Later, a Bundestag investigative committee examined the McKinsey networks active during that period.

Munich, a stronghold for military startups

Other startups producing robots or artificial intelligence for military use also hope to receive orders from the Ministry of Defence in the near future.

These include drone defense specialist Alpine Eagles and Arx Robotics, which develops autonomous ground systems and is currently establishing a company in Ukraine. Like Helsing and Stark Defense, both are located in Munich.

McKinsey military expert Jakob Stöber says that “proximity to the Bavarian aerospace industry, highly qualified talent from institutions like the Technical University of Munich and the Federal Armed Forces University,” and “targeted startup support” “particularly support innovation in this area.”

Industry experts also praise the Innovation Center at the Federal Armed Forces University in Munich. According to the center’s own statements, it serves the purpose of “transferring the results of digitalization and technology research to deep tech spin-offs” and “preparing early-stage startups for market entry in incubator and accelerator programs.”

The narrowing of the funding gap between the EU and the US regarding defense startups constitutes a significant advantage for German companies: From 2017 to 2020, only $310 million was invested in Europe, while this figure was $1.5 billion in the US. From 2014 to 2024, this figure was $2.2 billion in Europe and $5.4 billion in the US.

Satellite constellations: The goal of establishing a German ‘Starlink’

In addition to the procurement of unmanned aerial vehicles, combat robots, and artificial intelligence for military use, the German Armed Forces are also discussing the purchase of new satellites.

Currently, NATO countries in Europe have only 46 satellites for military use, while this number is 171 in the US.

10 of the 46 European satellites belong to the Bundeswehr, but two of them (two SARah reconnaissance satellites launched into space by Bremen-based OHB at the end of 2023) are not operational.

According to a report in the newspaper Handelsblatt, a complete satellite constellation will now be built; that is, a network consisting of several hundred individual satellites with communication or reconnaissance functions is being discussed.

The cost of a satellite constellation is estimated to be up to 10 billion euros, and the purchase of several constellations is not out of the question.

According to reports, the plan is to include the project in the budget after the new government is formed. The politically controversial point is that the project will likely separate from the IRIS2 project, which the Commission officially launched in December and aims to place one or more satellite constellations in space. The joint project can now be replaced by a national project.

Cockroach army

While a national satellite constellation is said to offer opportunities for the entire German space sector, especially for new space companies currently suffering from “weak commercial satellite business,” other examples show that future high-tech wars will not be limited to just satellites, unmanned aerial vehicles, robots, and other basically familiar military equipment.

For example, the startup Biotactics in Kassel is reportedly planning to build a cockroach army. According to reports, the cockroaches will be remotely controlled “like toy cars” using electronic impulses.

The Pentagon is said to have been researching this topic for decades; tiny electromechanical systems will be implanted in insects to receive impulses. The goal is to use them for surveillance purposes.

Last year, according to other reports, experts in Singapore succeeded for the first time in “remotely controlling a group of 20 cockroaches with the help of tiny computers attached to their backs and maneuvering them together over rough terrain.” Biotactics has not yet achieved a breakthrough, but according to reports, “investors are already lining up.”