Germany’s defence giants and tech startups battle over military spending, debating traditional tanks versus AI drones as the country ramps up its armed forces
FRANKFURT: A major debate is raging within Germany’s defence industry over how to spend hundreds of billions of euros allocated for rearmament.
Traditional arms manufacturers champion heavy weaponry like tanks, while a new wave of tech startups argues for investment in modern systems like AI-enabled drones.
Chancellor Friedrich Merz has pledged to build Europe’s strongest conventional army, accelerating a military build-up that began after Russia’s 2022 invasion of Ukraine.
The spending surge is driven by pressure from US President Donald Trump for NATO allies to contribute more and by concerns over America’s commitment to European security.
Defence tech startups point to the Ukraine war, where drone warfare is dominant, as proof that cheaper, mass-producible equipment is the future.
They argue that excessive spending remains focused on expensive, traditional platforms vulnerable to these new airborne threats.
“Clearly there’s been an overly strong focus on traditional platforms,” said Gundbert Scherf, a co-head and founder of German defence tech company Helsing.
“Spending patterns have to change as the world around us changes.”
Scherf’s Munich-based startup, founded in 2021 and now reportedly worth EUR 12 billion, supplies strike drones to Ukraine.
He hopes spending will shift from a 99% focus on traditional systems to a more even balance with autonomous technology.
Other startups echo this cautious optimism but warn the procurement shift is not happening fast enough.
“We are really good in Europe at writing strategic papers — but we have to execute more,” said Josef Kranawetvogl, a senior executive at startup Stark.
“We have to keep pace, we have to be fast.”
On the opposing side, traditional defence giant Rheinmetall argues that drones are just one component of future warfare.
CEO Armin Papperger insists that armoured vehicles remain essential for national defence and territorial repulsion.
“If there were a war involving NATO, it would look very different from what we currently see in Ukraine,” Papperger recently told a media briefing.
“Drones would play a less significant role than they do now.”
The German government plans to invest EUR 10 billion in drone technology in the coming years, according to Defence Minister Boris Pistorius.
However, reports indicate a continued massive focus on traditional arms, with EUR 377 billion in desired purchases earmarked for established defence titans.
A defence ministry spokesman said battle tanks and aircraft would continue to be needed, working alongside unmanned systems.
Some observers warn that Germany’s military planning is dangerously outdated.
They argue it is lagging behind the rise of autonomous systems and remains too focused on the weapons of the last war. – AFP
