The world’s largest defense companies are investing in military startups at record rates.
Giants such as BAE Systems and Lockheed Martin have piled $4.1 billion into venture capital rounds this year as they race to adapt to the rapid evolution of war, the Financial Times reported.
The model is reminiscent of the pharmaceutical industry, in which incumbents — capital-rich but slow-moving — purchase innovation from smaller, more nimble rivals.
Europe in particular, with two wars on its doorstep, is stepping up spending: EU governments are expected to shell out €454 billion this year, more than double 2021’s figure, Goldman Sachs said in a note. Deutsche Bank upgraded the French aerospace company Thales to a buy, suggesting investment would continue.