At a covert facility in southern Germany, Helsing SE—a Munich-based start-up specializing in artificial intelligence (AI)-driven defense technology—has emerged as a prominent player in the evolving landscape of military procurement. Established in 2021, the company produces lightweight attack drones weighing approximately 12 kilograms, designed to operate with minimal human intervention. These drones have been deployed extensively in Ukraine’s ongoing conflict against Russian forces, highlighting a broader shift toward smaller, more agile and cost-effective defense systems.

Traditionally, Western military acquisitions centered around high-cost, long lead-time projects involving tanks, fighter jets, and submarines from established contractors like Lockheed Martin and Northrop Grumman. However, Helsing’s rapid development cycle and relatively low unit cost—some drones are priced as low as €17,500—reflect a broader trend where privately funded companies backed by venture capital are driving innovation in defense technology. The Pentagon’s upcoming fiscal year budget includes $55 billion earmarked for new unmanned, AI-powered weapons, while the European Union has allocated around €115 million for similar initiatives.

Helsing's factory, protected by stringent security measures and capable of swift relocation, operates discreetly amid a suburban industrial setting. The company’s workforce of about 100, many of whom come from Germany’s declining automotive sector, undergoes rigorous vetting. The start-up’s leadership, including co-founder and co-CEO Gundbert Scherf—a former adviser to Germany’s defense ministry—attributes its founding to the imperative of countering perceived Russian threats in Europe. Initial funding challenges were overcome after Russia’s invasion of Ukraine accelerated investor interest in defense technology, with Helsing’s valuation reportedly reaching nearly $18 billion following a recent funding round.

The operational effectiveness of Helsing’s drones in Ukraine is noteworthy. The AI-enabled devices, often referred to as loitering munitions, can autonomously identify and strike small, hidden targets such as battery systems and armored vehicles, even under conditions of electronic jamming that degrade GPS and communications. Mission success rates near 70 percent have been reported, with real-time data from battlefield deployments informing continuous software improvements.

Looking ahead, Helsing is developing CA-1 Europa, an unmanned fighter jet designed for deployment from 2029. Constructed largely from carbon fiber and capable of electronic warfare and precision strikes, this platform aims to be produced at significantly lower cost compared to traditional manned fighters. The company’s vice president for air programs, Stephanie Lingemann, emphasized that removing the need to protect pilot lives opens new tactical possibilities.

Despite rapid growth and strong investor interest, the proliferation of defense technology start-ups has introduced complexity to the market, making it challenging for investors, governments, and the public to navigate. Still, many analysts see the demand for unmanned and AI-enabled military systems continuing to rise amid escalating geopolitical tensions.

Germany recently approved a €220 million contract to procure AI systems from Helsing, with drones destined for a brigade stationed in Lithuania near the Belarus border. Observers caution that increasing military expenditures reflect expectations of sustained or growing conflict in Europe rather than a move toward long-term peace. Alexander Blanchard, senior researcher at the Stockholm International Peace Research Institute, noted, “You don’t grow your arms industry because you are expecting a generation of peace.”