Wars are won with code, says German military AI maker

LONDON — It’s not about the kind of weapons a military has anymore; it’s the software on which it runs.

That’s the pitch with which European artificial intelligence champion Helsing is taking the defense-tech sector by storm, at a time when European governments are hurrying to funnel cash into new military systems and weaponry.

“Defense is turning more and more into a software problem,” the company’s co-founder and co-chief executive officer Gundbert Scherf told POLITICO in an interview. 

Helsing, headquartered in Munich, Germany, was valued at €4.9 billion in July, just four years after its inception. Its motto, “artificial intelligence to serve our democracies,” is emblematic of the defense-tech industrial complex that has spun out of the war in Ukraine.

The company said it processes millions of data from sensors and weapon systems of European militaries to enable “faster and better decisions” by humans and increase the lethality of weapons. So far, it has signed contracts with the British, German, French, Estonian and Ukrainian governments.

“You see fighter jets, frigates and satellites, but really, what you have to look at is that each one of those systems produces an unbelievable amount of data,” Scherf said.

Despite the upcoming third anniversary of the Russian invasion of Ukraine, Europe still has gaps in its air and missile defense systems, said Lieutenant General Ben Hodges, former commander of the United States Army in Europe, during the recent Warsaw Security Forum.

Scherf said the bloc needed to achieve “technology leadership” in core areas where it’s falling behind, such as AI, or otherwise be beholden to “our U.S. friends.”

Helsing has secured a series of government contracts, including the German Eurofighter Electronic Warfare upgrade with Saab, the AI infrastructure for the Future Combat Air System — a multinational joint initiative between Germany, France and Spain — and Airbus’ future Wingman system.

When the company was founded in 2021, ChatGPT hadn’t had its major breakthrough and Russian tanks hadn’t yet invaded Ukraine. Scherf said many in the tech space didn’t want to touch defense. 

Google employees famously protested the company’s involvement in a Pentagon program called Project Maven in 2018 that used AI to interpret video imagery to improve the targeting of drone strikes. Other big tech companies struggled with their relationship to military contracts, too.

The U.S., Israel and others built up strong links earlier between their militaries and the modern-day tech industries that grew in the internet era. European countries, on the other hand, lack strong programs to invest heavily in innovative defense technology through local tech sectors.

Scherf, who worked in the German Ministry of Defense before starting Helsing, said he thought the only way technology would filter into the European system was if someone was making it.

“There was this gap, which structurally nobody could or wanted to solve,” said Scherf. “We didn’t start the company because we thought everybody was going to do this, we started it because we thought nobody was going to do this.”

The problem wasn’t talent. In fact, Europe has always had a very strong presence in research and development. Scherf pointed to Microsoft, Google and Amazon all having crucial innovation hubs on the Continent. 

The problem was money — and in some ways it still is. Helsing’s Series C funding round that raised €450 million was led by American investment firm, General Catalyst. Money in Europe is hard to find in venture capital and pension funds generally don’t invest in defense technology, said Scherf.

Helsing’s first funding round was completed with contributions from British, French and German individuals who believed in the mission, he said. Later on, Spotify founder Daniel Ek poured in €100 million through his venture fund Prima Materia — and faced criticism from some artists on Spotify for doing so.

Since the outbreak of the war in Ukraine, the European mindset has slowly begun to change.

In May, the EIB waived the requirement that funding for technology used in both military and civilian applications — so-called dual-use tech — could only go to projects from which more than 50 percent of revenue came from civilian uses. But the defense industry since has called for the EIB to further shake off its shackles.

Scherf said Europe needs to stop shying away from putting real money into its armed forces directly to ensure they have the very best technology.

“Why do we need to always hide behind dual use?” asked Scherf, referring to a European Investment Bank’s policy of only investing in technology that has both civilian and military use. 

“Either we believe in our democratic armed forces and we support them with the best technology,” he said, “or we have to have a different debate.”