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German Startup Wants to Regrow Europe’s ‘Spine’ With AI Fighter Pilots, Drone Walls

Helsing taps into investor interest in the continent’s defense buildup, becoming one of region’s most valuable companies

MUNICH—Inside an unassuming redbrick building tucked beside railroad tracks in the Bavarian capital, engineers behind doors marked “maximum security“ toil on drone prototypes, flight simulators and lines of code they believe will shape the next era of warfare.

Helsing, a 4-year-old artificial-intelligence defense startup, has quietly emerged as one of Europe’s fastest-growing companies—and a poster child for a continent urgently re-engineering its defense in an era of fracturing alliances.

The company’s pitch: Only by fusing software and steel at scale can Europe safeguard its sovereignty. Some of Helsing’s AI-equipped drones are used in Ukraine, and it is currently testing autonomous piloting systems for jet fighters and underwater gliders that can detect Russian submarines.

One of Europe’s most valuable startups, Helsing has caught investors’ eye by positioning itself at the intersection of three trends: the continent’s surging military spending, the expanding role of military AI and the race to achieve technological independence from the U.S. and China.

“There is a growing sense of urgency in Europe right now,” Helsing’s co-founder, Torsten Reil, said. “So we need to make big bets.”

The company occupies a crowded zone. Many European, U.S. and Asian rivals make drones, often powered by AI. All of them will face competition from Ukraine, once its war with Russia is over. Ukrainian companies have proven adept at churning out cheap, deadly drones that will arrive into markets battle-tested. Many of Helsing’s products haven’t seen much action on the front, and it has faced criticism for some of its earlier models.

But a June funding round led by Spotify co-founder Daniel Ek’s investment firm, Prima Materia, raised 600 million euros, equivalent to roughly $702 million, for Helsing. That valued the company at €12 billion, according to a person familiar with the matter. It also turned Helsing into a significant European player alongside U.S. defense-tech companies such as California-based Anduril Industries, which recently raised $2.5 billion, and Palantir Technologies.

Once ambivalent about the region, U.S. investors and private-equity funds see Europe’s massive defense and infrastructure push, combined with often cheap valuations, as an opportunity. The German DAX index has outperformed the S&P 500 this year. Helsing itself has attracted funds from U.S. venture-capital funds.

Europe’s defense industry, long kept at arms’ length by investors because of political and ethical stigma, is experiencing an unprecedented infusion of public and private funds. The European Union’s military expenditure last year stood at €326 billion, a 30% rise since 2021 driven by Russia’s invasion of Ukraine and concerns about U.S. disengagement. Earlier this year, the European Commission, the EU’s executive arm, unveiled a “ReArm Europe” initiative aimed at mobilizing €800 billion for military spending by 2030.

“Washington is focusing more on China and, in some ways, turning its back on Europe,” said Eric Slesinger, a former Central Intelligence Agency officer who is now general partner at VC firm 201 Ventures. “We need to make sure Europe can solve its own problems and not be a football bounced around in authoritarian-versus-democratic global competition.”

That is where Helsing comes in. Reil, the co-founder, said the company wants to help Europe grow “its spine back” by building “autonomous mass,” or deploying large numbers of inexpensive, AI-powered weapons systems.

One practical application: To deter an increasingly belligerent Russia, Europe needs to erect a “drone wall” along its eastern flank consisting of some 100,000 drones. He said Helsing’s HX-2 AI strike drone can do the job.

The 26-pound HX-2 features onboard AI to counter hostile electronic warfare, allowing it to stay on target even if it loses its data connection. Using Helsing’s software, the drones can be sent in swarms to overwhelm enemy defenses.

In Ukraine, Helsing drones have destroyed Russian targets such as armored personnel carriers, logistics depots and radar antennas, the company said. Helsing has sent around 2,000 drones to Ukraine and is planning to deliver several thousands more.

The company is also active in the maritime domain where it is developing a subsea glider that can patrol underwater for up to three months. It can look for submarines or monitor critical undersea cables.

Helsing trained the glider’s AI brain—code-named Lura—much like large language models such as ChatGPT, except the inputs were terabytes of underwater sounds. Using that data, the system can detect and classify objects—is it a fishing boat, is it a submarine?—with 90% accuracy, according to the company.

Helsing doesn’t yet have military customers for the glider but said it has received interest from several navies. The company recently announced the establishment of a factory in the U.K.’s Plymouth for the production of the glider.

In the air, Helsing recently conducted tests with a Gripen jet fighter made by Sweden’s Saab, where its AI system briefly flew the plane on its own in a combat scenario over Sweden and the Baltic Sea and executed maneuvers. A video from the cockpit shows a human pilot saying “AI agent activated” and then raising his hands up in the air, leaving the controls to the machine.

Such tests and deployments are a jump from the company’s start in 2021. It was founded by an unlikely trio: Reil, a videogame entrepreneur, Gundbert Scherf, a former German Defense Ministry official, and Niklas Köhler, a medical AI researcher.

“At the time, no European VC wanted to talk to us, mainly for ethical reasons,” Reil said. Helsing’s first seed round in 2021 raised €8.5 million, mainly from family offices and individuals, he said.

The Ukraine-Russia war acted as an accelerant. European officials now describe the conflict as the world’s first “AI war lab.” Both sides have deployed autonomous drones, AI-powered intelligence-analysis tools and data-driven targeting, transforming traditional warfighting into a test bed for emerging tech.

When it comes to AI’s application in defense, “the mindset in Europe has shifted from ‘let’s wait and see’ to ‘we have to build now’,” said Jeannette zu Fürstenberg, board member at Helsing and managing director at VC firm General Catalyst.

Despite the recent successes, the company is battling challenges.

For one, not all feedback for its systems has been glowing. Some Ukrainian soldiers have criticized Helsing’s older drones as less effective than competitors. The company said it has learned from critiques and addressed them in the new HX-2.

Finding European supply chains for specialized items like explosives or electronic circuits that are usually concentrated in China is another challenge for Helsing. Threats to sensitive information and operations, meanwhile, are also top of mind at the startup.

At Helsing’s Munich headquarters, several employees recently joked about Russia’s Federal Security Service intelligence agency listening in. A spate of sabotage operations in Europe linked to Moscow in recent years presents risks for Helsing, which keeps the locations of some of its production facilities secret.

“We have to worry about operational security, about hacking,” said Sam Rogerson, Helsing’s chief operating officer. “There is too much at stake and we cannot afford to be complacent.”