Simmons Sitrep: Insights on Defence Tech, AI, Law & Policy

Strategic Direction & Policy Signals

1. The Pentagon's fiscal budget request for FY2026 allocates $13.4bn for autonomous systems, alongside $3.1bn for counter-drone capabilities. Key investments include $9.4bn for aerial drones, $5.3bn for naval autonomy projects, and funding for enabling technologies to integrate these systems across domains (here).

2. The UK Government published its 2025 National Security Strategy, outlining its commitment to spend 5% of GDP on national security and build its AI capabilities by enhancing national capacity, accelerating sector adoption, and addressing national security risks posed by new technologies (here).

3. As part of its 10-year Industrial Strategy, the UK Government will invest over £150m in AI and technology programmes and has pledged to allocate at least 10% of the Defence Budget to acquiring advanced technologies, including drones and AI (here).

4. The UK and Ukraine signed an agreement to share battlefield technology, allowing data sets from Ukraine's front line to be shared with UK defence firms to facilitate the production of drones and other advanced military equipment (here).

5. Canada and the EU entered into a new Security and Defence Partnership to work together on security, cyber and hybrid threats, and defence industrial co-operation. A second treaty would be required for Canada to access the EU's €150bn SAFE loan programme for defence procurement (here).

6. The UK launched the UK Defence Innovation body with a £400m budget and the aim of creating high-skilled jobs in the dual-use technology sector and driving innovation in the defence industry. UK Strategic Command will be renamed Cyber & Specialist Operations Command to mark a shift in its responsibilities to matters of national cybersecurity (here).

7. The EU Commission has proposed a series of measures known as the Defence Readiness Omnibus, designed to support the defence industry in delivering €800bn worth of defence investment across the EU, including measures to fast-track permits, reduce administrative burdens, and encourage joint procurement (here).

8. The US Army has launched Detachment 201: Executive Innovation Corps, a programme aimed at integrating private-sector technological expertise into the Army Reserve by recruiting senior tech executives as part-time advisors to drive the innovation and adoption of technology in the military (here).

Legal, Regulatory & Ethical Updates

9. The US Senate passed President Trump's "One Big Beautiful Bill" which includes a $150bn increase to defence spending with the Pentagon planning to use $113bn in FY26 for major military investments including missile defence systems and naval ships, as well as a further $3.6bn commitment to expand US military satellite systems (here).

10. The US Senate struck down the proposed federal 10-year moratorium on state regulation of AI, meaning that that states retain the authority to regulate AI independently, even if this may lead to a lack of uniformity in the US AI regulatory framework (here).

Industry Updates

11. Skyeton International and Prevail Partners have launched a UK/Ukraine joint venture to manufacture and integrate the Raybird unmanned aerial system in the UK, following the drone agreement signed between the UK and Ukraine (here).

12. NATO has announced that its Challenge Portal is now live, inviting innovators developing dual use technology to submit proposals by 12:00 UTC on 11 July in the following areas: energy, advanced communications, human resilience, critical infrastructure, extreme environments, maritime operations, space resilience, autonomy, and data-driven decision-making (here).

13. BAE Systems and Avioniq are trialling an AI-powered threat-detection system, Rattlesnaq, on a simulator for the Eurofighter Typhoon. The technology uses AI to provide live threat assessments of air defence missiles and other factors to identify safer flight routes and enhance pilot situational awareness. Contracts have been secured with the RAF and Swedish MoD as the initiative is part of broader efforts to advance Eurofighter Typhoon technologies, including faster mission computers and improved cockpit displays (here).

14. The UK Government announced that it will purchase 12 F-35A fighter jets that carry both nuclear and conventional weapons, marking its entry into NATO's nuclear Dual Capable Aircraft mission in a move that will support 20,000 jobs in the UK (here).

15. A new initiative led by Leidos and backed by companies from the UK, France, Germany and Italy plans to modernise NATO's IT infrastructure by implementing a private cloud-based centralised IT solution to improve operational efficiency and cyber security across its command structure (here).

16. Shield AI and RTX have announced a partnership to integrate Shield's Hivemind autonomy software and ViDAR sensor technology into RTX hardware, such as an undisclosed "operational weapon". Additionally, Shield's ViDAR sensor software will be installed on MTS multi-sensor turrets, enhancing their ability to detect and track incoming enemy drones and unmanned attack boats by automating AI-based sensor autonomy (here).

17. The US has granted Lockheed Martin a $2.9bn, 10-year contract to continue supporting the Aegis Ballistic Missile Defence system (here).

Capital & Investment Watch

18. The British Business Bank has announced a £6.6bn capital commitment, including a £4bn investment initiative into eight key growth sectors, including defence and advanced manufacturing, which will also leverage an additional £12bn in private capital to deliver £16bn in total investment over four years (here).

19. Helsing has announced a €600m funding round led by Prima Materia, the investment firm launched by Spotify founder Daniel Ek, which values the company at €12bn (here).

20. Kraken Technology Group, a UK-based producer of uncrewed surface vessels that are designed to enhance naval capabilities while reducing risk to personnel, has secured funding from strategic investors such as the UK's National Security Strategic Investment Fund and the NATO Innovation Fund (here).

21. Mach Industries has raised $100m in Series B funding to scale its manufacturing capabilities and develop a new industrial base for unmanned warfare and autonomous defence systems (here).

22. PhysicsX, a London-based AI start-up founded by former Formula 1 engineers, has raised $135m from investors, including Siemens and Temasek, valuing the company at nearly $1bn amidst growing interest in defence technology. PhysicsX uses AI to support the design and development of products in the defence and manufacturing sectors, including components for drones and engines (here).