Simmons Sitrep: August 2025

Strategic Direction & Policy Signals

1. The UK and Türkiye have signed a memorandum of understanding regarding potential Eurofighter Typhoon exports, with Türkiye reportedly interested in acquiring 40 jets. This development follows the recent UK-Germany agreement to collaborate on export campaigns (here).

2. The US Government has published "Winning the AI Race: America's AI Action Plan," which aims to expand the US AI industry's global reach and reduce regulatory barriers to innovation. Key policies include delivering secure AI export packages to allied nations, accelerating infrastructure development for data centres and semiconductor facilities, removing federal regulations to encourage private sector innovation, and leading efforts to assess national security risks posed by advanced AI systems (here).

3. The Pentagon has reorganised its Chief Digital & AI Office, moving it under the oversight of its R&D chief rather than having it report directly to the Deputy Secretary of Defense, sparking concerns that this could signal a reduced priority for AI within the Department. While some see the move as a step towards mainstreaming AI across the military, critics argue it risks slowing the rapid deployment of AI technologies (here).

4. The Pentagon has awarded contracts worth up to $200m each to xAI, OpenAI, Anthropic, and Google to advance "frontier AI" projects for national security applications. These contracts will provide the Department of Defense with cutting-edge AI capabilities, including large language models, agentic workflows, and cloud-based infrastructure (here).

5. Germany plans to acquire 8,300 military drone systems by 2029, a figure that some critics suggest lags behind NATO allies, as it seeks to modernise its armed forces amidst growing global investment in unmanned and autonomous weapons (here).

6. On 15 July, the French Ministry of Armed Forces published the Strategic Defence Review 2025, outlining France's defence and security priorities through 2030. The review, prompted by President Macron, addresses heightened threats from Russia, as well as challenges posed by other state actors like China, Iran, and North Korea. Key priorities include territorial defence, European security, global partnerships, and Indo-Pacific stability. The strategy emphasises nuclear deterrence, cyber resilience, industrial readiness, and increased defence budgets, with €64 billion allocated for 2027. This comprehensive roadmap aims to bolster France's sovereignty and resilience in an unstable geopolitical landscape (here).

7. Spain has ruled out purchasing Lockheed Martin-made F-35 fighter jets and is now deciding between the European-made Eurofighter and the Future Combat Air System, as it plans to spend most of its defence budget within Europe (here).

8. Estonia has unveiled a €10bn defence development plan for 2026–2029. The plan includes significant investments in drones, long-range strike capabilities, air defence systems, naval upgrades, and infrastructure, with defence spending set to reach 5.42% of GDP by 2029 (here).

9. Belgium has announced a €33.8bn defence spending programme under its ‘Strategic Vision Defence 2025’ plan. The plan includes €1.67bn for 11 additional F-35A fighter jets, €13.9bn for land-based capabilities such as 1,500 combat vehicles, €1.27bn for an anti-submarine frigate, and €1.17bn for mine warfare capabilities, from 2026 to 2034 (here).

Legal, Regulatory & Ethical Updates

1. The EU’s Act in Support of Ammunition Production programme and other funding initiatives have accelerated the production of ammunition, missiles, and other defence hardware, as European arms factories expand at three times their peacetime rate, with over 7 million square metres of new industrial development driven by public subsidies and the need to replenish stockpiles and support Ukraine (here).

2. The Ukrainian Government’s ‘Test in Ukraine’ programme, which was launched in July and gives international defence suppliers the opportunity to trial their technologies and receive feedback from the battlefield, has already attracted 45 applications. The initiative is managed by Brave1, Ukraine’s national Defence technology accelerator, which helps assess and fast-track promising innovations for potential deployment (here).

Industry Updates

1. TechUK (the UK’s Technology Trade Association) has launched a new Defence Technology Manifesto. The Defence Board identified four key focus areas where TechUK will engage directly with the UK’s MOD to help change. These are architectural innovation, commercial reform, capability delivery, and skills gaps (here).

2. Helsing has announced plans to open an advanced manufacturing facility in Plymouth as part of a £350m investment into the UK. The site, referred to as a "resilience factory," will produce AI-powered autonomous undersea vehicles, such as the SG-1 Fathom, designed to detect threats and protect critical undersea infrastructure (here).

3. The US Army is developing a drone marketplace to streamline the process of matching certain types of drones with units based on mission requirements. Designed as a user-friendly platform, the marketplace will vet and categorise drones into tiers, ensuring they meet advertised capabilities, while also accelerating acquisition timelines and fostering collaboration between vendors and military personnel (here).

4. US Defence supplier Auterion will provide 33,000 Artificial Intelligence guidance kits for Ukrainian drones. These kits, powered by Auterion’s Skynode technology, convert manually-operated drones into autonomous systems capable of AI-driven targeting. Once deployed, Auterion claims that the drones can resist electronic jamming and accurately engage moving targets from up to one kilometre away, significantly enhancing Ukraine’s precision strike capabilities in contested environments (here).

5. Anduril has announced the opening of a Taiwan office, partnering with local organisations like the National Chung-Shan Institute of Science and Technology to accelerate the delivery of autonomous defence systems, including its Altius attack drones, as part of a broader US-Taiwan defence collaboration (here).

6. Archer has advanced its defence programme by securing two acquisitions to address increasing global demand for autonomous military systems: the intellectual property and critical staff of Overair, a spin-off of Karem Aircraft, as well as a 60,000-square-foot composite manufacturing facility from Mission Critical Composites (here).

Capital & Investment Watch

1. Five major financial institutions, including ING and JPMorgan Chase, have announced their support for the Defence, Security and Resilience Bank (DSRB), a not-for-profit bank designed to aid NATO and its allies finance their defence needs. By issuing AAA-rated bonds, the DRSB will support defence production and procurement and help nations meet NATO’s 5% defence spending pledge (here).

2. BAE Systems has invested in UK-based AI and robotics start-up Oxford Dynamics to enhance its capabilities in deploying innovative technologies across air, land, sea, space, and cyber domains. The partnership will initially integrate Oxford Dynamics’ AI technology into BAE’s Prophesea platform, which helps defence firms monitor the operational readiness of critical defence assets, with the ultimate aim of integrating its technologies across the BAE portfolio (here).

3. German loitering munition company Stark is reported to be in talks to raise $60m at a valuation of $500m, from investors led by Sequoia Capital. The funding round has also attracted interest from Thiel Capital, the NATO Innovation Fund, and In-Q-Tel, reflecting growing investor confidence in AI-powered battlefield technologies. Stark, founded in 2024, is developing autonomous strike drones and command systems, and recently expanded to the UK with a new production facility in Swindon (here).

4. Merlin, an AI flight software company, is set to go public through a merger with Bleichroeder Acquisition Corp., a special purpose acquisition company, in a deal valuing Merlin at $800m and is expected to close in early 2026, subject to regulatory approval. The IPO to take Merlin public will raise funds for Bleichroeder to acquire the company. Merlin is developing an autonomous "Merlin Pilot" system, which has secured US Defence Department contracts and a partnership with Northrop Grumman (here).

5. Vulcan Elements, a rare earth magnet processor has raised $65m in a Series A funding round led by Altimeter, bringing its total funding to $75m and valuing the company at $250M. The funds will be used to scale up production from its facility in North Carolina to meet growing demand, driven by the Pentagon’s push to reduce reliance on Chinese rare earth magnets and the upcoming 2027 ban on China-linked magnets in US defence systems (here).