Updated · Center for European Policy Analysis · Jun 12
European Defense Startups Keep IP in Europe as €150 Billion EU Funds Outweigh US Access
Updated
Updated · Center for European Policy Analysis · Jun 12
European Defense Startups Keep IP in Europe as €150 Billion EU Funds Outweigh US Access
2 articles · Updated · Center for European Policy Analysis · Jun 12
Summary
European and Ukrainian defense founders are increasingly leaving only thin US holding companies in place while keeping intellectual property, engineers and core operations in cities such as Kyiv, Warsaw and Tallinn.
ITAR is a central deterrent: bringing defense IP under US jurisdiction triggers costly compliance, legal risk and Washington’s control over export destinations, a poor fit for startups selling mainly to Ukraine and Europe.
US procurement adds another barrier, with years-long contracting processes and little access for foreign founders to the non-dilutive government funding and early contracts that help American defense startups scale.
Europe now offers stronger incentives to stay: the €1 billion NATO Innovation Fund excludes US firms, while the EU’s €1.5 billion Defence Fund and €150 billion SAFE program favor EU-based companies free of third-country control.
That mix is shifting future market share toward Europe, as governments increasingly buy from domestic suppliers and battlefield-tested companies choose to build their next defense champions outside the United States.
With US regulations pushing innovators away, how can Washington reform its system to attract the next generation of global defense technology?
As Europe forges its own defense giants, is the era of American technological supremacy within the Western alliance now ending?
Ukraine's drone success relies on Chinese parts. How does this dependency threaten long-term European defense autonomy and security?
Europe’s €150 Billion SAFE Initiative: Transforming Defense Autonomy, Industrial Capacity, and Global Alliances
Overview
Launched in May 2025, the Security Action for Europe (SAFE) initiative marks a turning point in the European Union’s pursuit of strategic autonomy in defense. Driven by the urgent security challenges following Russia’s war against Ukraine, SAFE demonstrates the EU’s commitment to strengthening its defense capabilities and acting independently in the face of threats. The initiative aims to build a more integrated and self-sufficient European security ecosystem by reducing reliance on non-EU suppliers and boosting technological sovereignty. SAFE’s launch signals a new era for Europe’s collective defense posture and its ability to respond to future challenges.