by Alimat Aliyeva
Global investments in defense technology startups reached at least $40.8 billion in the first half of 2026, marking a record high for a six-month period over the past decade.
According to reports, investment volumes increased by 56% compared with the same period in 2025, highlighting growing interest in innovative military technologies.
Traditionally, large defense corporations have played a dominant role in developing weapons and military equipment in Western countries. However, smaller technology companies are increasingly gaining ground by developing new solutions faster and often at a lower cost. Their innovations include unmanned aerial systems, autonomous technologies, and artificial intelligence-powered tools designed for military applications.
This shift is attracting both private investors and government funding to defense startups. NATO member states, in particular, are accelerating the modernization of their armed forces and investing in technologies that can improve operational efficiency, surveillance, and battlefield decision-making.
A similar trend is emerging in Japan. In the first half of 2026, Sakana AI reportedly raised 31 billion yen (more than $196 million) for projects related to the application of artificial intelligence in the defense sector.
Meanwhile, the Japanese government is working to establish a dedicated funding structure to support startups developing advanced technologies for national security.
One of the key trends to watch is the growing role of AI and autonomous systems in modern warfare. As military technology evolves, startups are becoming important players in an industry that has traditionally been dominated by established defense contractors. This could reshape how military innovations are developed, funded, and deployed in the coming years.