Faced with geopolitical tensions and the acceleration of technological innovation, the UK is seeking to fundamentally modernise its defence apparatus. Artificial intelligence, in particular, is now identified as a key lever to transform military capabilities and accelerate innovation.

In September 2025, the British government published its Defence Industrial Strategy, a roadmap for the years ahead, which clearly identifies artificial intelligence as a major area of development for the defence sector.

This strong political signal is accompanied by significant public investment in the “DefTech” sector.

A strategic investment fund

The UK government has, for example, announced the creation of a strategic investment fund for national security, endowed with £330 million, specifically aimed at addressing the country’s national security and defence needs.

In addition, as part of the “Spending Review 2025”, Chancellor Rachel Reeves announced a total commitment of £86 billion for R&D over four years (up to 2029/2030), a significant portion of which is allocated to defence.

Against a more unstable international backdrop, the military budget had already been increased by an additional £2.9 billion in the Autumn Budget 2024, exceeding NATO commitments.

A reform to align the military with the pace of innovation

However, investment alone will not be enough. For many industrial players, the main challenge lies in aligning the pace of military organisations with that of technological innovation.

“What is encouraging is that the Ministry of Defence is giving us clear guidance on its investment priorities,” observes Mike Sewart, UK Chief Technology Officer at the British subsidiary of the French group Thales, adding that “the challenge now is ensuring that the pace of change within the military aligns with the pace of technology.”

This is precisely one of the objectives of the Strategic Defence Review, launched last year by the British government. This reform aims to modernise decision-making structures and supply chains to make them more agile and more open to innovation. “This reform should simplify certain processes and enable faster deployment of more innovative technologies,” hopes Mike Sewart.

A more open and collaborative ecosystem

In this context, large industrial groups are also seeking to strengthen their collaboration with the technology ecosystem.

With 8,000 employees in the UK across England, Scotland, Wales and Northern Ireland, Thales operates primarily in aerospace, defence, security and ground transportation and intends to play a major role in this movement, through both investment and partnerships.

“It is a strategic priority for Thales to develop and work with a diverse ecosystem,” explains the CTO of the French group.

Thales collaborates, on both sides of the Channel, with startups, SMEs, academic institutions, as well as hyperscalers such as Google, Amazon Web Services and Microsoft Azure, particularly for its sovereign cryptography solutions.

“I fundamentally believe that the power of innovation comes from the diversity of skills. Large organisations like Thales bring a deep understanding of the customer and expertise in safety and security. Startups and SMEs bring brilliant technologies that often need to be integrated into larger systems,” explains Mike Sewart.

Having joined Thales in mid-2025, he is well placed to observe the profound transformations underway in the sector. The UK defence industry, long dominated by heavy engineering, is undergoing a deep transformation with the arrival of artificial intelligence and advanced technologies. “The defence sector in the UK is catching up—things are improving,” he notes.

That said, there is still progress to be made in aligning the pace of technology with defence processes… But AI could well accelerate this shift.

200 AI experts at Thales UK

On this specific topic, Thales invested £40 million last year to develop its AI capabilities in the UK, notably by hiring specialists in the field. “We launched CortAIx in 2024—it is our group-wide AI accelerator. In the UK, we have around 200 AI experts out of the 800 employed by Thales globally,” explains Mike Sewart.

Applications of AI in defence cover a very wide spectrum. “Take image recognition in sonar data: we use AI to identify patterns and train algorithms capable of recognising objects in water,” illustrates the CTO. “This same image recognition technology is also used in tactical mission planning for the military, but also in our civilian solutions such as virtual airport control towers.”

This “dual-use” approach—where military and civilian technologies feed into each other—is one of the defining characteristics of the UK’s defence tech market. “The fundamentals of AI, such as image recognition or natural language processing, are the same whether applied to military or civilian use cases. Only the application changes,” emphasises Mike Sewart.

A national ambition for AI

Beyond the defence sector alone, the UK has strong ambitions in artificial intelligence. Ranked first in Europe and fourth globally in the Global AI Index 2024, the country is home to more than 3,700 AI companies employing 64,500 people. It has also attracted more than £44 billion in private investment since 2024, positioning itself as the leading European market and the third-largest globally for AI venture capital, behind the United States and China.

To support this momentum, the UK government launched the “AI Opportunities Action Plan” in January 2025, an ambitious programme worth more than £2 billion. It notably aims to increase computing capacity twentyfold by 2030 through the “AI Research Resource”. The plan also includes the creation of “AI Growth Zones” across the country to accelerate the development of infrastructure (data centres, computing facilities, etc.).

In addition, a “Sovereign AI Unit” has been established, chaired by James Wise of Balderton Capital, with £500 million in funding to accelerate the development and control of AI in the UK.

In the current geopolitical context, the defence sector is one of many areas benefiting from this strong political commitment.

The Commercial Section of the British Embassy in Paris supports French companies in their expansion projects. Click here to find out more.