This European AI Unicorn Is Pivoting To Launch Fleet Of Killer Drones

Forbes

Helsing built a $4.5 billion business on a pledge to transform Europe’s militaries with software, not hardware. Now its reversed course with plans for a fleet of attack drones.  Read the full story on Forbes: https://www.forbes.com/sites/iainmartin/2024/12/05/helsing-europe-pivot-killer-drones/  Subscribe to FORBES: https://www.youtube.com/user/Forbes?sub_confirmation=1  Fuel your success with Forbes. Gain unlimited access to premium journalism, including breaking news, groundbreaking in-depth reported stories, daily digests and more. Plus, members get a front-row seat at members-only events with leading thinkers and doers, access to premium video that can help you get ahead, an ad-light experience, early access to select products including NFT drops and more:  https://account.forbes.com/membership/?utm_source=youtube&utm_medium=display&utm_campaign=growth_non-sub_paid_subscribe_ytdescript  Stay Connected Forbes newsletters: https://newsletters.editorial.forbes.com Forbes on Facebook: http://fb.com/forbes Forbes Video on Twitter: http://www.twitter.com/forbes Forbes Video on Instagram: http://instagram.com/forbes More From Forbes:  http://forbes.com  Forbes covers the intersection of entrepreneurship, wealth, technology, business and lifestyle with a focus on people and success.

Transcript

00:00Today on Forbes, European AI unicorn pivots to launch fleet of killer drones.

00:09When Helsing's CEO and co-founder Torsten Reil took the stage of a tech conference in

00:14a London church-turned-event space last September, his vision for the $4.5 billion defense startup

00:20was clear.

00:22He said, quote,

00:23We are not a hardware company.

00:25We're a software company.

00:26That's all we do.

00:29The pitch was radically different from other defense startup entrepreneurs like Anduril

00:33billionaire Palmer Luckey or Shield AI's Ryan Tseng, who want to build their own missiles

00:38and drones, eventually challenging defense giants like Raytheon or Lockheed Martin.

00:44Instead, Reil said Helsing would focus on software alone, using AI to supercharge Europe's

00:50militaries and arms makers.

00:52At another event in 2022, Reil, a former video games developer, explained, quote,

00:58It's specifically about adding capabilities to existing assets.

01:03But now he's made a 180-degree shift.

01:07Helsing last week unveiled the HX-2, a drone with a 50-mile range, capable of hunting in

01:13swarms and destroying armored vehicles.

01:17In a statement, Niklas Kohler, co-founder of Helsing, said, quote,

01:21When deployed along borders at scale, HX-2 can serve as a powerful counter-invasion shield

01:27against enemy land forces.

01:30Peter Quentin, a Helsing spokesperson, said the company had recently started manufacturing

01:35the HX-2 drones in Germany, adding that they would be cheaper than comparable systems.

01:40Reil told Bloomberg early last week that the company planned to produce tens of thousands

01:45of the devices a year, adding the drone, quote,

01:48as the capability to create a deterrence level that currently just isn't feasible.

01:54Helsing's pivot follows a string of deals the company signed with European arms manufacturers

01:59like Germany's Leopard tank maker Rheinmetall and planemaker Airbus and Swedish aerospace

02:05group Saab.

02:07Co-founders Reil, Kohler and Gunnbert Scherff had pitched investors on its AI, which had

02:12been used to upgrade the radar system of Saab's Gripen fighter jets and to level up the German

02:17Luftwaffe's Eurofighters.

02:20The company had started designing and manufacturing its own drones after it couldn't find an existing

02:25product that matched the specs it needed, according to a Helsing investor, who requested

02:30anonymity to speak freely.

02:32The investor said, quote,

02:34There's no prime in that space, and these drones are quite commoditized.

02:38But only with AI and autonomy, they become game-changing.

02:42If you want to drive AI into the drone space, you need some vertical control.

02:47Helsing's spokesperson disputed the company had struggled to find a partner.

02:51Quentin said, quote,

02:53We partner with industry across all domains, whenever it is possible to pursue approaches

02:57that are truly software-defined, but decline to simply subcontract when that is not possible.

03:04Investors have plowed more than $100 billion into defense startups since 2019, according

03:10to PitchBook.

03:11But only Anduril, which raised $1.5 billion at a $14 billion valuation this year, commands

03:17similar resources to Helsing.

03:20Helsing's valuation soared to $4.5 billion in July after raising $480 million from American

03:26venture funds General Catalyst and Accel in a deal first reported by Forbes.

03:32That followed an earlier $325 million raised from investors including Spotify billionaire

03:38Daniel X investment firm since its launch in 2021.

03:43Europe's most valuable defense startup now enters an incredibly competitive landscape.

03:48Aside from Chinese-made drones that have dominated the market, Helsing is also facing an uphill

03:53battle against American incumbents like Anduril, Shield AI, and Skydio, which have been building

03:59small, expendable drones for years.

04:02It could also impinge on the territory of its own partners like Saab, Airbus, and French

04:07missile maker MBDA, which all have their own drone programs.

04:13Most startups have encountered significant challenges in deploying drones in Ukraine,

04:17where the Ukrainian army has found success by instead churning out thousands of drones

04:21with off-the-shelf parts.

04:24For full coverage, check out Ian Martin and David Jeans' piece on Forbes.com.

04:31This is Ciaran Meadows from Forbes.

04:33Thanks for tuning in.

04:43Transcribed by https://otter.ai

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