The Government’s Strategic Defence Review 2025 aims to make the UK safer by being ‘secure at home and strong abroad’. In this article we look at the updates in it relating to defence technology.
Ahead of the Review, there was a lot of discussion from the Government on the need to increase leading-edge capability within the UK’s defence forces and announcements around increased funding, partnerships between government and venture capital firms. The Review fleshed out this rhetoric.
There is a strong push to create a new partnership with industry and radically reform procurement and creating jobs and wealth - what Prime Minister Keir Starmer has termed the ‘defence dividend’. The Review also announced that a dedicated strategy for the financial services sector will be developed by March 2026 to boost private investment in defence and dual-use (that is, goods, software, and technology that can be used for both civilian and military purposes) technology sectors. This would bring venture capital and private equity investors into the fold.
We can see the immediate effects of the UK Government's renewed commitment to defence in the number of funding rounds we are supporting within the sector. For instance, we recently advised AI defence startup Arondite, which integrates systems built by different manufacturers, on its latest funding round, and we supported Skyral, which has developed advanced threat modelling and analysis capability on its recently announced $20 million Series A round. We have also seen an increase in the volume of RFPs from the UK The Ministry of Defence (MOD) to our early and growth stage clients developing novel technologies in both the software and hardware sectors. This increased level of economic activity suggests that the Government’s broad and very vocal support for defence innovation is quickly flowing down into the private funding markets and UK MOD.
The Review sets out how the UK wants to become a leader in innovation within NATO. By December 2025, a revitalised system for science, technology and innovation will be established under the National Armaments Director Group. This includes a new Defence Research and Evaluation organisation for early-stage research and a UK Defence Innovation (UKDI) organisation focused on commercial innovation, with UKDI receiving an annual budget of at least £400m.
This investment and shift in priorities to put security and defence as a fundamental organising principle of government will manifest itself in core technological advancements. Unsurprisingly, AI is at the heart of this new approach, alongside deploying the power of drones, to complement traditional military assets. Lessons from the conflict in Ukraine, where drones are proving more lethal and more cost-effective than traditional artillery, are driving UK innovation in drones, data, and digital warfare - at a reduced cost.
Announcements in the Review relating to defence technology include:
- The Armed Forces will be integrated through a new £1 billion Digital Targeting Web, which will enable rapid, integrated battlefield decisions by linking sensors and shooters across domains. This requires a common digital foundation and shared data for faster decision-making by its planned launch in 2027.
- A target of at least 10% of the Ministry of Defence (MoD)’s equipment budget to be spent on innovative technologies has been pledged.
- A new Cyber and Electro Magnetic Command, led by General Sir James Hockenhull, will be established by the end of 2025 to defend the UK from daily cyber attacks.
- Uncrewed and autonomous systems are to be incorporated over the next five years and combined with crewed assets. A new Digital Warfighter group will be established by July 2026 to enable digital and conventional warfighters to be deployed side-by-side on operations.
- The Royal Air Force will develop next-generation fast jets through the Global Combat Air Programme and autonomous fighters. Aircraft carriers will be transformed into the first European hybrid air wings, incorporating fast jets, long-range weapons and drones.
- Up to 7,000 new long-range weapons will be built in the UK to enhance European deterrence. New investments will allow for a submarine to be produced every 18 months, growing the nuclear-powered attack submarine fleet to up to 12 through the Australia, UK and US (Aukus) security partnership programme.
The Review states these initiatives will help the British Army to be ten times more lethal than today. It will combine personnel and armoured capability with air defence, communications, AI, software, long-range weapons, and land-drone swarms.
The innovation in technology and approach is underpinned by a rethink of procurement and industrial partnerships. Traditional customer-vendor defence relationships are out as the Government seeks to engage earlier with industry, rewarding productivity and risk-taking, and removing barriers for smaller companies. A new defence industrial strategy, led by the new Defence Growth Board, will outline the future of the MoD.
The Review aligns with the Government’s goal of focusing on domestic growth too. A new Defence Exports Office will be created within the MoD to increase exports of, for instance, world-leading innovation in autonomous systems to allies.
International capability partnerships, such as Aukus and the Global Combat Air Programme, are seen as crucial for economies of scale, innovation and a stronger collective defence industrial base.
The Strategic Defence Review 2025 is, on paper, a significant shift from where the UK was in a world before Donald Trump’s second term became a reality. A £2.2 billion uplift to the MoD’s budget for 2025/26, agreed in the Spring Statement 2025, to £59.8 billion forms part of the commitment to raising NATO-qualifying defence spending to 2.5% of GDP by 2027. It is now clear where that money is going to be spent, with a fundamental rethinking of the UK’s approach to defence through significant investment in cutting-edge technologies and fostering a new partnership with industry.
Put simply, it is how the UK intends to move to the stance of “war-fighting readiness” as pledged by the Prime Minister.