BI-WEEKLY MARKET INTELLIGENCE REPORT 15.06.2025 to 30.06.2025

harrygeisler2
Jun 30
4 min read

Updated: Jul 3

Welcome to the latest edition of Dual-Use Dispatch – your bi-weekly briefing on the intersection of commercial innovation and national security.

In this issue: The Pentagon has tapped commercial AI (OpenAI) with a new $200M contract, underscoring AI’s dual-use promise. In Europe, finance and policy moves are priming more dual-use R&D – the EU lifted its investment cap to €100B (including billions for energy grids and military bases) and launched a €1.5B defence funding programme. A Dutch startup’s maritime drone goes military – Lobster Robotics’ AUV is being militarised for NATO use. Elsewhere, global tensions and cyber threats loom large: Ukrainian forces are repurposing Estonian Milrem ground robots on the front lines, Japan’s prime minister skips the NATO summit, and hackers target airlines in a new “Scattered Spider” campaign.

MAJOR PROCUREMENT DEVELOPMENTS

Several high-profile contracts and deals highlight how commercial tech is being adopted for defence:

In the US, AI innovator OpenAI won a $200 million Department of Defense contract to supply AI tools, exemplifying civilian tech crossover into military use.
In the UK, outsourcing firm Serco is expanding in North America after acquiring Northrop Grumman’s Mission Training and Satellite Communications unit for $1.8 billion; this deal has made defence work roughly 40% of Serco’s revenue.
On the European continent, policymakers and investors are mobilising capital. EU ministers struck a deal on a €1.5 billion European Defence Industrial Programme (EDIP) to co-fund weapons projects.
French asset managers Tikehau Capital, SocGen Assurances, CNP Assurances and CARAC launched a €150 million defence and security investment fund, with backing from France’s defence ministry.
And in Germany, new procurement rules are set: the Bundeswehr’s acquisition chief announced that future arms purchases will “prioritise rapid delivery” over supplier nationality to speed up rearmament.

OpenAI wins $200 million contract with US Department of Defense. REUTERS/Dado Ruvic/Illustration/File Photo.

STARTUP RADAR: DUAL-USE IN FOCUS

Lobster Robotics (Delft, Netherlands) – A deep-tech startup known for its Scout autonomous underwater vehicle (AUV) used in civilian seabed mapping.

Lobster recently signed a cooperation with the Dutch Ministry of Defence to develop a militarised Scout variant for the Royal Netherlands Navy under NATO’s Rapid Adoption Action Plan.

Co-founder Jan Tuinman notes that such dual-use innovations “make us faster, smarter, and more effective” for armed forces. This partnership highlights Lobster’s strategy: adapt its commercial drone technology for defence tasks while continuing to sell AUVs for industry and research.

Lobster Robotics autonomous underwater robot. Photo provided to Vestbee by Stephan Rutten.

MAJOR DEFENCE AND SECURITY DEVELOPMENTS

Europe: Germany is accelerating its arms build-up – the procurement agency will buy from whoever can deliver fastest, rather than favour EU suppliers. Brussels also agreed on the €1.5B EDIP funding plan even as debate continues over “buy European” rules, and French financiers kicked off a €150M defence tech fund. On the battlefield, Estonia’s Milrem Robotics reports its THeMIS unmanned ground vehicles are actively clearing mines, carrying cargo, and evacuating wounded in Ukraine.
Asia/Pacific: Japan’s new Prime Minister Ishiba joined fellow Indo-Pacific leaders in cancelling a June NATO summit trip, indicating a shift in regional alignment. Tensions in Northeast Asia escalated as South Korean intelligence warned North Korea is preparing to send more troops and ammunition to support Russia in its Ukraine offensive this summer.
Middle East: In the Iran-Israel confrontation, Iran’s leadership has flatly rejected resuming nuclear negotiations while under Israeli attack. Israel, meanwhile, reported striking dozens of Iranian military and nuclear research sites in its latest wave of air raids. The conflict stokes regional security risks, even as diplomats scramble to revive long-stalled talks.
Americas: US defence priorities are shifting. President Trump’s FY2026 budget proposal increases spending on missiles and drones, but trims F-35 jet orders. This reallocation underscores a technology pivot in US procurement.

Iran said it would not discuss the future of its nuclear programme while under attack by Israel. (MENAHEM KAHANA/AFP via Getty Images).

INFRASTRUCTURE SECURITY DEVELOPMENTS

EU: Member states approved a historic hike in the European Investment Bank’s lending cap to €100 billion. Notably, EIB defence-related lending will triple to €3.5 billion, funding “dual-use” projects from drone programmes to fortified power grids and military facilities. These moves inject civilian financial channels into security infrastructure.
Global Nuclear: The World Bank and the International Atomic Energy Agency signed an MoU on June 26 to cooperate on safe nuclear power expansion in developing countries. This partnership aims to extend the life of existing reactors and accelerate small modular reactor deployment, recognising nuclear energy’s role in resilient infrastructure.
Aviation Cybersecurity: Industry alerts have surfaced about a cyber threat to transport infrastructure. Google’s Mandiant and Palo Alto Networks’ Unit42 warn that the “Scattered Spider” (UNC3944) hacking group is targeting the airline and aviation sector. Recent attacks against carriers (notably Hawaiian Airlines and WestJet) resemble this group’s tactics. Protecting critical aviation systems – from airports to air traffic control – is now a pressing concern.