Simmons Sitrep: November 2025

Strategic Direction & Policy Signals

1. Talks between the UK Government and the EU over the UK joining the EU's €6.7 billion SAFE defence fund have broken down after EU ambassadors turned down the UK's counter-offer to contribute €200 million. Joining the fund could increase the share of defence contracts open to UK firms from 35% to 50%. (link)

2. The UK and Indonesia have announced a £4 billion Maritime Partnership Program (MPP), led by Babcock, to support Indonesia's naval and fishing vessel production. The MPP promotes technology transfer, AI-enabled shipbuilding, and joint training. (link)

3. NATO has awarded Google Cloud a multi-million dollar contract to provide air-gapped, sovereign cloud infrastructure with AI capabilities for its Joint Analysis, Training and Education Centre (JATEC). The platform will handle classified workloads, analyse combat lessons from Ukraine, and enhance NATO-Ukraine interoperability, positioning JATEC as a testbed for NATO's adoption of advanced cloud and AI technologies. (link)

4. The European Parliament has approved a €1.5 billion programme to strengthen the European defence industry and deepen integration with Ukraine. The program includes €300 million for the Ukraine Support Instrument, allows Ukrainian companies to participate in EU defence projects, promotes innovation and joint procurement, and introduces a "buy European" principle. The program will also create a fund to accelerate defence supply chain transformation as part of a broader shift towards greater EU defence autonomy. (link)

5. The European Commission has launched a new initiative to simplify EU rules on the procurement of defence and sensitive security equipment and services. A public consultation and call for evidence are now open, running from 25 November 2025 to 17 February 2026. Stakeholders are invited to provide feedback, which will help shape the forthcoming proposal for a directive. The Commission aims to adopt the new rules in the third quarter of 2026. Companies involved in the defence and security sector, who are participating in procurements, are encouraged to participate in the consultation to ensure their views are considered in the development of the new regulatory framework. (link)

6. The US Department of War has narrowed its defence technology priorities from 14 to 6 key areas: applied AI, biomanufacturing, contested logistics, quantum/battlefield information dominance, scaled directed energy, and scaled hypersonics. A sign of where the DoW is focusing its resources. (link)

7. Canada has announced a major defence spending boost in its 2025 budget, committing an additional C$82 billion over five years to rebuild and modernise the Canadian Armed Forces, and develop a robust domestic defence industry. The plan includes the creation of a Defence Industrial Strategy and a new Defence Investment Agency. (link)

8. Taiwan's President has announced plans to propose a $40 billion defence package, aiming to raise defence spending to 5% of GDP by 2030. The package is subject to parliamentary approval, where the Kuomintang party dominates and has previously opposed increases in defence spending. (link)

Legal, Regulatory & Ethical Updates

1. Ukraine has moved forward with its plans to open up arms exports and weapons production in partner nations, following an announcement by President Zelenskiy that the first office will be opened in Berlin and Copenhagen this year. These office are reported to be designed to act as hubs where technology and platforms can be demonstrated and to provide support for companies looking to cooperate with governments. (link)

2. Following the ceasefire announced between Israel and Hamas on 10 October 2025, Germany has now announced that it plans to ease export restrictions on arms sales to Israel, which will now be reviewed on a case-by-case basis. This potentially allows German funds to once again export key components to the Israeli armed forces, such as parts for the Merkava MBT. (link)

Industry Updates

1. Kraken Technology Group, a UK based USV developer, has secured a $49 million OTA contract with United States Special Operations Command (USSOCOM), to design and prototype advanced uncrewed surface and subsurface vessel technologies for U.S. special operations forces. The contract follows Kraken's strong performance in two SOCOM innovation cycles and reflects USSOCOM's drive to adopt disruptive, non-traditional maritime capabilities and broader growth across the autonomous naval systems sector. (link)

2. Performance Drone Works (PDW) has secured a $35 million investment from Ondas Holdings to expand production of its C100 heavy-lift quadcopter and AM-FPV micro-drone platforms. The investment follows PDW's $20.9 million U.S. Army contract under the Transformation in Contact initiative and aligns with Ondas Capital's broader defence-tech investment strategy to build a portfolio of autonomous and counter-UAS technologies through its $150 million VC fund. (link)

3. HavoAI and SAIC have partnered to integrate SAIC's JRE multi-domain communications system into its USV fleet, enabling faster tactical data exchange and seamless integration with established U.S. and allied command-and-control networks. The startup has expanded rapidly since its 2023 founding - raising $85 million in October, delivering more than 30 USVs to the U.S. military, and advancing new platforms and partnerships, including collaborations with Lockheed Martin and Hanwha. (link)

4. Vermeer and Sentry Operations have announced a partnership to deliver fully autonomous navigation for strike drones operating in EW-dense and GPS-denied environments. The collaboration combines Vermeer's combat-validated visual navigation system - designed to operate without GPS or communications links - with Sentry's terminal-guidance and precision-effects technology. (link)

5. Heven AeroTech has partnered with quantum leader IonQ to develop quantum-enabled, hydrogen-powered drones. The partnership will integrate IonQ's quantum computing, networking, sensing, and security technologies into Heven's unmanned aerial systems, with initial deployments expected within 12 months. (link)

Capital & Investment Watch

1. Merlin Labs raises an additional $75 million in private investment in public equity (PIPE) financing bringing its total capital to over $200 million ahead of its planned IPO next year. It is reported that alongside new institutional investors, Inflexion Point (a global equities hedge fund) has provided half of this total capital raised to date. The funds will support the expansion of its AI-powered flight autonomy software across U.S. military and commercial aircraft, including uncrewed platforms. (link) 

2. Neros raises $75 million in a Series B round led by Sequoia Capital, with participation from Vy Capital US and Interlagos, bringing total funding to over $120 million. Neros has also secured major U.S. defence contracts, including the Marine Corps' $17 million order for 8,000 Archer Strike drones and selection for the Army's Purpose-Built Attritable System  program. The company is rapidly scaling production of its US-made drones. (link)

3. Thermopylae, a California based interceptor drone start up, raises $1.6 million in pre-seed funding. The company develops lightweight, foldable quadcopter interceptors designed to neutralise glide bombs and Group 2 drones, integrated with Ukrainian C2 systems, and plans to test and manufacture the systems in Ukraine for rapid frontline deployment. (link)