Artificial intelligence is becoming one of the most important technologies for Europe’s future—not only as a driver of economic growth, but also as a key enabler of security and resilience. Increasingly, AI operates in a dual-use context, where the same technological capabilities power both civilian and defence applications.
A new report developed under the StepUp StartUps project examines how AI is reshaping Europe’s dual-use technology field, where momentum is accelerating, and what still prevents the EU from turning innovation into strategic capability.
DEEP Ecosystems is proud to be a key partner in the StepUp StartUps project, a European Commission-funded initiative aimed at reshaping Europe’s startup ecosystem. Together with Barrabes, Leibniz IRS, Startup Europe Regions Network (SERN), and EU Startups, DEEP is spearheading a two-year journey to develop data-driven insights, conduct research, and organize events to inform policy transformation.
The primary objective of StepUp StartUps is to provide a comprehensive understanding of the functioning of national and local startup and scaleup ecosystems across the EU-27 and EFTA countries. This knowledge will inform the development of data-driven policy reports on key issues and challenges facing Europe’s startup ecosystem.
What Is Dual-Use AI?
Dual-use AI refers to artificial intelligence systems and capabilities that can be applied in both civilian and military or security contexts, without being designed exclusively for either. The dual-use nature lies not in the product itself, but in the underlying capability.
For example, the same AI models used for logistics optimization, infrastructure monitoring, or disaster response can also support military planning, autonomous systems, cyber defence, or intelligence analysis. As a general-purpose technology, AI enables autonomy, sensing, simulation, and decision-support across sectors—making it one of the most powerful dual-use enablers in today’s innovation landscape.
Europe’s Dual-Use AI Landscape: Strong Momentum, Structural Frictions
Europe’s dual-use AI ecosystem is expanding rapidly. Venture capital investment in defence and dual-use technologies has grown significantly since 2022, with AI emerging as the most funded segment. The EU leads globally in the number of dual-use AI investment deals, and strong hubs are forming in Germany, France, the Nordics, and the Baltic states.
Yet this momentum has not fully translated into scale. Large growth rounds remain concentrated outside Europe, and the path from civilian AI innovation to operational deployment in defence and security remains fragmented. Funding continuity, procurement complexity, and weak handover mechanisms between civilian and defence programmes continue to slow adoption.an needs.
From Innovation to Strategic Capability
The EU has begun to respond with new defence-innovation instruments, test networks, and dedicated funding vehicles. However, the report finds that Europe’s main challenge is no longer idea generation, but execution at scale. Turning AI into a strategic dual-use capability will require tighter civil-defence coordination, faster procurement pathways, and shared testing environments that allow trusted AI systems to move from prototype to deployment.
Why This Matters Now
AI will increasingly shape Europe’s competitiveness, resilience, and security position. How effectively the EU manages its dual-use potential will determine whether innovation strengthens Europe’s strategic autonomy—or remains dependent on external ecosystems.
The full report provides data, ecosystem mapping, and concrete policy recommendations to support this transition.
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The project is funded by the tender of the European Commission on “European Start-ups 2.0 – Taking Europe’s start-up economy to the next level through data-driven insights, research and events” with number CNECT/2022/OP/0133. Views and opinions expressed are however those of the authors only and do not necessarily reflect those of the European Union, European Commission or the Council of Europe. Neither the European Union nor the granting authority can be held responsible for them.