This Week in Dual-Use
NEWS
Defence Investment Plan to pivot towards drones
I spent the weekend at Reykjavik Security Forum. Halfway between the US and Europe, it was a fitting location to contemplate the future of global security. Against the backdrop of a decoupling between America and its North Atlantic allies, one of the truths accepted by all attendees was that we are entering uncertain times. Security matters more now than it has in the last few decades.
And so to the UK’s Defence Investment Plan, finally released yesterday. I recently wrote about the departure of John Healey, the UK’s Defence Secretary. It seems his resignation was not entirely in vain.
The new DIP shifts spending towards drones and uncrewed systems - a welcome update. Its most bold element is the idea of a ‘Hybrid Navy’, composed of crewed and uncrewed vessels carrying weapons, sensors and anti-submarine systems. The Type 83 destroyers are cancelled.
But it is still not enough. The goal of allocating 2.7% of GDP to defence by 2029 is a disappointment. The government has failed to recognise that we are at a Zeitenwende in global security. It must change its plans to spend on welfare, as painful as that may be.
Pentagon invests $200M in quantum sensing
The Department of War's Defense Innovation Unit (DIU) announced the launch of a multi-phase initiative designed to transition mature quantum sensing and timing technologies directly to the Joint Force. This initiative is expected to spend up to $200M within the next year in support of this goal.
DIU will apparently focus on developing high-fidelity quantum electric field sensors, magnetometers, gravimeters and tactical clocks that are small enough for field deployment yet sensitive enough to unlock new tiers of situational awareness.
That is a strong market signal for a technology which is still in the early stages of development. I take my hat off to DIU for its forward thinking. Of course $200M is small beer for the DoW, but the intent is clear.
Russia fields fastest ever jet-powered drones
A Ukrainian air defence commander has told Militarnyi that the drones his crews are sent up to chase are now too fast to catch. Russia's newer Gerans fly at more than 300kph. That means interceptors built to hunt the slower Shahed-136 cannot keep pace.
In 2025 Russia launched a total of 180 jet-powered Geran drones. In the first six months of 2026 it has launched 1,400.
Ukrainian industry is responding. MaXon Systems has combat tested its autonomous interceptor, which automates 95 per cent of the engagement cycle and sells for roughly $3,500 a unit.
Meanwhile, Yartura's Dancer is a fixed-wing interceptor capable of 450kph with an AI-driven re-engagement loop that circles a target until the kill. There are presumably others which have not yet been made public.
New Chinese quantum company
A former Microsoft Azure Quantum architect, Liu Hongbin, moved back to Shanghai and founded a quantum computing company, Taiyi Quantum. Until recently he was based in the Microsoft headquarters near Seattle.
Taiyi Quantum is developing a neutral-atom quantum computer and has just raised 300 million yuan, or about $44M. That feels like an own goal for the West.
FUNDRAISING
DEFENCE
Dominion Dynamics, a Canadian company building the autonomy stack for the Arctic, raised a $100M Series A, the largest in Canadian defence history. It was led by Georgian, with participation from Expeditions.
MAKO, an Australian developer of shark skin-inspired adhesive film for aviation, raised a AU$28M (US$20M) round led by Virescent Ventures.
Askari, an American developer of hand-launched interceptors, raised a $9M seed led by Builders VC.
SE3 Labs, a German developer of a spatial AI platform enabling better understand and command autonomous systems, raised a €5.5M round from Lakestar, Seedcamp, Twin Track and others.
Longshot, an American developer of ground-based kinetic launch systems, raised $5M in fresh funding from South Park Commons.
SPACE
Nebex, an American company that connects space companies with sovereign buyers and financing for government space contracts, raised a $30M seed led by GV.
Ubotica Technologies, an Irish builder of Earth observation satellites, raised an $11M round co-led by Act Venture Capital and Greencode Ventures.
QUANTUM & AI
Peregrine Technologies, an American developer of full-stack AI for government and enterprise, raised a $250M Series D at a $6.8B valuation led by Fifth Down Capital, Sequoia, XYZ Ventures and others.
Taiyi Quantum, a Chinese quantum computing company led by a former Microsoft Azure Quantum architect Liu Hongbin, raised 300 million yuan, or about $44M in pre-A funding.
GOING PUBLIC
Elroy Air, an American drone manufacturer, announced plans to go public via a SPAC. The merger includes over $165M in investment, valuing Elroy at ~$1B when it is listed on the Nasdaq.