Last week, the UK unveiled a new plan aimed at integrating AI across its armed forces — but founders and investors are questioning whether the government can fulfil its ambition.
Announced by prime minister Keir Starmer during London Tech Week, the new Rapid AI Delivery (RAID) taskforce is designed to accelerate the deployment of AI-enabled tools across the military.
Ministers say it will help personnel make faster decisions, reduce exposure to risk and keep pace with adversaries already integrating AI into their own military systems.
Despite the rhetoric, founders and investors warn the initiative risks being undermined by the Ministry of Defence’s (MoD) slow-moving procurement processes.
“Procurement is the key and capital follows contracts,” says Craig Beddis, CEO of defence simulation startup Hadean, which is a member of the UK Defence Industrial Joint Council. “Right now the MoD can’t match up users with real need and funding.”
‘Completely unsustainable’
Longstanding issues with UK government procurement policy has directly impacted how quickly startups can scale, founders say.
“When contracts take months, or even years, to negotiate, startups go longer without the revenue they need to grow and raise more capital,” Beddis tells Sifted. “Relying on SME philanthropy through free trials and experiments is completely unsustainable.”
Investors echo this concern. Andy Bloxham, partner at London-based investment firm Foresight Group, says the UK’s stated appetite for innovation often collides with how defence actually buys technology.
“Defence may say it wants innovation, but if the route to contract takes years, many of the most promising companies will either run out of runway or look elsewhere,” he says.
The result is a system where intent and execution are often misaligned — particularly when it comes to newer software-led capabilities like AI.
Words followed by action
The launch of RAID comes at a time when European defence tech is attracting growing investor attention, driven by geopolitical instability and rising defence budgets.
European defence startups raised €2.3bn in funding last year, up over 100% from 2024, according to Sifted data. Yet many argue that Europe’s procurement systems remain structurally biased towards incumbents.
Founders highlight differences in approach between the UK and US, where they argue industrial agility is treated as a strategic asset.
“The US has been more effective at integrating emerging companies and new manufacturing technologies into its defence ecosystem,” says Stephen Bennington, CEO of Bristol-based robotics company Q5D. “Treating industrial agility as a strategic advantage rather than an administrative risk.”
Hadean is “pushing ministers to ensure words are followed by action,” says CEO Beddis. “But our success in selling into the Department of War as a UK company shows how all roads lead to the US. Startups like us have to follow the money to grow.”
The government is keen to frame RAID as a step change in how defence adopts technology.
Raid will collaborate with the UK tech sector to broaden access to defence contracts and support the growth of domestic SMEs, the government said.
Its initial cohort of partners includes Rowden, a British engineering firm that recently secured a £25m investment from the National Wealth Fund, aimed at creating around 500 jobs and scaling sovereign technologies for national security and resilience.
But industry figures caution that similar initiatives have struggled to shift the underlying incentives.
“There are so many intelligent and public-spirited men and women in the MoD,” says Beddis. “But bureaucratic complexity and lack of clarity on funding slows down the process at a time when warfare is changing faster than ever.”
From an investor perspective, RAID is a welcome development — but not yet a structural reset.
“The Rapid AI Delivery Taskforce is a credible attempt to move at the speed of software, not the speed of traditional defence procurement,” says Bloxham. “The challenge is that it still sits on top of a system that was never designed for that pace.”
