Helsing, Europe’s leader in defence AI, is leveraging Rakuten to enter Japan’s arms market.

      Helsing, the Munich-based startup that has emerged as Europe's most well-funded defence-AI firm, is expanding into Asia and has found an unexpected partner. The German company has engaged Japan's Rakuten, best known for its e-commerce and mobile services, to assist in selling its unmanned systems to Japan's Ground Self-Defence Forces.

      Central to this initiative is the HX-2, a compact drone guided by AI that Japan's military is currently testing in field trials set to continue until the end of September. In addition to the drone, Helsing offers AI software for battlefield analysis, underwater surveillance, and combat aircraft, forming a software-centric arsenal that has positioned it among Europe's most valuable tech companies and a prominent example of the continent's rearmament efforts.

      The conglomerate aims to serve as a facilitator for foreign defence startups navigating Japan's notoriously complex procurement process, a role it has fulfilled before by helping the Ukrainian drone software company Swarmer demonstrate its technology to Japanese units. In a landscape where the bureaucracy can be as challenging as the competition, a reputable local name is highly beneficial.

      This timing is strategic, as Japan is undergoing its largest military expansion in decades, prompted by a more assertive China and a war in Ukraine that has altered views on drones, while also relaxing its longstanding arms-export and procurement regulations earlier this year. This has opened up a market previously inaccessible to foreign weapons manufacturers, and Helsing is not the only one now eyeing these opportunities.

      Tokyo has pledged to increase defence spending to levels not seen since the postwar period, and every yen of that budget is attracting the type of autonomous, software-driven equipment that the war in Ukraine has popularized. The transition of a company rooted in online shopping and mobile networks into a mediator for weapons startups underscores the extent of the defence boom, which is drawing in investors, cloud service providers, and consumer technology firms eager to tap into a market now flooded with government funding.

      Both Europe and Asia are witnessing significant investment and talent being directed towards anything that could provide a competitive edge on the modern battlefield. Founded just in 2021, Helsing has raised billions this year, ranks among Europe's top private tech firms, and has become a key supplier of drones to Ukraine with support from Berlin.

      Its assertion that contemporary warfare increasingly relies on software and autonomy instead of just hardware has made it Europe's most prominent advocate for integrating AI into defence strategies. However, its reputation isn't without blemishes; earlier this year, Ukraine halted further orders of the HX-2 due to technical issues encountered in the field, illustrating the gap that can exist between a compelling AI demonstration and a reliably effective battlefield weapon. Japan's ongoing trials, with one month remaining, will be closely monitored for this very reason.

      The move into Japan aligns with Helsing's broader expansion strategy. The company is developing an AI submarine, forming a partnership with Mistral on military AI, and establishing itself as a key player in Europe’s push to rearm. Selling to Asia broadens this ambition beyond NATO and subtly transforms a European leader into a potential global arms supplier.

      It's still uncertain whether the partnership with Rakuten will lead to contracts, as Japan remains a cautious buyer with a long procurement history. Nonetheless, the fact that a European AI startup less than five years old is testing strike drones for the Japanese military, backed by an e-commerce giant, highlights the rapid transformation of the warfare industry and the eagerness of new entrants to get involved.