The $500B Opportunity in Europe’s Defense Buildout

Europe is preparing to mobilize up to €800B in additional defense spending. But money alone doesn't solve one of its biggest problems. After decades of underinvestment, Europe's defense industry needs to dramatically increase its ability to manufacture at scale. Component lead times can stretch into years, certain contracts can take 4–5 years to deliver and modern warfare increasingly requires systems produced in the tens of thousands, hundreds of thousands or even millions. As Aistis Šimaitis puts it, “Volume wins.” I sat down in Monaco with Aistis, Co-Founder & CEO of Onodrim and former head of Palantir's commercial business in Europe, George Hadjiminas, Chief Strategy Officer at Theon International & EFA Group, and Bruno Wejchert, Partner at Strike Capital. We get into › How Ukraine exposed the gaps in Europe's defense industrial base › Why manufacturing and volume matter as much as new technology › Why autonomous warfare requires dramatically cheaper components at massive scale › Why George believes “prototypes don't fight wars” › Bruno's prediction that Europe could produce a $500B defense company within the next decade The conversation covers everything from autonomous systems and defense procurement to the lessons Aistis took from Palantir and why George believes “prototypes don't fight wars.” As billions flow into European defense, the question is increasingly not just who can build the best technology, but who can actually manufacture and deliver it at scale. Recorded at the Strike x Sourcery Summit in the South of France. Aistis Šimaitis: https://www.linkedin.com/in/aistissimaitis https://www.linkedin.com/in/aistissimaitis/ George Hadjiminas: https://www.linkedin.com/in/georgioshadjiminas https://www.linkedin.com/in/georgioshadjiminas/ Bruno Wejchert : https://www.linkedin.com/in/bruno-jan-wejchert-00b46a1a6 https://www.linkedin.com/in/bruno-jan-wejchert-00b46a1a6/ Molly O’Shea: https://x.com/MollySOShea Sourcery: ⁠https://x.com/sourceryy 𝐄𝐏𝐈𝐒𝐎𝐃𝐄 𝐋𝐈𝐍𝐊 YouTube: https://youtu.be/X_1wGD6nxbo 𝐒𝐏𝐎𝐍𝐒𝐎𝐑𝐒 • Brex https://brex.com/sourcery—The modern finance platform, combining the world’s smartest corporate card with integrated expense management, banking, bill pay, & travel. https://brex.com/sourcery • Zone https://zonefrontier.com/—develops next-generation data center campuses, partnering with AI companies, site developers and technology leaders to bring compute online faster and at scale. Visit: https://zonefrontier.com https://zonefrontier.com/ • Turing https://turing.com/sourcery—Turing delivers top-tier talent, data, and tools to help AI labs improve model performance—and enables enterprises to turn those models into powerful, production-ready systems. https://turing.com/sourcery • VCX https://fundrise.com/vcx—VCX is the public ticker for private tech, allowing investors of all sizes to invest in venture capital. View The Portfolio at http://GetVCX.com http://getvcx.com • Deel https://www.deel.com/sourcery—Deel is the global people platform that helps startups hire, manage, pay, and equip anyone, anywhere. Trusted by more than 35,000 fast-growing companies, Deel is the people platform that just works, so teams can scale without the chaos. Visit: https://www.deel.com/sourcery • Public http://public.com/sourcery–Investing platform Public just launched Generated Assets https://public.com/generated-asset, which lets you turn any idea into an investable index with AI. With Generated Assets, you can build, backtest, refine, and invest in any thesis with AI. Gone are the days of one-size-fits-all ETFs. https://public.com/sourcery Follow Sourcery for the latest updates! https://www.sourcery.vc https://www.sourcery.vc/ Disclosure Paid Endorsement. Brokerage services by Open to the Public Investing Inc, member FINRA & SIPC. Advisory services by Public Advisors LLC, SEC-registered adviser. Crypto trading provided by Zero Hash LLC, licensed by the NYSDFS. Generated Assets is an interactive analysis tool by Public Advisors. Output is for informational purposes only and is not an investment recommendation or advice. See disclosures at public.com/disclosures/ga. Matched funds must remain in your account for at least 5 years. Match rate and other terms are subject to change at any time.

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Molly O'Shea?

  Welcome to Sorcery.

• 0:10Speaker 01

  The potential of photonics.

• 0:12Speaker 02

  The technology to interconnect these GPUs.

• 0:14Speaker 03

  Global payroll and HR platform.

• 0:16Speaker 04

  Eight billion operational data points.

• 0:18Speaker 01

  Scale-ups over startups. You'd rather have a million of something than one of anything. Building the intelligence layer for the fence.

• 0:24Speaker 02

  There isn't enough power. There's not enough memory chips. We're at the end of physics of what we can still do.

• 0:40Molly O'Shea?

  All right, so for this one, we're going to do something special and hand the baton to Bruno to introduce our lovely guests today. Bruno is a host for us with Strike and at Villa Charlotte. So Bruno?

• 0:54Speaker 05

  Perfect. Well, we're here today with ISIS, who was leading Palantir's commercial business for Europe and now is a co-founder and CEO at Onodrim Industries. And we're here with George Hagemannas, who was the Chief Strategy Officer at Theon. Thank you guys for coming.

• 1:10Speaker 01

  Thank you, Bruno.

• 1:12Molly O'Shea?

  For the audience, without much context, so we're going to be talking about European defence right now. And I would love to start with both of you, just give a little bit of background.

• 1:22Speaker 06

  Onodrim's mission is strengthening foundations of European defence. So our company will not building like kind of a prime, a neo-prime. We actually work to find the very good manufacturing and critical mission system businesses in Europe, acquire them and make them not about the next European defence to make sure that the defence primes can deliver the orders in the next decade. So that's our mission.

• 1:46Speaker 01

  Well, Theon is an established player in the European defence industry. The focus is electropics, both for man-portable and platform applications. An example for everyone would be like night vision systems, augmented reality, head-up displays, things like this. And we are a company, one of these companies that was well positioned to take advantage of this boom in European defence over the past few years, both through an IPO in 2024 and having a pretty strong growth trajectory since then.

• 2:14Molly O'Shea?

  So what is the current state of European defence? And how has warfare changed since the start of the Ukraine war?

• 2:22Speaker 01

  So to answer this question, we have to look at where Europe was a few years ago versus where it is today. Europe really was underspending on defence for the past few decades. Ukraine proved that this can no longer be the case. We need to prepare. We need to be ready. We need to industrialise.

• 2:43Speaker 01

  It showed a lot of the weaknesses, so to speak, that we had in terms of our own ability to manufacture at scale and supply our militaries at scale. And now, obviously, there is a very large influx of money that is being poured into defence as Europe and European nations aim to strengthen up their arsenals and build up their armies. And this provides a very interesting opportunity to a lot of companies to scale up, to develop technologies, to create new technologies, and to really achieve scale that a few years ago in this industry in Europe would not have been achievable.

• 3:19Speaker 06

  And I'll add, sort of elaborating on the scale paradigm. I think the biggest lesson for defence companies, sort of lesson from Russia invasion of Ukraine and the war that's happening, is actually that the advantage is technology and volume. Like, just having technology is not enough. And actually, if you had to pick between the two, you would go for volume. Like, volume wins. Like, large scale, you'd rather have a million of something than one of anything. So ideally, we have to do both. But really, I think a lot of the defence industry pre-full-scale invasion of Ukraine was exquisite technologies, this advanced technologies that are like dreams of generals

• 4:05Speaker 06

  that cannot be mass-produced. But now, what we see, the shift in the realities of defence, anything you do has to be produced in tens of thousands, hundreds of thousands or millions. So volume matters a lot. So this is, I think, the biggest conceptual change. Ideally, it also has to be technology and ideally also not easily copy-pasteable.

• 4:26Speaker 05

  And to maybe double down on what ISIS said, a lot of the systems that have been new and tested in the United States that have been deployed in Ukraine, frankly, at the beginning of the war, didn't work. And they needed to go through these iterative cycles where they keep on updating them and making them better. So even before they reached scale, they have done extremely well in testing environments, but they just have not managed to perform towards the beginning of the war as well as expected.

• 4:52Molly O'Shea?

  Bruno, I'm actually curious, because you have mapped out the whole market, how do you categorise where people are building most in defence right now? And where do you think there are still gaps?

• 5:04Speaker 05

  There has been a very big focus on neo-primes like Helsing. And each sort of core geography has some emerging players that are likely to seize a very large part of defence spend in that country. But one of the biggest gaps that we've noticed is, as ISIS has pointed out, a lot of those systems are going to need to be produced at massive scale. And a lot of those systems will need to, more importantly, be produced in Europe. And in order to do that, you're going to have to acquire a very fragmented manufacturing base. The lead times for some of those components could also be in the years, which is why certain primes take four or five years to deliver on certain contracts. So I really think that the white space is very much in the sort of manufacturing gap

• 5:48Speaker 05

  for supplying some of those next-generation primes that are building systems on sort of outdated supply chains.

• 5:55Molly O'Shea?

  Have you had any issues of hiring and talent?

• 5:59Speaker 06

  I think hiring in the defence has been great. Like, people like the Europe's ambition to rearm and re-industrialise. So honestly, from a monitoring perspective, we see the top talent, you know, my co-founder, Alex, CEO, he spent 17 years in the US. And now he came back to Germany two weeks ago with his family to strengthen European defence. And we see a lot of that demand, especially with the companies with big ambitions, which I think Europe has not seen enough. And Helsing has seen the same. They have no problem of attracting the best talent. So I really think this is a very favorable environment.

• 6:34Molly O'Shea?

  In the US, defence is funded by the government and also ventures come into the scene. What has been the process like for funding and how is it different?

• 6:46Speaker 06

  So it's, government is the buyer. There is, there are obvious theories that the private military corporations will be the next way to do defence, but that's not yet the case. So funding is from the government, a lot of initiatives from the European Union. And, you know, that obviously attracts venture funding. When there is like, you know, trillion of dollars being poured into defence by 2030, this triggers venture, private funding for the companies to make use of those funds. So this has been the dynamic in Europe.

• 7:21Molly O'Shea?

  As warfare becomes more and more autonomous, there's more robotics involved, there's AI, there's software. How does that change the supply chain?

• 7:30Speaker 06

  Well, the key thing, and I'll let others add, the key thing is actually that everything has to become cheaper.

• 7:38Speaker 06

  It's like if the radio could cost $30,000 four years ago for military, and that was acceptable. This is no longer acceptable when you're talking about autonomous mass technologies, a lot of robots, hundreds and tens of thousands. So a lot of components that were exquisite, and I mentioned radio specifically as an example, but there is more, cameras is actually the same. A lot of these components have to go like significantly cheaper in price, significantly higher in scale. So that's, I think, the big impact. Again, coming back to the volume, it becomes like a significant issue.

• 8:12Speaker 01

  I could not have said it, I could not have said it better. Scale is the most important parameter here, but also having the underlying supply chain networks that allow for the scale to be reached.

• 8:24Molly O'Shea?

  This episode is brought to you by Brex, my favourite. You become what you spend on, and I refuse to spend my time on work that shouldn't exist. Expense reports, receipt chasing and manual closes. The companies building what's next, from Vercel, OpenAI, Anthropic, Granola and Deepgram, all made the same call. They all run on Brex. Brex is the intelligent finance platform that combines cards, expenses and banking into a single stack with agentic finance built in. AI agents that handle expenses automatically, enforce policy before spend happens and close your books in minutes. That's why Sorcery runs on Brex, so I can spend time on building and not busy work.

• 9:09Molly O'Shea?

  It's time to get Brex AF. Learn more at brex.com/sorcery. That's B-R-E-X dot com slash S-O-U-R-C-E-R-Y. Bye. Turing is training the next generation of AI with tasks that require real expertise and real-world judgement. That's why companies like Nvidia, Anthropic, Salesforce and Gemini partner with Turing. Turing builds realistic reinforcement learning environments and data systems based on real operational traces, the kind of infrastructure Frontier Labs need to train superintelligence. Visit turing.com/sorcery.

• 9:51Molly O'Shea?

  In 20 years, do you think defence companies will look more like technology companies or industrial?

• 9:59Speaker 01

  I personally don't see this as being mutually exclusive. I think for our example with Theon, we were mostly an industrial company about four or five years ago. The main product we were making was night vision, and still, to be honest, is. But since then, we've branched significantly into new technologies.

• 10:18Speaker 01

  Mind you, the militaries of the world were not very quick to adopt new technologies a few years ago. This is changing. It is not so much a revolution, I would say. It is more of an evolution as new technologies get gradually adopted into existing platforms and systems.

• 10:38Speaker 01

  But to answer your question, I think the right recipe is a combination of both. You need prototypes don't fight wars, no matter how good they are, they cannot win wars. So if you want to be able to be competitive in today's world, you need to have good technology. You need to be at the forefront of technological development and also be industrially acute enough to be able to deliver this at scale.

• 11:03Speaker 06

  And my view here is slightly maybe controversial, but I think you need the two types of companies. I think I think the technology companies who do AI and software for defense and connected battlefield have to not want to also be the manufacturing giants of the world. So essentially, I think there will be two types of the the success recipe for Europe is having and for the world is having technology companies who focus on the on the tech, on the software, on AI, on on weapon final assembly and make testing and make sure that they work. And then there are industrial companies who are extremely good at producing components that those companies that those companies making technology need.

• 11:45Speaker 06

  And the synergy between the two and not a competitive nature, but as non zero sum nature where they collaborate to produce at scale. I think this this is my winning recipe for for this part.

• 11:57Molly O'Shea?

  So I asked this question yesterday when we were interviewing FEMA on photonics about the state of AI in Europe versus the US and kind of the dynamics there. But the question for you both and Bruno too, what is the biggest misconception about European defense?

• 12:19Speaker 01

  European defense has to a very large extent similar technological capabilities to the US.

• 12:31Speaker 01

  I don't place them as far apart as a lot of people might think. We have some fantastic companies in Europe.

• 12:40Speaker 01

  I'd say one main differentiator is

• 12:46Speaker 01

  the prevalence of startups in the US that have become scale ups, so to speak. And will being one of them, a Palantir being another, and scale ups is an understatement of what these companies are. But in Europe, in Europe, the traditional primes are very similar to the US traditional primes. Well, the only difference is that we have some countries that protect. We have conflicting interests between countries. So each you have a lot of national champions in Europe because there's just many countries. It's not like the states in the US. So I would say that the difference is that we have more companies than are needed in a lot of ways, because so many are national champions that will not survive in otherwise

• 13:30Speaker 01

  competitive landscapes, whereas in the US, all of the US primes seem to have found their niche. So this, I would say, is where I would compare one on the other.

• 13:40Speaker 05

  To add further to Georgia's point, I think one of the biggest misconception is that processes in US and in Europe for procurement of defense systems are similar. They actually aren't, and they're quite fragmented and it's sort of country by country or on the European level. And because of that, a lot of the current existing military sort of industrial complex is is very outdated. So countries like Germany and others have large volumes of systems that are not necessarily working. And in the US, companies like Androil or Hadrian have partnered with the government in joint venture initiatives to really change how this relationship between government

• 14:23Speaker 05

  spending and defense OEMs exists. And and we think that Europe is certainly going in that direction, but it's very much behind in terms of those partnerships. So I would say that's that's the biggest misconception.

• 14:39Molly O'Shea?

  Do you think we're at risk of a defense bubble or is it still too early? Is it too late?

• 14:45Speaker 05

  From a venture landscape point, I would say that a lot of companies have been funded with minimal amounts of capital, like five or 10 million. And the products that those companies have built can potentially be even better than the existing system. The problem is if you don't have hundreds of millions of dollars on your balance sheet and the end is the end customer is the government. They have very little belief in your ability to actually deliver and manufacture the problem at scale versus a company that has been working with the government for 10 or 20 years and has thousands of employees and millions or hundreds of millions on their balance sheet. So I think a lot of those companies in Europe are not going to do well, even though their

• 15:28Speaker 05

  product might be deemed superior compared to sort of traditional OEMs. But at the same time, certain companies have already been de facto king made, like Helsing in Germany or sort of Icy on the sort of European level for for SAR applications. And those companies are just going to keep on eating away at market share from traditional primes.

• 15:50Molly O'Shea?

  I asked this before we started rolling and taping, but I have to ask you again. What do you think is a secret you know about the world that no one else does?

• 16:03Speaker 06

  I think that the choice is an illusion.

• 16:09Speaker 06

  I think the there is more and more research actually showing that we think after we feel. So I think that's

• 16:23Molly O'Shea?

  Damn.

• 16:24Speaker 06

  My answer to this question. George?

• 16:27Molly O'Shea?

  George?

• 16:27Speaker 01

  How could I top that?

• 16:28Molly O'Shea?

  How can you follow that?

• 16:30Speaker 01

  Yeah, that was that was deep. I think Bruno should take that.

• 16:34Speaker 05

  Thank you very much for the rain. I think I think I think ISIS is hard to beat. One secret about the world that nobody else knows, is that the question?

• 16:44Molly O'Shea?

  Yeah.

• 16:47Speaker 05

  Should we talk about the Ukraine Russia conflict?

• 16:52Speaker 05

  No, I I would say one secret about the world that very few people know is, and this might be a bit of cliche, but I think that the next five to 10 years of scientific knowledge because of AI would be the equivalent of 100 years of sort of manual human research. So it may be not seen as a secret, but I think the world is very much going to fundamentally change over the next five or 10 years in more ways than we imagine. And all of our lives are going to change because of this. So I don't know if that's a secret or not, but

• 17:25Molly O'Shea?

  Good answer.

• 17:26Speaker 05

  I'm not sure many people are aware of that.

• 17:28Molly O'Shea?

  ISIS, I have to ask you, what is the biggest lesson you learned from Palantir? And maybe Alex Karp.

• 17:35Speaker 06

  Focus on being important and valuable and the money will come. So that's Palantir not being profitable for, I don't know, over 15 years is good. And now being great. So I think that's like, I think I think I always remember when people ask, you know, what do you sell tomorrow? What's like your next year's revenue? I think that's what I remember, like what, how am I creating value? Why we are becoming more important as a company for the world? And then, you know, then the money will come.

• 18:08Molly O'Shea?

  Amazing. Okay, so as we close out, you guys get the question everybody else gets. We have to know, what is your hottest take right now?

• 18:14Speaker 01

  I roughly mentioned this before. I think a somewhat controversial take is that defense does need more this ability to scale rather than crazy innovation or revolution, so to speak, on the technology side. And this is a very interesting thing to tell to people that are in the VC world that, you know, it's not about finding something that's going to revolutionize everything, but finding the right fit that has the capacity to scale to be successful. So I would say scale ups over startups in defense is a somewhat controversial take.

• 18:45Molly O'Shea?

  Bruno?

• 18:46Speaker 05

  Well, very tough to beat both of those, but I believe that because of how large the defense market is, especially in Europe, and how close we are to the front lines, that if Europe can truly do exceptionally well on both manufacturing locally, but also in building the intelligence layer for defense, there could be a half a trillion dollar company come out of Europe in the defense space that was founded probably in the last five years or so. So how long will it take? Well, don't quote me on that, but I think could be done in the next decade.

• 19:23Molly O'Shea?

  Amazing. Well, that's a wrap. Thank you, guys.

• 19:27Speaker 06

  Thank you.

• 19:27Speaker 05

  Thank you.

• 19:30Molly O'Shea?

  Great job. AI needs more than chips. It needs power, land and infrastructure. Zone develops next generation data center campuses, partnering with AI companies, site developers and technology leaders to bring compute online faster and at scale. Zone is building the foundation of the AI frontier. Visit zonefrontier.com to learn more. That's zone frontier.com to learn more. Today's episode is sponsored by V C X by Fundrise, the public ticker for private tech, allowing investors of all sizes to invest in venture capital. Learn more at get v c x dot com. Some of you may not have heard this yet, but our sponsor Public just launched something

• 20:14Molly O'Shea?

  called Generated Assets, and it brings AI into investing in a way I've honestly never seen before. Here's how it works. You type in an idea like AI powered supply chain companies with positive free cash flow or defense tech companies growing revenue over 25% year over year. Public's AI then dispatches a swarm of agents that scan every single US stock, evaluates them and instantly builds a custom index around your thesis. What really stands out is how clearly it explains why each stock is included. And before you invest, you can even back test your idea against the S and P 500. So you're making decisions with real context, not just guessing. And beyond Generated Assets, Public lets you invest in stocks, bonds, options, crypto, all in one place.

• 20:56Molly O'Shea?

  They'll even give you an uncapped 1% match when you transfer your investments over from another platform. If you want to build a portfolio that actually reflects your thesis, visit public.com slash sorcery, paid for by Public Investing. Full disclosures in the description. Founders scale faster on deal. Set up payroll for any country in minutes, hire anyone, anywhere, get visas handled fast and get back to building. Visit deal.com slash sorcery. That's D E E L dot com slash sorcery. Hey, it's Molly. If you enjoy our interviews, check out our newsletter, sorcery.vc, where we deliver a once a week top deals and tech headlines email and also go deeper on our podcast interviews.

• 21:38Molly O'Shea?

  Subscribe to Sorcery today and don't forget to subscribe to the podcast on YouTube, Spotify, Apple or wherever you listen. Link in description to sign up.