AUKUS and Beyond: The New Defence Tech Alliances

The Tech Cold War is not being fought by nations alone. A web of new security partnerships — from AUKUS to NATO's Indo-Pacific outreach — is reshaping how democracies develop and deploy military technology.

In September 2021, the leaders of Australia, the United Kingdom, and the United States announced a new security partnership with a name that quickly entered the geopolitical lexicon: AUKUS. The headline was nuclear-powered submarines for Australia. But the deeper story — and the one that may prove more consequential — is what lies beneath that headline: a sweeping effort to jointly develop the advanced technologies that will define military power for decades to come.

Three and a half years later, AUKUS has become the most ambitious trilateral defence technology programme since the Cold War. And it is not alone. Across the democratic world, a new architecture of defence tech alliances is taking shape — linking the Atlantic and the Pacific in ways that would have seemed improbable a decade ago.

AUKUS Pillar Two: The Technology Engine

While Pillar One of AUKUS focuses on delivering nuclear-powered submarines to Australia — a programme that will unfold over decades — Pillar Two is where the near-term action lies. It covers eight working areas: undersea capabilities, quantum technologies, artificial intelligence and autonomy, advanced cyber, hypersonic and counter-hypersonic capabilities, electronic warfare, innovation, and information sharing.

Each of these areas targets technologies that are central to the broader strategic competition with China. The Australian Strategic Policy Institute has assessed that China leads in 19 of 23 technologies relevant to AUKUS Pillar Two — a finding that underscores both the urgency and the scale of the challenge.

Progress has been uneven but tangible. In undersea capabilities, the AUKUS Undersea Robotics Autonomous Systems (AURAS) project has conducted joint trials of autonomous underwater vehicles. In quantum technologies, the AUKUS Quantum Arrangement (AQuA) is focused on developing alternative positioning, navigation, and timing systems — capabilities that become critical when GPS signals are jammed or denied. Pentagon officials have reported meaningful progress on quantum clocks that could be integrated into next-generation submarines.

In AI, the three nations have deployed common artificial intelligence algorithms on P-8A Maritime Patrol Aircraft, allowing them to process sonobuoy data trilaterally — a seemingly modest step that represents the first tangible piece of Pillar Two technology to reach operational use.

In August 2024, the three partners achieved what was described as a historic breakthrough in defence trade, lifting certain export controls and technology-sharing restrictions that had long hampered cooperation. A new deep space advanced radar capability is planned to be operational in Western Australia in 2026, with sites in the US and UK to follow by the end of the decade.

Beyond AUKUS: The Expanding Web

AUKUS does not exist in isolation. It sits at the centre of a rapidly expanding network of defence technology partnerships that increasingly link the Euro-Atlantic and Indo-Pacific security architectures.

NATO has moved to formalise its engagement with four Indo-Pacific partners — Australia, Japan, South Korea, and New Zealand — known collectively as the IP4. In 2026, for the first time, all four nations were invited to compete in NATO's Innovation Continuum exercises, a series of technology acceleration events designed to identify and field emerging capabilities.

Japan's defence transformation has been particularly notable. Following the approval of three landmark security documents in December 2022, Tokyo committed to substantially increasing defence spending, reaching the 2 percent of GDP target two years ahead of schedule. Japan is now developing its first-ever defence industry strategy, expected by the end of 2026. In a significant milestone, Australia selected Mitsubishi Heavy Industries to build its next-generation frigate — a sign that Japan's defence industry is emerging as a global player. NATO Secretary-General Mark Rutte visited Japanese defence firms in 2025, signalling the alliance's interest in deeper industrial cooperation.

South Korea has emerged as one of the world's fastest-growing defence exporters. Between 2020 and 2024, it ranked among the top ten global arms exporters, with major contracts in Poland alone worth over $12 billion for tanks, howitzers, and fighter jets. In June 2025, Seoul and NATO agreed to establish a high-level consultative group focused on defence industry collaboration, covering joint development, supply chain resilience, and standardisation. South Korea's cooperation with NATO now extends to cyber defence, emerging technologies, and AI-enabled command-and-control systems.

The Technology Priorities

Across all these partnerships, several technology domains recur as priorities.

Autonomous systems are at the forefront. From underwater drones to uncrewed aerial vehicles, the ability to deploy autonomous platforms at scale is seen as a decisive capability. The war in Ukraine has accelerated this trend, demonstrating how relatively inexpensive autonomous systems can challenge conventional military platforms.

Artificial intelligence is being embedded across the full spectrum of military operations — from intelligence analysis and targeting to logistics and decision support. The challenge is not just developing AI algorithms but integrating them into allied systems that can communicate and operate together.

Quantum technologies represent a longer-term investment but one with potentially transformative implications. Quantum-resistant cryptography will be essential to protect communications against future quantum computers capable of breaking existing encryption. Quantum sensing could revolutionise navigation, submarine detection, and precision timing.

Hypersonic weapons and their countermeasures are another area of intense activity. The US Army expects to complete fielding of its Dark Eagle hypersonic missile in early 2026, while all three AUKUS partners are collaborating on both offensive and defensive hypersonic capabilities.

The Challenges

Despite the momentum, significant obstacles remain.

Export control reform continues to be a friction point. The US International Traffic in Arms Regulations (ITAR) framework has been identified as a persistent barrier to the technology sharing that AUKUS and broader alliances require. While reforms have been implemented, industry participants report that the pace of regulatory change still lags behind the pace of technological development.

Interoperability between allied systems is easier to aspire to than to achieve. Three (or more) nations integrating AI systems, autonomous platforms, and encrypted communications networks face enormous technical and bureaucratic hurdles. Innovation challenges and joint trials are valuable, but scaling from demonstration to deployment remains the critical gap.

There are also questions about the sustainability of current spending trajectories. NATO allies have endorsed a target of 5 percent of GDP on security by 2035. Collective European defence spending surpassed $693 billion in 2026. Japan's defence budget reached $57 billion. But maintaining these levels over decades, particularly for nations facing domestic fiscal pressures, will require sustained political commitment.

A New Architecture

What is emerging is not a single alliance but a layered architecture of technology partnerships — AUKUS at the core, NATO-IP4 cooperation as a bridge, and a growing mesh of bilateral deals between like-minded nations. The logic is straightforward: no single democratic nation can match China's scale of investment in dual-use technologies. Only by pooling resources, sharing research, and integrating industrial bases can the democratic world maintain its technological edge.

The Tech Cold War is ultimately a contest of systems — not just technological systems, but the systems of cooperation and trust that allow nations to innovate together. AUKUS and its expanding network of partnerships represent the most significant attempt since the original Cold War to organise democratic nations for a sustained technological competition.

Whether this architecture can move fast enough to matter — translating policy frameworks into fielded capabilities before the window of advantage narrows — is the defining question of allied defence strategy in 2026.

This is part of Tech Cold War's coverage of the defence technology landscape. Subscribe to receive weekly analysis on the technologies and alliances reshaping global security.

Sources
Congressional Research Service, "AUKUS Pillar 2 (Advanced Capabilities): Background and Issues for Congress," R47599, May 2024 (congress.gov)
House of Commons Library, "AUKUS pillar 2: Advanced capabilities," February 2026 (commonslibrary.parliament.uk)
CSIS, "AUKUS Pillar Two: Advancing the Capabilities of the United States, United Kingdom, and Australia," February 2025 (csis.org)
ASPI, "AUKUS Pillar Two can deliver fast — after we fix it," The Strategist, August 2025 (aspistrategist.org.au)
National Bureau of Asian Research, "AUKUS Pillar II: Speed, Innovation, and Expansion," 2025 (nbr.org)
DefenseScoop, "NATO invites some alliance outsiders to compete in Innovation Continuum exercises," January 2026 (defensescoop.com)
CSIS, "Japan's Present and Future National Security Strategy: Five Key Challenges to Watch," January 2026 (csis.org)
Lowy Institute, "South Korea is on track to become a defence powerhouse," 2025 (lowyinstitute.org)
Atlantic Council, "South Korea and Europe are stepping up on security cooperation," December 2025 (atlanticcouncil.org)
Sasakawa USA, "Europe and Japan, a New National Security Calculus?," September 2025 (spfusa.org)
Indo-Pacific Defense Forum, "South Korea emerging as strategic defense partner as NATO spending surges," August 2025 (ipdefenseforum.com)