Defence Technology & Alliances

The technology cold war is not only fought in laboratories and boardrooms. It is increasingly fought through defence alliances, joint development programmes, and the integration of commercial technology into military capability. The nations that build the strongest technology partnerships will shape the security order of the coming decades.

Why Defence Technology Matters in the Tech Cold War

Defence has always driven technological competition between great powers. What distinguishes the current era is the speed at which commercial technology — artificial intelligence, autonomous systems, quantum computing, advanced materials — is reshaping military capability. The boundary between civilian innovation and defence application has effectively dissolved.

This convergence means that the technology cold war and the defence competition are no longer parallel tracks. They are the same contest. A nation's ability to develop, integrate, and deploy emerging technologies for defence purposes depends directly on its position in the broader technology ecosystem: its access to advanced chips, its AI capabilities, its control over critical mineral supply chains, and the strength of its alliance networks.

The result is a new kind of defence competition — one defined less by the size of military budgets and more by the capacity to translate technological innovation into operational advantage at speed.

AUKUS: The Template for Technology Alliances

The AUKUS partnership between Australia, the United Kingdom, and the United States represents the most ambitious defence technology alliance of this era. While its Pillar 1 — the provision of nuclear-powered submarines to Australia — commands the most public attention, it is Pillar 2 that carries the broader strategic significance.

Pillar 2 covers the joint development and sharing of advanced capabilities across eight technology areas: undersea warfare, quantum technologies, artificial intelligence and autonomy, advanced cyber, hypersonic and counter-hypersonic systems, electronic warfare, innovation, and information sharing. The ambition is to create a seamless technology base across three nations — one that accelerates development timelines, reduces duplication, and establishes interoperability as the default rather than the exception.

The challenges are substantial. Export control harmonisation between the three partners remains incomplete. Industrial base integration requires overcoming decades of procurement nationalism. And the pace of bureaucratic reform has not always matched the pace of technological change.

Yet AUKUS has established a model that is influencing alliance architecture well beyond the three partner nations.

Read our full analysis: AUKUS and Beyond — The Defence Tech Alliances Reshaping the Indo-Pacific →

NATO and the Innovation Continuum

NATO's approach to defence technology has evolved significantly. The Alliance's 2026 Innovation Continuum exercise series marks a notable expansion: for the first time, four Indo-Pacific nations — Australia, Japan, South Korea, and New Zealand — are eligible to compete alongside alliance members in technology acceleration events focused on AI, counter-drone systems, electronic warfare, and cyber resilience.

The initiative reflects a growing recognition within NATO that the technological competition cannot be won within the Euro-Atlantic sphere alone. The most capable defence technology ecosystems increasingly span both oceans, and the Alliance's innovation architecture is adapting accordingly.

NATO's Defence Innovation Accelerator for the North Atlantic (DIANA) and the NATO Innovation Fund represent institutional efforts to connect the Alliance with commercial technology ecosystems — startups, venture capital, and dual-use research — that operate outside traditional defence procurement channels. Whether these mechanisms can move at the speed required by the technology competition remains an open question.

The Indo-Pacific Defence Technology Network

Beyond AUKUS and NATO, a broader network of bilateral and multilateral defence technology partnerships is taking shape across the Indo-Pacific.

South Korea's defence partnership with NATO and European allies has deepened rapidly. Arms exports to Poland alone have exceeded $12 billion. A high-level consultative group established in 2025 formalises a relationship that has moved from occasional cooperation to strategic alignment.

Japan is developing its first-ever defence industry strategy, expected by end of 2026. Its defence budget has reached $57 billion, and Mitsubishi Heavy Industries has been selected by Australia to build its next-generation frigate — a tangible example of the kind of cross-allied industrial integration that was rare even five years ago.

India, while maintaining its tradition of strategic autonomy, is increasingly engaged in technology partnerships with the United States, particularly in AI, semiconductor design, and defence manufacturing.

The emerging picture is not one of a single alliance but of a networked architecture — a web of overlapping partnerships linking the Atlantic and Pacific, with technology cooperation as the binding thread.

The Civil-Military Technology Fusion

One of the defining characteristics of modern defence technology competition is the degree to which military capability now depends on commercial innovation. AI models developed for enterprise applications are adapted for intelligence analysis and autonomous targeting. Satellite constellations built for commercial broadband provide military communications resilience. Drone technology developed for logistics and agriculture is repurposed for battlefield reconnaissance and strike.

This civil-military fusion creates both opportunities and vulnerabilities. It accelerates the pace of capability development — but it also means that defence supply chains are exposed to the same chokepoints and dependencies that affect the commercial technology sector. A disruption in rare earth supply chains affects not only electric vehicles but also precision-guided munitions. A restriction on advanced chips constrains not only AI startups but also autonomous weapons programmes.

The nations that manage this civil-military integration most effectively — maintaining access to critical supply chains while accelerating the adoption of commercial innovation into defence — will hold a decisive advantage.

The Autonomy Challenge

Autonomous systems represent perhaps the most consequential emerging domain in defence technology. From uncrewed aerial vehicles and naval drones to AI-enabled decision support and cyber operations, autonomy is reshaping how militaries operate across every domain.

The competition is both technological and doctrinal. Developing capable autonomous systems requires advances in AI, sensor fusion, edge computing, and communications. But deploying them effectively requires new operational concepts, new command structures, and — critically — new frameworks for human oversight and accountability.

China has invested heavily in military AI and autonomous systems, with stated ambitions to achieve a "Revolution in Military Affairs with Chinese Characteristics." The United States and its allies are pursuing parallel programmes, but face additional constraints: democratic accountability, ethical frameworks, and the requirement for meaningful human control over the use of force.

What We Cover

Tech Cold War tracks the defence technology competition across its full scope: the evolution of AUKUS, NATO innovation programmes, Indo-Pacific defence partnerships, the integration of AI and autonomous systems into military capability, the defence implications of semiconductor and critical mineral supply chains, and the broader question of how democratic nations can maintain a collective technological edge.

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