Finnish companies strengthening Europe’s defence – €387.5 million invested in projects

The 57 projects selected under the 2025 EDF cover a wide range of critical sectors, including artificial intelligence (AI), cyber defence, drones and counter drone systems. These investments are designed to ensure that the EU remains a leader in advanced defence technology.

“Developing defence technologies is expensive and requires long term commitment. The EDF shares financial risk and enables the development of solutions that companies might not otherwise undertake on their own. In addition to funding, EDF projects provide Finnish companies with access to European cooperation networks, strengthen their technological expertise and competitiveness, and at the same time support Finland’s defence capability and security of supply,” says Sauli Eloranta, Executive Vice President, Defence Technologies at VTT.

VTT is participating in three newly approved projects: DIALOG AI, SHIMBAD and SPIDER2. Together, these projects contribute to strengthening EU defence capabilities in the areas of artificial intelligence, radar systems and satellite technologies.

DIALOG AI (Defence Innovative Assessments and Live tests of Operational Generative AI) focuses on developing language technologies for defence use. In the last few years, the rise of generative Artificial Intelligence (AI), Large Language Models (LLMs), chatbots and dialogue systems has marked a significant technological evolution. However, attempts at using these technologies in defence systems have revealed a number of shortcomings, failing to achieve the required conditions for operational deployments. To tackle these problems and preserve European sovereignty in this domain, the DIALOG-AI project aims at setting up an ambitious multiyear evaluation challenge and live tests encouraging research and progress for the deployment of dialogue systems for defence purposes, using innovative evaluation protocols specifically addressing defence needs.

SHIMBAD (SHIpborne MultiBand AESA Demonstrator) aims to develop the first fully European multiband multifunction radar system for naval platforms. The project will design, build and validate a scalable 4D Active Electronically Scanned Array (AESA) demonstrator capable of operating simultaneously across multiple frequency bands to provide wide-area surveillance, precision tracking and electronic protection in contested electromagnetic environments.

SPIDER2 aims to develop a constellation of affordable satellites for space-based Intelligence, Surveillance, and Reconnaissance for defence use. It addresses developments of multi-mission affordable satellites constellations dedicated to space-based Intelligence/Surveillance/Reconnaissance (ISR) for defence use-cases compatible with national and EU initiatives. SPIDER2 will enable high reactivity, short revisit periods, and short end-to-end system latency.

Through the 2025 EDF call, the EU is also deepening its cooperation with the Ukrainian defence industry, supported by the EU Defence Innovation Office in Kyiv. This partnership aims to better integrate Ukraine into the European industrial base. One key initiative, Project STRATUS, will develop an AI-powered cyber defence system for drone swarms. It includes a Ukrainian subcontractor, ensuring the project benefits from direct battlefield experience.

The selected projects involve a total of 634 entities from 26 EU Member States and Norway, reflecting a strong commitment to European defence cooperation. A total of 16 organisations from Finland are involved in the projects. Small and medium sized enterprises (SMEs) play a central role in this funding round, accounting for over 38% of participants and receiving more than 21% of total funding.

The European Defence Fund is a programme funded with the EU budget and launched in 2021. The total budget of the fund for 2021–2027 is approximately EUR 8 billion. The aim is to promote cooperation between companies and research actors in the European Union and to increase the competitiveness, efficiency and innovation capacity of the European defence industry and research community.