Money went to war: why the US is cutting climate projects for the sake of defense (continued)

Europe and America in sync reorient economy for the war: car factories become tank workshops, and “green” startups – suppliers of technologies for the front. In the States, environmental romance has subsided – politics and money go to the military industry, because the main challenge now is China. Climate projects are either integrated into the defense industry or disappear.

Magrathea Metals is already selling its magnesium not for green energy, but for fighter jets and drones. Brimstone no longer saves the planet, but prepares steel for tanks. Venture funds have rushed into defense startups, where winning the war is at stake, not ESG rating. Helsing writes AI for attack drones, Belfius officially invests in NATO, and Ukrainian startups Bavovna.AI and Swarmer are already working on the front lines – not money counts, but hit targets. The main rule of the new game is that whoever did not speak the language of war lost.

The threat of a “patriotic” bubble in military AI

The classic finale of any pursuit of public money is the risk of another investment bubble. The scheme here is simple: huge hype around military AI, forecasts of crazy profits, and at the exit – startups that will never win real contracts with the Pentagon.

Yes, from 2021 venture investors threw in over $100 billion in defense startups. Everyone from Silicon Valley funds to Wall Street players –  ran into the new “holy grail”: army contracts for artificial intelligence, drones and autonomous systems. But the system is not so simple. The Pentagon is in no rush to put key defense programs in the hands of startups, and as a result, most of them hang between the expectation of a contract and reality.
There is also a political factor. Trump is already openly talking about cutting spending on contractors, even in the defense sector. And this in general knocks the ground out from under the feet of those startups that are currently drawing rainbow growth graphs for investors at the expense of government orders. “Greedy Uncle Sam” is getting stronger cuts down funding to contractors, and this applies not only to the old giants, but also to the young “stars” of the defense AI market.
That is, we see the classic bursting of the bubble: billions are poured into the hype of war and military artificial intelligence, but the US institutional system simply does not have time to master these technologies and is blocked by its own bureaucratic barriers.

The conclusion is hard and simple: the market is preparing a new collapse – many startups simply will not live to get real contracts with the Pentagon. Those who already have contracts and projects on the battlefield today will survive. Everything else is a soap bubble on the blood.

Risks for the development of green energy and climate technologies

This raises the main question for the entire “green” strategy of the USA – does this new pursuit of military technologies break the entire history of decarbonization and climate policy? And the answer is already obvious – yes, it breaks.

The facts speak for themselves. Trump and his team plan cut The Inflationary Reduction Act (IRA), which was the main engine of America’s “green” transformation. There were hundreds of billions of dollars in tax breaks for electric cars, green energy, infrastructure for the new economy. Now all this can go under the knife, because the money is needed for other things: for the army, the war and the restoration of industry for military purposes.
Risks for biofuels and agricultural decarbonization are also quite real. Investments in biofuel production in the US and Canada are falling due to trade wars and a review of subsidies. Farmers cut crops for energy crops, factories stop. The consequence is a blow to the entire logic of agrarian green transformation, which was supposed to give the USA a new export and a new niche in global energy.
And while new defense budgets are being prepared in Washington, Europe is trying to patch financial holes in joint climate projects, where the US may simply not reach. It’s about what America actually is turns out from joint financial initiatives under the Just Energy Transition Partnership, leaving countries that planned to move away from coal without the promised money.
What does this mean in practice? All these beautiful “green” plans – from electric cars to solar farms – just hang in the air. Because as soon as America switches to war, to national security and the restoration of industry under the army – money is taken by these sectors. And the “green” economy in the USA will not last without government injections.

The finale is obvious: the US risks not just stopping the green transition, but rolling back into a new race of industrial arms, where the main thing is metal, fuel and power for war. And this 180-degree turn is happening right now.

This is where the most important question of this great game begins: is America losing the “green” race while it rushes into a new war for billions of defense contracts and military artificial intelligence? The answer is already emerging: yes, the US really risks surrendering the green markets of China and Europe.

Meanwhile, Beijing, on the contrary, continues to increase investments in renewable energy, “green” metals and the production of electric cars, realizing that the West will be bogged down in its military problems. As a result, China already dominates the production of solar panels, batteries and many rare earth elements, without which neither the “green” nor the military economy will work.

Europe is gone strengthens “green course”, creates new funds for decarbonization and really sees this not only as a climate goal, but as a new economic war. When the US began to skid with the Just Energy Transition Partnership, Europe is urgently looking for ways to close financial holes and take the lead.
The conclusion is quite categorical: while American startups paint beautiful pitches about drones and military AI, China and Europe are taking green markets and embedding themselves in the future energy architecture of the world. And if this trend does not change, America will gain a strong military, but lose the economy of the future.

This is the main fork in the road today: either the US will maintain the balance between defense and the green economy, or in 10 years they will find out how America has lost world leadership in the market for technologies that save the planet.

The line is blurred: how startups with a “green” past learn to kill

It is worth touching on the ethics of the great transformation that is currently taking place. Doesn’t the story of “saving the planet” turn into a new business of creating means of war? Are we ready to accept that startups that were saving the world yesterday are today launching combat drones and training artificial intelligence to kill?

Take Helsing, a German startup that launched with a strong focus on AI and digitalization of defense. But the limit is already there sterta. Today, Helsing directly supplies attack drones for Ukraine, and with the position not just “we make software”, but “we are in the center of war”. With Spotify co-founder Daniel Eck behind him and hundreds of millions of investments. This is no longer defensive support, but full participation in an armed conflict with complex moral consequences.
Another example is the German Quantum Systems – developers of drones for farmers and surveyors. Civilian drones for surveying fields and maps. But the war nullified all plans. Today their drones are working at the front – in reconnaissance, under the sights of Russian electronic warfare systems. And money here is already counted not for hectares of crops, but for successful combat sorties.

American Anduril Industries – in the past surveillance technology for the civilian market. Now – a manufacturer of autonomous systems for the Pentagon, which has contracts worth billions. And the priority is no longer cyber security or the protection of private homes, but full-fledged work for the war.

Shield AI – an American startup. First there were autonomous reconnaissance drones. Now – strike platforms with AI. V-BAT is an autonomous drone for deep reconnaissance in the harshest cyberspace. Already working in Ukraine, opened an office in Kyiv to be part of this war.

Karolina Attspodina is an entrepreneur of Ukrainian origin, who only yesterday was selling portable solar panels for city balconies. WeDoSolar startup promised make renewable energy available to everyone. But instead of “green” dreams, he produces drones for the front. Attspodina is leaving the business and entering a new one: today it already invests in the German Deutsche Autonome Flugsysteme – a company that develops autonomous attack drones specifically for Ukraine. And this is not about the economy or energy. This is a bet to win.

Finally, it is worth mentioning Brave1 – a cluster of Ukrainian military startups. Combat drones, electronic warfare systems, and autonomous strike complexes are born here.

Roboneers – a Ukrainian startup that has already created a ground combat drone Ironclad. He is already at the front, storming the positions of the Russians.

…This list can be continued. Startups that yesterday were writing strategies to achieve zero emissions, today are training artificial intelligence to learn to destroy the enemy. The war destroyed all the old moral boundaries. Either we will be stronger technologically – or we will be destroyed.

Can these companies go back to “saving the planet”? Not already? Because grants, investors and the new reality are pushing them into a zone where every innovation is counted by the number of targets hit, not by tons of CO₂ reduced.

Nobody wants to talk about it now. But this war for the military AI market is already drowning the entire era of “green” startups. We really risk seeing a world where the most advanced technologies will work not for the climate, but for war. And there will be no turning back.

Tetyana Viktorova