The U.K. and Germany are emerging as key hubs for a new wave of AI defense startups, as Europe scrambles to rearm amid rising geopolitical tensions.

Private funding for defense startups across the region has ramped up in recent years, with investors looking to tap into increasing government military budgets, driven by the ongoing Russia-Ukraine war and pressure from the Trump administration.

But it's ecosystems in the U.K. and Germany that are seeing the most activity. The majority of the biggest rounds across the sector have been for startups based in those two countries, with both emerging as key launchpads into new markets and battlefield training.

David Ordonez, senior associate at NATO Innovation Fund, told CNBC that this was "thanks to the scientific expertise of their talent base

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