For decades, Saab built almost everything in-house. The Swedish defence prime -- maker of the Gripen fighter jet, the GlobalEye surveillance system, and a sprawling portfolio of radar, electronic warfare, and naval systems -- treated its technology supply chain the way a master watchmaker treats components: every piece fabricated internally, every capability developed behind closed doors.

That era is ending. In an interview with Sifted published this week, Saab CTO Petter Bedoire laid out a fundamental shift in how Europe's seventh-largest defence company approaches innovation: Saab is actively seeking startup partnerships in AI, autonomy, space, and advanced materials. Not as a marketing exercise. Not through a corporate accelerator that produces press releases and little else. As a strategic imperative driven by the recognition that the pace of technological change has outstripped what even a well-funded prime can develop alone.

The timing is not coincidental. European defence budgets are surging, NATO allies are scrambling to rebuild capabilities depleted by decades of underinvestment, and the technology stack required for modern warfare is evolving faster than traditional procurement cycles can accommodate. Saab is positioning itself not just as a buyer of startup technology, but as a platform for integrating it into fielded systems.

Saab's shift did not happen overnight. The company has been gradually expanding its external innovation footprint since the late 2010s, but the acceleration over the past 18 months has been dramatic. The catalyst is partly geopolitical -- the war in Ukraine exposed critical gaps in European defence capabilities -- and partly technological. AI, autonomous systems, and advanced sensor fusion are developing at a pace that makes in-house development cycles look glacial by comparison.

Bedoire was direct about the logic. Saab cannot build everything itself. The breadth of technologies required for next-generation defence systems -- from computer vision to edge computing to quantum-resistant encryption -- exceeds what any single company can master. Startups, with their speed, specialization, and willingness to take risks on unproven approaches, fill the gaps that primes cannot close on their own timelines.

This is not a small admission for a company with deep roots in Swedish industrial self-sufficiency. Saab's heritage is built on the premise that a mid-sized country can design and manufacture world-class military equipment independently. Acknowledging that this model needs supplementing with external innovation represents a genuine philosophical evolution.

Saab's engagement with startups has moved from occasional strategic investments to a systematic programme that spans acquisitions, partnerships, and open innovation initiatives. The 2025 acquisition of UK autonomous drone company Bluebear and the expansion of Saab Ventures signal that the company is willing to deploy both capital and integration resources to bring external technology into its product lines.

Here is the uncomfortable truth about defence tech startups: building great technology is the easy part. Getting that technology into the hands of military end-users is where most companies die. The defence procurement process is slow, opaque, and designed to minimize risk rather than maximize innovation. A startup with a brilliant AI targeting system can spend years navigating security clearances, qualification testing, and integration requirements before generating a single dollar of revenue.

What a prime contractor like Saab offers is a shortcut through that maze. By integrating startup technology into its own platforms and selling the combined capability to end customers, Saab becomes both a distribution channel and a de-risking mechanism. The startup gets access to military customers it could never reach independently. Saab gets capabilities it could not develop fast enough internally.

Bedoire emphasized that Saab is focused on startups developing technology in AI and machine learning, space systems, autonomous platforms, and advanced materials. These are areas where the technology cycle is measured in months rather than years, and where a startup with a dozen engineers can produce breakthroughs that would take a prime's R&D division five times longer.

Saab is not making this shift from a position of weakness. The company reported record order bookings in its 2025 year-end results, with a backlog exceeding SEK 137 billion -- roughly EUR 12 billion. Revenue for 2025 came in at SEK 53 billion, with operating margins in the 8-10 percent range. By defence industry standards, these are strong numbers that reflect both the surge in European defence spending and Saab's competitive positioning in key segments.

That financial strength matters because startup engagement is inherently risky. Not every partnership will produce usable technology. Not every investment will generate returns. But a company with a healthy order book and growing margins can afford to place multiple bets across the startup ecosystem without jeopardizing its core business.

The broader context is the European defence spending surge. NATO allies have committed to spending at least 2 percent of GDP on defence, and many are now targeting 3 percent or higher. For a company like Saab, this means a rising tide of procurement budgets -- and a growing appetite among military customers for the kind of advanced capabilities that startups are best positioned to deliver.

Saab's pivot comes at a moment when the Nordic defence tech startup ecosystem is experiencing unprecedented momentum. In a Sifted analysis published last week, Nordic defence startups raised record funding in early 2026, driven by geopolitical urgency and a growing willingness among traditional VCs to back dual-use technologies. Estonian missile maker Frankenburg raised EUR 30 million, Swedish sensor companies attracted significant growth capital, and Finland's defence innovation infrastructure continued to expand.

For these startups, Saab represents the most valuable kind of partner: a customer, integrator, and credibility stamp rolled into one. A startup that can claim Saab as a technology partner gains instant legitimacy with other NATO primes and government procurement offices. That halo effect can be worth more than the direct revenue from the partnership itself.

The challenge for Saab will be cultural. Primes and startups operate on fundamentally different timelines, with different risk tolerances and different definitions of success. Saab's ability to create genuine partnerships -- rather than the kind of slow-motion vendor relationships that drain startups of capital and patience -- will determine whether this strategy produces real results.

Saab's decision to open its innovation pipeline to startups is a bellwether for the broader European defence industry. If the continent's primes can successfully integrate startup technology into their platforms, the result will be a defence industrial base that is faster, more innovative, and more resilient than anything Europe has fielded in decades. If they cannot -- if the cultural and procurement barriers prove too high -- the gap between European and US defence technology will continue to widen. Saab is betting on the first outcome. The startups lining up at its door suggest the bet is mutual.