This post was published first on Shifter 5.3.2025 in Norwegian (post picture from the Shifter guest article)

Since Donald Trump became the 47th president of the United States, the geopolitical situation has deteriorated significantly for most European countries. The U.S. has made it crystal clear that the continent’s democracies must start taking greater responsibility for their own defense. The globalization of world trade in its current form no longer seems as appealing, now that the shale boom has made the U.S. the world’s largest producer of oil and gas.

On the other hand, we have another nuclear power, Russia, which appears to have two main geostrategic objectives that it is determined to achieve at any cost. The first objective is to secure its borders within what was once the Soviet Union’s sphere of influence. The second is to ensure its economic future by making Europe dependent on the gas and oil it produces, either through direct sales or via Belarus and, primarily, Ukraine.

All of this comes on top of an already worrying situation for the EU, as it competes with the U.S. and China. According to the report The Future of European Competitiveness, presented by Mario Draghi in November, the EU has long been lagging behind in technology and innovation. Additionally, the continent is portrayed as dependent on other global powers for both fossil and renewable energy resources and technology.

According to the same report, the EU needs annual investments of €800 billion if it is to remain competitive in the future. And this was even before recent events surrounding the war in Ukraine demonstrated that all of Western Europe must increase its defense budgets to much higher levels than previously anticipated just a few months ago.

The situation demanded action, and the response has been formidable. Recently, the President of the European Commission, Ursula von der Leyen, has launched one initiative after another to try to correct the situation.

With the so-called “omnibus package,” sustainability reporting requirements will be simplified and apply to fewer companies. At the same time, she intends to allocate hundreds of billions of euros to build up critical sectors such as artificial intelligence, defense, renewable energy, and clean industry. It is also proposed that the sums spent on strengthening the defense industry should not count toward the budget deficit and public debt rules that EU members must adhere to.

All of this is truly extraordinary. The scale of the money flow that all these initiatives together represent is difficult to comprehend. After a period of high interest rates and a capital drought for new business ventures, the money tap may now be fully open again.

This is excellent news for Norwegian entrepreneurs, innovative companies, and investors for several reasons.

First, analysts doubt that there are currently enough projects in Europe capable of absorbing such vast amounts of capital. Startups and innovative projects in the most critical areas for Europe’s future may therefore face less competition for these funds if they act quickly.

Second, the interpretation of projects related to artificial intelligence and defense can be quite broad. Many projects and startups incorporate some form of AI into their value proposition. Initiatives originally intended for civilian use—such as drones, autonomous vehicles, or robots—could easily be modified for military applications or presented as having military potential.

Third, the relaxation of sustainability reporting regulations means one less barrier for startups when negotiating business deals or investments with larger companies.

Europe has awakened to a new geopolitical reality that has changed the rules and priorities. A flood of money, not seen since the pandemic, is about to enter the productive economy—and likely for an extended period. If the bureaucrats in Brussels do not change their minds once the war in Ukraine ends, this represents a historic opportunity for innovative companies and startups. They can contribute with profitable—or potentially profitable—initiatives to the construction of a much stronger Europe.