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Defence giant Leonardo recently announced a multi-year partnership with leading Applied AI company Faculty.ai (see £30m for 'applied AI' Faculty), signalling a strategic shift in how the defence prime engages with scale-up businesses in the UK. As the first collaboration under Leonardo UK's new SME Partner Programme, this UK-to-UK alliance represents more than a typical vendor relationship.
Leonardo's newly created SME Partner Programme is run in conjunction with Form1 (Form1 launches new scale up offer) who are enabling the firm to establish strategic partnerships with innovative SMEs. The Leonardo/Faculty partnership looks like a good fit. Leonardo brings defence domain expertise, and develops the sensor and effector systems that collect and emit data in defence environments, while Faculty is a leader in turning that data into deployable software applications, leaning on experience across hundreds of successful custom AI projects. The businesses have said they will focus on accelerating development in domains such as autonomy, signal processing, navigation, and data fusion. Leonardo will also provide Faculty with additional support, such as access to testing equipment, data, and secure facilities, as well as sponsoring multiple Faculty Fellowships, which will see PhD students joining Leonardo to support on a diverse range of projects
This collaboration emerges against a backdrop of increased prioritisation of AI in defence, as evidenced by the UK's Defence AI Strategy and the establishment of the Defence AI Centre. It also addresses growing concerns about sovereign technology capabilities and reduced dependence on US defence technologies. Unlike traditional transactional arrangements in defence, where SMEs have minimal customer exposure, this programme enables direct engagement between Faculty and end customers.
The partnership builds on previous successful Faculty projects in electronic warfare and aims to "take AI out of the lab" and deliver capabilities "at pace" – suggesting a maturation in defence AI applications toward field-ready systems. This model appears to be the first in a series, with Leonardo reportedly developing similar partnerships with other specialist software and hardware companies. If successful, this approach could become a template for how defence primes use specialised technology partners while providing smaller companies more equitable participation in the defence industrial base.
As NATO defence budgets increase in response to global threats, partnerships that rapidly convert technological advantages into operational capabilities will likely prove increasingly valuable. The traditional model of primes maintaining transactional relationships with smaller technology vendors is giving way to more collaborative ecosystems that emphasise joint market development and product creation. By establishing a dedicated partnership management function and committing to sponsoring Faculty Fellowships, Leonardo is making a substantial organisational investment beyond typical vendor arrangements.
Posted by: Marc Hardwick at 09:02
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partnerships