16 Minutes
At the Foreign Investors Annual Summit 2025 in Vilnius, a high-energy panel on “Investing in Defense and Technologies” brought together practitioners from frontline defense tech, digital transformation, data platforms, and site selection. Held in the main ballroom of the Radisson Blu Hotel, the session unfolded as a fast, crowd-engaging conversation moderated by Bob Hess (Vice Chairman, Global Strategy, Newmark). Over the next fifty minutes, speakers compared lessons from war-adjacent theaters, NATO programs, EU procurement realities, and the hard arithmetic of capital projects—offering a pragmatic roadmap for investors and policymakers who want to convert Lithuania’s geopolitical urgency into sustainable, high-value growth. This report was prepared exclusively by Smarti.news.
A room primed for urgency—and opportunity
The moderator set the tone with a brisk tour of the landscape: an $800-billion aerospace and defense industry growing mid-single digits; a broader tech layer sprinting at 30% annually; and a NATO region moving to materially higher defense outlays. “It’s a VUCA world—volatile, uncertain, complex, ambiguous,” Hess said. “But precisely because of that, defense and technology sit at the intersection of growth and national resilience. The fundamentals still matter—space, talent, speed, and a workable regulatory regime—yet the differentiator is now data-rich decision-making.”
That framing proved prescient. Every voice on stage returned, in one way or another, to speed (cycles from idea to field), to talent (how to attract, integrate, and protect it), to procurement (how to move from rigid purchase orders to co-creation), and to AI (what it can do now, what it must not yet do, and how it multiplies scarce resources).
The defense-startup lens: procurement as the critical path
From the first response, Dr. Sigutė Stankevičiūtė—Baltics & Poland Manager at Mach Industries—put the spotlight squarely on procurement. After a career in government, she joined Mach only three months ago, recruited at a conference in Ukraine. The company’s portfolio includes vertical-takeoff missiles, high-altitude balloons, glide munitions, and counter-UAV solutions—a product mix that screams speed and iteration rather than decade-long acquisition cycles.
“Startups live or die by access to procurement,” she said. “If you are a prime, the door is open; if you are a startup proposing a novel concept, you first have to make it legible to doctrine, then to budgets. That can take five years. Few young companies survive five years without a contract.”
Her point was not a complaint; it was a design brief. While still in government, she helped stand up ITIS—an innovation-promotion pathway that maps unmet military needs to pilots, funding, and finally to procurement. The emphasis is systemic: give SMEs and startups predictable entry, an evidence-based pipeline, and a way to convert prototypes into programs. That, she argued, is why Mach is actively evaluating investment in Lithuania: not only because defense spending is rising, but because the process architecture is beginning to acknowledge how innovation actually happens.
And her personal why? “I joined to defend my country,” she said plainly. “Military capability wins wars; technology wins them faster. Lithuania’s defense industry is still small. That’s an opportunity.”
Digital government meets defense: interoperability, resilience, and the unglamorous backbone
Then came the operator’s view from Andrius Šimėnas of Nortal Lithuania. Nortal—born in a basement in Tartu—helped define what “e-government” means in the Baltics and beyond. Translating that muscle into defense, he said, means resisting the cinematic stereotype of missiles and pilots and embracing something more complex: defense as a mini-state.
“A modern military is logistics, finance, HR, soldier health records, inventory systems—hundreds to thousands of IT systems,” Šimėnas noted. “The battlefield glamour sits on top of interoperability, data movement, security, and resilient architectures. If 2,000 systems exist and 100 go down, how do we keep operating?”
This is where Nortal sees its lane. The firm audits system landscapes, defines replacement cadences, and designs fault-tolerant architectures so that breaches are contained and operations continue. It is patient work, sometimes “mundane,” he admitted, but in a domain where minutes matter, the back office is the mission. The point resonated with investors in the room: digital plumbing is investable—it is repeatable, exportable, and it compounds.
From games to war games: Hadean and the new command-and-control
The panel’s provocateur was Mimi Keshani, Co-founder & COO of Hadean. The London-based company (≈70 people, with a DC footprint) started in gaming; today it builds mission-lifecycle decision support and hyper-realistic war-gaming environments. In early 2022, working with NATO, Hadean built city-scale evacuation models of Estonia—a leap that exemplifies how creative engines from adjacent fields can now drive defense.
Keshani was frank about the historical challenge: “A year ago I’d have told you we needed to become a US company to scale. The procurement gravity was there.” But the geopolitics have shifted. “Europe had a wake-up call. The NATO-first posture is real, and we now see Central Europe as our main growth vector.” She credited Invest Lithuania for clarity and responsiveness, and called for partners to help Hadean build in the region.
Her diagnosis mirrored Stankevičiūtė’s: startups need two things above all—talent and contracts. The demand signal must be faster, clearer, and closer to end users. “Often the person writing requirements is not the person who will use the system. By the time the solution is built, the world has moved on.”
What AI should—and should not—do (yet)
AI threaded the conversation, but carefully. The panel agreed: AI is not a monolith. Classical machine learning and computer vision already run production workloads at scale—battle damage assessment from satellite imagery, anomaly detection, logistics optimizations—delivering deterministic, repeatable outcomes in bounded contexts. Generative AI, by contrast, is a force multiplier for human analysts and planners; it does more with less, but still requires human verification.
Šimėnas offered a decisive rule-of-thumb: “If cost of failure is high, you constrain AI to the sub-tasks where stochastic outputs are acceptable—or you don’t use it yet. If cost of failure is low, AI is the best tool in the stack.”
That distinction dovetailed with the data-platform perspective from Rimantas Žylius (now with Palantir Technologies and formerly Lithuania’s economy minister). In both military and civil spheres, he said, threat velocity is rising while decision velocity stays flat. “We need to react in days and minutes, not quarters. Software—and especially AI-assisted software—closes that gap.”
Žylius pointed to NATO’s adoption of smart targeting workflows supported by platforms like Palantir: “In the Iraq war, two thousand analysts did the targeting grind. With today’s AI-assisted tools, that workload can compress to tens. The scale difference is immense.”
Site selection and fundamentals: talent, space, speed, rules
From Wolfgang Riedel came the investor’s balancing act. Lithuania, he reminded the audience, competes in tri-continental tournaments: Europe vs. Europe, Europe vs. Asia, and Europe vs. U.S. states. Each serious project benchmarks five-and-five-and-five, minimum. “That’s how hard the funnel is.”
Riedel’s résumé spans Zeiss, semiconductor fabs, and clients that cannot be named; he mentioned TSMC to illustrate how process technology drives facility systems and thus capital intensity. His message to Lithuanian stakeholders was clear: if you want the most sophisticated parts of the AI hardware stack or dual-use advanced manufacturing, you must understand the end-to-end process requirements and be ready with sites, utilities, and speed. “Don’t forget the fundamentals,” he echoed the moderator: “space, talent, speed, regulatory predictability.”
A Baltic answer to the “border risk” question
From the audience came the predictable question: given Lithuania’s proximity to Russia, Belarus, Kaliningrad, do companies worry about investing here?
The panel’s answer was emphatically no—and more than no. Šimėnas argued proximity should be energizing, not paralyzing: it pushes teams to be fast, realistic, and targeted. Žylius added that Palantir’s presence in frontline democracies is intentional—“technology for the West to win,” as CEO Alex Karp often says. Stankevičiūtė reframed the geography as a pull factor: a smaller military with a sharper threat needs more innovative technologies—a perfect fit for defensive startups and agile investors.
Hess, fresh from a week in Vilnius this summer, took the message back to boardrooms in New York and LA: “When someone asks ‘Isn’t Lithuania dangerous?’ I say no. It is aligned, resilient, and has been dealing with this for centuries. That clarity is an asset.”
Co-creation, not cosmetic procurement reform
If there was a single policy takeaway, it was this: incremental procurement tweaks won’t deliver wartime speed. Žylius called for frameworks of co-development where government, primes, and startups iterate with users, in short loops. Stankevičiūtė’s ITIS model is a starting point: translate unmet needs into pilots, fund bridges across the “valley of death,” and only then lock into multi-year buys.
Keshani underscored why: when the requirements author is disconnected from the operator, time and relevance are lost. “By the time you deliver, the mission context has shifted,” she said. The alternative is mission-phase software that evolves with the operators, across planning, execution, and assessment—decision support as a living system.
Talent, contracts, capital: the triangle that decides outcomes
All roads led back to the triangle: talent, contracts, capital.
Talent: Lithuania’s edge is quality and motivation, sharpened by proximity to real threats. But volume still matters, and investors will ask how quickly teams can scale across secure clearances, cyber hygiene, and domain knowledge.
Contracts: Without predictable demand signals—pilots that graduate into programs—startups burn runway and leave. Programs like ITIS can schedule those signals.
Capital: Co-creation reduces technology risk, making equity and debt easier. Meanwhile, investors will keep testing the fundamentals: sites, utilities, suppliers, universities, and the policy spine.
The NATO-first shift and a European scaling thesis
Keshani captured the macro turn: “A year ago I would’ve said you can’t scale defense tech in Europe. The world changed. The NATO-first stance, a clear strategic defense review in the UK, and a whole-of-society posture across the Baltics now make Central Europe our preferred growth axis.” For a company like Hadean—working both with UK MOD (a £20m multi-service program) and US DoD—that repositioning is nontrivial. It suggests a bilingual strategy (Atlantic and European) where Lithuania functions as a testbed and hub.
Stankevičiūtė’s presence at Mach tells the same story: European talent, American product DNA, a Baltic operating context, and a procurement bridge designed in Vilnius.
What AI changes in practice: four concrete patterns
To make AI less abstract, the panel settled on four patterns that already work:
Perception at scale — battle damage assessment from satellite or drone imagery; border surveillance anomaly detection; supply chain exception spotting. These are ML/CV domains with rigorous training datasets and bounded outputs.
Human-in-the-loop decision support — Generative AI as copilot for planners and analysts (drafting CONOPs, summarizing intel stacks, red-teaming plans). Verification is mandatory; speed and breadth are the payoff.
Resilient architectures — AI helps simulate failure modes and design graceful degradation: if 5%–10% of systems fail, which services stay up, what roles re-route, and what decisions still get made?
Cyber containment — AI-assisted detection and microsurgical isolation to ensure adversaries cannot roll up an entire network from a single foothold.
What AI shouldn’t do (yet): hard deterministic effects where the cost of failure is catastrophic (e.g., autonomous kinetic targeting without bounded safeguards). The path forward is composability—identify the sub-tasks where AI is safely superior, and integrate them under strict governance.
A note on big projects: lessons from Rheinmetall and beyond
Riedel referenced the Rheinmetall investment announced for central Lithuania. No one on stage unpacked the exact siting criteria, but his point was structural: each project is sui generis. A tank plant, a radar line, a microelectronics fab, or an AI data center each stress different constraints—from power and water to workforce mix, export controls, security perimeters, and supplier radius. Policymakers must resist one-size-fits-all checklists and instead learn the stack for each vertical they court.
The scoreboard: is Lithuania on track?
Hess asked for a quick vote: Is Lithuania on the right track—digital, defense, innovation? The panel scored it a confident yes (multiple “yeses,” in fact), with candid caveats:
Don’t confuse ambition with execution. There are low-hanging fruits in digitalization that must not be ignored while chasing moonshots.
Procurement reform should aim at co-creation frameworks, not cosmetic timelines.
Keep building the talent pipeline—from universities to returning diaspora—aligned with clearances and mission skills.
Stay obsessive about the fundamentals investors expect to find on day one.
What investors heard between the lines
For investors and corporate strategy teams, three messages stood out:
Lithuania is a speed market. Proximity to threat compresses feedback cycles and political attention. This is not just risk; it is execution energy.
Defense is a systems business. The winners are those who can stitch interoperability, resilience, and human-machine teaming across dozens of workflows—not just a single shiny capability.
The commercialization bridge is being built. From ITIS-type pathways to NATO-first commitments, the region is engineering the demand side of innovation. That is where startups become suppliers and where suppliers become anchors.
Closing reflections: the Baltic method
If the session had a single thesis, it was that Lithuania’s advantage is no longer cost; it is coherence. Coherence between policy and procurement, between talent and mission, between AI’s promise and its governed use. The country’s task is to institutionalize that coherence—co-develop with operators, decide with data, site with speed, and scale with partners.
There were jokes (about James Bond and three-million airline miles), but the undertone was serious. The region’s leaders know that strategy is an everyday practice: making doctrine legible to startups, making startups legible to doctrine, and refusing to let a good idea die in the valley between pilot and program.
“Don’t forget the fundamentals,” Hess reminded the room one more time. “Space, talent, speed, regulatory predictability. Build from there—and let AI and alliances do the rest.”
Credits & Notes
Panel: “Investing in Defense and Technologies,” Foreign Investors Annual Summit 2025, Radisson Blu Hotel, Vilnius.
Moderator: Bob Hess, Vice Chairman, Global Strategy, Newmark (Arlington Heights, IL, USA).
Panel voices quoted and summarized in this report:
Dr. Sigutė Stankevičiūtė, Baltics & Poland Manager, Mach Industries
Andrius Šimėnas, Head of Delivery / Project Success Director, Nortal Lithuania
Mimi Keshani, Co-founder & COO, Hadean
Rimantas Žylius, International Government Strategy, Palantir Technologies; former Minister of Economy of Lithuania
Wolfgang Riedel, Managing Partner & Founder, Riedel Consulting (Stuttgart)
Photography: captured exclusively by Smarti.news on site.
This article: Prepared by the Smarti.news Editorial Team and published across the Smarti Media Network using Smarti CMS, our AI-driven multilingual platform.
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Key Takeaways (Investor Brief)
Lithuania’s defense-tech thesis: co-creation over procurement theatrics; AI-assisted decision velocity; resilient digital backbones; and NATO-aligned demand.
Startups: need talent + contracts; ITIS-style pathways reduce time-to-procurement.
Enterprises & primes: look for sites, utilities, clearances, policy spine; Lithuania’s posture and pace are advantageous.
Capital: follow teams that unite automation, data, and operator feedback—and that design AI where cost of failure is constrained.
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