Germany’s drone buy hits turbulence over investor controversy

A planned multibillion-euro German military drone contract has come under political scrutiny, casting uncertainty over its approval as lawmakers question the involvement of billionaire investor Peter Thiel and the transparency of the procurement process.

According to a report by POLITICO, the controversy centres on Stark, a Berlin-based defence technology startup set to supply loitering drones to Germany under a seven-year framework agreement. The contract includes an initial fixed order worth €268.6 million and could reach about €2.86 billion if all optional purchases are exercised. Each deployment package would include 20 loitering munitions along with control stations, spare parts, software and training. 

The deal would mark one of Germany’s first major acquisitions of loitering drones, weapons widely used in Ukraine since Russia’s full-scale invasion.

Lawmakers across Germany’s governing coalition have raised concerns over Thiel’s minority investment in Stark, questioning whether it could provide him with influence over company decisions or access to sensitive defence information. The German-born investor, who holds US citizenship and is known for supporting President Donald Trump and conservative US political figures, has become a focal point of the debate. His foundation did not respond to requests for comment.

Members of parliament have also criticised the structure of the contract itself, noting that documents submitted for parliamentary review contained redactions covering key details such as pricing, quantities and optional volumes. Budget lawmakers have expanded their review to include delivery timelines, overall costs and the scale of optional orders, arguing that effective oversight is difficult without full disclosure.

Under German law, defence contracts exceeding €25 million require approval from the parliamentary budget committee, making a scheduled vote decisive for the project’s future. Additional concerns have emerged over timing, as the government would commit to serial production before final munitions safety certification, expected by September 30. The agreement includes exit clauses allowing Berlin to withdraw if safety tests fail, performance benchmarks are not met, or ownership changes raise security risks.

Defence Minister Boris Pistorius downplayed the controversy, stating that Thiel is believed to hold only a small stake — estimated between 3 and 4.5 per cent — and does not play a decisive role in the company. Stark also said no shareholder has access to product information and that any foreign investment exceeding regulatory thresholds would trigger a government review.

Despite criticism from Greens lawmakers and growing scrutiny within the Christian Democratic and Social Democratic parties, coalition legislators are now working toward conditional approval. Proposed safeguards would tighten oversight of pricing and restrict how optional portions of the contract can be activated.

The outcome of the parliamentary vote will determine whether the politically sensitive procurement moves forward and whether the governing coalition can unite behind one of Germany’s most closely watched defence deals.

By Tamilla Hasanova