Fedorov Launches Ukrainian Defense Tech Fund With AI Investments

Mykhailo Fedorov, Ukraine's defense minister until July 2026, has announced on Telegram the launch of a new venture capital fund set to become the country's largest investment vehicle focused on defense technology. The capital is meant to flow both to existing Ukrainian defense tech startups and to entirely new companies built from scratch around combat robotics and AI-based weapons systems.

Three investment areas

The new fund is set to focus on three areas that the Ukrainian military considers the most under-resourced. The first is combat robotics and sensor systems, intended to reduce the number of soldiers sent to the most dangerous sections of the front. The second is affordable jet-powered interceptor drones, designed specifically to counter Russian Shahed drones, which have for months been straining Ukraine's air defense with their unit costs. The third pillar is cheap strike missiles that use AI algorithms for guidance and target identification.

A two-track model

The fund is meant to operate differently from typical venture capital structures. Rather than only taking stakes in existing companies, Fedorov's team says it will simultaneously build new enterprises around technologies deemed critical to the front's needs. Capital is therefore meant to flow through two channels at once: to already-operating Ukrainian defense tech companies, and to entities built from zero to address specific technology gaps the military flags as urgent.

In recent weeks, Fedorov's team has held talks with foreign donors, technology companies and venture capital funds about investing in Ukraine's tech sector. The specific amount of capital the fund will have at launch has not yet been disclosed.

We need an answer to every attack from the enemy and to build our own system capable of responding at scale - Mykhailo Fedorov, former Ukrainian defense minister

Who Fedorov is today

Fedorov, the creator of Ukraine's Diia digital services platform and a longtime digital transformation minister, lost his defense portfolio in July 2026 after six months in the role. His departure triggered weeks of protests in the country and tension around President Volodymyr Zelensky. In August he became an adviser to Italian defense minister Guido Crosetto, and in September he separately announced the creation of a standalone defense tech company, with Palantir CEO Alex Karp expected to be its main investor.

The new fund is thus another piece of the puzzle Fedorov has been assembling since leaving government, one that combines political connections, relationships with Western tech investors, and access to information about the real needs of the Ukrainian front.

Criticism and legal questions

The initiative has drawn criticism from parts of the Ukrainian opposition. Lawmaker Oleksii Honcharenko of the European Solidarity party noted that Fedorov does not appear in the State Export Control Service's registry as an entity authorized to conduct international transfers of military-purpose goods. As of September 9, 2026, he also had not filed an application for such registration, which raises questions about the formal status of the fund's planned transactions, especially those involving foreign capital.

The case touches on a broader problem facing Ukraine: former state officials with access to networks of contacts and knowledge of military needs are increasingly moving into the private sector, where the line between public duty and business can blur.

Why it matters

The war in Ukraine has for years served as a testing ground for autonomous systems and AI in military applications, from FPV drones to targeting algorithms. A fund led by a figure as prominent as Fedorov, backed by Western capital and ministerial-level connections, could accelerate the commercialization of technologies that later reach NATO markets, including Poland, where the defense industry is investing ever more heavily in unmanned systems and AI-based solutions.