Netherlands to spend $1.65 billion on major defense upgrades, including drones, AI, and anti-torpedo systems

Netherlands to spend $1.65 billion on major defense upgrades, including drones, AI, and anti-torpedo systems

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The Netherlands is set to modernize its armed forces with several new acquisitions, including an anti-torpedo weapon system, a new standard assault rifle, tracked armored vehicles for heavy infantry operations, new drone systems, and a major expansion into artificial intelligence (AI) applications.

According to a formal notice issued by the Dutch Ministry of Defense to Parliament this week, these initiatives would be a part of 17 major defense equipment projects planned for the coming years.

Total investment across these projects will exceed $1.65 billion, based on the lower end of the individual project estimates, as detailed in a comprehensive procurement notice issued by the government.

“It’s essential that the Ministry of Defense has the necessary defense equipment at its disposal in good time to increase our deterrence and be a reliable NATO ally,” State Secretary of Defense Gijs Tuinman stated in the document.

“With this omnibus letter, the Ministry of Defense is taking the next step toward greater flexibility and less internal bureaucracy in the procurement process,” he added.


The Netherlands’ increasing defense spending

The new initiatives follow a significant increase in defense spending. The Netherlands raised its 2025 defense budget to $25.08 billion, compared to $24.40 billion in 2024. This budget growth underscores the Dutch government’s commitment to enhancing its military capabilities amid a shifting European security environment.

A key highlight of the new procurement plans is the integration of a hard-kill anti-torpedo system for the Royal Netherlands Navy. This system is designed to protect new frigates, submarines, and amphibious transport vessels from modern threats such as unmanned underwater vehicles and enemy torpedoes.

Soldiers testing SkyWall shoulder-mounted anti-drone system
Netherlands soldiers testing SkyWall shoulder-mounted anti-drone system. (Image Credit: Merlin Daleman/via OpenWorks)

The Netherlands plans to begin fitting its forthcoming anti-submarine warfare (ASW) frigates with this advanced defensive weapon. Development of the anti-torpedo torpedo (ATT) will proceed under the European Union’s Permanent Structured Cooperation (PESCO) framework, ensuring European collaboration on the project until 2028.

According to Tuinman, “Potential international military cooperation through PESCO will reduce the technical development and financial risks.”

The Ministry of Defense expects to acquire a “qualified ATT” beginning in 2029, coinciding with the scheduled entry into service of the first new ASW frigate. The projected investment for the ATT system ranges between $285 million and $1.14 billion over the period from 2025 to 2039.


Bolstering ground forces

Meanwhile, the Dutch Army is focusing on bolstering its ground forces. The 43rd Mechanized Brigade, which is being transformed into a heavy infantry brigade, will receive tracked armored general-purpose vehicles, a move intended to significantly enhance its battlefield mobility and resilience.

The brigade will also be supported by a full-fledged tank battalion and mobile air-defense systems, bringing it closer to NATO heavy infantry standards.

Additionally, the Dutch Armed Forces will replace their standard assault rifle starting this decade, ensuring that infantry units remain agile, effective, and interoperable with NATO allies.


Accelerating defense AI capabilities

In parallel with traditional hardware modernization, the Netherlands is making a significant push into digital warfare. The Ministry of Defense announced an investment of $352 million in 2025 to expand the use of drones and artificial intelligence across defense operations, as revealed by State Secretary Gijs Tuinman.

Artificial Intelligence - Navigating the Convergence of Emerging Technologies
Artificial Intelligence – Navigating the Convergence of Emerging Technologies. (Image Credit: X/@NATO_ACT)

Tuinman emphasized that AI is becoming “the backbone” of defense innovations and is “already changing warfare forever.” The funding will support the rapid integration of AI into military processes such as intelligence analysis, maintenance scheduling, and operational planning.

Tuinman highlighted ongoing partnerships with Dutch firms like Lobster Robotics and Avalor AI and announced the creation of “DefGPT,” a secure in-house AI platform isolated from the public internet.

Following visits to U.S. tech firms Anduril and Palantir, Tuinman also called for faster collaboration between the Ministry of Defense and domestic AI companies, particularly in developing synthetic data systems and proposing deliverable solutions within six months.


Strategic alignment with NATO commitments

These modernization efforts reflect a broader strategic realignment by the Netherlands to meet NATO’s increasingly stringent capability targets, especially amid growing concerns over European security.

The investments are aimed at boosting the Netherlands’ credibility within NATO and the European Union by ensuring that Dutch forces can contribute meaningfully to joint operations, particularly in high-intensity conflict scenarios that require robust naval, ground, and cyber capabilities.

“The security environment is changing rapidly, and it demands that we not only invest but invest wisely,” an unnamed senior Ministry of Defense official said. “Our partnerships in PESCO and NATO are central to how we design and acquire new capabilities.”

Permanent Structured Cooperation (PESCO) projects to enhance maritime security
Permanent Structured Cooperation (PESCO) projects to enhance maritime security. (Image Credit: PESCO Europa)


Timeline and challenges

Despite the ambitious plans, defense analysts note that the Netherlands will need to carefully manage procurement timelines, integration of new systems, and interoperability with allies. Development of the ATT system will require close European coordination to stay on track, while AI integration poses its own technical and organizational challenges.

Nonetheless, Dutch officials remain optimistic. “We are creating a more flexible and responsive procurement system that can deliver results when they are needed most,” Tuinman emphasized.

With over $1.65 billion already earmarked for upgradation projects, the Netherlands is signaling its intent to remain a leading-edge military player in Europe. By investing simultaneously in cutting-edge naval defenses, ground force modernization, and AI-driven innovation, the Dutch military is positioning itself to meet future threats with unprecedented technological and operational readiness.

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