BAE Systems has acquired an equity stake in Oxford Dynamics, a UK deep-tech start-up, in a move the defence group says will speed the deployment of artificial intelligence and robotics across its platforms and bolster sovereign capability.
According to BAE, the deal will embed Oxford Dynamics’ agentic AI into its Prophesea digital platform, which monitors and maintains the operational readiness of warships, armoured vehicles and combat aircraft. The investment forms part of a wider strategy to integrate emerging technologies across air, land, sea, space and cyber domains, supporting AI-enabled decision-making, autonomy and resilience in contested environments.
Andrea Thompson, Group Managing Director of BAE’s Digital Intelligence business, said “the landscape of warfare is rapidly evolving and embracing emerging technology is vital to keeping the UK safe,” adding that partnerships with companies such as Oxford Dynamics would help “strengthen the UK’s sovereign defence and security landscape.”
Founded in 2020 at the RAL Harwell Campus, Oxford Dynamics was established by Shefali Sharma, Dr Edward Jackson and Mike Lawton. The company develops autonomous systems, agentic AI and embedded platforms — marketed under names including AVIS, SR-1 and Strider — for tasks from data analysis and sensor fusion to semi-autonomous robotics in hazardous environments. It positions its products as “trusted, explainable AI” for defence and security.
Dr Jackson said the collaboration answered the UK Strategic Defence Review’s call to “accelerate innovation, deliver sovereign capability and build a more integrated and lethal force,” and would allow the firm to scale its technology for frontline systems.
Industry reports say Oxford Dynamics will remain independent after the investment, with BAE described as its first external backer. Funding is expected to support growth, IP development and skilled-job creation within the UK defence base.
The integration aims to pair advanced sensing and analytics with decision support and autonomy so platforms can respond faster in complex, multi-domain operations. BAE says the combination of Prophesea and Oxford Dynamics’ AI should streamline maintenance, reduce downtime and improve operational availability of high-value assets.
Delivering “trusted” AI into front-line systems will require rigorous testing, explainability, human-in-the-loop controls and clear certification before operational use. Both companies stress the importance of transparency and accredited practice to meet military and regulatory standards.
For the UK, the deal signals that domestic deep-tech firms can attract strategic investment from prime contractors and move quickly into defence capability pipelines. Commentators note such partnerships can help retain skills and IP onshore, shorten adoption cycles and expand the sovereign supply base — if smaller developers can preserve agility while scaling.
If successful, the partnership could accelerate AI adoption in maintenance and operational decision-support, and strengthen the case for further collaboration between primes, start-ups and government to build a responsible innovation ecosystem in UK defence.
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