hello, and welcome to talking business with me, mark lobel. on this show, the uneasy alliance between freedom and firepower. another conflict rages in the world and defence spending is shooting up across the globe. in america, donald trump has announced plans for america's first $1 trillion military budget, and he's not alone. nearly every country in the world is ratcheting up the money they spend on security. on this programme, we're heading right to the cutting edge of the new technology, where drones meet artificial intelligence, and talk to the companies hoping to reap a profit from the billions flying into the sector.

from denmark, we'll hear from our reporter on the ground at one of the biggest industry gatherings of this new sector. and i'll be talking to the boss of the uk start-up vizgard. he's just raised $2 million. how is he going to spend it? plus one of the world's leading experts from the stockholm international peace research institute on the new questions being asked about how humans and weapons work together in the age of ai. and later in the programme, i'll hear from the boss of one of the companies changing how payments are being made across the whole of africa and beyond, olugbenga agboola, the founder of flutterwave. welcome to talking business wherever you're watching us in the world. 38 years ago, almost to the day, the american president ronald reagan stood in front of the brandenburg gate and made this now-famous plea

to his russian counterpart, mikhail gorbachev. general secretary gorbachev, if you seek peace, if you seek prosperity for the soviet union and eastern europe, if you seek liberalisation, come here to this gate. mr gorbachev, open this gate. cheering and applause mr gorbachev, tear down this wall. cheering and applause a few months later, before the year was through, reagan and gorbachev signed the landmark intermediate-range nuclear forces treaty, ridding 4,000 nuclear warheads from the world and signalling the start of the end of the cold war, the fall of the berlin wall, and an end to an arms race that had spanned decades. now the race seems to be back on. last year, global military spending grew

at the fastest rate since the end of the cold war, almost 40 years ago. around the world, around $2.7 trillion was spent on defence, up nearly 10% from 2023. the countries spending the most were the united states, china, and russia, followed by germany and india. while the vast majority of the money is going to the established defence companies, called primes in the sector, there's also a new generation seeing billions flow in, especially into the area of drones, which are defining the current conflicts in ukraine and iran. the bbc's adrienne murray has travelled to the drone show in denmark's third city, odense. taking to the skies over denmark, these drones are high-flying and high-tech. for many companies at this international drone show, it's the defence and security applications of their technology

that are now sharply in demand. among the home-grown companies is quadsat. it makes drones that monitor and manage radio spectrum, and besides civilian uses, its devices can also identify enemy radar systems. here in scandinavia, defence spending has been ramping up. it follows pressure from donald trump on nato members to step up, but also because of concerns closer to home in the baltic, the north sea, and the arctic region and its close proximity to russia. this airfield and drone port are a hub for tech start-ups. but from next year, it'll also be home to a $110 million test centre and training facility run by the danish military. less expensive than traditional hardware, drones are increasingly being deployed for intelligence gathering, surveillance, but also for combat.

meanwhile, other counter-drone technology is also emerging to protect critical infrastructure like airports, oil rigs, and power stations. the commercial market is now struggling its fourth year in a row with declining venture capital. and on the other side, we see a huge demand on the military end of things, which means a lot of companies are refocusing from the commercial space to the military space. new geopolitical realities are reshaping this industry. but as this fast-paced technology moves forwards, there will also be questions about the ethics and how regulations keep up. adrienne murray for bbc news. as we've been hearing, the war in ukraine has changed the way wars are fought. drones are very much at the heart of the conflict. earlier, i spoke to my first guest, who was in the uk's royal marines as a submariner, and after leaving four years ago, he set up vizgard, which makes ai-based

software which can be used to control drones and other long-range security applications. he's also just raised $2 million worth of investment funding. alex kehoe, founder and ceo of vizgard, welcome to the programme. thank you very much. all wars seem to spawn a new era in defence technology. how has the war in ukraine changed technology, and specifically the area of drones, in which you work? the pace of innovation in ukraine is unheard of. so they're working on, it's said, a three-to-four-development life cycle where they'll deploy some equipment, the front line will give them some feedback. they'll adjust the software, adjust the hardware, redeploy it again. and so what it means is that what might be cutting edge today could be completely useless and as useful as a brick in a month's time. and so defence is completely unused to being able to operate with that fast an innovation life cycle. and that's why it's especially important

for some of the slower-moving companies. the ukrainians are adapting constantly and doing things like using ai to try and automate the intelligence-gathering process, or they're putting tens of thousands of kilometres' worth of fibre optics on the drones so that their drones become completely impervious to any enemy interference. so they can...they can navigate without gps and things like that. the technology that's being used is actually readily available, really cheap, hobbyist-type drones, and they're being used to take out what could be enemy equipment that's worth tens of thousands of times more than the equipment they're using. and the best example of this is operation spiderweb, where 117 ukrainian drones were able to cause, it's said, $7 billion worth of damage to russian equipment. you're talking about the june 1st attack that took out 41 aircraft, some bombers, some spy planes. when you read that news, did you understand the technology that had been used, or were you surprised that it existed?

i'd say the whole attack was... it was immensely impressive in terms of kind of how it just never... it had never been done before. and then to actually have all these drones smuggled in on trucks to be able to remotely launch them, have some of the top of the trucks open up, launch them, and actually have them deliver the successful kind of missions, it was absolutely incredible, and it's never been done before. there are also reports that drones were smuggled in inside suitcases and trucks into iran by israel. and presumably these things are long in the planning. so if ukraine has just done so, and, reportedly, israel, is that the way that this type of technology is being used now? is that the cutting edge? that is very much the cutting edge, and it causes even more disruption, because how...what can you do? you can't necessarily... you can't stop every single truck. if you stop every single truck, then you're stopping all kind of logistics. and that's also going to have an effect on you if the enemy are doing that. and then smuggling them

in suitcases - again, it becomes increasingly challenging to be able to actually find the threats in the first place. and rather than worrying about them once they're in the sky, you need to try and find them much earlier in the process. and there's currently not really any ways to be able to do that, any of that at the moment. alex, when you set up this business in 2021, could you have predicted this? i saw at the time that the drones and ai were very much transformative technologies, and they were certainly here to stay, but at the time, defence and even the word drone was seen as almost dirty words that would make most investors blush. but that all changed after the invasion of ukraine. almost overnight, there was a broad realisation that perhaps the world wasn't quite as rosy or stable as we once thought. when it comes to the operators, with so much money going into this area, you're going to need more and more people with specific skills to do this job. is that a challenge for you at the moment, or for the industry? there's new defence and dual-use start-ups popping up almost every day. so that does show that there's definitely

interest in this area, and that's bringing us a fresh wave of new talent. however, because these are emerging technologies, it's very challenging to be able to find engineers who have actually built it previously and fielded these types of technologies. and inevitably, some of those best engineers will get snapped up quite quickly by the larger players with deeper pockets. and so over time, if we're not taking a proactive approach at trying to decrease the shortfall in expertise, it could be quite a challenge. and so we do need to be trying to introduce emerging technologies much earlier in education so that we're... ..being able to set up the future workforce. obviously, people are going to be concerned by ai making decisions when it comes to weapons rather than humans. how do you allay those concerns? it's definitely a concern, and it's one that dates back even before ai, and it doesn't necessarily just relate to weapons. it's more the idea of intelligent machines being able to make these critical decisions, potentially without human oversight. and that's

been long-raised concerns and quite profound questions, and rightly so. so in order to prevent ai from having too much power, as you say, i would make sure that the inner workings of these systems are transparent and understood, ie, it's not a black box. and we need to make sure that there's robust safeguards around the systems to make sure that they're behaving within well-defined operating boundaries. and ultimately, anything that is safety critical, where lives are potentially at risk, that needs to remain firmly with the operators. alex kehoe, ceo and founder of vizgard, thanks for joining us on talking business. thank you very much. the new technology of drones and artificial intelligence is raising questions as well as investment, especially about the way humans and ai should work together when it comes to weapons. my next guest is the lead on this issue at the stockholm international peace research institute. dr vincent boulanin,

thank you for joining us. let me start with this. how significant is the flow of money into these new technologies like ai and drones? the market analysis that i've seen indicate that this investment in this area are pretty substantial and growing very rapidly. they are fuelled by both kind of private and public funding across many sectors, including logistics, defence, public safety, and disaster response. and just to give you a sense of scale, the drone market alone was valued at around $34 billion in '24, and is projected to reach $61 billion by the end of '29. and even if we just look at the ai specifically within the drone market, it was estimated to have, like, $13 billion in '25, and it's projected to be around 55 billion by '32. the ai market is much broader. and estimates for the market in '24 fell between,

like, 230 billion to 280 billion. and according to some forecasts, it should be at the impressive amount of, like, 1.9 trillion by 2030. and i think one caveat is that the figures also include, like, you know, it's not just like ai solution or services. it also includes like, erm, you know, markets for, like, ai components, like computer chips and various type of software platform. just to put things in perspective, our latest estimate for the world military expenditures was around 2.7 trillion in '24, which means that the global military market is ten times larger than the global ai market. drones were massively deployed in iraq and afghanistan as well a while ago. why is it different now? i guess the key difference is in the type of drones that are being used. so in the conflict of in iraq and afghanistan were characterised by the use of large, long-range, military-grade drones. while in ukraine, we have seen a massive deployment

of smaller quadcopter drones that are actually based often on commercial designs. dr vincent, we've seen that defence, like almost every other part of life, could be changed by artificial intelligence. this is one of your specialist areas. is there cause for concern here? in the military domain, you know, ai present both kind of opportunity and challenges. and in terms of opportunities, you know, obviously, like, you know, ai offer a lot of, like, substantial kind of operational benefit. they can help militaries kind of process battlefield information and make decisions much more quickly. they can be leveraged to make weapons more autonomous, which make them more resilient to electronic warfare. they also have, like, economic benefits. ai can help militaries kind of overcome, like, manpower issues, for instance, by reducing the need of human analysts to process intelligence information. but they also have... like, they also create a number of concerns, right? and typically i would say, like, there are

two broad set of concerns. the first revolve around how the current kind of rapid adoption of military ai can disrupt peace and security at the global or regional level. the second set of concerns focus much more on how military...i mean, ai is used in armed conflict, how it might impact warfare itself. and here the discussion centres mainly around how the increasing reliance on ai tools might actually undermine the ability of the armed forces to kind of a, fulfil their legal obligations, like distinguishing between combatants and civilians, but also how they may be able to manage escalatory dynamics. and some fear that basically, like, the use of ai could kind of lead to some kind of erosion of human control or human responsibility over the use of force. so that's why a lot of the kind of diplomatic talks that we see today on the topic are focused on how humans can continue to exercise

judgment and control in a paradigm where we increasingly rely on algorithms for decision making. dr vincent boulanin, it's been great to chat to you on the show. thank you. thank you so much for having me. coming up after the break, i'll talk to the boss taking the digital payment revolution across borders throughout africa. see you then.

welcome back to talking business with me, mark lobel. for some years now, kenya, nigeria, and other countries across africa have been pioneers with digital payments. now one company is changing how those payments can be made, not just within countries, but across the continent

and beyond. olugbenga agboola, ceo and founder of flutterwave, welcome to talking business. let me start with this. what inspired you to start flutterwave, and how did you see a need to improve payments in africa? thanks for having me. great to be here. so i saw first-hand the friction an african business will have when they try to pay or get paid. it wasn't just broken, it was non-existent, in my opinion. right? when a nigerian business based in lagos is getting paid by a customer in dallas in the us, that requires a wire transfer. that takes four or five days. and the point is, how can we make that better? how can we make that quicker? the infrastructure is there, it is just not connected, not interoperable. how do you build an infrastructure that connects the payer and the receiver and the business

via one simple layer? and it's just a trust layer, right? and that's flutterwave. so we built that because we saw that problem. i want to solve that to make it easy to expand the opportunity for trade for africans and globally. i'm really interested in how you've changed people's lives with flutterwave. so can you describe for us your typical customer? that's one thing i love talking about a lot, which is basically how we empower our businesses. i'll give you an example. we have... we had a customer on our platform who, during the pandemic, right, started selling chickens online via a platform. it was a very interesting experience. on flutterwave store, a business in lagos will sell their chickens, literally chickens, yes, to customers online and deliver. that was unparalleled. and she's been online ever since. we have... we saw, for example, air peace airline fly to london from lagos for the very first time, right? that was possible because we powered the payment layer. that's the impact.

we're laying, in my opinion, the pipes for the new african digital economy growth. what access or functionality did you give to that chicken seller that they didn't have to be able to sell online? could they not get a bank account or could they not make the transition for online sales? what was unique about your product that got them selling chickens online? so prior to us, to make that happen, they had to get an engineer, build an e-commerce shop, manage it, erm, integrate the payment system, go through the entire system. that can take them maybe months to build. with flutterwave store, it takes them just one minute. go online, sign up, use them, take a picture of the chicken, upload it, set the price, launch the store, and that's it. and share the store link to family and friends and customers via whatsapp, email, sms, whatnot. and that's it. and the customers can then buy from them online. your company is yet to

make a profit, and you say it will go public when it does. so what are the timelines and targets for those two things? so we're in no rush to go public at all, right? we will list when the business is ready. and for us, it's really just about we're building to last, not just to impress, in my opinion, right? we're trying to understand that what we're trying to build here is pretty important for the future of how payments will work across the continent. so for us, it's about long-term being sustainable, long-term being profitable, scaling properly, having the right impact. right now we are the most licensed non-bank entity in africa. and that's a testament to the work we're doing to be sustainable. for us, compliance isn't just what you do to keep governance. it's how you become over time sustainable as a company and to grow and scale your business. so for us, those are the key points. we want to be here for a long time. we want to scale our business. we want to help our customers solve real problems

that affect them. your company was at the centre of fraud allegations in nigeria and kenya. how have you responded to that and in rebuilding confidence in the company? so at flutterwave, we take every allegation very seriously, right? we've rebuilt our culture inside out. we've scaled our leadership team. we've built new frameworks, independent review, zero tolerance. that's how we run the company. however, every company goes through its crucible, in my opinion, right? we have chosen accountability and growth and facing all, everything heads on. so that's the way a company can grow. we've taken every lesson we've learned in our journey. we apply it to where we are to scale the business, and we're also building amazing infrastructure for security. customers understand that this is what they have to do to stay secure in a fast-moving fintech landscape. the customer sometimes will do things that will not allow them to have a gap in the infrastructure, but we know that our responsibility as a company to help our clients understand how to use our products so they can scale well

for their business, and they can make sense for what the goals they have and they came to us for. so at flutterwave, our goal is accountability and growth. and that force is key as we continue to scale on the continent. how do you see flutterwave going forward and its impact on the african economy and global financial inclusion over the next few years? so from day one, we saw the friction african companies were having to get paid, both in africa and across borders. like i said earlier, it was very, very broken. we had to be the company that will connect africa to the global opportunity. right? our mission is connecting africa to global payments across everywhere. so we started by fixing payments. but fixing payment is core to a bigger problem - enabling a small business in lagos can now sell to customers

via one api because we exist. a diaspora can send money back home via our infrastructure because we exist. that is really the unlocking we're trying to do here - connecting africa to the world through seamless payments. olugbenga agboola, founder and ceo of flutterwave, it was great to connect with you today. thanks for joining us here on talking business. thank you. that's it for now. for more updates throughout the week, follow me on social media. i'm @marklobeltv. thanks for watching. goodbye.

live from washington, this is bbc news. reports say the us is deploying stealth bombers to the pacific island nation of guam - as president trump weighs whether to take direct action in iran. the pro-palestinian student activist - mahmoud khalil - speaks out after being released from detention in the us. whether you are a citizen, an immigrant, anyone on this land, you are not illegal. that doesn't make you less of a human. and - feeling the heat - temperatures climb in europe and america - while the uk experiences the warmest day of the year so far.