The Drop 2026 on geopolitics

Everybody stood up at the geopolitics of space Ripple when asked whether Europe needs its own launch capacity. Everybody stood up at the battery Ripple for a sovereign European supply chain. The next questions found the limit. Handed an imaginary 100 million each, almost nobody chose launch. At the battery Ripple, nobody trusted the EU to deliver one within five years, and the buyers would not pay extra for a European cell.

The Drop framed the theme around energy, chips, food and minerals becoming matters of security, with governments paying for resilience and promising steady demand in return. Few in these 13 Ripples doubted the need. They kept asking who pays the premium that local supply costs, and the answers mostly pointed to buyers that the US and Japan already have and Europe does not.

Buyers still buy on price

The bluntest version came from the raw-materials Ripple. Procurement teams at large car companies had told one founder that they buy the cheapest and do not care whether it comes from Europe or China. If a European process ever matches China's price, the founder said, China will cut its price again. Corporates see the geopolitical risk, Johan Attby of Norrsken Evolve said, but their procurement teams do not own it.

At the mobility Ripple, Daniel Wu of Hyundai Cradle said a part made in Europe cannot be as cheap as one imported from China, and it is yet to be seen whether European consumers will pay a bit more. A board member in the electric-vehicle sector told the battery Ripple that without taxes on imported batteries, Europe would end up with no battery production at all.

Staying dependent is not free either. At the other space Ripple, Elena Ballesteros of Voyager Ventures said the end of SpaceX's rideshare programme has taken one portfolio company's launch bill from about 2.5 million to almost 10 million. At the food sovereignty Ripple, one participant said everyone already pays for cheap food, just not at the till. Local food may never be as cheap as food shipped across oceans, they said, but "we definitely have an insurance premium there that we currently don't pay."

Targets without contracts

Iris ten Have of Visionaries Tomorrow told the story behind the gap at the feedstock Ripple. France is helping to finance two new rare-earth plants. Japanese investors arrived with an offtake agreement that sends half of one plant's output to Japan, and a US company took a large stake in the other, with rights to buy. Europe shows up with targets, Iris said, and Japan and the US show up with contracts. "We can build, but apparently, we can't buy."

The US kept coming up as the contrast. Its defence department has given MP Materials a floor price for NdPr, and Iris knew of no European buyer willing to set one for ten years. At the electrification Ripple, Shravan Shah of Keeling Capital said the Inflation Reduction Act penalised Chinese inputs while giving 45X production tax credits to anyone building in the US. An American participant called Europe's carrot weak and its stick non-existent. At the sovereignty playbook Ripple, Birthe Ross of SPRIND said Europe's industrial strategies set targets and allow state aid without putting cash on a start-up's P&L.

Several sessions reached for the same fix, the state as customer. At the raw-materials Ripple, an investor described a contract for difference under which the state guarantees that a buyer of a novel material pays only today's market price and recoups its money if China cuts supply and prices shoot up. The obstacle is the tender. Its rules favour the cheapest bid, and incumbents with 40-person government-affairs teams work to keep them that way, Lasse Köhler of EIFO said. The same 40-person teams came up at the playbook Ripple, where the advice was to be at the ministries while a tender is written, because once it is published it is already decided.

Defence is the exception

Defence is where European states already buy. At the playbook Ripple, an investor traced ICEYE's path from tracking deforestation for Brazil's armed forces to a 1.7 billion contract with Germany's. Participants at the battery Ripple said drones and other small devices drive demand for a fully sovereign chain, and that full sovereignty means accepting a price premium. At the reshoring Ripple, an investor saw the first openings with customers who tolerate higher prices, in defence and then national security.

The money has moved the same way. In rounds with a sovereign investor, climate and energy fell from 60% in the second half of 2023 to 10% in the first half of 2026, the playbook Ripple heard, displaced by semiconductors, defence, space and foundation models. At the pitching Ripple, Philip Specht and Hugo Rauch found climate or carbon in all 20 of a random set of 2023 pitch decks and in seven of 20 from 2026. A founder making printable solar now talks about cheaper electricity and energy security instead. At the food Ripple, one participant wanted food security counted as part of the government money moving to defence.

Venture investors still hold back. Germany has earmarked 35 billion for military space technology, Nick Gosen of KOMPAS VC said, but European investors hesitate over dual use. When the hosts handed out the imaginary 100 million, defence found no takers.

What Europe must control

With the premium unpaid, some sessions tried to narrow what Europe has to own. At the electrification Ripple, one participant proposed a test. Europe must be independent wherever someone can cut its access indefinitely, and solar panels fail it, because Europe could rebuild production at a premium if it had to. A representative of industrial energy users ranked the grid first, from high-voltage cables to their cybersecurity.

Inverters came up twice. At the flexibility Ripple, one of the hosts said 80% of inverter makers are in China, and a participant said switching the inverters off means a blackout. The American participant at the electrification Ripple said Europe has ignored them. "If you want to be independent electrically, you need to control the intelligence in your system."

Copying China looked like a losing bet. At the reshoring Ripple, an investor said 30 years have shown that China will out-engineer any process a start-up copies. Partners take time too. At the India Ripple, Mark Kahn of Omnivore and Divya Murthy of OysterBay made the case for India as Europe's next partner. One investor there called India more of a stopgap than a long-term strategy, and a participant said China's edge lies in learning curves it no longer exports. Mark called that a function of time.

Nobody settled who pays. At the feedstock Ripple, all but one of those who answered expected the sovereignty push to last, and the exception said only the man in the White House knew. At the battery Ripple, a founder said the giant factories need very large investors with a 50-year horizon, and did not know who would be brave enough to write that cheque. The founder at the reshoring Ripple who dismissed European reshoring as talk set a test for next year's Drop, whether anything actually improved.