MW Defense stocks gain from global conflict. These companies profit after wars end.

By Brian Abrams

'Peace tech' aims to stop conflicts before they start

If peace tech were to capture even 1% of war's economic toll, it would be a $190 billion industry.

Defense technology is a magnet for investment capital. From drones that strike with pinpoint precision to AI-powered surveillance networks, military innovation has surged alongside rising geopolitical tensions.

But now, a new sector is emerging: peace tech. It's technology for preventing, reducing and resolving conflict. As wars become costlier and more complex, investors and governments are beginning to recognize that innovation isn't just about sharpening the tools of war but also about reducing instability before it escalates.

Russia's invasion of Ukraine and the conflict between Israel and Hamas have fueled the rapid expansion of defense tech, as governments and investors alike have rushed to back companies promising strategic advantage. Currently there are 56 active conflicts in the world, the most since the end of World War II.

Yet war comes at a staggering cost - $19.1 trillion annually, or 14% of global gross domestic product $(GDP.UK)$, according to the Institute for Economics & Peace. That figure is more than just a humanitarian tragedy; it's an economic drain. As the financial burden grows, so does the case for investing in technologies that foster stability, from AI-driven diplomacy tools to predictive conflict analytics.

Peace tech is the flipside of defense tech. Military innovation focuses on winning wars; peace tech aims to prevent them or, at the very least, to help governments and companies make smarter, more rational decisions that reduce the likelihood of conflict. It's a young sector, but one with enormous potential, both in terms of impact and investment.

If peace tech were to capture even 1% of war's economic toll, it would be a $190 billion industry. That's a market larger than the current global cybersecurity sector. Given the success of defense tech - where venture-backed firms like Anduril Industries and Palantir Technologies $(PLTR)$ have grown into multibillion-dollar behemoths - there's every reason to believe that peace tech can follow a similar trajectory.

The investor's perspective

I've spent my career investing in early-stage companies, managing over $1 billion in assets, evaluating thousands of startups and serving on multiple boards. As a venture capitalist looking to see this sector blossom, I seek out smart entrepreneurs building software solutions for one set of problems that can be adapted to resolve conflicts, promote peace and generate exceptional returns on investment. These dual-solution opportunities could turbocharge peace tech.

To give you an idea of the types of companies in this industry, here are three I've invested in that are leading the charge:

1. CulturePulse: This Slovakia-based AI-powered platform builds digital twins of societies and organizations, modeling how communities react to different policies. In divided regions such as Israel-Palestine and Armenia-Azerbaijan, it helps policymakers simulate and refine peace initiatives before they're implemented, potentially saving years of trial-and-error diplomacy. The same software, their ARES artificial-intelligence engine, enables corporate customers to improve integration of acquisitions, improve marketing efficiency and even optimize supply chains.

2. Inclus: This Finnish company was spun out of Nobel laureate Martti Ahtisaari's conflict-mediation organization $(CMI)$ and provides risk-management software for multinational corporations. It also puts their solutions to work in conflict zones. Already deployed in places including Yemen and Ukraine, Inclus helps humanitarian organizations and governments identify interventions that have the highest likelihood of stabilizing fragile regions.

3. A war-gaming company: This next-generation AI company, which has not yet announced its name because it's still in stealth mode, doesn't just model conflict but also explores pathways to de-escalation. By running tens of thousands of simulations, it helps policymakers and defense strategists predict and prevent flashpoints, whether in Taiwan, Eastern Europe or the Middle East. This same simulation software can help companies protect their competitive moats.

Each of these three companies remain privately held, requiring accredited investors for participation. However, platforms such as EquityZen, AngelList and OurCrowd are making entry to private companies more accessible by lowering investment minimums. As peace tech continues to scale, it's only a matter of time before publicly traded firms emerge in this space, mirroring the trajectory of defense technology.

Opportunities for individual investors

These 'quasi-peace tech' companies contribute to postwar reconstruction, economic stabilization and infrastructure rebuilding.

While pure-play peace tech companies are not yet available on public markets, there are investment prospects in adjacent sectors. These "quasi-peace tech" companies contribute to postwar reconstruction, economic stabilization and infrastructure rebuilding that may get a boost from the eventual end of the conflicts in Ukraine and Gaza. Postconflict economies often expand rapidly, offering major avenues for early investors in rebuilding efforts. (I do not own shares in any of these publicly listed companies.)

Key industries include:

-- Construction and infrastructure: As Ukraine eventually rebuilds, demand for materials, engineering and logistics will surge. Notable companies include Austria's Strabag AT:STR and Porr AT:POS; Poland's Budimex PL:BDX; Switzerland's Holcim CH:HOLN HCMLY and Ferrexpo UK:FXPO FEEXY, and Germany's Heidelberg Materials XE:HEI. In Israel, companies including Inrom Construction Industries IL:INRM may experience a postwar boom in construction.

-- Heavy industry and transportation: Companies specializing in logistics, timber, rail and industrial equipment will play a role in reconstruction efforts. Relevant names include Finland's Cargotec FI:CGCBV and UPM-Kymmene FI:UPM UPMMY, Japan's Mitsubishi Heavy Industries JP:7011, Germany's Siemens XE:SIE SIEGY and Sweden's Volvo SE:VOLV.B VLVLY.

-- European banks: Stability in Europe will benefit financial institutions with exposure to central and eastern Europe. Austria's Erste Group Bank AT:EBS EBKDY and other regional banks stand to gain.

NATO and government-backed funds dominate defense tech, but no equivalent exists for peace tech - yet. That's changing. Demand for tools that mitigate conflict and stabilize economies is rising. If industries such as commercial spaceflight, decentralized finance and climate technology have risen from skepticism to thriving sectors within two decades, peace tech can chart a similar path.

Brian Abrams is founder and managing partner at B Ventures Group.

-Brian Abrams

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March 21, 2025 15:35 ET (19:35 GMT)

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