Amidst geopolitical tensions and volatile markets, the question of Europes ability to weather the storms ahead, especially as President Trump seems intent on having his pound of tariffs from the continent, is looming large. But an extensive new report claims deeptech is poised to become a key pillar of Europes security, defense, and future autonomy, in particular from the U.S.Deeptech attracted 15 billion ($16.3 billion) in venture investments in 2024, according to a 184-page report by venture firms Lakestar, Walden Catalyst, Dealroom and the deeptech conference, Hello Tomorrow. The report also found that nearly one-third of all venture capital invested in Europe is now going to deep tech.M&A activity in the space increased to $12.2 billion last year, the report said, but it also found that European deeptech startups still rely on the U.S. for exits. Furthermore, 50% of the growth capital raised by deeptech startups comes from outside the continent. Still, deeptech could also be seen as a hedge against normal momentum investing amongst venture capitalists, said the report.The reports co-author Lukas Leitner, also a deeptech investor at Lakestar, told TechCrunch that while geopolitical tensions pose significant challenges, Europe needs to embrace the moment, and deeptech could be the key that unlocks future resilience for the continent. However, the road ahead is not without challenges. The U.S. has a flywheel effect in deeptech while Europes ecosystem is still immature, Leitner noted. We have a flywheel in the shallow tech scene. You see a lot of second-time founders, coming out of Revolut and so on, building great companies. But not yet from deeptech companies.Europe has strong research institutions, engineering talent, and supportive public sentiment for deeptech, but there need to be policy changes to foster a culture that supports taking risks, he added.Arnaud de la Tour, the CEO of Hello Tomorrow, said that the notion that compute-poor Europe would always lag in AI was recently challenged by the appearance of open-source DeepSeek: Its a huge opportunity for Europe, because we have great AI talent [] Many are looking to come back to Europe because of the geopolitical landscape. But we definitely need to have the right policy framework in order to unlock the kind of potential that we have.Leitner pointed out that Europes relative weakness in computing power is offset by its strengths in photonics computing, which offers major advantages in speed and efficiency. Were really good in Europe with photonics, because we have good laser systems, and we have good fundamental research on the photonic side, he said.De la Tour added that Europe could also take advantage of a brain-drain in the U.S. as science is defunded by the Trump administration. The National Science Foundation, which is the biggest supporter of founder-applied research in the U.S. has had its budget cut by half. A lot of those great scientists dont have a job anymore, and many could come to Europe, he said.