BERLIN — A multibillion-euro German military drone contract has triggered scrutiny inside Chancellor Friedrich Merz’s governing coalition over its most prominent investor, Trump-friendly billionaire Peter Thiel, putting its approval in doubt.
Thiel is at the center of a political controversy over his investment in Stark, a Berlin-based defense-tech startup. German lawmakers question whether his minority stake could give him direct or indirect influence over the company’s decisions or access to sensitive defense information.
They have also raised concerns about how the contract is priced and structured, saying key details on unit costs, quantities and optional volumes were redacted from documents presented to the country’s parliament.
“The fact is that Peter Thiel openly rejects our democracy. We do not know how large his influence at Stark is. And even worse: The federal government cannot explain it,” Greens lawmaker Jeanne Dillschneider told POLITICO. “We need drones, no one disputes that. But the question of how large Thiel’s influence is must be clarified before we procure them.”
The Thiel Foundation, a private foundation set up by Peter Thiel and contacted by POLITICO in an effort to seek a response, did not respond to emailed requests for comment.
The confidential Stark contract, seen by POLITICO, is structured as a seven-year framework agreement with an initial fixed order worth €268.6 million. If all optional orders are exercised, the total value could rise to roughly €2.86 billion.
The agreement covers the serial production of “deployment sets,” each consisting of 20 loitering munitions, a ground control station, spare parts and software and training packages. It would be one of Germany’s first purchases of loitering drones, which have become a low-cost weapon of choice in Ukraine after Russia’s full-scale invasion.
It’s unclear what Thiel’s share in the company is. The German-born investor, who is also an American citizen, is known for his support for President Donald Trump and for bankrolling conservative candidates such as Vice President JD Vance, aligning himself with the populist wing of the Republican party.
That has raised concerns among German lawmakers, affecting the outlook for parliamentary approval of the deal.
Under German law, any defense contract exceeding €25 million must receive explicit approval from the parliamentary budget committee, meaning a vote scheduled for Wednesday is legally required for the deal to proceed.
Stark declined to comment on the details of its shareholder structure but said any foreign investment exceeding a 10 percent threshold would trigger a mandatory review by Germany’s Economy Ministry. The same applies below that level if special rights exist, the company said, adding: “None of this applies.”
It also stated that no shareholder has information rights relating to its products and that any transfer of technical details would be subject to German export control approval.
Defense Minister Boris Pistorius rejected the idea that Thiel’s involvement should stall the deal. Speaking to the Deutsche Welle broadcaster at the recent Munich Security Conference, he said: “I don’t know whether my information is correct or not, but as far as I’m informed, we are not talking about a key stakeholder — we are talking about somebody who has between 3 and 4.5 percent.”
That, he added, means Thiel does not play “a key role as a stakeholder,” and while the issue should be considered seriously, it is “not an obstacle really to make contracts with that company.”
However, the final decision lies not with his ministry but with parliament.
Coalition scrutiny grows
While the Greens were the first to target Thiel’s involvement, criticism has spilled over to Germany’s governing parties, the Christian Democrats and the Social Democrats.
Budget lawmakers who spoke with POLITICO on the basis of anonymity to speak candidly have since broadened their review to include pricing structures, delivery timelines and the overall scale of the framework agreement’s optional volumes.
A central point of scrutiny is timing: Berlin would be committing to serial production before a full munitions safety qualification has been completed. According to the contract, the qualification is expected by Sept. 30.
The agreement contains exit clauses allowing the government to withdraw if the qualification fails, if performance benchmarks such as hit probability are not met, or if changes in the company’s ownership create security concerns.
Lawmakers from both ruling coalition parties have also raised concerns after portions of the Stark contract were redacted. In particular, details relating to quantities and pricing were not fully visible to MPs. They say meaningful oversight becomes difficult if key financial parameters are not fully disclosed.
“Responsibility does not mean rubber-stamping,” Christian Democratic budget lawmaker Andreas Mattfeldt wrote on LinkedIn, alluding to further examination of the procurement. “Responsibility means examining, questioning and, if necessary, correcting. For a strong Bundeswehr [German armed forces] and a clean handling of taxpayers’ money.”
In an explanatory memo to lawmakers seen by POLITICO, the Defense Ministry outlines the overall contract structure and aggregate values but doesn’t provide granular figures. It confirms that the initial fixed tranches amount to roughly €270 million per supplier and that the total ceiling values — roughly €2.9 billion for Stark — would only apply if all optional orders are exercised. Bloomberg first reported on the memo.
That document does not, however, directly address why specific passages were withheld from committee review. That gap has added to frustration among some coalition MPs ahead of the vote.
Lawmakers from Germany’s governing parties are now preparing a conditional approval that would attach binding requirements to the contract before it takes effect.
According to two officials familiar with the talks, budget lawmakers are drafting language that would require closer oversight of pricing and limit how the larger optional parts of the deal can be triggered. The move suggests the contract is likely to pass, but not without new safeguards in response to concerns raised inside the coalition.
Whether Stark clears the hurdle this week will determine not only the fate of the contract, but also whether the coalition is prepared to close ranks behind one of its most politically sensitive defense procurements.
Doepfner Capital, led by Moritz Döpfner, the son of Axel Springer CEO Mathias Döpfner, is also an investor in Stark. Axel Springer owns POLITICO.
Peter Thiel ties put major German military drone deal on shaky ground
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