Saudi Arabia Bets Billions on Turkish Stealth Jet

Why it matters

This deal aligns directly with Saudi Arabia's Vision 2030, which mandates localizing over 50% of military equipment spending by 2030, a dramatic increase from just 2% in the past. The Kingdom is leveraging its position as one of the world's top defense spenders to move beyond simple assembly and build an integrated local industry for high-value military hardware. Negotiations, led by Turkish Aerospace Industries (TAI) General Manager Mehmet Demiroğlu, are in their final stages and could result in a formal agreement in 2026. The talks cover not just the acquisition of a squadron of KAAN jets but also local production options and deeper industrial cooperation, a model that requires a significant order volume to be feasible. The KAAN fighter, which made its maiden flight on February 21, 2024, is a twin-engine stealth aircraft designed to replace Turkey's F-16 fleet. Current prototypes are considered "4.5+ Gen" as they use General Electric F110 engines, with full 5th-generation capabilities like supercruise dependent on a domestically produced engine targeted for the early 2030s. TAI aims to deliver the first batch to the Turkish Air Force by 2028. This potential export follows a surge in Turkey's defense and aerospace sector, which saw exports hit $10.05 billion in 2025, a 48% year-over-year increase. The industry's share of total Turkish exports has more than doubled since 2022. Other significant recent deals include a preliminary agreement to sell 48 KAAN jets to Indonesia and the sale of Hürjet trainer aircraft to NATO member Spain. The success of firms like TAI and drone-maker Baykar, which recently acquired Italian manufacturer Piaggio Aerospace, signals a maturing deeptech industrial base. This vertical is a key focus for Turkish venture capital, with firms like Diffusion Capital Partners and 212 actively investing in deeptech and B2B tech startups. For Turkey's startup ecosystem, the trend signifies a robust commercialization pathway for university-level research, especially in AI, robotics, and advanced materials. The country's deeptech sector comprises over 650 companies that have collectively raised $1.31 billion. In 2025, while global VC activity saw fewer but larger deals, Turkey's deal count grew, showing strong early-stage dynamism. The integration of AI is a critical component, with Turkish defense giants like ASELSAN and HAVELSAN pioneering AI-assisted command systems, computer vision, and autonomous technologies. This creates a downstream effect, fostering a talent pool and B2B opportunities for startups developing dual-use AI applications in sectors beyond defense.

Key numbers

• This deal aligns directly with Saudi Arabia's Vision 2030, which mandates localizing over 50% of military equipment spending by 2030, a dramatic increase from just 2% in the past.
• Negotiations, led by Turkish Aerospace Industries (TAI) General Manager Mehmet Demiroğlu, are in their final stages and could result in a formal agreement in 2026.
• The KAAN fighter, which made its maiden flight on February 21, 2024, is a twin-engine stealth aircraft designed to replace Turkey's F-16 fleet.
• Current prototypes are considered "4.5+ Gen" as they use General Electric F110 engines, with full 5th-generation capabilities like supercruise dependent on a domestically produced engine targeted for the early 2030s.

What happens next

• Negotiations, led by Turkish Aerospace Industries (TAI) General Manager Mehmet Demiroğlu, are in their final stages and could result in a formal agreement in 2026.
• TAI aims to deliver the first batch to the Turkish Air Force by 2028.

Sources

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• This deal aligns directly
• Negotiations, led by
• Current prototypes are
• TAI aims to deliver the
• This potential export
• Other significant recent
• The success of firms
• This vertical is a key
• For Turkey's startup
• The country's deeptech
• In 2025, while global
• The integration of AI
• This creates a downstream

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