Austro-Italian ironclad arms race
Austria's defeat in the Seven Weeks War forced Austria to determine a new set of foreign and domestic policies for the future, as Austria's interests since the days of the Holy Roman Empire had primarily been found in Italy and Germany. The Empire thus reformed itself into the Austria-Hungarian Empire following the adoption of the Austro-Hungarian Compromise of 1867 (German: "Ausgleich"), which re-established the sovereignty of the Kingdom of Hungary and placed Hungarians within the Empire on an equal footing with Austrians. Under the "Ausgleich", Emperor Franz Joseph I would be crowned as King of Hungary, while a separate parliament at Pest with powers to enact laws for the lands of the Holy Crown of Hungary would be established.
Austria–Prussia rivalry
Maria Theresa, still chafing under the loss of "the most beautiful gem of my crown", took the opportunity of the breathing space to implement several civil and military reforms within the Austrian lands, like the establishment of the Theresian Military Academy at Wiener Neustadt in 1751. Her capable state chancellor, Prince Wenzel Anton of Kaunitz, succeeded in the Diplomatic Revolution of 1756, allying with the former Habsburg nemesis France under King Louis XV in order to isolate Prussia. Frederick, however, had completed the "stately quadrille" by the conclusion of the Treaty of Westminster with Great Britain. He again took action by a preemptive war, invading Saxony and opening a Third Silesian War (and the wider Seven Years' War).