Why Is America Spending $50 Billion On Drones?

In Washington, D.C., the U.S. Army's biggest event of the year, AUSA brought soldiers, defense giants, and startups together under one roof. And at nearly every booth on the floor, one technology defined the conversation. Drones. Cheap, fast, and now everywhere on the modern battlefield. The Pentagon wants hundreds of thousands of them by 2027, requesting 53.6 billion dollars specifically for the Drone Dominance Initiative, and an additional $50 billion dollars in funding to accelerate mass production and strengthen domestic supply chains. First, we have to operationalize the acquisition system. So drone dominance is how we buy them and buy them quickly and scale them quickly and send the demand signal to all these young, hungry companies that were open now for that kind of business. These contract-hungry companies descended on AUSA in force with the same vision of the new frontline Everybody has a drone problem. And that drone problem continues to evolve. The battle that we're seeing, it's not really taking place at 30,000 feet anymore. It's really taking place at 300 feet. Something like 70-75% of casualties and the destruction of their vehicles is due to very cheap drones with a little bit of C4 attached to them. Coming up on the Business of Defense, we'll explore the future of drone warfare. From Sig Sauer's latest Firestorm, which takes high-powered assault weapons airborne. To Smart Shooter's AI-powered targeting system that aims the rifle for you, and futuristic lasers straight from the pages of Star Wars, already knocking the toughest UAVs out of the sky. The Death Star was a great, you know, very powerful offensive weapon, but really it was a terrible layered defense approach. Plus the groundbreaking innovations that keep it all running. I don't think anyone's produced a battery that has a hole in it All of this and more, coming up on the Business of Defense. Not every drone is built for the same fight. The military sorts them by size, from hand-launched Group 1 quadcopters under 20 pounds to Group 5 aircraft the size of small planes. But on today's battlefield, the bigger question is the mission. Some drones strike. Some watch, and some hunt for the enemy signal. U.S. weapons manufacturer Sig Sauer built its name on rifles and pistols. Now it's putting that same firepower in the sky. About a year and a half, two years ago, I was brought on board to start the Advanced Concepts program. We do technology, a lot of R&D. We always want to stay on the edge or beyond, so drones is another avenue or approach to do so. It allows us to get into a new market. And then also take what we do now on the firearm side and integrate that into the drones. SIG designs and builds its drones in-house, from the airframe to the software to the weapon. We can take a product, we can scale it quickly and deliver quantities they need. Meet the company's new Firestorm 250. SIG partnered with Israel Aerospace Industries to mount its Hornet weapon system, built around the Army's new XM250 machine gun, onto a heavy lift drone. So that gives us about four hours of flight all up. Pretty significant capability for the warfighter. It's a belt-fed machine gun. Fires about 725 rounds a minute. It'll carry 200 rounds on board so once you're done with that you'll return to base, reload and then send back up again. We recently entered it into a combat evaluation which it's passed so we're looking forward to the future of that program. There's a lot that goes into the tuning parameters, where we mount the firearm, the weight we take out of the firearm, recoil reduction. There's a ton of Especially when you're flying in 3D space, our pilots are actually flying real-time, so we get immediate feedback. And then the weapon system itself will basically cut or terminate to a non-fire state if there's any issues with the aircraft. So from the aircraft up, if there's a problem, our payload saves itself. SIG's lineup also goes smaller, with a family of drones and payloads sized to different missions and budgets. We chose titanium because it is a hard metal, but it is also lightweight. We make it in-house so we can print this, we can control. Just about every aspect of the design so we can optimize it for the customer's mission set. Being that it is 3D printed or digitally manufactured, it opens up the envelope of what we can do so we can add strength and durability and reduce weight and we can also customize where we put our hardware. This right now is about sub 4,000. If Sig's drone is built to strike, Orchid's is built to see. This is an ISR drone intelligence surveillance and reconnaissance so we have multiple payloads from EOIR, radiometric, lidar and photogrammetry. It is a fully electric aircraft that flies two plus hours and in the very near future we're flying three plus hours so it takes off vertically transitions into horizontal flight and gets its efficiency. While most drones rely on radio or cell signals, Orchid flies everything over satellite. You can have your pilot, your command center in Washington, D.C. and be flying a mission in Hawaii and it would make no difference to the aircraft versus if you were on site. The company started out in drone delivery and industrial inspection. Its flight testing happens in Colombia, South America, where the terrain and the threat are real. In South America, In Colombia, we have what could be very well considered an active war zone with narco-terrorism and very diverse conditions in terms of mountainous territory, humidity, definitely giving us that real-world battlefield experience. That experience got the company in front of the 82nd Airborne at the Army's Joint Readiness Training Center. We literally have a report from JRTC stating that this is the best ISR platform that has ever flown. They were astonished that we were able to implement their feedback. Orchid expects to be flying multiple aircraft with the Army in 2027, and it's already thinking beyond one pilot, one drone. Through a partnership with Paladin AI, Orchid is building self-orchestration capabilities that let a fleet of its aircraft fly together as an intelligent swarm. So 20 aircraft all talking to each other, handing off targets, orchestrating what the best tactic is, feeding that critical information to the warfighter. Orchid is also rethinking how the aircraft itself gets built. Working with HP, its next generation of aircraft could come straight off a 3D printer. One of the great advantages of HP is your design flexibility. In this case, I've got a wing here that you can see it's got the flap. This flap isn't assembled, but this flap... is printed in place. The other example that I would like to highlight is, say you've got a five meter wingspan and you need to be able to run cables from one tip to the other tip. Traditionally, it's a very long process of fishing that cable through. With additive manufacturing, out of the printer will come a fish wire printed inside that you attach to one end of the cable and then just fish it through. So a process that you should take an hour passing cables through can now be as fast as 10, 15 seconds. Whether striking or surveilling, every drone has a pilot, and every pilot gives off a signal. CX-2 builds drones that hunt for it. So CX-2, our electromagnetic warfare company, 21st century drone company built for modern-day warfare. As we know, the invisible battlefield, the RF spectrum, is contested in every way possible, and dominating it is imperative for our end users, our operators, and our NATO allies. What we like to do with our RF-seeking and RF-sensing payloads is to paint a visualization and data visualization. of the RF spectrum and give our operators an opportunity to characterize, identify, and ultimately prosecute any sort of targets in the battlefield. Our motto is hunt the archer not the arrow and it is totally like changing the way the battlefield is being displayed today. As we know these counter UAS and drone operators, adversary drone operators can go out there with up to 10 drones at a certain time so going after those people individually will ultimately end the war in an expedited fashion. It monitors the spectrum from the low end 800 megahertz up to 60 gigahertz and kind of identifies anything that it's emitting within that range. We currently are targeting high powered emitters, jammers and enemy GCSs within that and it gives the end user an opportunity to one create a spectrum heat map, identify where the emitter is coming from, characterizes it and with our EOIR camera it gives a little bit more fidelity on what exactly that emitter is Hexon is our RF sensing payload. We basically demodularized it and put it onto our platform Wraith. Hexon is a modular RF sensing payload that can be put on any fixed wing or rotary wing that has the capacity to hold the weight. The company's next push is getting its systems beyond special operators and fielded out to more SOCOM units, Army, Marines, and Air Force. We're modular. We want to play with everybody. Stopping a drone is harder than it sounds. They fly low and fast. Fiber optic drones are immune to traditional RF jamming, so militaries need to build their drone defense in layers. And it starts with a soldier. Hitting a small, fast drone with a rifle is close to impossible for even the most skilled marksman. Smart Shooter's AI-powered optic is designed to change that. Smart Shooter is a weapon-mounted, electro-optical fire control system. Once you lock on a target, The system continues to machine learn so it's doing all the ballistic calculations to that target whatever you decided you want to engage and then once you want to engage that system you basically hold down the trigger and line it up with a disturbed reticle and when this says it's got the highest probability of a hit it releases the round. Once you engage it has over a 95% probability of first at least first if not second round hit. Right now it's fiber optic drones. So, you know, any kind of RF-type jamming is not going to work. So now you have a kinetic solution for the individual soldier, marine, or airman, and this gives them the ability on their own weapon to take down a drone. On a 5.56 platform, which is a smaller size round, We have about 180 to 200 meter effective range. So what that means when they're in a dismounted environment or whether they're in a you know perimeter protecting an airfield or you know wherever that may be, it gives that soldier that ability and it's highly accurate. You'll come up onto your target. You're going to press and release once onto the lock button. You'll see that lock. Now pin your trigger to the rear. Keep perfect. Just like that. Drone eliminated. It's really an evolution of technology. So we started, this is considered a 1x, so there's no magnification. We also have a 4x version which is called the X4. So now that gives you a four power and that's primarily for what we call designated marksmen. People that want to have a longer range view, mostly ground type targets. And then the very top one was an actual The R&D program we had with the Irregular Warfare Technical Support Directorate, IWTSD, they wanted us to design and build a prototype to have the 1-8x, so now you can really look far against these set of targets. We do have systems that do handle a Class 3, like the Smash Hopper that we have over here. The Department of War is already on board. Smart Shooter recently landed a $150 million dollar contract that lets every service order the system directly. SIG Sauer is taking a different approach, a site that spots the drone early and keeps the soldier shooting. We're showing the X-ray 9 Counter Unmanned Aerial System that has an integrated 1550 SWIR rangefinder. It also has a proprietary slew rate sensor, so we can tell at point of shooter whether you're tracking a drone or you're stationary. And then we combine that with the rangefinding information to get vector and speed of the drone. and then instantly paint a disturbed reticle hold point for you to engage. Our goal is to intercept and measure the drone at kind of 300 to 500 meter range and provide that solution so that when it comes into range, depending on the the firearm and the ammunition that you're shooting, you can start engaging at 100 meters and try to intersect that drone. At 100 meters moving about 70 miles an hour you only have about three seconds. So you have enough time maybe to get off a half a dozen rounds. I would rather be getting lead in the air than hoping I get a single shot solution that might or might not go off. Our goal is to have this launchable in Q2 of 27. SIG is also bringing bigger guns into the counter drone fight. Its remote weapon station is lightweight and versatile enough to be mounted on boats, trucks, and airplanes. It's about 200 kilos. So you can jump it, you can throw it on a small vehicle, and it's also agnostic to guns. You can go all the way from an LMG 7.62 all the way up to a .50 cal and anything in between, right? On it right now, we have our .338 Norma Magnum machine gun. It has about an 1,800 meter capability for engagement. On board, you have stabilization, you have target tracking, you have multiple point and shoot, which means I can select on a screen. Four different targets, and when I pull the triggers, those four targets will be engaged. The big name in the game now is Counter UAS. As we start to look at that threat and how we improve our system to engage those threats, we'll continue to develop with these partners in the U.S. and also our partner nation. The military's newest layer runs on light. Laser weapons have been promised for decades, and for most of that time they meant systems the size of a ship's compartment, with price tags to match. But Aurelius Systems, a young startup, is betting on small. So Aurelius Systems is an edge-deployed directed energy systems company. We make laser weapons, autonomous, on the edge, capable of defeating drone swarm threats. While working on his Ph.D., La Framboise spoke with Ukrainian counter-drone officers about what they were facing. In 2024, he left the program and built a first prototype, Archimedes, an autonomous laser turret that uses AI-guided sensors to find, track, and burn down small drones. Last year, Aurelius won the Army's few startup competition here at AUSA. What we realized is that for the drone swarm threat, you don't need one massive gigasystem. You want thousands or tens of thousands of smaller systems distributed out, especially to maneuver brigades. And that is really where our company is focused. To get a kill with a laser, it's a function of two really core KPIs. It's power density, or just how much light you're putting down range, and how well you're able to keep that light on target. If you have a new generation, next generation of AI-enabled fire controller that allows you to stay on target, do predictive analytics on where the drone is, do weak spot detection on the drone. And you're able to target that much better. You can use a lower powered laser that drops the cost to produce. What we're able to do is essentially lock in, identify a drone, identify kind of its vector of where it's going. We do future flight path prediction, weak spot detection. We do a hard kill. We melt the drone. We cut it down. You could fit like five or six of this onto one of these UGVs. And so we're so small and we're so edge deployable and we shoot so far away. That we essentially allow you to execute your mission by protecting you from these drones and still maintaining a lot of payload on these vehicles so that you can do your mission. A vehicle will generate electricity from its alternator and a lot of it is just wasted. It's not really used. We can turn that into magazine capacity. And so that's really, really attractive, not only from a distance of kill or a quickness of kill or a modality of kill, but from a continued sustained defensive posture that we can continue to maintain for many, many days out in the field. The company just raised a $40 million Series A and is building its factory in Detroit for full vertical integration. While Aurelius is building lasers small enough to bolt onto a small vehicle, KBR, a long-time integrator on the Army's laser programs, is scaling up for bigger threats at longer range. Meet Firefly. Firefly ultimately is our counter-UAS platform. So this is high-energy lasers. We've got a lot of users. The Firefly system specifically, what we like to call our family of systems, is a modular approach to high-energy lasers. Taking a 5-kilowatt module, we're able to size our system appropriately all the way from 5 kilowatts all the way to 30 kilowatts. So, you know, we kind of look at it as a, you know, counter UAS is not a one-size-fits-all, you know, type of approach. We're able to engage threats at distances greater than 3 kilometers, so approaching the 4-kilometer range of Group 1 through Group 3. And with the smaller drones, like a Group 1, we're able to defeat anywhere from two to three seconds. We have also had a defeat at a test range of a Group 3 within 15 seconds at two and a half kilometers. So very effective. We get our power from the electrical grid. We actually store the power within our battery systems. So you're talking about a couple dollars a shot at most. A radar spots the threat. AI holds the beam on target. But a human still decides when to make the decision to fire. The Department of War just selected Firefly as one of four directed energy weapons for a year-long pilot defending five U.S. military bases against drones. It's a recognition that KVR is a legitimate defense provider when it comes to counter-drone defense. And with us, we're just super excited about it because we actually get to take this to the field. We get to see, you know, it being used by... Operators for a good amount of time gives us data, gives us more data that's going to be able to show what our capabilities are and the longevity and really takes us to the next step of getting it to where it's a true deployed asset. Every drone, every laser, every jammer on the battlefield requires one common thing to fight. Energy. And the batteries behind much of it are a weak link. Most drone batteries and the materials inside them are made overseas. That has turned energy into one of national security's biggest concerns. Badland Batteries wants to bring that production home. Recently, the company opened its brand new 80,000 square foot factory in Fargo, North Dakota. We just opened the first lithium ion manufacturing facility in the United States, which is purpose-built for drones, providing an end-to-end domestic solution all the way from innovation cell manufacturing to fully integrated packs. We're going to start at 2,000 cells a day and then ramp that to 5,000 cells a day and then go to 15,000 cells a day based on demand. In the drone space, 80 to 90 percent of the batteries have been sourced from overseas. The materials that go into those batteries have sort of followed that same suit. So in standing up this new facility, having a National Defense Authorization Act approved supply chain is very, very critical. Drones put different demands on a battery than an electric car does. Every ounce of power costs flight time, and every mission requires something different. If it's a long-range ISR platform, we're going to use a different battery in a different configuration than a heavy payload drone. Inside every battery, We have a tiny little computer that measures current voltage temperature, provides real-time alerts to the pilot so they have situational awareness of power at all times. We have six chemistries coming online at Badland Batteries this year. One is a very high power cell. We adjust those chemistries and add different materials like silicon to improve the overall energy density. The battery performs very differently in extreme heat. than it does in extreme cold. So we want to know what is that operational envelope, ensure that not only are we giving it the right chemistry for the mission, but for the environment that it's going to operate in. Badland Batteries already powers drones in public safety, search and rescue and wildfire response. The military has taken notice. The company recently won a Fast Track Pentagon Award to supply the Air Force, Navy, Army and Special Operations Command. We have received funding from the Navy to build a standardized battery system for drones in the naval fleet. So they're very focused on safety. We also can work with light ground vehicles or robots. We're also shipping products in submersibles, as well as building systems for the Air Force for space. If Badland is changing where batteries are made, startup company Materiel is changing what they look like. Materiel, we 3D print batteries and manufacture packs. We're solving a really unique problem. We're able to make energy fit into devices and hardware where it's otherwise constrained, so weird shapes, geometries. This is a standard 8S1P configuration for a battery pack. As you can see, there's a lot of void space in between the cells. and also take notice of the canisters as they're wrapped, there's a lot of inactive material, all of that's being wasted. What we've decided to do is basically rip that apart and print into the contours of the volume of the product. What that enables roughly for Class 1 UAS applications from these particular cells is about a 30 percent increase in energy density by just putting more battery on device. And so what we're doing is taking that design, unlocking the form. to stack these and utilize as much volume in a current system as possible. We have an advanced deposition method that allows us to construct the pack layer by layer and provide a product that can be optimized for thermal runaway, cooling, or other advanced applications. Material is delivering on an Air Force research laboratory contract with drone flight tests planned for early 2027. The equipment that we're developing as a capital machine for a factory is making it possible to form cells and electrodes in under 48 hours. Drones have completely rewritten the rules of war, making the battlefield cheaper, faster, and more crowded than ever. At AUSA, that change was everywhere. America wants to buy fast. The companies are ready to meet that demand. Our adversaries are evolving at a blinding pace. And ultimately, as Americans and as the industry that supports us, we have to be able to do the exact same thing, but we have to move fast. The question now is if America can keep pace with the threat. Thanks for joining us on the Business of Defense.