Firestorm Labs manufactured more than 1,000 parts and 12 of its proprietary 3D-printable first-person view Squall drones aboard the Wasp-class amphibious assault ship USS Essex as it transited toward RIMPAC 2026 in Hawaii, according to a release.

“Every part xCell printed on deck is one that doesn’t need to be flown or shipped across contested waters — cutting the fuel, aircraft hours, and personnel it takes to keep a ship operational,” a social media release said. “Repairs that once meant days or weeks waiting on a resupply run can now happen in hours, on station.”

Firestorm Labs created the xCell as a factory-in-a-box that can be deployed aboard U.S. Navy vessels to churn out unmanned aerial systems and spare parts for expeditionary warfare.

As waves as high as 12 feet crashed against the ship, service members assembled drones that were later flown as adversary aircraft during a counter-drone exercise at RIMPAC 2026 in Hawaii.

The service members also helped print mechanical test components that assessed the efficacy of the 3D printer used for drone production and fabricated military repair parts that crew members of the USS Essex needed.

The Defense Department, and Navy in particular, is laser-focused on building out modular payload capabilities that can deliver mission-ready assets for the service.

Chief of Naval Operations Adm. Daryl Caudle announced the “containerized capability campaign plan” in March at the McAleese Defense Programs conference.

Caudle outlined a vision in which transportable containers housing defense capabilities such as drones and weapons can be deployed to any region in the world.

In May, the Pentagon announced framework agreements with defense companies Anduril, CoAspire, Leidos and Zone 5 to acquire more than 10,000 containerized missiles over three years beginning in 2027.

The move signaled the launch of the “Low‑Cost Containerized Munitions (LCCM) program.”

The extension is in line with the Trump administration’s efforts to curb illicit narcotics flowing into the United States via alleged drug-carrying vessels in the Caribbean Sea and eastern Pacific Ocean.

Since 2023, Saildrone’s USVs have worked in coordination with the U.S. Navy, supporting the Joint Interagency Task Force South (JIATF-S) and U.S. Naval Forces Southern Command/U.S. Navy Fourth Fleet, per the release.

“The continuity of Saildrone’s presence along the southern border for nearly three years demonstrates the strategic value we bring as the world’s most experienced operators of unmanned surface vehicles,” said Saildrone President VADM (ret.) John Mustin. “Our unmatched ability to remain on station and on mission in critical regions for months at a time is why our fleet serves as a powerful deterrent to bad actors. We look forward to continuing to partner with the Navy in its mission to secure the country’s maritime approaches and southern border.”

The 33-foot-long Voyager is designed for persistent surface and subsurface surveillance and can also conduct nearshore mapping missions and seafloor characterization, the release states.

Able to remain “on mission and on station” for months at a time, the USVs are “both a deterrent and an alarm” along the U.S.’s expansive southern maritime border, according to the company.

Since September 2025, the U.S. military has conducted strikes against alleged drug-carrying vessels in the Caribbean Sea and eastern Pacific Ocean in support of what the Pentagon has called continued counternarcotics efforts.

As of June 22, the Trump administration and U.S. military have disclosed 66 strikes, killing at least 196 people.

Called the Guardian Angel, the four-wheeled UGV has already completed live-fire testing.

Thales Australia worked with two other Australian firms to create the new system. One was Chaos 1, which specializes in rapid assessments, prototyping and autonomous-system experimentation.

The second company was W&E Platt, which makes weapon mounts. Indeed, the Guardian Angel features its low-cost Remote Operated Weapon PLATTform, with an image showing the ROWP mounting a Dillon M134D Minigun.

Thales Australia said in a statement that this project showcases its “sovereign industrial strength, ability to meet the nation’s defense and security needs, and capacity to deliver and manufacture autonomous systems and solutions”.

The company said the project was driven by one aim: to keep Australian troops safe.

However, a spokesperson explained to Defense News, “The Guardian Angel is a prototype and wasn’t specifically built for market. It’s part of a program to test and strengthen our capability in autonomous systems and solutions.”

Nonetheless, its completion paves the way for future platforms, in which a containerized mission system could offer capabilities such as medical evacuation, troop support, cargo transport and fire support.

“UGVs can preserve soldiers by operating in high-risk environments while providing a clear tactical advantage, assisting operations on the battlefield,” Andrew Downes, vice president of Land Thales Australia, commented. “They offer scalable, agile, cost-effective capability that can increase operational reach without increasing risk to personnel.”

Meanwhile, Benny Johanson, Founder and CEO of Chaos 1, described the process as “rapid prototyping in true form — little time, extremely chaotic and high risk.“

“In just six weeks we moved from a concept graphic to live-fire demonstration, and many said it couldn’t be done,” Johanson said, adding that the Guardian Angel “proved the sheer horsepower industry can generate for the warfighter at speed.”

Australian industry has developed a number of UGV designs, and the army is actively experimenting with some of them. For instance, it is trialing M113AS4 armored personnel carriers converted into modular robotic vehicles by BAE Systems Australia.

BAE Systems Australia’s largest platform is the ATLAS 8×8, fitted with an unmanned turret and 25mm Bushmaster cannon. It is currently in a prototype demonstrator status.

The Australian Army has also tested the tracked Warfighter UGV from Cyborg Dynamics Engineering. The army is already using the Ground Uncrewed System, affectionately known as GUS and produced by Outlook Industries, for remote coastal surveillance.

A couple of attritable UGV platforms also being tested are GaardTech’s Jaegar-C and DefendTex’s Banshee, small vehicles that can carry kinetic payloads.

“We’re about to bring into the next exercise UGVs. We can practice breaching minefields, for example, with sacrificial UGVs that might drag a tube full of explosives across a minefield — and we can detonate that,” Brigadier Ben McLennan, commander of the Australian Army’s 3rd Brigade, recently told Defense News. “That’s just one application. There’s a raft of other applications we’re making.”

Ukrainian F-16s have destroyed more than 2,500 Geran and Gerbera one-way attack drones, wrote airpower expert Justin Bronk in an analysis of the Ukraine air war for the Royal United Services Institute, a British think tank.

“[The] use of fighters against such drones has consumed an unsustainable number of airframe flying hours and air-to-air missiles … since mid-2024, when the Ukrainian Air Force received its first Western aircraft and trained crews,” the analysis reads.

“Russian industry produces more than 6,000 [one-way attack] drones per month, and fighter aircraft have only a finite number of airframe hours available before they need time consuming deep maintenance cycles to be performed at a factory by expert technicians.”

Ukraine’s fleet currently operates an estimated 39 F-16s, out of about 79 promised by various Western European nations. Ukraine also flies an estimated four Mirage 2000-5 fighters, out of up to 20 promised by France, plus a few Soviet-era Su-27 and MiG-29 fighters.

The F-16s have been a game changer in the Ukraine air war. They enable Ukraine’s small air force to launch stand-off attacks against ground targets using American-made JDAM and French-made AASM Hammer glide bombs. The threat they pose to Russia’s air force became evident earlier this month, when a Ukrainian F-16 reportedly downed an Su-35 over eastern Ukraine.

Ironically, the F-16 has proven such a capable aircraft that it has become a victim of its own success.

“The F-16 fleet has been over-tasked, mostly by C-UAS [counter-drone] interception duties, for which there is almost unlimited demand over time,” Bronk told Defense News.

The root of the dilemmas is that Ukraine is squeezed between multiple aerial threats.

In addition to drone strikes, Russia has launched numerous cruise and ballistic missiles at Ukrainian cities. Russia has become adept at launching massive combined strikes that begin with waves of drones, followed by cruise missiles, such as the Kh-101, and then ballistic missiles, such as the Iskander-M and Kinzhal.

Ukraine has managed to at least partially tame the drone threat by creating dense belts of short-range air defenses, or SHORAD. These SHORAD belts combine short-range anti-aircraft missiles, anti-aircraft guns, mobile machine gun teams and a variety of homegrown interceptor-drones.

The drawback there is maintaining dense SHORAD coverage along the 745-mile front line — plus defending cities in the rear — with short-range weapons.

“What unites all these mobile air defense teams and counter-drone teams is that their equipment and ammunition is relatively cheap and thus their operations are sustainable,” the RUSI analysis noted. “However, they are relatively personnel intensive to deploy at scale and require both force density and geographical depth to be effective.”

These limitations also point to the difficulties NATO would face in creating its own Ukrainian-style SHORAD system.

“NATO cannot replicate the density of SHORAD defenses that Ukraine deploys for C-UAS coverage, due to the huge personnel requirements of doing so on a sustainable basis,” Bronk told Defense News.

However, NATO could invest in radar-guided anti-aircraft guns to protect key installations, such as airbases and headquarters, and develop cheaper drone-killing munitions for aircraft such as the APKWS II rocket.

Nonetheless, this still leaves Russia’s cruise and ballistic missiles, against which SHORAD is largely ineffective.

As with the U.S. and Israel versus Iran’s missiles, Ukraine must carefully manage limited stockpiles of air defense interceptors like the American-made Patriot and the European-made SAMP/T.

Ideally, Ukraine should rely on SHORAD to stop the drones, while reserving its F-16s for other missions, Bronk argues.

“Other systems need to be used wherever possible for [one-way attack] drones so that F-16 capacity can be used to intercept cruise missiles and deliver strike missions,” Bronk explained. “Within the Ukrainian Air Force inventory, it is by far the most efficient asset for this.”

Bronk believes that F-16 stand-off ground attacks could be even more effective — if Ukraine’s high command was less rigid.

“There is potential for the Ukrainian Air Force to have greater effects if squadrons and wings are given more authority to plan strikes themselves rather than being centrally tasked by Army-centric headquarters elements,” he said.

The Defense Department has put out a solicitation for robot boats that are capable of launching small attack drones — with technology mature enough to be deployed to the field within 120 days.

The goal for the Suitable Warfighting Adaptive Payloads, or SWAP-USV, project is to find “mature, market-ready [unmanned surface vessels] fully integrated with two or more mature, market-ready aerial drones to detect, identify, track, and defeat hostile threats,” according to the Defense Innovation Unit solicitation. The call out set a response deadline of Aug. 10.

To make this happen, DIU created a year-long contest backed by $100 million in prize money. DIU wants to “partner with established maritime manufacturers, autonomy developers, sensor manufacturers, and UAS developers to execute a multi-phase Prize Challenge.”

The SWAP-USV project is billed as a solution to a problem that has also plagued missile and drone defense on land: the economics favor the offense.

“The cost-exchange ratio for detecting and neutralizing asymmetric maritime threats in contested environments is heavily skewed in favor of the adversary,” the DIU solicitation states. Nor can the U.S. military continue to rely “on exquisite, multi-million-dollar naval and aviation assets to intercept these inexpensive targets.”

The solicitation paints the picture of a drone boat that can carry, launch and control at least two small UAVs. The UAVs together should be capable of conducting kinetic strikes with a combined payload of at least 2 kilograms, or just over 4 pounds.

DIU wants a mix of recoverable and one-way attack drones that can patrol ocean, coastal and riverine waters, and loiter on station. The drones, according to the solicitation, should “support one or more operational effects, including ISR, comms relay, electronic warfare, payload delivery, or precision engagement of moving or stationary, as applicable, under operator command.”

The Pentagon also wants the system to be mobile enough to fit into a standard cargo container, on road trailers or on C-17 and C-130 transports.

“Solutions that can launch from unimproved locations or provide additional launch flexibility, i.e. remotely from a container, will be looked upon favorably,” DIU noted, adding that the UAVs should be “technically mature and have an established production line.”

Interestingly, among the maritime threats the DIU solicitation cites are “‘go-fast’ smuggling boats, and semi-submersibles.” Drug cartels have used semi-submersibles to transport contraband from South America to the U.S., and such pseudo-submarines are hard to detect.

The SWAP-USV project calls for robot craft capable of “autonomous surveillance and interdiction of defined maritime operating areas, maximizing operational coverage, probability of detection, interdiction effectiveness, and time on station while minimizing daily operating cost, logistics burden, and required personnel.”

The surveillance elements of the solicitation state that the drone boat must be able to “autonomously follow or shadow a vessel of interest, and autonomously intercept a noncooperative, maneuvering vessel. Autonomous execution of these functions is desired but not required.”

The SWAP-USV Challenge, meanwhile, comprises three “sprints,” or phases, each with separate prize money. To sweeten the pot further, companies that pass the test in each phase will be eligible for procurement contracts backed by a $200 million budget.

Sprint 1 calls for in-water testing in fall 2026, with a goal of deploying a system in the field within 120 days.

“Solutions must include a complete mission ready USV with integrated drone capability system available for testing and evaluation within 29 days of down-selection for Sprint 1,” the solicitation specified. There will be $40 million in prize money.

Sprint 2 will have a fall 2026 deadline and in-water testing in early 2027, with the focus on “expanded payloads, upgraded autonomy, and multi-vendor integrations.” The prize money for that timeframe will also be $40 million.

Sprint 3 will take submissions in early 2027, with in-water testing in summer 2027. The goals of this phase will be announced later, but there will be $20 million in prizes.

Companies must specify which phase they want to join. “The government reserves the right to assign applicants to [Sprint] cohorts based on technical and manufacturing maturity,” the solicitation noted.

The defense company’s first YFQ-44A was built in its Pickaway County, Ohio, manufacturing facility, dubbed Arsenal-1, according to a social media post. Anduril first announced the facility’s construction in January 2025 and slated its first products manufacturing to begin July 2026.

In January 2026, Anduril declared that its first product would be the YFQ-44A, a missionized variant of the company’s FQ-44, or “Fury,” autonomous fighter jet, for the U.S. Air Force’s Collaborative Combat Aircraft program.

The $1 billion, 5 million-square-foot facility is located near Rickenbacker International Airport and plans to add 4,000 jobs to the area.

The aircraft’s production comes two weeks after the Air Force conducted its first-ever live-fire test with its CCA. The YFQ-44A executed an end-to-end, beyond-line-of-sight strike against a simulated target using an inert AIM-120, which is an advanced medium-range air-to-air missile.

As Anduril announced the aircraft’s production, the Air Force also revealed on Monday the completion of a recent Agile Combat Employment exercise that showcased CCA operations at Creech Air Force Base, Nevada.

“Air superiority in today’s increasingly contested environments requires the rapid fielding of affordable mass,” Air Force Chief of Staff Gen. Ken Wilsbach said in the release. “CCA are essential to this effort. By integrating uncrewed systems to fly alongside our Airmen, we extend reach and increase lethality.”

The multi-day exercise was conducted by the CCA Experimental Operations Unit and was meant to build foundational tactics, techniques and procedures that will shape how the aircraft are integrated into the force, the release says.

The EOU completed multiple sorties, integrated with manned platforms in the local airspace and simulated scenarios.

“Our test teams can continuously use these warfighter-run exercises to gather and analyze data that aids in informed CCA fielding decisions well ahead of the normal process to deliver combat capability when needed by our Air Force and the Nation,” said Brig. Gen. Jesse Friedel, Air Force Operational Test and Evaluation Center commander, whose team members observed the event.

Air Force officials have continuously asserted that any decision to deploy munitions still lies in the human operator’s hands, as they have control and command of the platform at all times, even though the aircraft are unmanned and semi-autonomous.

In a recent roundtable, former Air Force Secretary Frank Kendall said that building trust between human operators and autonomous systems begins with computerized, man-in-the-loop simulations and training exercises, such as Red Flag at Nellis.

The Air Force awarded the CCA contracts last month to Anduril and General Atomics for their YFQ-44A and YFQ-42A, respectively.

The service has eyed 100 to 150 aircraft in its program’s first increment, with a longer-term goal of fielding 1,000 CCAs.

Anduril had not yet announced Tuesday the number of YFQ-44As the facility will produce, but the production line has the capacity to build 150 each year.

Operating far behind the front line on Ukraine’s sweeping steppe, such units have hit more than 180 vessels and other sea-borne targets around the peninsula over the past three weeks, opening a new front in the war.

The attacks, first in the Sea of Azov and now expanding into the Black Sea that it opens into, are designed to raise the cost for Russia of occupying Crimea and to swing the initiative towards Kyiv in the fifth year of full-scale war in Ukraine.

“We work day and night, every day, without time off,” said battalion commander “Ray” of Magyar’s Birds, a brigade that is an important part of the effort. In line with Ukrainian military practice, he identified himself only by his call sign.

During a recent visit by Reuters, his team launched drones every couple of minutes. The unit said it struck a cargo vessel and floating crane in the Black Sea and a power substation in south Crimea. Reuters could not independently verify this.

The attacks are part of the growing duel in strategic waters in recent weeks, during which Russia has stepped up strikes on Ukrainian ports and international cargo ships.

Kyiv’s agriculture minister said on Thursday that shipowners had ​temporarily suspended vessel arrivals at Ukraine’s Black Sea ports for agricultural exports following the surge in attacks.

BATTLE OVER CRIMEA

Crimea, which serves as a transit and military hub for Moscow’s troops, has become a new focus for Ukraine’s drone forces as they scale up their strike capabilities.

In recent months, they have targeted road and rail links in a swath of occupied southern Ukraine that connects the peninsula to Russia — which seized and annexed it in 2014, long before Moscow’s full-scale invasion of Ukraine in 2022.

That has led to fuel shortages and a state of emergency in Crimea, with power and gas facilities also systematically hit.

Now, attacks on oil tankers, dry cargo ships and other vessels mark a widening of Kyiv’s effort to pressure Russian forces by starving them of resources.

Since the new phase of their campaign began in July, drone forces under commander Robert “Magyar” Brovdi have reported hitting about six vessels per day, detailed by Brovdi in mocking, emoji-riddled reports.

The attacks have choked Russian shipping through the Sea of Azov, which receives ships from Russia’s main southern grain-producing region via the Don River.

Brovdi’s forces said the Kerch ferry crossing between eastern Crimea and Russia’s Krasnodar region had lost around 75% of its capacity. Reuters could not verify this.

The commander told Reuters the attacks were aimed at “ruining the myth” of Russian domination and establishing total control over Ukraine’s territorial waters.

The new campaign is dubbed “Molochko”: a portmanteau that sounds like the word “milk” but denotes the phrase “Moscow will collapse because of Crimea.”

Sidharth Kaushal, a senior fellow at the Royal United Services Institute think tank in London, said Ukrainian attacks on Russian overland logistics had led to an increase in shipping through the Sea of Azov, thus providing more sea-borne targets.

The attacks, he said, are “a logical continuation” of Ukraine’s Crimea campaign.

RUSSIAN ATTACKS ON PORTS AND VESSELS

Ukraine’s strikes have been mirrored by intensifying Russian attacks on southern Ukraine, particularly the city of Odesa and ports that send much of the country’s grain through a maritime corridor to international markets.

On Sunday, 10 sailors were killed after Russian forces struck a Guinea-Bissau-flagged vessel carrying corn from the port of Odesa, Ukrainian officials said.

Last week, at least three people were killed in attacks on Odesa and Mykolaiv, another port city.

In the first two weeks of July alone, Russia struck Ukrainian ports 23 times and civilian vessels 17 times, Kyiv’s seaports authority said last Thursday, leaving traders struggling with logistics headaches.

Agricultural exports such as grains and vegetable oils remain Ukraine’s biggest source of foreign currency earnings, with more than 90% shipped from ports in the Odesa ​region through a maritime corridor.

Russia has said its attacks are aimed at infrastructure storing military cargo and fuel.

HUNTED BY RUSSIANS

The Ukrainian-made FP-1 and FP-2 drones used by battalion commander Ray’s team are a staple of Kyiv’s growing arsenal. They fly automatically to the operational zone, then pilots — often based far away — take over to land the final blow.

Minutes after catapulting their last propeller-powered drone using a small jet booster, the launch team packed up and prepared to move. No site is re-used and teams are often sent to new locations at a few hours’ notice.

Although technological advancements have allowed them to launch from over 100 km, or 62 miles, behind front lines, they are still a prized target for enemy drone teams.

“This is a constant war — a continuous struggle of measures and countermeasures,” said Ray, who commands his brigade’s ninth battalion, called Kairos.

Panama, a squadron commander, said he and fellow troops were motivated by the “tangible results” of their operations.

Beyond complicating Russian logistics, the campaign is boosting Ukrainian morale.

“It’s great that our tempo is so high,” he said, “but we still need to sustain it.”

The funding round and the valuations, reported here for the first time, are still fluid, the sources said.

One idea that had been floated was for the company to use a two-stage process, where investors would need to commit to financing a second round at a higher valuation that could occur within a year, the sources said. The valuation for the second funding round could involve Anduril meeting certain financial benchmarks, they said.

Reuters could not determine how much Anduril planned to raise.

In a statement, a spokesperson for Anduril said no decisions had been made about any future financing.

“As a private company, we regularly evaluate opportunities to fund the growth of the business,” the spokesperson said.

The talks come as the company has posted booming military sales and generated investor enthusiasm around its suite of drones, software and missiles amid the U.S. conflict with Iran.

Just two months ago, the company doubled its valuation to $61 billion in a $5 billion funding round led by Thrive Capital and Andreessen Horowitz.

The discussions also underscore how fast-growing startups are increasingly wielding market power and demanding highly unusual concessions from investors.

Before going public in June, SpaceX, for example, imposed unusual conditions on investors in its private fundraising rounds, including extensive vetting and limited financial disclosures.

The potential valuation would make California-based Anduril nearly as valuable as Lockheed Martin, one of the world’s largest defense conglomerates and maker of several of the Pentagon’s priciest fighter jets, including the F-22, F-15 and F-35. Lockheed is valued at $130 billion.

Led by founder Palmer Luckey, Anduril has been announcing new military weapons and drones at a rapid pace. The company said in January it had reported $2.2 billion in revenue in 2025, and doubled its workforce.

Earlier this week, the company announced a new vertical-takeoff-and-landing drone called Thunder at the Farnborough Air Show in England, which it hopes will fly alongside military helicopter units.

The U.K.’s biggest defense company showcased a model of its new jet, Brontanax, derived from the ancient Greek words for thunder and king, at the Farnborough Airshow. It is about the size of a Hawk trainer and would be ready to start flight testing next year, BAE said.

As the global threat level rises and western nations re-arm, defense chiefs say the lesson from the Ukraine war is clear: nations need to control the skies to avoid Ukrainian-style attritional trench warfare and that requires air forces to bulk up.

BAE enters an increasingly crowded market for so-called Collaborative Combat Aircraft, with Airbus, Boeing, Anduril and General Atomics among a growing number of companies competing for business at Farnborough in a sector expected to expand rapidly.

Often described as “loyal wingmen,” CCAs are designed to fly alongside piloted aircraft and are expected to cost roughly a third as much as a traditional fighter jet.

Crowded marketplace

Britain’s new Defence Secretary Wes Streeting, who was appointed on Monday, said it was a “groundbreaking moment.”

“We will adopt this as our operational concept demonstrator, and we’re going to get it in the air in 2027,” he said at the airshow.

BAE has invested hundreds of millions of pounds in its CCA, pushing ahead without the government co-investment which usually underpins new platforms.

“We’ve put our money where our mouth is,” CEO Charles Woodburn told Reuters.

“We could see where the market was going,” he added, saying he hopes to secure a U.K. order, and that other countries in Europe and the Middle East could follow, with some already showing an interest.

BAE has developed Brontanax alongside the Royal Air Force, in a project dating back to 2022, and already has a fully assembled aircraft at its Warton facility in northwest England. It could enter service by 2030, BAE said.

That timeline compares to Boeing’s MQ-28 Ghost Bat, on display at Farnborough, which has already started flight testing, and could be flying for Australia by 2028.

BAE said its CCA offered more stealth than rivals and it was aiming for it to have 70% to 80% of the capabilities of a fighter jet and to come in at under 25% of the cost, which could give it a price tag of around $25 million.

Its open architecture and modular design will allow software upgrades and changes to easily be made, with BAE looking at non-military suppliers to help with the build.

Britain said in its defense investment plan earlier in July that it would spend an initial £300 million ($401 million) to launch a sovereign CCA program it has named Storm Fighter.

During the 12-day event at Camp Grayling, Michigan, 49 companies competed across multiple mission sets. Officials evaluated their small unmanned aircraft systems on performance, ease of use and each company’s ability to produce at scale. By the end, 19 companies advanced to the next round of testing, scheduled to begin in August.

The list of finalists offers a snapshot of the rapidly evolving defense drone industry. Nearly all are privately held companies focused on small UASs rather than traditional weapons. About half already have systems on the Defense Department’s Blue UAS Cleared or Blue UAS Select lists, making them easier for military units to purchase. Most are also relatively young: seven were founded within the past 13 years and eight within the past four.

To better understand why the field looks the way it does, Military Times spoke with J.R. Mullis, a retired Air Force contracting officer who founded the defense technology consultancy ellimaC Partners and Watchtower, a nonprofit that connects emerging defense technology companies with military organizations and hosts its own Best Drone Team Competition.

While many of the companies are young, Mullis said they are considerably “more mature” than the average drone startup. More importantly, they are developing technologies the military can field today.

“I mean, they’re able to be deployed right now,” he said.

Mullis said the finalists share less in common than many observers might assume. Rather than competing to build the same aircraft, many are developing different pieces of the same capability, from airframes and sensors to autonomy software.

“If you were to circle all of them and mash them together,” he said, “I think it would make a really good capability.”

Still, the dominance of younger companies reflects a broader shift in how the Pentagon acquires technology.

Mullis said the government has become more willing to identify operational gaps, giving entrepreneurs with specialized expertise an opportunity to build products that directly address military needs.

He pointed to one company competing in Drone Dominance, which he declined to identify by name, describing it as “one of the best ones” in the competition. Founded by what he called a “young founder” with deep technical expertise, the company grew from zero to millions of dollars in revenue in roughly two years by solving a specific problem.

One example from the list of qualifiers is Massachusetts-based Ascent AeroSystems, founded in 2014 by two brothers and a friend who originally set out to build a rugged drone small enough to fit inside a backpack during hiking and rock climbing trips.

The company later adapted its technology for military use and, in 2024, was acquired by California-based Robinson Helicopter, which later formed Robinson Unmanned. Today, Ascent’s Aero Spirit drone appears on the Defense Department’s Blue UAS Cleared list and the company has received more than $2 million in Defense Department contracts.

“Going back years and years, a lot of the defense-tech founders were developing technology based on headlines,” Mullis said. “As the government is more open about what its capability gaps are, the real experts are able to put their hands up and build solutions for it.”

Manufacturing, not innovation, is the biggest hurdle

Coming up with a good idea is only part of the challenge. According to Mullis, the biggest obstacle facing small defense companies isn’t developing technology, but rather, producing enough of it.

A startup may successfully build a prototype, sell a handful of systems and convince the military it has a winning product. But when the government suddenly wants thousands, a small company or startup may lack the manufacturing capacity and capital needed to meet demand.

One example of how companies overcome that hurdle is the partnership between Georgia-based Kinetic Frames and Alabama-based Griffon Aerospace. Kinetic Frames is a relatively young company with a modest public presence — a simple website and Instagram page — while Griffon has received more than $400 million in federal contracts since 2009.

Together, the companies have produced and delivered more than 2,000 drones to the Defense Department, illustrating how smaller innovators can pair with established manufacturers to meet the military’s production demands.

“Scaling in order to meet the needs of the government is, I would say, one of the valleys of death [for a small company],” Mullis added.

Where defense giants fit in

At first glance, Drone Dominance appears to be dominated by startups, but Mullis said that doesn’t mean major defense contractors are ignoring the market.

Many of the industry’s largest “prime” contractors — companies that hold the government’s primary contracts — are already working on similar technologies through existing programs. Because those efforts are often backed by long-term government funding, he said, they don’t need the visibility that comes with participating in a public competition.

“The publicity matters for those small companies,” Mullis said. “It does not matter at all for those primes.”

That doesn’t mean established companies are absent from the competition, though.

Among the current finalists are publicly traded companies such as Kratos Defense & Security Solutions and Red Cat Holdings, both of which have built businesses around unmanned aircraft. Others represent partnerships between established defense manufacturers and newer drone developers, reflecting the increasingly collaborative nature of the market.

Mullis said acquisitions are often a natural outcome for successful startups, rewarding founders while helping proven technologies reach larger production scales.

“It’s good for the whole ecosystem because the founders are being rewarded for solving a problem,” he said, adding, “An acquisition is just an absolute success.”

Building the next generation of defense companies

Mullis said he thinks Drone Dominance is doing more than selecting companies for future contracts. He said the competition reflects a broader shift in defense acquisition by “encouraging and almost forcing collaboration.”

Earlier this year, the Defense Department announced the Drone Dominance Lethality Prize, which paired drone competitors with approved manufacturers capable of supplying standardized explosive payloads for one-way attack drones.

Even companies that fail to win contracts stand to benefit. “The best founders in the world wear failure like a badge of honor,” he said. “If you go to Drone Dominance, you get, if nothing else, real feedback on your technology.”

In an increasingly crowded drone market, that feedback should be considered valuable. “Even if they’re not selected, they’ll have their marching orders and they’ll know what to do to make it better,” Mullis said.