Shield AI website located on a laptop computer on Friday, February 13, 2026 in New York, USA.
Michael Nagle | Bloomberg | Getty Images
The U.S. government is partnering with defense technology startup Shield AI for more affordable drones to combat rising material costs during the war with Iran.
The Office of the Under Secretary of Defense for Research and Engineering announced Tuesday that it will integrate Shield AI’s autonomous Hivemind software to enhance the Low-Cost Unmanned Combat Attack System (LUCAS drone).
Shields said artificial intelligence software will allow the military to coordinate and adapt LUCAS drone swarms in rapidly evolving battlefield environments. This technology also allows the platform to operate, coordinate, and make decisions without human intervention.
“At the end of the day, it’s a win for the American taxpayer because it’s not only cheaper to destroy the target, but it’s also safer for the warfighter,” Shield co-founder and president Brandon Tseng said in an interview with CNBC. “In fact, they have the tools they need to go to the battlefield and make an impact.”
Shields and the Department of Defense did not disclose the financial details of the deal.
The U.S. government is introducing new technology to its war against Iran, as Middle Eastern countries’ low-cost Shahid drones destroy expensive military systems and reshape modern battlefields. Defense technology companies like Shield AI are offering solutions, but the tools have not yet been deployed at scale.
Lucas is one of the major exceptions, with the government looking to buy more in the market after its success in Iran.
The $35,000 drone, made by Arizona-based Speckleworks, is a copycat version of the Iranian drone that has wreaked havoc on data centers, embassies and airports.
Tseng predicts that cheaper, AI-powered military systems like LUCAS will eventually overtake legacy systems in the armament, but that transition could take more than a decade.
Hivemind is Shield’s flagship autonomous platform, serving as the AI pilot for unmanned systems. Customers include the U.S. government, defense technology contractors, and the Indian Army. The company has also integrated AI pilots into Ukraine’s one-way attack drones and completed the first flight test on one of Anduril’s combat drones in February.
“This means that everything we do in Ukraine will be done on a heavily used American platform,” Tseng said.
The defense technology market is soaring as President Donald Trump embarks on an ambitious military reindustrialization plan. These goals included scaling up defense manufacturing and shipbuilding and building a missile defense system similar to Israel’s Iron Dome.
This has led Silicon Valley investors to pour money into hot spots. Shield AI just raised a $2 billion funding round, valuing the defense technology company at nearly $12.7 billion and ranking No. 49 on this year’s CNBC Disruptor 50 list. Anduril, backed by Palmer Lackey, doubled its valuation to more than $60 billion last week.
Tseng expects the system to be fully operational within the next two months and then undergo military trials.
“No one in the world is faster at building, integrating, and putting AI pilots on the battlefield,” he said.
WATCH: A first look at Shield AI’s new AI-piloted fighter drone
