- Shield AI builds autonomous drones and AI-powered software for the military.
- Cofounder Brandon Tseng says the US needs more affordable, intelligent drones to compete globally.
- Global interest in cost-effective, autonomous drones is growing with deals in Japan and Ukraine.
Brandon Tseng was betting on AI in the military long before it became venture capital’s latest craze.
The former Navy SEAL, who served in Afghanistan, cofounded defense tech unicorn Shield AI in 2015 by asking himself one simple question: “What role do AI and autonomy play in the military of 2035?” he told Business Insider.
A decade in, the 900-plus-person startup is riding a wave of demand for cutting-edge military tech. With the changing of the guard at the White House, there’s even more optimism. While nominee for Secretary of Defense, Pete Hegseth wrote that “technology is changing the battlefield” and pledged to prioritize such modernization.
Fresh off a $240 million fundraise at a $5 billion-plus valuation and a leadership shakeup — Tseng’s brother and Shield AI cofounder Ryan stepped down as CEO last week, handing the reins to former Splunk chief Gary Steele — Tseng is clear on how AI and his company’s technology can benefit the US and allied militaries.
“We need AI pilots,” Tseng said. “We need affordable drones. We can’t be losing $40 million, $100 million aircrafts to really cheap weapon systems.”
Tseng envisions a “hybrid force structure” for modern militaries: a few expensive assets, like fighter jets and aircraft carriers, “augmented by millions of more affordable, intelligent drones,” he said. This approach, he thinks, will reduce the military’s reliance on costly machinery and make it more nimble in areas with limited communication.
Tseng’s San Diego-based startup builds these kinds of autonomous drones, as well as an AI-powered military software called Hivemind, which enables drones to fly and make tactical decisions autonomously. Shield’s flagship drone, the V-BAT, carries out intelligence, surveillance, and reconnaissance (ISR) missions in contested environments — even when communications systems are jammed and GPS isn’t available — using Hivemind.
Last July, Shield AI clinched a nearly $200 million contract from the US Coast Guard to deploy its V-BAT drones, a push by the government to use drones to augment aircraft capabilities and to prevent the loss of costly warplanes to cheap enemy weapons.
The accuracy of autonomous drones is a major selling point for companies like Shield: AI-powered drones are three to four times more likely to hit their target than drones piloted solely by humans, according to a Ukraine war researcher.
Peter Tague, managing partner at the US Innovative Technology Fund, which participated in Shield’s most recent fundraise, agrees that cost efficiency and tech innovation are key to the military’s future. He also thinks that the Trump administration’s focus on military innovation is good news for companies like Shield.
“Even in the prior administration, we were seeing an increasing push to apply new commercial technologies to the challenges facing our national security community,” Tague wrote to BI in an email. “Under President Trump we have only seen these priorities accelerate.
“The US military needs numerous flexible platforms to deter our adversaries,” Tague continued. “Within the drone space specifically, this will range from the exquisite — and expensive — platforms traditionally built by the large defense primes through attritable, man-portable devices like those being built in the thousands in Ukraine.”
The push for autonomous, cost-effective solutions isn’t unique to the US. In January, Japan inked a deal to buy multiple V-BATs from Shield — marking the first-ever shipboard drone to be used by the Japanese navy. The deal reinforces governments’ rising interest in more cost-friendly, intelligent drones as the battlefield changes.
Shield AI has also done crucial business in Ukraine. In January, the company opened an office in Kyiv and began training Ukrainian drone operators on using the V-BAT. In 2024, Ukraine purchased about 10,000 AI-enhanced drones, according to the Center for Strategic and International Studies.
“Ukraine has said they’re building a million drones,” Tseng said. “China has said they’re building a million drones. I think that you’ll see the United States — under this administration — really make an effort to build millions of drones to augment our more exquisite capabilities.”
Investors pile into defense tech as founders face tough questions
The swelling demand for autonomous weapon systems encompasses more than Shield’s V-BAT, underscoring investors’ and the government’s commitment to emerging defense technologies.
Saronic, which makes autonomous surface vessels, quadrupled its valuation from $1 billion to $4 billion in just seven months with its Series C in February.
Despite investors’ growing appetite for defense tech, founders building at the intersection of AI and warfare are wrestling with tough ethical questions — chief among them: Should AI make life-or-death decisions on the battlefield?
The answer is clear for Tseng, who has faced those choices while serving in the military.
“It’s a very human thing to make those decisions,” he said. “I don’t ever believe that that should be ceded to AI or autonomy. … They should not independently be making the call whether to take human life. That belief is Shield AI’s policy. It is US military policy, it’s NATO policy.”
