Shield AI, a US startup for autonomous aircraft software, will nearly double its valuation to 5 billion dollars with a new financing round. The San Diego company, which develops AI-based software for autonomous drones and aircraft, is raising around 200 million dollars from strategic investors such as Palantir, Airbus, and L3 Harris, according to people familiar with the matter.
Even venture capitalists like Andreessen Horowitz, Point72, and Riot Ventures will join the financing round.
Shield AI's core business is the "Hivemind" software, which enables unmanned aerial vehicles to operate without GPS, communication links, or human control. The technology is already used by leading defense companies that integrate it into their own aviation systems.
Companies invest in competitors when it is strategically sensible," said a person familiar with the financing. This shows the strong willingness of investors to incorporate Shield AI's autonomy technology into their programs.
The funding round takes place amid a heightened global security environment characterized by the wars in Ukraine and the Middle East as well as geopolitical tensions between the US and China. The US defense budget of $850 billion increasingly offers technology companies the opportunity to challenge traditional defense contractors such as Lockheed Martin, Raytheon, and Boeing.
It was recently revealed that Shield AI could become part of a consortium of defense technology companies that want to bid jointly for government contracts. In addition to Shield AI, heavyweights such as Palantir, SpaceX, and Anduril are also among the participants.
The designated U.S. Secretary of Defense Pete Hegseth emphasized the importance of competition and innovation to accelerate weapons development during his hearing in the U.S. Senate. "For the first time in generations, Silicon Valley is showing genuine interest in bringing its best technologies to the Pentagon," Hegseth said.
