Pentagon plans a drone army to counter China’s market dominance
The Washington Post December 1, 2023
The war in Ukraine has shown the value of low-cost drone swarms in modern warfare. Now the Pentagon is planning to build an army of thousands of small, cheap drones in hopes of spurring U.S. drone production and cutting China’s dominance of that market.
American drone makers are hoping the Pentagon’s “Replicator” program will give a shot in the arm to U.S. manufacturing. Defense experts say there is a need for Washington to build a drone supply chain that doesn’t run through China, due to the small but real risk of a future war between the two rivals.
“We have learned an enormous amount as a department about how to mobilize the industrial base in new ways in order to support the needs that we’re seeing, for example, in Ukraine,” Doug Beck, director of the Pentagon’s Defense Innovation Unit, said at a news conference Thursday. The rising challenge from China is an impetus for the program, he said.
The Pentagon is aiming to produce “thousands” of drones through Replicator as early as the end of next year.
Paul Scharre, executive vice president at the Center for a New American Security, who previously worked at the Defense Department developing its autonomous weapons policy, called the timeline challenging, given the lengthy process of wrangling defense budgets.
“The goal is a bold and ambitious one,” Scharre said. “The clock is ticking.”
While “Replicator” most famously refers to the fictional machine from the “Star Trek” television series that conjures things out of thin air, DIU officials say the name is meant to reflect that they are developing a process they can “replicate” in other industries. Beck said drones are their first target - “Replicator One” - but they plan to turn to other technologies.
China overwhelmingly dominates the global consumer drone market, with Shenzhen-based DJI occupying some 70 percent market share with its budget-friendly flying robots. U.S. officials say it’s prudent to develop alternate sources, with the U.S.-China relationship expected to remain in tense competition for years to come. In a worst-case scenario of a war on the island of Taiwan, a geopolitical flash point off the coast of China, the U.S. military would want to send in drones that aren’t made in China.
Gregory C. Allen, former director of strategy at the Defense Department’s Joint Artificial Intelligence Center, said the U.S. military has long procured small numbers of top-of-the-line drones, such as the $220 million Global Hawk. But the war in Ukraine has shown the utility of also having large numbers of low-cost drones that can be sent on missions they are unlikely to return from, he said.
“It’s not just a doubling down on drones, but a re-envisioning of what the cost-per-performance paradigm needs to be for drones,” said Allen, now a director of an AIcenter at the Center for Strategic and International Studies, a Washington think tank.
Ukrainian soldiers have been sending droves of small, cheap, commercial drones into battle, some for reconnaissance, others rigged with bombs for one-way flights. The drones - many of which are made in China and cost about $2,000 each - have succeeded in inflicting millions of dollars of damage to Russian military equipment. But they also are susceptible to Russian jamming of their communications signals. The U.K.-based Royal United Services Institute has estimated that Ukraine is going through 10,000 drones a month.
Russia has been racing to produce its own army of self-detonating drones based on Iranian technology by summer 2025, The Washington Post has reported.
“Drones used to be toys. Now everyone’s realizing how important they are,” said Jeff Thompson, founder of Salt Lake City-based drone maker Red Cat, who recently returned from a trip to Ukraine and said some of his company’s drones are in use in the war there.
U.S. military planners are increasingly favoring a strategy of building large fleets of cheap, autonomous drones that can supplement human-flown aircraft. “Loyal wingman” drones are being developed to fly alongside expensive new jets like the F-35. “Loitering munitions” - drones that can circle the battlefield and divebomb targets on their own - are being developed by numerous countries, and have already seen combat in Libya, Armenia and Ukraine.
The push is opening up opportunities for smaller tech companies to compete with the giant military contractors that have dominated the industry for years. On Friday, military tech start-up Anduril unveiled a new jet-powered drone called Roadrunner that can be launched to intercept enemy planes, and return to a base if it doesn’t end up being used against a target.
“This radical shift in thinking allows for large-scale defensive launches at extraordinarily low cost,” Anduril said in its announcement.
There is still considerable skepticism about the Replicator program in Washington, partly because it lacks its own budget. It’s also unclear if the Pentagon will buy enough drones on an annual basis to sustain an expansion in the U.S. industrial base.
“It could be an inflection point,” said Loren Thompson, a defense consultant with the nonprofit Lexington Institute. “Or it could just be the latest fashionable flourish where we get a little carried away without really understanding what we’re trying to accomplish.”
Rep. Mike Gallagher (R-Wis.), chairman of the House Armed Services subcommittee on cyber, information technologies and innovation, is among those who have raised the concern that without a budget, Replicator might cannibalize other programs. In a statement, Gallagher said the initial announcement of Replicator in August “left much to be desired,” but a “cautious level of optimism” has since developed. He said it remained worrisome that the Pentagon’s drone procurement had been so slow that a new initiative seemed warranted.
“We must also address what seems to be a lingering problem within the Department of Defense: that it takes intervention from senior Pentagon leadership to quickly and effectively deploy critical technologies to the battlefield,” he said.
The project is being directed by the DIU, a unit of the Defense Department established in 2015 with the mission of helping the military assimilate leading commercial technologies. Allen described it as akin to a diplomatic organization between the Pentagon and Silicon Valley, operating on a shoestring budget, but with the remit to make big deals happen. “It’s almost like the Department of Defense’s embassy in Silicon Valley,” he said.
Former DIU director Michael Brown said the unit had begun working with domestic manufacturers to make small drones with stronger cybersecurity and U.S.-made key components during his tenure, 2018 to 2022, but that the companies lacked consistent, large-scale orders.
“The part that was missing from that was a large demand signal from the military,” he said. He said the Replicator program is how Deputy Secretary of Defense Kathleen Hicks, who is the Defense Department’s primary proponent of the idea, is trying to “create that demand signal.”
Just how much momentum the Replicator program gets may depend on funding. The House of Representatives has proposed a new $1 billion fund for DIU as part of defense appropriations for 2024, but the Senate has not agreed to it. If DIU doesn’t secure an expanded budget, it will need to rely on reprogramming funds from other parts of the defense budget.
U.S. drone makers have been vying for a spot in the Replicator program, even as many details of the initiative remain unclear.
“It’s very compelling,” Red Cat’s Thompson said. “I hope we’re in there.”
Thompson said his company is in the process of selling its consumer division that manufactures in China, and all of their remaining manufacturing will take place at a new factory in Salt Lake City, which began production in September. He said the factory has a little under 100 workers, with the capacity to produce thousands of drones a month. Their drones start at $14,800 now, a price point that he said could be lowered with larger-scale production.
Industry executives say it’s unlikely that U.S. drone makers will be able to match the prices of China’s DJI, which has benefited from investments by China’s government, as well as lower labor costs. DJI’s popular “Mavic” line of consumer drones starts at $1,599. DJI did not respond to a request for comment.
The Arlington, Va.-based drone maker AeroVironment also says it’s hoping for a spot in the program. “We have not only invested in the maturation of such disruptive technologies, but also in the production capability and capacity to make them in large volumes at the levels of reliability that the U.S. DoD expects,” AeroVironment CEO Wahid Nawabi said in a statement.
Mark Valentine, president of global government for California-based drone maker Skydio, said what U.S. drone makers need more than anything is consistent demand, so they can plan their investments and parts orders.
“Many of these things are not trivial as far as expenses go,” he said. “If you run on the high side, you end up spending a lot of money for these long lead items, and they’ll sit on the shelf. On the other side, you could be in a position where you’ve got a lot of demand coming in that you can’t meet.”
Small drones are also expected to be used more widely across civilian sectors in coming years, though it is uncertain just how big the market will be. Doron Kempel, CEO of New York-based personal security company Bond, said police in Coral Gables, Fla., are using their company’s drone for security at events like Fourth of July gatherings.
A bill was introduced in the House last month that would prohibit the federal government from purchasing drones manufactured in China and other countries deemed national security threats. The revelation that the FBI was buying and using DJI drones caused consternation in Washington last year.
The United States saw a spate of drone start-ups pop up a decade ago when Amazon founder Jeff Bezos declared ambitions to deliver packages by drone across the nation (Bezos owns The Post. Interim CEO Patty Stonesifer sits on Amazon’s board). Many of those start-ups have since died out in the face of stiff price competition from DJI and as widespread drone-based deliveries have not materialized.