Vast sums of private capital fueling the U.S. military’s drone drive

TAMPA, Fla. — A “golden age of private capital” is driving the development and production of the small unmanned systems key to the Pentagon’s Drone Dominance Initiative, a top Defense Department official told a major military conference Wednesday.

Speaking at the Special Operations Forces Week convention, Emil Michael, the Pentagon’s under secretary of war for research and engineering, said a major influx of private money is reshaping the nation’s drone industry. This, in turn, is opening new pathways for the military to acquire the huge numbers of cutting-edge drones it needs to stay ahead of adversaries such as China.

“We’re at a golden age of private capital. … It’s never been this big before, so our responsibility as a department is to make sure the ones who should win [Pentagon contracts] do win,” Mr. Michael said during a panel discussion.

Mr. Michael was referring to the Pentagon’s Drone Dominance program, a push to buy hundreds of thousands of small attack drones by 2027. The program provides a stage for competing bids from industry suppliers to offer small, lethal and expendable drones manufactured through U.S.-based supply chains.

Mr. Michael said that the Russia-Ukraine war has proved that those small drones — many of which are on display on the SOF Week convention floor — are crucial in modern combat.

“Drone Dominance was an outgrowth of looking at what was happening on the Russia-Ukraine battlefield and how it’s turned into a robot-on-robot, drone-on-drone, war,” Mr. Michael said.

In Silicon Valley and in key tech and industrial hubs across the country, private capital is flowing into the sector, helping to bankroll the growing number of firms aiming to be a part of that specific program and the military’s broader push to incorporate drones in huge numbers into its operations. That money is also helping companies race ahead in drone technology with the goal of keeping the U.S. — the military and its private-industry partners — at the cutting edge of the sector, ahead of adversaries such as China, Russia, Iran and others who have poured huge amounts of money into their own drone programs.

Drones and other robotics programs are attracting vast sums of private money from venture capital firms and other outfits. The robotics venture capital sector saw nearly $28 billion in investments across more than 1,000 separate deals in 2025, according to the recent Robotics & Physical AI VC Trends report from the financial research platform PitchBook. Those investments include other robotics and drone applications outside of the military realm.