The Pentagon on Tuesday named 25 defense manufacturers competing for its $1 billion Drone Dominance Initiative — a list mixing Silicon Valley startups with traditional military contractors in what industry insiders are calling a revolutionary shift in how America buys weapons.
The transformation has been swift and dramatic. The small drone industry “was literally in garages like five years ago” but has now moved into “very, very real, large-scale production,” said Amol Parikh, co-CEO of Doodle Labs, which supplies radio modules for seven finalists.
“A lot of folks who you would not traditionally expect to be in defense contracting now sort of have a seat at the table,” said Brendan Stewart, senior vice president of government affairs for Red Cat, one of the competing companies.
Red Cat exemplifies the garage-to-Pentagon pipeline. The company started as a Silicon Valley venture and is now publicly traded with a valuation over $2 billion.
Companies will advance to “Gauntlet I” testing in February, competing for approximately $150 million in prototype delivery orders. The military plans to field 30,000 small uncrewed aerial systems in 2026 — what Defense Secretary Pete Hegseth has called “capable attack drones.”
Mr. Hegseth has said the military will deploy “tens of thousands” of these drones to the services during 2026.
SEE ALSO: Pentagon picks 25 companies for $1 billion ‘Drone Dominance’ program
The initiative marks “one of those step changes in terms of how they approached putting this program out,” Mr. Parikh said, noting the Pentagon is “really stressing the system — by design — to force it to make this massive step up and evolution.”
Rather than relying solely on established prime contractors with long development cycles, the Pentagon is turning to startups and venture-backed companies specializing in uncrewed systems, artificial intelligence, software development and rapid prototyping.
The shift is also rebuilding American manufacturing. The Pentagon requires all drone components be U.S.-made, forcing domestic development of brushless motors and lithium batteries previously sourced from China.
“I’m really excited about the way that drone dominance was structured for that reason,” Mr. Stewart said. “Because it’s opening the aperture a little bit, and it’s forcing companies like some of the traditional primes to be a little bit more competitive, and frankly a little bit more innovative.”
The 25 selected companies include Vector Defense, Red Cat’s Teal Drones Inc., Performance Drone Works, Anno.AI, Ascent Aerosystems, Auterion Government Solutions, Dzyne Technologies, Ewing Aerospace, Farage Precision, Firestorm Labs, General Cherry Corp., Greensight, Griffon Aerospace, Halo Aeronautics, Kratos SRE, Modalai, Napatree Technology, Neros, Oksi Ventures, Paladin Defense Services, Responsibly LTD, Swarm Defense Technologies, Ukrainian Defense Drones Tech Corp., W.S. Darley & Co. and Xtend Reality.
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