Pentagon Bets Its Drone Arsenal On Racers, Hobbyists, And Two Ukrainian Firms

The Pentagon is staking the next generation of American combat airpower on a company that once analyzed grass on golf courses, a firm with roots in aerial light shows, and a startup run by a 23-year-old former drone racing world champion. These are not the defense primes that have built U.S. weapons for decades. They are the eclectic field competing in Drone Dominance, the 18-month, $1.1 billion contest the Department of War launched this year to flood the force with cheap, expendable attack drones.

The prize is a share of $1.1 billion in contracts and the chance to supply roughly 300,000 one-way attack systems by the end of 2027. The ambition behind it runs far larger. Next year’s defense budget asks for $54.6 billion to fund a dramatically expanded drone-warfare command, money that would turn a fringe procurement experiment into one of the biggest bets in the Pentagon’s portfolio. A new round of the competition is scheduled to begin this month, and the list of contenders looks nothing like a traditional bid sheet.

I have watched this program since the Department of War issued its first request for solutions in December, and the through-line has stayed consistent: the people who grew up flying first-person view quadcopters for sport are the ones the military now wants building its strike drones.

An Arms Race Run By Former Hobbyists

The competition draws an unconventional mix of vendors because the skills the Pentagon wants did not come from the defense industrial base. They came from the consumer and racing worlds, where builders learned to make agile, low-cost airframes years before the military went looking for them. The Washington Post reported that the field includes a company that used drones to monitor golf course conditions, another tied to a firm that stages aerial light shows, and two Ukrainian manufacturers with combat experience. At the front of the pack sit Skycutter, a British firm partnered with a battle-tested Ukrainian maker, and Neros, founded by Soren Monroe-Anderson, the former racing champion.

Monroe-Anderson’s pitch leans directly on his racing background. He described to the Post how the maneuverability needed to carve sharp turns around a racecourse translates into precision on the battlefield, letting an operator place an explosive inside a two-foot target box rather than simply hitting the tank. That is the bet the whole program rests on: that hobbyist reflexes and consumer-grade engineering can be redirected into weapons faster and cheaper than a prime contractor can manage.

I profiled Neros and Monroe-Anderson in detail last November, tracing how two people in their twenties built a company now holding more than $121 million in defense work after one of them flew to Kyiv to learn from Ukrainian operators directly. The company has since delivered its first kits under a separate U.S. Army contract ahead of schedule. The arc from racing league to defense contractor is no longer an outlier. It is the template the Pentagon is funding.

The Gauntlet Has Already Reshaped The Field Twice

Drone Dominance runs as a series of open competitions called Gauntlets, each one a live evaluation where military operators fly competing systems through mission scenarios rather than judging them on paper specs. The program began with Gauntlet I at Fort Benning, Georgia, in early 2026, where the 25 invited companies competed and 11 advanced to share an initial $150 million order for 30,000 drones.

Skycutter topped that first leaderboard with 99.3 points, with Neros second at 87.5, a result DroneXL covered when the scores went public. The second Gauntlet has expanded sharply. According to Inside Unmanned Systems, the Phase 2 qualifier field grew to 48 companies fielding roughly 78 distinct drone designs, a dramatic jump from the 18 originally planned for the round. The Pentagon will not eliminate vendors between phases, an unusual design choice meant to keep companies that stumble early in the running for later contracts.

The Defense Innovation Unit also ran a separate Lethality Prize Challenge in May, seeking cheap, mass-producible warheads for Group 1 drones weighing 20 pounds or less. Breaking Defense reported that Bravo Ordnance, Kela Defense, Kraken Kinetics, Mountain Horse, and Northrop Grumman won, with the five payloads placed on a preferred munitions list shown to all Gauntlet II applicants. Northrop was the only traditional prime in the group. The rest are the same kind of upstarts the program was built to attract.

Ukraine And Iran Wrote The Doctrine

The program draws directly from conflicts in Ukraine and the Middle East, where drones costing a few thousand dollars have overwhelmed air defense systems that spend millions per intercept. Defense officials have framed the effort as a doctrinal break, moving away from small numbers of expensive platforms toward mass deployment of cheaper, software-enabled systems that can operate in coordinated swarms.

The math is the entire argument. Ukrainian troops have used racing-derived FPV drones to hunt tanks across trench lines, and Iran has used drones to strike beyond its borders and harass shipping in the Strait of Hormuz even with a large U.S. force present. As DroneXL has tracked across this year, a soldier with a $300 controller and a $500 payload can disable a multimillion-dollar armored vehicle, and that asymmetry only deepens as the drones get cheaper.

The budget reflects the scale of the shift. The Defense Autonomous Warfare Group, the office at the center of the drone push, received about $225 million in fiscal 2026. The fiscal 2027 request seeks $54.6 billion for the same group, a figure that exceeds the entire Marine Corps budget request and sits inside the reconciliation portion of a $1.5 trillion defense proposal. I broke that line item down when the FY27 request landed in April, where the DAWG increase registered as the largest year-over-year jump of any program in the budget.

The Pentagon Is Weighing Ownership Stakes, Not Only Orders

Procurement contracts are only one half of the strategy. The Pentagon is also in advanced talks to provide direct financial support to domestic drone makers through its Office of Strategic Capital, a lending office created under the Biden administration to fund companies tied to national security supply chains. The Wall Street Journal reported that the proposed deals could combine loans and equity, giving the U.S. government partial ownership in the companies it backs.

The firms identified for possible funding are Performance Drone Works, Sequoia Capital-backed Neros Technologies, and component supplier Unusual Machines. The goal is not to buy finished drones but to underwrite the production ramp the program demands and to build a supply chain free of Chinese components. I covered the equity proposal in full when the Journal broke it, including the conflict-of-interest questions raised by Donald Trump Jr.’s role as a shareholder and advisory board member at Unusual Machines. An equity stake is a bet on the company itself, which is a different posture than the Pentagon writing checks for hardware, and it ties the government’s balance sheet to the survival of firms that earlier domestic drone efforts could not keep alive.

DroneXL’s Take

The detail that keeps pulling my attention is the supply chain, not the spectacle. The story everyone is repeating is the fun one: golf-course-grass companies and light-show operators and a 23-year-old champion building flying bombs. The story that matters is whether any of them can ship at volume using parts made in the United States. Phase II of Drone Dominance bans motors and batteries from covered countries starting in August, which means the entire roster has to prove it can source domestically right as China controls an estimated 98 percent of rare-earth magnet manufacturing. The hobbyist origin story is charming. The brushless-motor sourcing problem is the one that decides this.

When I profiled Neros last November, the reversal that stuck with me was that Monroe-Anderson flew to Kyiv to learn drone manufacturing from a country producing roughly 4 million units a year while American makers were still untangling Chinese parts dependency. That gap has not closed. The U.S. built on the order of 100,000 small drones in 2025. The Pentagon now wants 300,000 from this program alone, on a domestic supply chain that did not exist at scale eighteen months ago.

Two things are worth watching, and neither is a prediction. First, the equity question: a Defense Department official told the Journal that any final decision would arrive in a formal announcement later, so whether Washington takes actual ownership positions or reverts to the conditional-loan structure the Office of Strategic Capital has used before remains open. Those are different instruments, and the difference determines whether this is a real break from the old playbook. Second, the Senate’s Subcommittee on Emerging Threats and Capabilities publicly challenged the $54.6 billion request on May 20 over the absence of a clear doctrine for autonomous weapons. Whether that scrutiny shapes the appropriation or fades is the kind of thing this program’s credibility now rides on. The drones are the easy part. The money and the magnets are not.

Sources: The Washington Post, Breaking Defense, Inside Unmanned Systems, The Wall Street Journal.

DroneXL uses automated tools to support research and source retrieval. All reporting and editorial perspectives are by Haye Kesteloo.