Shield AI is about to shake up the defense industry.
The company has secured $240 million in its latest funding round, valuing the company at $5.3 billion, and plans to unveil its next-generation autonomous fighter jet, known as the X-Bat, on Wednesday.
CNBC received exclusive access to the company’s headquarters ahead of the launch.
According to Shield AI, the unmanned aircraft is equipped with a jet engine, has a range of 2,000 miles, can fly up to 50,000 feet, has vertical takeoff and landing capabilities, and can operate in remote locations without runways, such as on a ship in the middle of the ocean.
X-Bat is piloted by AI software called Hivemind, developed by Shield AI. The company is currently betting much of its future on the development of artificial intelligence.
“This software is the foundation and foundation of everything we do,” said Shield AI CEO Gary Steele. “It will ultimately drive long-term growth for this business as it enables the development of this next-generation aircraft.”
Shield AI ranks 38th on the 2025 CNBC Disruptor 50 list.
The X-Bat combines some of the defense industry’s most advanced technologies into a single fighter aircraft. In the 1950s, experimental aircraft were being built with vertical takeoff and landing capabilities, but they required a pilot. Shield AI also used Hivemind to fly the F-16, one of the most widely used modern fighter jets, autonomously.
“But these two elements – AI maneuvering and vertical takeoff launch and landing – have never been combined in the form of a next-generation aircraft,” said Brandon Tseng, Shield AI President and Co-Founder.
The company says it plans to produce the X-Bat for about $27 million, a fraction of the typical cost of advanced military aircraft. For example, the F-35 fighter jet currently used by the U.S. government and its allies costs more than $100 million to manufacture.
Unlike Shield AI’s previous aircraft, the X-Bat is designed for combat and can be equipped with missiles.
“We fundamentally believe that by mitigating the risks that put people at risk, we can save military lives. What I’m particularly excited about is the mission that we’ve been working on and the opportunities that it unlocks from a business perspective,” Steele said.
Shield AI has been around since 2015 and has already won several major defense contracts. In 2024, the company won a nearly $200 million contract with the U.S. Coast Guard for a drone it manufactures called the V-Bat.
However, the startup continues to prove itself in a highly competitive industry. Although it has grown rapidly, the company is relatively small compared to companies like defense companies. lockheed martin and Northrop Grumman Anduril, its biggest startup competitor, is valued at more than $30 billion.
Despite generating billions of dollars in revenue, Shield is still not profitable. In 2023, Forbes reported that the company was on track to reach profitability by 2025. But that goal was thrown off track in 2023 when a U.S. serviceman severed part of his finger during a Shield AI drone landing demonstration.
“Throughout that process, we lost some trust from our customers,” Steele said. “But I think we’ve done a tremendous job of bouncing back from that and rebuilding momentum. And sitting here today, we’re very confident in our ability to deliver a safe and great product.”
Drones have been used in combat zones since the early days of World War I, but their prevalence has increased dramatically in recent years. The Ukraine war helped demonstrate to the public the scale and prevalence of drone use on today’s battlefields.
“As we have seen from the wars in Ukraine and the Middle East, they are absolutely tactically, operationally and strategically important weapons,” said Oleksandra Molloy, a drone expert and senior aviation lecturer at UNSW Canberra. “We’ve seen a lack of these systems in the United States, and we haven’t really seen a lot of American companies present, especially on the actual battlefield.”
But the US government is now trying to change that. In June 2025, President Donald Trump issued an executive order called “Releasing America’s Drone Domination” aimed at accelerating the commercialization of drone technology and integrating it into the national airspace system. Although no direct dollar amounts are attached to the order, the Big Beautiful Act allocates billions of dollars for unmanned aircraft systems and AI development.
“We need to strengthen our defense industrial base using the very same development tools, infrastructure, and pipelines that Shield AI used to enable AI autonomy,” Tseng said. “We work directly with the world’s leading defense contractors. We want to see them be very successful in building AI and autonomy, because at the end of the day, that’s what warfighters need. That’s what the United States and our allies need.”
Watch the video to learn more about how Shield AI is making a name for itself in defense.
