Shield AI is trying to shake up the defense industry.
The company, which is valued at $5.3 billion after securing $240 million in its latest round of funding, is set to unveil its next generation, autonomous fighter jet known as the X-Bat on Wednesday.
CNBC got exclusive access to the company’s headquarters ahead of the launch.
Shield AI says the unmanned aircraft has a jet engine, will have a 2,000 mile range, can fly up to 50,000 feet and has the ability to take off and land vertically, enabling it to operate in remote locations without a runway — like on a ship in the middle of the ocean.
The X-Bat will be piloted by an AI software developed by Shield AI called Hivemind. The company is now hinging a lot of its future on artificial intelligence development.
“The software is a cornerstone and foundation for everything we do,” said Shield AI CEO Gary Steele. “It will ultimately be the long term growth driver of this business because it enables the development of this next generation aircraft.”
Shield AI ranks number 38 on the 2025 CNBC Disruptor 50 list.
X-Bat combines some of the defense industry’s most advanced technologies into one fighter jet. There have been experimental aircrafts built as early as the 1950s with vertical takeoff and landing capabilities but they required pilots. Shield AI has also used Hivemind to fly the F-16, one of the most widely used modern fighter jets, autonomously.
“But those two things — AI piloted and vertical takeoff launch and land — have never come together in the form of a next generation aircraft,” said Brandon Tseng, Shield AI president and co-founder.
The company says its on track to produce the X-Bat for around $27 million, which is a fraction of what advanced military aircrafts typically cost. For example, the F-35 fighter jet that’s currently in use by the U.S. government and allies, costs more than $100 million to produce.
Unlike Shield AI’s previous aircrafts, the X-Bat is designed for combat and can be equipped with missiles.
“We fundamentally believe we can save service members’ lives by reducing the risk that you have of putting people in danger,” ” said Steele. “What I’m particularly excited about is the mission we’ve been on, and the opportunity that it unlocks from a business perspective.”
Shield AI has been around since 2015 and has already landed some major defense contracts. In 2024, the company secured a nearly $200 million contract with the U.S. coast guard for a drone it produces called the V-Bat.
But the startup is still proving itself in a competitive industry. Although it has grown quickly, the company is relatively small compared to defense primes like Lockheed Martin and Northrop Grumman and its biggest startup competitor, Anduril, which is valued at over $30 billion.
Despite generating billions of dollars in revenue, Shield is not yet profitable. In 2023, Forbes reported that the company was on track to reach profitably by 2025. However, those targets were thrown off track when a U.S. service member had his fingers partially severed during a Shield AI drone landing demonstration in 2023.
“Through that process, there were some loss of confidence from customers,” Steele said. “But I think we’ve done a phenomenal job of recovering from that and rebuilding momentum. And today as we sit here, we’re very confident in our ability to deliver great products that are safe.”
Drones have been used in war zones as early as World War I, but their prevalence has grown dramatically in recent years. The war in Ukraine has helped show the general public the scale and prevalence of drone usage on the battlefield today.
“What we see from the war in Ukraine and the Middle East, they are tactically, operationally and strategically absolutely important weapons,” said Oleksandra Molloy, a drone expert and senior aviation lecturer at UNSW Canberra. “We have seen a lack of those systems from the U.S., and particularly, we have not really seen the presence of many American companies in the real battlefield.”
But the U.S. government is now trying to change that. In June 2025, President Donald Trump issued an executive order called Unleashing American Drone Dominance that aims to accelerate commercialization of drone technologies and integrate them into the National Airspace System. Although no direct dollar amount was attached to that order, the Big Beautiful Bill has allocated billions of dollars in unmanned aerial systems and AI development.
“We have to empower the defense industrial base with the exact same development tools, infrastructure and pipelines that Shield AI has used to make AI autonomy,” Tseng said. “We work directly with the major defense prime contractors of the world. We want to see them wildly successful building AI and autonomy, because at the end of the day, that’s what the warfighter needs. 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 the defense sector.
