The week defence-AI got priced

Russian Geranium-2 drones are falling apart in flight — panels, wingtips, and nose fairings detaching before reaching targets. UAS Vision reported on 4 May that Russia's hit rate is at its lowest since March 2025. The failures trace to a switch from the original Iranian engine to inferior Chinese Telefly powerplants and rushed pre-flight checks at Alabuga.

At $48,000 per airframe, pre-flight structural failure destroys the cost logic that made mass drone launches compelling for Russia. Read full version ↓

Anduril named its team for building America's space-based missile interceptors on 5 May, with Sandia National Laboratories — the US government's nuclear weapons physics lab — and four commercial space start-ups, inside a $3.2 billion Space Force contract pool awarded in April.

For the first time, a Silicon Valley company is leading a programme where the government's own nuclear lab works underneath it, rather than alongside the traditional defence giants like Lockheed Martin. Read full version ↓

The US Army selected AeroVironment's Switchblade 400 loitering munition on 4 May for its LASSO programme. The weapon has a 65 km range and can be deployed by a single soldier. The Army is requesting $110 million for FY2027, with a $1.2 billion ceiling through 2031.

That 65 km range is the significant figure: it more than sextuples the strike distance available to a ground unit without air support, changing what a standard army brigade can attack and from where. Read full version ↓

Kratos Defense beat earnings estimates on 6 May, reporting Q1 revenue of $371 million, but its stock fell 5.3% after the release. The market focused on production rate: Kratos is targeting 40 of its XQ-58 Valkyrie drones per year by end-2027, while competitor Anduril's Arsenal-1 factory already builds 150 Fury aircraft per year.

A 3.75-to-one production gap at this stage sets up a difficult comparison when Pentagon programme managers pick which autonomous-aircraft design to fund at scale. Read full version ↓

Red Cat Holdings reported Q1 2026 revenue of $15.5 million on 7 May, up 849% from $1.6 million a year earlier. A NATO member country ordered its Black Widow drone through The Alliance's purchasing agency; an Asia-Pacific country placed a separate order.

Red Cat also announced a partnership with Ukraine's state arms exporter for next-generation drone development. The company is still losing money — net loss of $26.6 million — and the 849% growth started from a very low base. Read full version ↓

Ukraine launched 347 drones at Moscow on 8-9 May, the eve of Russia's Victory Day parade. Russia said it intercepted all of them and shut down mobile internet across the city. Mayor Sobyanin confirmed 26 were intercepted specifically over Moscow.

A 347-drone salvo in a single night changes what Russia must plan to defend against. It was the second-largest Ukrainian aerial strike of the war, demonstrating a production and logistics capacity that did not exist a year ago. Read full version ↓

DroneShield formally appointed Hamish McLennan as a director on 1 May, with a one-year locked share grant worth A$200,000. The AGM on 29 May will be the first shareholder vote since the founders left in April, when the stock dropped 20%.

The appointment closes the governance gap opened by the dual departure. Whether institutional investors endorse both McLennan's chairmanship and new CEO Angus Bean's compensation at the AGM is the next test of market confidence in the post-founder leadership. Read full version ↓

Skydio committed $3.5 billion over five years to expand US manufacturing on 24 April, launching a SkyForge programme that invites component suppliers to co-locate near a new factory planned at five times the current size.

The bet is straightforward: US government demand for American-made drones has surged since Chinese-origin products were banned from federal procurement, and Skydio wants manufacturing scale as the durable competitive advantage before other domestic suppliers catch up. Read full version ↓

BAE Systems issued a May trading update guiding 7-9% sales growth and named drones and counter-drone technology as a growth priority for 2026. BAE gave no drone revenue figure, and the guidance matched analyst expectations for the broader defence sector.

BAE calling out drones without a revenue line reflects where the company is: repositioning its existing portfolio toward autonomous systems rather than a mature drone business generating standalone revenue. Read full version ↓