22JUN

DIU ranks Gauntlet II drone winners

3 min read

13:56UTC

The Pentagon's contest for cheap attack drones named its winners and about 60,000 drones of orders, while the first round's deliveries ran about 60 per cent complete.

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Key takeaway

Gauntlet II named its winners while Gauntlet I suppliers had delivered only about 60 per cent of orders.

The Defense Innovation Unit (DIU), the Pentagon's office for buying commercial technology, ranked the winners of Gauntlet II on 18 September⁠¹. Gauntlet II is the second round of the Pentagon's fly-off contest to pick suppliers of cheap attack drones. DIU named five vendors in each of two categories, deep strike and close-quarters work, and officials put orders at about 60,000 drones. The round had been cut to 19 finalists in July.

Neros, the only firm on both lists, announced a 14,000-drone order worth more than US$100m on 30 September⁠². In an earlier Pentagon attack-drone buy, only 43 per cent of the Archer drones Neros shipped cleared acceptance.

The first round's record sits underneath the new orders. Vendors had delivered 13,440 of the 22,320 drones ordered in Gauntlet I by 25 August, about 60 per cent, according to Inside Unmanned Systems as relayed by DroneXL⁠³. Only three vendors delivered in full, one of them Ukrainian Defense Drones. The roughly 8,880 drones still undelivered from Gauntlet I are being moved to the firms that ship.

AeroVironment, which reported record full-year revenue of US$1.98bn in June, shows the same gap from the supplier's side. On 9 September it said its funded backlog, the value of signed and funded orders not yet delivered, reached a record US$1.5bn at 1 August, up 37 per cent on a year earlier⁠⁴. First-quarter revenue rose 6 per cent, to US$480.5m.

Deep Analysis

In plain English

The Pentagon runs contests called Gauntlets to choose which companies will supply cheap attack drones. Firms fly their drones in tests, and the best performers win orders. The second contest has named ten winners, and the military plans to buy tens of thousands of drones from them. Companies that won the first contest have struggled to build and deliver drones fast enough, so the Pentagon is moving orders to the few firms that have delivered on time.

Deep Analysis

Root Causes

Most of the ten Gauntlet II winners are young firms with limited factory capacity. A contest can pick the best design in weeks, but building thousands of drones a month needs parts, staff and floor space that most entrants lack.

The programme's own rules sharpen the pressure. Moving undelivered units to vendors that ship punishes delay quickly, and it also hands extra volume to firms that already have the most capacity.

What could happen next?

Risk
Reallocation to on-time vendors may leave US small attack-drone supply concentrated on Neros.
Consequence
Gauntlet 2.5 and Gauntlet 3 give firms that failed to place a fresh chance within months.

Source Landscape

This story draws on neutral-leaning sources

Primary parallel: Gauntlet's first stage at Camp Grayling in June tested 49 companies and 79 drones, with price ceilings of US$5,500 for long-range and US$4,500 for close-quarters airframes. DIU then cut the field to 19 finalists and now to ten winners, a funnel in which each stage narrows supply.

Counter-parallel: Japan's interceptor trial in August left a single survivor out of dozens of proposals, making that maker the default supplier. DIU's two boards of five keep more firms in play, though the reallocation rule still rewards whichever of them ships on time.

By Lowdown's calculation, Neros's order works out at more than about US$7,100 a drone, and Swarm Defense Technologies' 4,000-drone order of at least US$25m at more than about US$6,250. Both sit above the Gauntlet II airframe ceilings, which suggests the orders include kit or support beyond the aircraft; neither firm has published a breakdown.

AeroVironment's results show where the money is heading at the larger end of the market. Its first-quarter bookings reached US$0.7bn for a book-to-bill ratio of 1.4, and gross margin rose to 26 per cent from 21 per cent.

Consensus view: DefenseScoop reports the Defense Innovation Unit widening the contest rather than slowing it, with a 'bomber' Gauntlet 2.5 due next month and Gauntlet 3 about six months after Gauntlet II ends. On that view a rolling series of fly-offs keeps new makers entering and keeps prices under pressure.

Counter-view: Inside Unmanned Systems' Gauntlet I figures, relayed by DroneXL, show only Neros, Ukrainian Defense Drones and Griffon Aerospace completing their orders. Volume moved from late vendors to those that shipped, including 800 drones reassigned to Neros, so the contest is concentrating real orders on a few firms.

Key tension: Whether repeated competitions widen the supplier base, or whether reallocating orders to the firms that deliver leaves the Pentagon dependent on two or three makers.

Sources:DefenseScoop·DroneXL·AeroVironment (SEC filing)

Mentions:Defense Innovation Unit →Gauntlet II →Neros →Drone Dominance →Gauntlet I →Defense Drones Tech Corp →AeroVironment →DroneXL →Camp Grayling →DefenseScoop →Japan →Pentagon →Inside Unmanned Systems →Griffon Aerospace →Swarm Defense Technologies →

First Reported In

Update #18 · Four EU states skip tenders on drone defence

DefenseScoop· 1 Oct 2026

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Causes and effects

Caused by

Pentagon orders 120 drones in five weeks

Gauntlet II's 19 finalists from July were ranked into ten winners.

Occurred 1 Jul 2026

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Pentagon's drone buy lands a third short

Gauntlet I delivery shortfalls led to undelivered volume moving to firms that ship, including Neros.

Occurred 7 Jun 2026

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This Event

DIU ranks Gauntlet II drone winners

The Pentagon is ordering attack drones faster than its suppliers have so far delivered them.

Led to

Hegseth plans a four-star drone command

Drone Dominance and Gauntlet are among the efforts the new command is meant to scale.

Occurred 30 Sept 2026

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Thunder Tiger delivers Gauntlet I drones

Gauntlet deliveries stood at about 60 per cent in late August before Thunder Tiger completed its order.

Occurred 16 Oct 2026

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Different Perspectives

Cross-border power traders

The France-Germany day-ahead spread flipped from a EUR 17.20 German premium on 1 August to a EUR 4.15 French premium on 3 August, the same day French curtailment peaked. They cannot yet attribute the flip to curtailment alone, since a like-for-like overnight comparison shows French nuclear output rising while wind fell and demand returned on the weekday step.

EDF

River-cooling limits took 7.6 GW, 12 per cent of its fleet, offline on 3 August, the highest curtailment since the heatwave began, with an easing forecast to 4.3 GW on 4 August and 3 GW after. It manages the cut as a recurring seasonal constraint, expecting it to lift with river temperature, not repair.

Gasunie

TTF, the Dutch hub it operates, drifted to roughly EUR 55 to 58 per MWh across the window, staying inside its recent range through both the German spark reversal and the French curtailment. It reads a flat hub price as evidence that neither event this window carried enough weight to move the fuel leg on its own.

German gas-fired generators

Record German solar of 18,761 MW on 2 August pushed the clean spark spread to minus 18.48 EUR/MWh, a loss-making day, before it returned to plus 16.20 on 3 August. They now price dispatch against post-solar residual load rather than wind alone, since the sign flipped inside 48 hours on unchanged fuel and carbon costs.

European Commission (DG Energy)

Its implementing-measures register logged transposition notices from only Portugal and Slovakia against Wednesday's Article 94 deadline for Directive (EU) 2024/1788, with 25 states silent. It expects the register to fill only gradually, since filing routinely lags legislating and any infringement track against non-notifying states runs on a slower clock than the deadline itself.

Spain's LNG terminal operators

Spain's 9,145 GWh terminal inventory is the largest single stock in the EU LNG network, an option value that can reroute cargoes wherever the winter strip pays best rather than a cavern gas obligation tied to a fixed date. That flexibility matters more as Germany's cavern shortfall pushes more of the winter security question onto import infrastructure.

Written with AI from Lowdown's published reporting. Not individually reviewed by an editor. Editorial standards.