Shield AI plans to make technology for detecting and countering drones a central part of its long-term strategy through its acquisition of Echodyne, the company said in an interview.
The purchase takes Shield AI into a market where it expects growth. The transaction exceeds $5 billion, Bloomberg Technology reported in the interview published Nov. 5.
“This will be a core part of our overall long term strategy as a next generation defense tech company,” Shield AI said. Echodyne supplies technology used to detect and counter drones.
Shield AI sells artificial intelligence-enabled software systems to U.S. and allied militaries. Conflicts around the world have sustained strong demand for its products, the company said.
The company expects changes within the U.S. government but sees its ability to deliver military technology at lower prices as a reason for continued support. Its case rests on providing different capabilities and better value.
Asked whether Democratic control of Congress would change the outlook, Shield AI said it did not anticipate a radical shift in thinking. It described support from both sides of the political divide.
“We're delivering next generation technology,” the company said, describing its aim as putting that technology into the hands of military personnel. It presented that purpose as relevant regardless of which party holds power.
Shield AI declined to discuss its work relating to the conflict in Iran when asked how an end to that war would affect its business. It instead described demand across the U.S. military and foreign armed forces.
The company linked that demand to systems that use artificial intelligence to produce different results at different prices. It described Echodyne's drone-detection capabilities as a further investment in that approach and predicted rapid growth for the market.
Much of Shield AI's work is defensive, the company said when asked how it would adapt to a more peaceful world. Echodyne also serves civilian organisations with public-safety needs alongside its military customers.
The company expressed confidence that demand would continue even with fewer conflicts. It did not give a timetable or quantify the growth it expects from the acquisition.
Shield AI is raising $2.5 billion, Bloomberg reported. Its valuation is more than double the $12.7 billion level attached to a $2 billion fundraising earlier this year.
Shield AI described strong investor interest in defence technology, linking it to expectations of change in military spending and capabilities. It said its battlefield results and financial performance had helped attract interest, without providing financial figures.
