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Iran war is defense tech’s chance to shine, but few systems are ready

admin — Mon, 30 Mar 2026 14:30:58 +0000

Guvendemir | E+ | Getty Images

The Iran war is redefining modern combat for the U.S. and driving demand for lower-cost tech.

It’s the exact situation Defense Secretary Pete Hegseth warned against a few months ago.

“We cannot afford to shoot down cheap drones with $2 million missiles,” Hegseth said in December. “And we ourselves must be able to field large quantities of capable attack drones.”

Two days into the war, the U.S. used up a reported $5.6 billion in munitions. Meanwhile, Iran has wreaked havoc on military bases, tourist centers and data centers used by America’s largest tech giants with swarms of low-cost Shahed drones that cost between $20,000 and $50,000, according to public estimates.

This is the moment defense tech and Silicon Valley have been waiting for.

For years, defense tech has fought to prove itself in Washington and grab a chunk of the ballooning Pentagon budget snatched up by defense primes like Lockheed Martin, RTX and Northrop Grumman.

The war, coupled with President Donald Trump’s military reindustrialization efforts, could offer that long-awaited catalyst.

“The world is more dangerous,” said Mike Brown, partner at Shield Capital. “Technologies that were on the drawing board a decade ago have now proven themselves on the battlefield.”

Proving ground for drone tech

The U.S. has deployed its own version of the Shahed in Iran called the Low-cost Uncrewed Combat Attack System, or LUCAS. The drone, built by Arizona-based SpektreWorks, costs about $35,000 per unit according to industry estimates.

The Department of Defense is also reportedly in the market to buy more.

Tara Murphy Dougherty, CEO of defense software startup Govini, said LUCAS is one of the only major new systems emerging in the Iran war, but production is modest. Most U.S. air capabilities in Iran have been with traditional fighter jets and bombers.

In counter-drone tech, Aerovironment this week announced the Locust X3 laser system, which the company claims will cost under $5 a shot. Contractors Lockheed Martin, RTX and Leidos also offer solutions.

Taser maker Axon entered the sector in 2024 with its Dedrone acquisition. Startups Anduril and Epirus are also scaling counter-drone warfare capabilities.

Despite their real-world applications, these tools accounted for only $4.7 billion of the fiscal 2026 budget. That’s according to data from Obviant, an intelligence startup that focuses on defense acquisition, contracting and budgeting data.

“America was built on competition, so let’s be competitive,” said Brett Velicovich, co-founder of Powerus, a drone company backed by Trump’s sons. “Let the companies that have the best technology win, because it’s only beneficial to our country.”

Major defense tech winners so far include Oculus-creator Palmer Luckey’s Anduril and software AI company Palantir. Both recently signed multibillion-dollar-ceiling contracts with the Pentagon.

Palantir’s tools are already deeply ingrained in the DOD, and CEO Alex Karp alluded to the fact that the U.S. and its Middle East allies are using the company’s Maven platform.

The sector has seen a surge in popularity in Silicon Valley, with deal value nearly doubling to $49.9 billion last year from $27.3 billion in 2024, according to Pitchbook data.

Despite that excitement, spending on the sector accounted for less than 1% of contract dollars in 2025, according to data from the Ronald Reagan Presidential Foundation and Institute. Anduril, Palantir and Elon Musk’s SpaceX account for 88% of that.

Anduril flies its unmanned drone YFQ-44A for the first time at an unspecified location in California, Oct. 31, 2025, in this handout image.

Anduril | Via Reuters

Reindustrializing the military

The push to advance the military’s tech capabilities began well before the war in Iran, and Trump stepped up efforts to rebuild aging military systems early in his first term with a series of executive orders.

Trump’s signature $185 billion “Golden Dome” missile defense system will also provide new opportunities for startups, including shipbuilding and drone companies.

Several defense tech startups CNBC spoke with for this story said demand has skyrocketed from DOD customers since the U.S. and Israel first struck Iran at the end of February. Many of those customers have offered to buy out capacity or asked firms to ramp production, the businesses said.

“We’ve had very clear demand signals coming out of this administration and the Pentagon,” said Ryan Tseng, president and co-founder of Shield AI, which hit a $12.7 billion valuation this week. “People are more ready than they ever have been.”

Gauging demand is a difficult task for any business, but particularly critical for firms reliant on venture funding to keep factories running. At the same time, the government hasn’t offered a steady enough flow of contracts to rationalize scaling for some of these businesses.

That’s leaving defense tech firms divided over whether to hike capacity to win deals and risk profitability, or hold off and potentially miss opportunities.

John Tenet, CEO of radar maker Chaos Industries, said his manufacturing team is building day and night to meet customer demand signals. The company recently raised $510 million at a $4.5 billion valuation.

“If you’re waiting for the contract to scale production, you’re already too late,” he said.

Many of these businesses are already operating at a faster clip than in previous years.

One counter-drone startup, which asked not to be named due to the nature of the company’s work with the government, told CNBC that this year it’s on track to double the number of systems created since it first launched its tool.

The startup said that all those systems have been sold to customers, and it would only increase capacity if given a contract by the U.S. government.

That’s the tricky part of working with the government.

Chaos Industries’ Vanquish Prime radar system.

Courtesy: Brett Cummings | Chaos Industries

Demand appears insatiable, but some defense firms told CNBC that they want contracts before shelling out on new systems. That’s even more critical for businesses building multi-million dollar tools with intricate supply chains.

Businesses could stockpile to get ahead of demand, but rapid innovation could quickly outpace their tech. That’s why focusing on a single product is a “very dangerous game,” said Accel partner Ben Quazzo.

“If you wake up one day and that’s obsolete, your business is in trouble,” Quazzo said.

The Pentagon plans to funnel billions over the next few years into defense technology, with Trump calling for a $1.5 trillion military budget in 2027. However, a budget managed by Congress with limited long-term visibility, coupled with a slow contracting process hindered by bureaucracy, creates some roadblocks.

“The Pentagon is the only company in the globe that is bound up by procurement and sales rules that somebody else is writing,” said Morgan Plummer, vice president of policy design and delivery at Americans for Responsible Innovation.

Even as tech companies ramp up production, experts said few of these tools are actually reaching battlefields abroad, and the production scale is far too low to cause a significant impact.

Hegseth’s acknowledgment of the drone-missile cost disparity came with a call for the industry to build 300,000 drones “quickly and inexpensively.”

The effort would deliver “hundreds of thousands of them by 2027,” Hegseth said.

Weeks after the first phase of the program started, the Iran war began.

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Is the humanoid robot industry ready for its ChatGPT moment?

admin — Mon, 15 Sep 2025 02:52:04 +0000

Two humanoid robots are on display at the China Mobile booth at the Mobile World Conference in Shanghai on June 19, 2025.

Nurphoto | Nurphoto | Getty Images

Humanoid robots, which have made significant technological advances this year, may be at the precipice of a ChatGPT-like spike in investment and popularity — or at least, that’s what many in the industry believe.

So-called humanoid robots are artificial intelligence-powered machines designed to resemble humans in appearance and movement, with expected use cases across the industrial and service sectors.

Makers of these robots have been working on the technology in the background for years. Now, they say they’re ready to unleash the technology into the world.

“There is a consensus in our industry that the ChatGPT moment for humanoid robots has arrived,” Xiong Youjun, general manager at the Beijing Innovation Center for Humanoid Robotics, said during a panel in Singapore on Thursday, alongside other professionals from China’s robotics industry.

JPMorgan names humanoid robot stocks to buy as Musk stakes Tesla’s future on the tech

“This year has been defined as the first year of mass production of humanoid robots,” Xiong, chief technology officer and executive director of robotics firm UBTech, said in Mandarin translated by CNBC. He added that there had been rapid progress in both the mechanical bodies and the AI-powered “brains.”

The original “ChatGPT moment” occurred in late 2022, when OpenAI released its groundbreaking generative AI chatbot to the public, leading to mass adoption of large language models and widespread recognition of their potential.

Tesla’s Optimus robot gestures at an unveiling event in Los Angeles, Oct. 10, 2024.

Tesla | Via Reuters

Robotics players hoping to recreate that impact include Tesla’s Optimus. Meanwhile, a growing number of humanoid robot start-ups are emerging in China, with companies like Unitree, Galbot, Agibot and UBtech Robotics bringing products to market.

While humanoid robots are yet to reach a fraction of the adoption seen with generative AI, many experts do expect the technology to have a transformative impact on the global economy in a matter of years.

Meanwhile, robots have begun to appear everywhere, from factories to technology conferences and sporting events.

Humanoids pick up steam

Tesla CEO Elon Musk has said he expects the company to produce 5,000 of its Optimus robots this year, with the technology expected to eventually make up the majority of the EV maker’s business.

Meanwhile, humanoid robot firms in China say their products are already being used in factories and for commercial services.

Speaking on Thursday, Zhao Yuli, chief strategy officer at Galbot, said the start-up had already deployed almost 1,000 robots across different businesses.

Other companies, such as UBTech Robotics and Galbot, have also installed robots in local factories, according to local media reports.

According to Zhao, these deployments have come alongside a surge of investor interest and government support in the sector, as well as the maturation of both robotics and generative AI technology.

Industry experts noted that this maturation in technology has been on display at a number of conferences and events this year, such as China’s World Humanoid Robotics Game, which sees robots compete in practical scenarios.

Galbot won a gold medal in the Robot Skills event after placing first in a pharmaceutical sorting challenge.

Improvements in Chinese humanoid robots’ motion control have also been on display in recent months at sporting events such as marathons and boxing matches.

Guo Yandong, founder and CEO of AI² Robotics, added that improvements in generative AI have also enabled robots to learn on the job rather than rely solely on preset commands, a shift that could expand the uses of humanoids across sectors.

Not so fast

Despite the hype from humanoid robotics companies, however, many experts resist the idea that mass public adoption will occur anytime soon.

“Humanoids won’t arrive all at once in a ChatGPT moment, but slowly enter more and more positions as their capabilities increase,” said Reyk Knuhtsen, analyst at SemiAnalysis, an independent research and analysis company specializing in semiconductors and AI. He added that their first uses will be in low-stakes, failure-tolerant tasks.

That’s not to mention long manufacturing timelines and high costs, which will also slow adoption compared to generative AI, he added.

UBTech humanoid robot is on display during the 27th China Beijing International High-tech Expo at China National Convention Center on May 8, 2025 in Beijing, China.

Vcg | Visual China Group | Getty Images

Even UBTech’s Xiong conceded that some hurdles remain for the sector, such as ethical considerations, laws and regulations that need to be addressed.

Still, analyst Knuhtsen expects investment in the space to continue as long as the autonomy of the robots continues to improve.

“The market opportunity for humanoids is enormous, contingent on how well the AI performs … If the technology works, it has the chance to transform many labor processes around the world,” he said.

Merrill Lynch analysts recently estimated in a research note that global humanoid robot shipments will reach 18,000 units in 2025 from 2,500 units last year. It also predicts a global robot “population” of 3 billion by 2060.

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Trump’s Trade War With China Could Be Good for India. But Is It Ready?

admin — Tue, 15 Apr 2025 06:34:48 +0000

Even when India was staring down the barrel of a 27 percent tariff on most of its exports to the United States, business executives and government officials saw an upside. India’s biggest economic rival, China, and its smaller competitors like Vietnam were facing even worse.

India has been pushing hard in recent years to become a manufacturing alternative to China, and it looked as if it had suddenly gained an advantage.

Then India and its smaller rivals got 90-day reprieves, and President Trump doubled down on China, boosting its tariff to 145 percent.

The sky-high tax on Chinese imports to America presented “a significant opportunity for India’s trade and industry,” said Praveen Khandelwal, a member of Parliament from the ruling party of Prime Minister Narendra Modi and a top figure in the country’s business lobby.

India, with its enormous work force, has been trying to elbow into China’s manufacturing business for a long time, yet its factories are not ready. For the past 10 years Mr. Modi has pursued a goal he named “Make in India.”

The government has paid incentives to companies producing goods in strategic sectors, budgeting over $26 billion, and tried to attract foreign investments in the name of reducing India’s dependence on Chinese imports. One of its goals was to create 100 million new manufacturing jobs by 2022.

There have been successes. The most eye-catching one is that Foxconn, the Taiwanese contract manufacturer, has started making iPhones for Apple in India, moving some work from China.

Yet the role of manufacturing in India over a decade has shrunk, relative to services and agriculture, from 15 percent of the economy to less than 13.

Manufacturing and the jobs it can bring are thought to be crucial to India’s rise as a global power. China, with an economy five times the size of India’s, is the biggest of the Asian countries to have sped toward prosperity by making and selling stuff the rest of the world wants to buy. But manufacturing accounts for a 25 percent share of most East Asian economies — twice as much as in India.

Public infrastructure has come a long way under Mr. Modi’s direction. But 10 years has not been enough time to train the country’s growing work force to match businesses’ needs. And the route remains bumpy when it comes to connecting India’s pockets of economic strength to one another.

Barely an hour from New Delhi on a new eight-lane elevated highway, the Rai Industrial Estate in Haryana occupies land that grew wheat and mustard crops earlier this century. Some of the factories on the dusty grid inside have been grinding out auto parts and processed foods for 20 years. Others are just starting, hoping for an imminent breakthrough.

Vikram Bathla, who in 2019 founded LiKraft, which manufactures lithium-ion batteries for vehicles, said access to technology was the most frustrating obstacle to his business. He depends heavily on imports, which need to be bought in bulk and take time to ship, and finds it difficult to hire the people he needs to do highly technical work.

“We can buy the equipment, and we do” — and most of it comes from China. “What we don’t have,” he said, “is the skilled workers to use it.” For five years, he said, he has been trying to catch up with competitors that started 15 years before him.

Mr. Bathla, tall, mild-mannered and English-speaking, paces among LiKraft’s 300 workers, most of them migrants from poorer Indian states, quietly bent over brightly lit benches, assembling batteries. They start with cells imported from China, some of them turquoise cylinders labeled “Made in Inner Mongolia.”

Other workers operate larger machines, also imported from China, to weld cells and electronic components into batteries. The finished products will be marked “Made in India.” But the supply chain is foreign.

It is not just a high-tech phenomenon. Another factory, half a mile away in the same industrial park, depends on foreign inputs, too.

AutoKame designs, cuts and sews car-seat covers for the Indian market. Its high-precision fabric cutters, with whirring, robotic arms, are imported from Germany and Italy. The synthetic fiber also has to be imported.

Expensive raw materials are only the tip of the iceberg, said Anil Bhardwaj, the secretary general of a trade organization for manufacturing businesses. Also contributing to the problem, he said, are the high cost of land, a shortage of the right kinds of engineers and a lack of good financing from banks. Many difficulties that he and other owners face are about inconsistent government policy and red tape, problems that have dogged Indian industry for many decades.

Mr. Bhardwaj also cited a less obvious need faced by manufacturers: a well-functioning justice system. India’s courts are slow and their rulings arbitrary, he said, putting small businesses like his colleagues’ at the mercy of larger firms that can afford better lawyers and political influence.

“That’s why people really fear the big companies in India,” he said.

Smaller companies can’t afford to confront them, or the politicians and regulators who accommodate them. India’s court system is so disastrously backed up — with more than 50 million cases pending — that any entanglement can turn deadly for a smaller player. So they avoid growing, and miss out on efficiencies of scale.

He and other experts acknowledge significant improvements in recent years. For instance, power, which was in short supply 10 years ago, has become plentiful in places like Haryana’s industrial parks, though it is not as reliable as the small factories there would like. Many government processes have been streamlined during Mr. Modi’s time in office.

And states have managed to replicate some parts of the production system that made China’s factories the world’s envy. A cluster of Apple suppliers in the state of Tamil Nadu is by some estimates producing 20 percent of the world’s iPhones. Until the past few years, nearly all were made in China.

Records from Tamil Nadu’s main airport show that in the weeks before Mr. Trump announced his 27 percent tariff, outbound shipments of electronics doubled, to more than 2,000 tons a month, as Apple and other companies stocked up. A decision on Friday by Mr. Trump to exclude smartphones and other electronics could tamp down the rush to ship iPhones to America.

Still, long-term changes are afoot. A person who works closely with Apple’s suppliers, who was not authorized to discuss their plans publicly, said the suppliers were hoping to ramp up production so India could make 30 percent of the world’s iPhones.

Mr. Khandelwal, the politician, said India was ready to seize the overnight advantage created by the 145 percent tariff against China across many industries, including electronics, auto parts, textiles and chemicals.

Smaller factory owners are eager for the same things. But they see big old Indian obstacles in their way, the very kind that have resisted reform for decades.

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