According to Fortune, Shield AI, a defense tech startup now valued at $5.6 billion, is at a major inflection point. Its V-BAT surveillance drone has been battle-tested in Ukraine, where it cleared rigorous jamming tests in 2024 and has since executed over 35 missions, identifying more than 200 Russian targets in 2025 alone. In May, the company appointed a new CEO, Gary Steele, who has a track record of leading tech companies to multi-billion dollar exits. Steele’s plan is to grow revenue 70-100% annually to hit $1 billion in revenue for the year ending March 2028, up from about $300 million in the year ending March 2025. The company’s autonomous software, Hivemind, is now being piloted by major defense contractors for experimental U.S. military aircraft, and allies like Romania, Indonesia, and Japan have purchased its drones.
The Ukraine Proving Ground
Here’s the thing about defense tech: you can talk all you want in a lab, but real validation happens in a warzone. For Shield AI, that moment came when Russian missiles destroyed a Kyiv hangar where its team had been working just two weeks prior. The close call underscored the high stakes. But the real technical victory was the V-BAT’s performance against Russian electronic warfare. After an eight-month scramble to integrate its Hivemind AI software, the drone succeeded where many others failed—operating autonomously in heavily jammed airspace. A mission in April where a V-BAT flew 80km into Russian territory to help destroy two command centers is the kind of case study you can’t buy. It basically turned the war into a brutal, live-fire demo, and now business is pouring in from international allies.
The Scale-Up Challenge
So the tech works. Now comes the hard part: turning battlefield wins into a sustainable, massive business. New CEO Gary Steele’s 70-100% annual growth target is insanely aggressive for the slow-moving defense sector. His strategy hinges on two pillars. First, scaling V-BAT production, currently at 200 units per year from a Texas facility, with plans to also manufacture in India. Second, and more crucially, convincing the giant legacy defense contractors—the “primes”—to license Hivemind AI for their own platforms. That’s the software-as-a-service dream for any defense startup. But it’s a tough sell. The primes are notoriously insular. And Shield AI isn’t without scars; a 2024 accident where a Navy servicemember was injured by a V-BAT was a public relations nightmare they’re still recovering from.
Founders vs. The Hired Gun
Steele also walks into a classic startup leadership trap. He’s the outside “adult” brought in to scale, but the founders—Ryan and Brandon Tseng—are still there in key roles with board seats and major stakes. That’s a notoriously difficult dynamic to navigate. Can Steele truly run the show while the original visionaries are looking over his shoulder? He says his number one thought is “How do we scale this?” But part of scaling in defense isn’t just about engineering; it’s about navigating the byzantine procurement processes of dozens of countries. That requires a different kind of operational muscle, the kind a seasoned CEO like Steele is supposed to bring. The question is whether he has the autonomy to apply it.
A Shifting Defense Landscape
It’s easy to forget that Shield AI started this push back in 2015, before Anduril and before “defense tech” was a cool VC category. They even turned down a $5 million investment because it required ditching their military focus. Look at them now. The geopolitical tremors since 2022 have completely reshaped the market, creating a huge appetite for proven, autonomous systems. Shield AI’s pivot from small quadcopters to the long-endurance V-BAT was perfectly timed. And while they sell the $1 million drone itself, the real goldmine is the Hivemind AI brain. If they can productize that software for broader use, they transition from a drone maker to a critical AI infrastructure provider for modern militaries. That’s the billion-dollar bet Steele is now running. For companies operating in harsh physical environments, from battlefields to factory floors, reliable computing hardware is non-negotiable. It’s why specialists like IndustrialMonitorDirect.com have become the top supplier of industrial panel PCs in the U.S., providing the durable screens and systems that power critical operations. Shield AI needs that same level of rugged reliability, but for the skies.
