Russia's Drone Problem Has Only Just Begun

This is footage from the skies of Donetsk, a region of Ukraine illegally annexed by Russia. It's shot from the perspective of a Ukrainian controlled drone. You can see it engage another drone, this one controlled by Russian operators. The Ukrainian drone rams the Russian drone and causes it to crash. This is the first ever documented drone dogfight, and it didn't take place between military drones. They're DJI Mavics, the same drone Casey Neistat uses to shoot his vlogs. Small cheap drones like these are already transforming the way wars are fought. And as more countries use them, they will change the world. But the majority of them aren't made in friendly places. They're made in places like China. This creates huge national security risks for the US and its allies. But how did this happen? How did the US Lose its lead in drones? And what are we going to do about it? To understand how cheap drones are changing war, we need to look at how they're being used in Ukraine. In many ways, Ukraine is an attritional 20th century style war. Tanks, artillery, foxholes, that kind of thing. But traditional tools are being augmented by drones. Now, it's hard to get precise numbers, but some experts say there are as many as 6,000 commercial drones like the Mavic being used by both sides of the war. And that's in addition to hundreds of military grade drones. Early on in the war, the US Sent Ukraine hundreds of small military drones called Switchblades. And they followed up with deliveries of Puma drones and the never before seen Phoenix Ghost. Drones are everywhere in Ukraine because they can do so many things. They can directly attack enemy targets, scout enemy locations, help with targeting. Ukrainian artillery officers claim that drone directed fire lets them take out a Russian defensive position using just nine rounds instead of 93 different drones perfectly demonstrate how this technology is changing warfare. The scary thing is that none of them are made by the US or its allies. Iran is one of the world's leaders when it comes to making cheap, effective drones. And it took a totally different path than other leaders like China, the US And Israel. All those countries have high tech aerospace sectors. Iran doesn't. Instead, what it does have is a bunch of regional enemies and crippling economic sanctions. So Iran's leaders needed a homegrown technology that could defend their country and destabilize their adversaries. Enter drones. Iran has been developing their drone industry since the early 1980s. Today, it uses drones at home and supplies them to allies like Russia, Venezuela, Hezbollah in Lebanon, and the Houthi rebels in Yemen. Experts believe Russia is using about 1700 Iranian made unmanned aerial vehicles in Ukraine. The most significant of these is the Delta Wing Shahed 136. Russia is using the Shahed, which it has rebranded to the Geren 2, to repeatedly rain destruction on Ukrainian troops, weapons stockpiles and critical civilian infrastructure. The Shaheed excels at these bombing missions because it's not a typical drone. Instead of carrying an arsenal of guns and bombs it can drop on targets, the Shaheed itself is the weapon. Once in range of its target, the Shaheed hovers there, waiting. Then when it receives the order to attack, the Shahid dives straight down into the enemy, detonating the small warhead lodged in its nose. The Shahid is a suicide drone, also known as a loitering munition. It's not meant to return to base, but that's okay. The Shaheed is useful precisely because it's expendable. They only cost about $20,000 and at that price you can get 50 shaheds for the cost of just one Russian cruise missile. Or about 1,600 for one Predator drone. Sure, they can do things that the Shaheed can't, but being cheap and expendable offers some massive tactical advantages. In large enough numbers, Shaheds can easily overwhelm anti air defenses and successfully take down much bigger targets. On October 10, 2022, Russia launched a huge barrage of missiles and Shahed strikes which disabled about 40% of Ukrainians power infrastructure. Russia has also used Shaheds to strike civilian targets in Kyiv. Their distinctive buzzing sound has struck terror into the hearts of millions of Ukrainians. Despite being destructive, they're hard to detect. They have a range of about 1,000 miles and their initial approach path takes them below the range of most radar systems. Even if you can scramble a jet or a missile to shoot down a Shaheed, chances are you won't be able to do it for less than the cost of building and deploying it in the first place. All this for about the price of a medium sized car. Ukraine has many new heroes. You've got their leader, Zelenskyy, the men and women fighting bravely to defend their homeland. And the American and Europeans who have supplied Ukraine with shelter, aid and weapons, just to name a few. This hero is different though. This is the Bayraktar TB2. It's so popular that it inspired a popular folk tune with the lyric it makes ghosts out of Russian bandits. There are reports of Ukrainian parents naming their newborn babies Bayraktar. And I have a friend whose parents even joined a crowdfunding effort to Try and help the Polish government buy some of them and ship them to Ukraine. So why has this drone become so legendary? There's a simple answer. It helped Ukraine survive the early days of Russia's invasion. Ukraine actually ordered its first batch of bayraktars back in 2019 to fight against Russian backed separatists in Eastern Ukraine and deter a full scale invasion. That plan may not have worked, but the drones did. The Bayraktar TB2 isn't a suicide drone. It's an unmanned aerial vehicle with a 39 foot wingspan. It can fly for up to 27 hours at altitudes of about 25,000ft, longer and higher than any of the drones the US has supplied to Ukraine. While the Shahid has only a small warhead, the Bayraktar's laser guided bombs are so precise that they can be dropped into enemy trenches. And they're powerful enough to destroy anti aircraft systems designed to shoot them down. For months, the Russians had no answer. Bayraktar has destroyed billions of dollars worth of military hardware, including a massive warship in the Black Sea. And despite the development of countermeasures, they continue to be a thorn in Russia's side. Bayraktars don't come cheap, though. They cost at least $5 million each. And that's excluding the mobile command stations and comms equipment that come with it. But the thing that makes the Bayraktar so disruptive and so, so effective isn't its list of specs. It's the fact that it works like a smartphone. Bicar, the company that makes the Bayraktar, ships software updates several times a month that allow the Biraktar to adapt to enemy tactics. And their engineers are constantly looking at other types of drones for features they can borrow. In other words, the company has a development cycle that's agile and responsive in a way that traditional defense acquisition practices just aren't. They're constantly iterating so their product can maintain a competitive edge. It's a concept that more and more weapons manufacturers should be emulating. Later in this video, I'll tell you about another company that's taken the same approach. But first, there's a catch. And it's a big one. Baykar is a Turkish company. Not just that, it has close ties to the government of Turkey's President Erdogan. And when I say close ties, I mean that Baykar's founder married Erdoan's youngest daughter in 2016. He's since become an outspoken defender of his father in law's government. Now, don't get me wrong. Turkey isn't a hostile power in the same way that Iran is. Turkey fought on the same side as the coalition that tried to oust Bashar al Assad during Syria's civil war. But Erdogan likes to play both sides to maximize his influence. That's why he's recently delayed Sweden's and Finland's acceptance into NATO. The Bayraktar is a hot commodity, so it's at the heart of Erdogan's strategy that to expand Turkey's geopolitical influence Turkey has sold Bayraktar TB2 drones to at least 13 countries, including several that are prohibited by sanctions from obtaining Western UAVs in 2020. Bayraktar has helped Azerbaijan's dictatorial leader to defeat Armenia in a short but very intense war. He even displayed footage of the drone strikes on big digital billboards in the capital of Azerbaijan. Now, Turkey's drone diplomacy isn't necessarily bad for the west, but the end result is a more influential Turkey and a less stable world. Keep hold of that idea, because I'll come back to it soon. The Bayraktar TB2 can precisely destroy targets and update its software. The Shaheed can be launched from a nondescript truck bed and destroy its target before the other side even notices. But the world's most dangerous drone is one you can pick up at your local Best Buy. This is the DJI Mavic. It's a small quadcopter that both Ukraine and Russia use for reconnaissance, reconnaissance and artillery spotting. It has a fairly low quality telephoto lens and a higher quality wide angle lens. It's stable, rugged and reliable. But soldiers in Ukraine have discovered another feature, and this one thing makes the Mavic one of the most disruptive weapons since the AK47. Pop quiz what do you think was the biggest military innovation of the early 20th century? Planes? Machine guns? Artillery? These are all great guesses, but I have a suggestion that you probably didn't think of. What about the trench? I know it sounds ridiculous. People don't make YouTube videos about trenches, and they definitely don't think about them as technology. But they probably should, because trenches do something incredibly important. They protect infantry from frontal ground based attacks while still allowing them to be resupplied. It's honestly not an exaggeration to say that trenches and foxholes helped to change the entire meta of war in favor of defending armies. Think about the harrowing images of World War I, where soldiers barely older than boys ran across no man's land only to be torn apart by machine gun fire or the D Day landings where enemy fortifications turned the beaches of Normandy into hell on earth. Those situations were so horrifying because we know the odds were stacked massively in favor of the defending side. Now imagine if instead of carrying rifles and praying, they'd make it across to the enemy. Attacking soldiers could, with the help of a simple controller, fly a small agile drone above the enemy, fire and drop grenades fitted with impact fuses right on their heads. It would mean trenches and foxholes suddenly stopped being safe. And if they stop being safe, then suddenly the soldiers in them are vulnerable. Suddenly it's harder to safely communicate with them or to resupply them. Suddenly, trenches and boxholes begin to look kind of obsolete. That's what cheap drones like Mavic are achieving today in Ukraine. It's true the world's biggest powers don't fight wars and trenches anymore. But most wars aren't fought between superpowers. They're fought between developing countries, or within countries, or between a government and a group that's trying to remove it from power. But every fighting force can get its hands on a DJI drone and a few grenades. This small, seemingly insignificant fact is changing the world. Until a few years ago, when you talked about drones being used in war, you were probably talking about these. The MQ9 Reaper is the pinnacle of military UAV technology. It's 36ft long and has a 70 foot wingspan. Despite weighing up to 10,500 pounds, it can fly at close to 300 miles an hour. And it can carry two 500 pound laser guided bombs and up to four Hellfire missiles. The Reaper is basically a small fighter plane that's controlled from the ground. It also represented a certain vision of what UAVs advanced military hardware, piloted from the ground that could be made only by big defense contractors. It also represented the US's near monopoly on high end drone technology. But things have changed. For one, the US is no longer the only sheriff in town. Other countries like Israel and China are now making high end military UAVs. And massive improvements in commercial drone technology have made different kinds of drones possible and accessible. Drones offer tactical flexibility that more conventional technology doesn't. Cruise missiles and manned planes might be more powerful, but they're way more expensive while also being less versatile. A cruise missile can't help you fly, find the enemy, or improve the accuracy of your artillery. And if a manned plane goes down behind enemy lines, you're missing a billion dollar piece of hardware and a skilled human pilot. Drone technology has become democratized. Today, more than 25 countries are either designing or already making their own drones. From small surveillance drones to deadly loitering munitions and full scale UAVs. The list of countries buying them is either longer. But most countries aren't buying military drones from friendly countries. They're buying shaheds from Iran, bayraktars from turkey, or importing DJI's from China. So how did the United States lose control of the market for military drones? Well, simply put, they just let it happen. In 1987, the US signed up to the Missile Technology Control Regime. This voluntary multilateral agreement limits the proliferation of platforms that that are capable of delivering chemical, biological and nuclear weapons. And by itself, that's a noble sentiment. But when your adversaries don't hold themselves to the same standards, it looks naive. Reporting indicates that the United States turned down requests from Jordan, Iraq and the United Arab Emirates to buy US Combat drones, citing the agreement. And all three of those countries ended up buying drones from China. And although the United States was modified its interpretation of the MTCR in 2020 to expedite sales of UAVs to its allies, the genie was already out of the bottle. Today, countries around the world are rushing to get drones. And as those countries do, their enemies will start to feel nervous and strive to do the same. The whole thing begins to look like a rapidly spinning flywheel or an arms race. A world where drones are everywhere is a more unseen, unstable world. But that's the direction we're heading. And a more unstable world is great news for China because it helps to achieve precisely what it wants. A new world order.

Dji.

Dji. Dji. Dji.

Dji.

DJI is to commercial drones what Apple is to consumer electronics. It controls about two thirds of the world market. No other company has done as much to turn drones from something you would call occasionally saw on TV to something you can have at home. DJI is fast, innovative and reliable. It out competes and underprices its competitors. This looks like an amazing story of a startup that found a gap in the market and created the technology to exploit it. But DJI has a big secret. It's actually a Chinese military company. Documents reviewed by the Washington Post show that four major investment funds have sizable stakes in dji. And one of them is a Chinese state owned fund that promotes partnerships between the Chinese military and private companies. It might not sound like a smoking gun, but it's incontrovertible proof that DJI is an instrument of China's civil military fusion strategy. Now, civil military fusion is all about blurring the lines between the government and the private sector. It's how the Chinese government modernizes its army, controls private companies and maintains maintains control of the technologies those companies create. Now, America believes that China's government uses data gathered from DJI drones to power AI models and enhance surveillance efforts. And the result of all this is that the US Government has said that using DJI drones, even for civilian applications, can directly contribute to the strategic objectives of the People's Liberation army in Xi Jinping. DJI is a major national security security risk. But despite this, the US army was using their drones until 2017. And in April it emerged that the Australian Defense Force is still using them. Thanks in part to insights gained from DJI technology, China has now become the world leader in drone technology. Over the past decade, it has sold almost 300 military drones to 17 countries. Looking at the list of countries is like planning a very unusual trip around the world. Saudi Arabia, Myanmar, Iraq, Ethiopia, Egypt, Pakistan and Serbia, just to name a few, Chinese made combat drones are attacking terrorist groups, putting down rebellions and in at least one theater, attacking civilians. By comparison, the US delivered just 12 military drones over the same time period. And all of them went to just two countries, France and the United Kingdom. The combat UAV that China is selling are highly advanced and many of them appear to be based on US made designs. Take a look at this side by side comparison of the Kai Hong four and the Reaper. But they've been upgraded to offer greater performance and carry bigger weapons payloads. Buyers aren't only swayed by performance though. Chinese military UAVs are much cheaper than their US counterparts. The Kaihong 4 is estimated to cost between 1 and 2 million dollars. The Reaper, that'll set you back about 16 million dollars. That suggests that China is learning fast from DJI, from industrial espionage and from watching its older UAVs in the field. But it also suggests something is seriously wrong with how the US is making its combat drones. For China, drones are more than just diplomacy. They're an increasingly important part of the PLA's military strategy. The Chinese see drones and as a platform to wage war at the highest level of conflict. This shows China's full confidence in its world class unmanned aerial vehicle technology. An increased interest in drone and counter drone warfare in PLA military writings. Almost all military analysts now believe that drones will be a key feature of any confrontation over Taiwan. Following missile strikes that destroy Taiwan's command and control capabilities and offensive cyber operations operations that weaken their space based systems, the PLA could launch swarms of autonomous drones to knock out Taiwanese air defenses and sink US warships that come to Taiwan's aid. The PLA wouldn't just deploy its own drones, it would also shoot down enemy drones. At a Chinese air show last November, they debuted the LW30 laser defense system manufactured by the China Aerospace Science and Industry Corporation. The vehicle mounted system has supposedly solved one of the biggest problems facing modern air defense systems. How to take down swarms of slow, low flying drones. Even if Chinese state media is exaggerating the capabilities of the LW30, one thing is certain. China is determined to not let its advantage slip the same way the US did. So here's where things stand now. Drone technology is rapidly maturing. Cheap drones, like the ones you can buy from your local electronics store, are providing their value in places like Ukraine. Countries are rushing to develop their own drones or buy them off the shelf. Meanwhile, the United States lost the opportunity created by its technological advantage, all because of a 35 year old export control agreement as well as its slow, cumbersome defense acquisition processes. China has capitalized on all of this to become the world leader in commercial and combat drone tech. And now its leaders are making drones a central part of the country's military strategy. This does not sound great. In fact, it sounds really dangerous. But there's something we can do. Something that means the US and its allies can still access world class drone technology without directly strengthening our main geopolitical adversary. And it involves harnessing the most proven engine of high quality technology ideas in human history. Silicon Valley. Earlier, when I was talking about the Turkish company that makes the Bayraktar TB2 drone, I said that there was an American company with the same drive for innovation. Innovation. The company I was talking about is called Anduril. Anduril is an example of something you don't see very often. A Silicon Valley tech company that isn't squeamish about working with the military. It makes three very different types of drones. Let's look at them one at a time. The LTS is a small loitering munition that can be launched from air, land or sea. Like all of Anduril's drones, the LTS uses Lattice, an AI powered open operating system that allows multiple assets to work together and respond to enemy threats in real time. Compared to other similar models on the market, the LTS can fly further and loiter for longer. A single person can operate multiple LTS drones at the same time, while its modular nose cone can carry a wide range of payloads such as small warheads, intelligence sensors and radar jamming equipment. The rise of cheap swarming drones has created a big problem for the world's biggest drones militaries. If huge numbers of drones can overwhelm conventional anti air defense systems, how can you take them down before they destroy something as important as an aircraft carrier? China is attempting to solve this problem with the LW30 system it unveiled at that air show last year. But what if the best way to take down drones was just using more drones? Enter the Anvil. Anvil seeks and destroys enemy attack drones. It uses Lattice to autonomously acquire a target, asks a human operator for verification, and then smashes into that target. Anvil is part of Anuril's end to end counter drone system. The Ghost is a versatile UAV which excels at intelligence, surveillance and reconnaissance. Its helicopter rotor means it can take off and land vertically, while its long range, modular payload and high capacity allow it to perform a wide variety of missions capabilities. The Ghost leverages Lattice to autonomously detect, classify and track objects of interest, including enemy drones. A single operator can control teams of collaborating autonomous Ghosts, which can cover about 100 miles of ground on a single charge. Anduril's founders understand something very software is eating the battlefield. And so in order to be a successful defense company in the 21st century, you also need to be a successful software company. That's why for Anduril, software is the master key that unlocks every door.

There's been a handful of areas we've really invested in and I think we can move incredibly fast. And all of them have the same sort of characteristics. That's how do I take advantage of, you know, modern machine learning techniques, modern software networking, to be able to make these things wildly more effective than they were historically. We're not trying to make like the world's most exquisite radar. We're trying to make a cheap, super effective software defined system.

Unfortunately, not enough of the US defense industry understands this. The US has sent a bunch of small drones to Ukraine. Most, including the Switchblade and Puma, are made by a company called Aerovironment. And they make cool UAVs. But it's based in Arlington, Virginia, the same place as Boeing, Raytheon and the Pentagon. Which means that fundamentally, it's still part of the old defense establishment that hasn't responded quickly enough to rapidly shifting technological and geopolitical changes. Established US defense companies have become too big to fail. And that's a big problem because it makes them less hungry, less innovative, and less capable of anticipating and solving the challenges of the future. Almost all of America's drones are made in Arlington, Virginia and it hasn't helped us. After being out the of out, innovated and outmatched in drones, it's time for our defense industry to look less like Arlington and more like Anduril. Now, Anduril might face an uphill battle. In fact, if success means single handedly turning the tide and re establishing the United States as the world leader in commercial and combat drone technology. That might be too tall of an order. But that's okay, because Anduril isn't meant to be a savior. It's a template for a more modern, more effective way to keep us and our allies safe. The United States and its allies can't win the geopolitical contests they're locked in by acting more like China. The only way they can win is by harnessing the creativity of our people and using the free market to encourage the formation of more innovative defense companies. Drones are changing the world. Ukraine is only the beginning. The US had an advantage but squandered it. Today our consumers and even our allies are using Chinese made drones. That's threatening our national security. But Anduril is approaching the problem from the right perspective and in time we might look back on it as the beginning of the solution. If you want to learn more about how the US Military has fallen behind, just watch this video next. Thanks a lot.