Summary of US Military Drone Strategy Article

On July 11, 2025, shares of US drone manufacturers AeroVironment Inc. (AVAV.US) and Kratos Defense and Security Solutions Inc. (KTOS.US) surged by over 10% following a significant announcement from the US Department of Defense (DoD). The announcement, made by Defense Secretary Hegseth, outlined a new Pentagon strategy aimed at enhancing the military's drone capabilities.

The DoD's directive focuses on "unleashing U.S. military drone dominance" by eliminating previous restrictions that hindered the adoption of drones within military operations. Specifically, the DoD has rescinded policies from 2021-2022 that prohibited military units from procuring drones containing Chinese-made components. This change allows troops to purchase, test, and train with compliant small unmanned aerial systems (UAS) without facing bureaucratic delays.

As a result of this new strategy, hundreds of American-made drone products have been approved for military use, positioning the U.S. to compete against adversaries that mass-produce low-cost drones. The DoD is also encouraging private investment to stimulate innovation in domestic drone technology and AI-driven combat systems.

The list of DoD-approved drones and software, known as Blue UAS, is expanding rapidly. Furthermore, the integration of drone combat into official military training is set to commence in 2025, which will include simulated scenarios of drone-on-drone warfare.

This strategic pivot by the DoD signifies a robust commitment to enhancing the U.S. military's technological edge in drone warfare, reflecting a broader trend towards the increasing importance of unmanned systems in modern combat.