A First Look: Shield AI’s X-Bat AI Fighter Drone

Shield AI, a company aiming to disrupt the defense industry with cutting-edge artificial intelligence and autonomous systems, is poised to unveil its next-generation autonomous fighter jet, the X-Bat, on Wednesday. This announcement follows a recent $240 million funding round that values the company at $5.3 billion.

CNBC was granted exclusive access to Shield AI’s headquarters for a preview of the X-Bat, an unmanned aircraft designed for high-performance operations. Key features include a jet engine propulsion system, a 2,000-mile range, a 50,000-foot operational ceiling, and crucially, vertical take-off and landing (VTOL) capabilities. This VTOL functionality enables the X-Bat to operate from austere locations lacking traditional runways, such as naval vessels at sea, greatly increasing its deployment flexibility.

The X-Bat’s flight operations are governed by Hivemind, Shield AI’s proprietary AI software platform. CEO Gary Steele emphasized the critical role of artificial intelligence in the company’s long-term strategy. “The software is a cornerstone and foundation for everything we do,” Steele stated. “It will ultimately be the long term growth driver of this business because it enables the development of this next generation aircraft.” This reliance on AI goes beyond simple automation; it aims to create an autonomous system capable of complex decision-making in dynamic and contested environments.

Shield AI’s innovative approach has earned it the 38th spot on the 2025 CNBC Disruptor 50 list. The X-Bat represents a convergence of advanced technologies, integrating AI piloting with VTOL capabilities, a combination not previously seen in a next-generation aircraft. While experimental aircraft with VTOL capabilities existed as early as the 1950s, they all required human pilots. Shield AI’s demonstrated ability to autonomously pilot even complex platforms like the F-16 using Hivemind underscores their technological advantage.

Brandon Tseng, Shield AI president and co-founder, highlighted the breakthrough: “But those two things — AI piloted and vertical takeoff launch and land — have never come together in the form of a next generation aircraft.”

The company projects a production cost of approximately $27 million per X-Bat, a significantly lower figure compared to existing advanced military aircraft. For instance, the F-35 fighter jet, currently in use by the U.S. and its allies, carries a production cost exceeding $100 million. This cost-effectiveness, combined with its advanced capabilities, positions the X-Bat as a potentially disruptive force in defense procurement.

Unlike Shield AI’s earlier platforms, the X-Bat is designed for combat and is capable of carrying missile payloads. This shift signals the company’s ambition to move beyond intelligence, surveillance, and reconnaissance (ISR) roles and into more direct combat support missions.

“We fundamentally believe we can save service members’ lives by reducing the risk that you have of putting people in danger,” Steele explained. “What I’m particularly excited about is the mission we’ve been on, and the opportunity that it unlocks from a business perspective.”

Founded in 2015, Shield AI has already secured notable defense contracts, including a nearly $200 million contract with the U.S. Coast Guard in 2024 for its V-Bat drone. However, despite its rapid growth, Shield AI remains a smaller player compared to established defense giants like Lockheed Martin and Northrop Grumman, as well as its closest startup competitor, Anduril, which is valued at over $30 billion. The challenge for Shield AI lies in scaling its production capabilities and securing larger, more consistent contracts to compete effectively in the long term.

While experiencing substantial revenue growth, Shield AI is not yet profitable. A 2023 report indicated projected profitability by 2025; however, an incident during a drone landing demonstration in 2023, which resulted in injury to a U.S. service member, temporarily impacted customer confidence. The company has since focused on rebuilding trust and emphasizing the safety and reliability of its systems.

“Through that process, there were some loss of confidence from customers,” Steele said. “But I think we’ve done a phenomenal job of recovering from that and rebuilding momentum. And today as we sit here, we’re very confident in our ability to deliver great products that are safe.”

The increased use of unmanned aerial systems in modern warfare, particularly highlighted by the conflict in Ukraine, has demonstrated the strategic importance of drone technology. The U.S. government is actively pursuing initiatives to accelerate the development and integration of drone technologies. President Donald Trump’s “Unleashing American Drone Dominance” executive order, along with significant funding allocated to unmanned aerial systems and AI development, signals a commitment to strengthening the U.S. position in this critical sector.

“We have to empower the defense industrial base with the exact same development tools, infrastructure and pipelines that Shield AI has used to make AI autonomy,” Tseng said. “We work directly with the major defense prime contractors of the world. We want to see them wildly successful building AI and autonomy, because at the end of the day, that’s what the warfighter needs. That’s what the United States and our allies need.” Shield AI’s collaborative approach, working alongside established defense contractors, underscores its commitment to fostering a broader ecosystem of AI-driven defense capabilities.