SAN DIEGO – Three San Diego businesses — Firestorm Labs Inc., Kratos SRE Inc. and ModalAI — are among 25 companies that have been invited to compete in the first phase of the U.S. Department of War’s Drone Dominance Program. The program is being launched at a time when small drones have become a major force on the battlefield, notably in the war in Ukraine.
The Pentagon is seeking small, low-cost aircraft with the goal of fielding hundreds of thousands of one-way attack drones ready for combat by 2027. To prepare, it has announced an initial evaluation called the Gauntlet, scheduled to begin Feb. 18 at Fort Benning, Georgia. The tryouts will run through early March. At that point, the War Department will place $150 million in prototype delivery orders over subsequent months.
The Pentagon statement from Feb. 3 underscores Secretary of War Pete Hegseth’s emphasis on not only changing weaponry but changing the agency’s approach to acquisition.
“Drone Dominance operationalizes the Secretary of War’s acquisition reform priorities by sending a clear demand signal to industry – $1.1 billion over four phases, placing war-fighters at the center of evaluation and driving competitive, iterative cycles measured in months, not years,” said the statement. “Across the program’s four phases, unit prices decrease, production volumes increase, and operational capability rises.”
In related news from the Singapore Air Show, Reuters reported Feb. 3 that U.S. drone makers were seeking customers in Asia. The move comes as China builds up its military presence in the region. General Atomics Aeronautical Systems Inc. and Shield AI were among the San Diego County companies exhibiting at the show. The two vendors make larger, comparatively expensive unmanned aircraft models.
Shield AI announced at the show on Feb. 4 that it had signed a memorandum of understanding with ST Engineering. The deal calls for both companies to integrate Shield AI’s Hivemind autonomy software across selected ST Engineering platforms. Financial terms of the deal were not disclosed.
Firestorm Labs
FOUNDED: 2022
CEO: Dan Magy
HEADQUARTERS: San Diego (Kearny Mesa)
BUSINESS: Aviation and aerospace manufacturer
VENTURE FUNDING: $47 million in series A in July 2025, following a $12.5 million seed round
WEBSITE: launchfirestorm.com
CONTACT: [email protected]
NOTABLE: The company produces a military drone with 3-D printed parts, which has flown in Ukraine, and has developed a 3-D printing factory to be used in the field
Kratos Defense & Security Solutions
FOUNDED: 1994 as Wireless Facilities Inc.
CEO: Eric DeMarco
HEADQUARTERS: San Diego (Scripps Ranch)
BUSINESS: Defense contractor
REVENUE: $1.14 billion in 2024
EMPLOYEES: Approximately 4,000 in 14 countries, as of late 2024
STOCK: KTOS (Nasdaq)
WEBSITE: kratosdefense.com
CONTACT: (858) 812-7300
NOTABLE: Kratos acquired Birmingham, Alabama-based Kratos SRE, formerly Southern Research Engi-neering, in May 2022
ModalAI Inc.
FOUNDED: 2018
CEO: Chad Sweet, formerly of Qualcomm
HEADQUARTERS: San Diego (Sorrento Valley)
BUSINESS: Maker of electronics for UASes (unmanned aircraft systems) as well as development drones
WEBSITE: modalai.com
CONTACT: modalai.com/pages/contact-us
NOTABLE: ModalAI’s products are built and assembled in the United States, and comply with the NDAA 2020 Section 848 Act
