Shield AI will buy Echodyne for $5.3 billion, Axon will invest $1.2 billion in Skydio, and more - Defense AI Brief #65

In this edition, covering 2 to 8 November:

• Shield AI will acquire US radar company Echodyne for $5.3 billion and raise $2.5 billion, including $1 billion in Series H funding at a $28.8 billion valuation.
• Axon will invest about $1.2 billion in Skydio at a $5.2 billion pre money valuation and become its exclusive public safety distributor in the United States and Canada.
• Palantir reported third quarter 2026 revenue of $2.313 billion, up 96% year over year, and raised its full year revenue growth guidance to 91%.

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Shield AI

Shield AI will buy US radar company Echodyne for $5.3 billion and raise $2.5 billion, including a $1 billion Series H at a $28.8 billion valuation, with closing expected in early 2027. Cofounder Ryan Tseng says Shield AI will soon announce European orders and partnership agreements for its X-BAT drone, whose full scale prototype has completed assembly in Texas. Echodyne deal · X-BAT in Europe

Drones and counter drone systems

Axon will invest about $1.2 billion in Skydio, raising its stake by about 20%, and become Skydio's exclusive public safety distributor in the United States and Canada. EIFO joined TEKEVER's $580 million Series D, announced at a $6.4 billion valuation, as TEKEVER plans its first Nordic operational presence in Odense, Denmark. The Pentagon awarded Los Angeles based Machina Labs a $9 million contract for an 18 month trial building metal airframes for LUCAS attack drones with AI powered robotic arms. Axon and Skydio · TEKEVER · Machina Labs

Origin and Anduril demonstrated their Blaze interceptor with the Lattice command platform in a live airborne engagement in Latvia, and said no procurement commitments have been made. General Atomics is developing NextGen, an uncrewed flying wing with hybrid electric propulsion and more than 60 hours of potential endurance for reconnaissance and strike missions. DJI introduced the Matrice 5T enterprise drone with LiDAR, mmWave radar, 1K thermal imaging, onboard AI and up to 59 minutes of flight time. Origin and Anduril · General Atomics NextGen · DJI Matrice 5T

Maritime and space

Windward acquired Azimut.ai, adding camera based identification of vessels at ports and maritime chokepoints, including vessels that stop transmitting signals, to its maritime intelligence platform. Corridian raised $38 million in seed funding led by Point72 Ventures to develop crewless underwater vehicles that carry standardized military payloads across thousands of nautical miles. Windward · Corridian

UK startup Shield Space plans swarms of up to 100 autonomous cubesats to protect Western satellites, with a test mission, Project Broadsword, planned for the fourth quarter of 2027. Flexcompute introduced a Physics Twin that assesses how thruster plumes affect nearby spacecraft during docking and refueling, and Northrop Grumman says the approach could speed analysis by about 200 times. Shield Space · Flexcompute

Bremen satellite startup Marble Imaging raised €6 million led by Cherry Ventures; it already sells AI analytics to defence and security customers and plans its first launch in February 2027. Marble Imaging

AI in the armed forces

U.S. Transportation Command built about 33 AI enabled tools in Palantir's Maven Smart System in the first two weeks of Operation Epic Fury, and roughly half are still in use. The US Navy is launching the Navy Innovation Unit to bring private sector technology experts into the Reserve, and received about 300 applications for 10 positions. Saab unveiled in house AI agents tested on the Gripen E fighter for beyond visual range combat, which its AI Fighter Pilot Academy will develop for piloted and uncrewed aircraft. TRANSCOM apps · Navy Innovation Unit · Saab AI agents

Seoul based Newtype Industries says it stopped testing its Barbara AI artillery software with Ukrainian military units after a diplomatic dispute between South Korea and Ukraine; Ukraine has not confirmed the cause. Stream Engine says it delivered a deepfake detection analytic to the Air Force Research Laboratory's test and evaluation testbed, where it was ready for formal evaluation in June 2026. Lone Star Analysis launched Debrief IQ, AI software that helps military pilot training organizations analyze training data, identify performance patterns and prepare debriefs. Newtype Industries · Stream Engine · Debrief IQ

Companies and contracts

OpenAI appointed former US Army Secretary Dan Driscoll to a new role as senior counsellor for national security modernisation, supporting AI adoption across US and allied defense institutions. Palantir reported third quarter 2026 revenue of $2.313 billion, up 96%, as US commercial revenue of $984 million passed US government revenue for the first time. OpenAI · Palantir results

The US Air Force Nuclear Weapons Center awarded Exiger a $12 million contract to analyze supply chain risks and the industrial base behind intercontinental ballistic missile systems. Accrete will add TenderAlpha's government contracting, supply chain and trade data to its Argus for Supply Chain Influence platform, with the expanded insights available in early 2027. Raytheon will design and demonstrate photonic circuits that process signals with light for DARPA's PICASSO program, with Synopsys providing design and simulation tools. Exiger · Accrete and TenderAlpha · Raytheon PICASSO

XTEND AI Robotics' Asia Pacific subsidiary Performance Rotors received an $8.3 million order from a defense customer in the region. Hanwha Systems is expected to lead a 70 billion won commitment in robot dog maker LionRobotics, ChosunBiz reports. XTEND · LionRobotics

Budgets and policy

South Korea will allocate 21.3 trillion won to AI and semiconductors next year and raise defense spending to 73.3 trillion won, President Lee Jae-myung says. A decree signed by Russian President Vladimir Putin requires privately owned data centers in Russia to reserve 10 percent of their capacity for government use with 24 hours' notice. South Korea budget · Russian data centers

Also

OMNI and Rackner formed OMNI Rackner LLC, an SBA approved Mentor Protégé Joint Venture providing AI, cloud, cybersecurity and software services to US national security agencies. Darkforce says its cyber and AI security platform was assessed as Awardable in the CDAO's Tradewinds Solutions Marketplace. Finch AI received Cybersecurity Maturity Model Certification Level 2 after an independent assessment by Ace of Cloud. OMNI Rackner · Darkforce · Finch AI