Shield AI has agreed to acquire radar manufacturer Echodyne in a $5.3 billion transaction announced Thursday, marking a major deal aimed at expanding the defense contractor's drone-warfare capabilities. Echodyne produces solid-state radar systems based on patented Metamaterials Electronically Scanned Array (MESA) technology. The systems are designed to detect drones and can be integrated into various monitoring and weapon setups, including high-energy lasers and microwave weapons.
The transaction values Echodyne at $5.3 billion, with $4.8 billion to be paid and issued at closing and up to $500 million more contingent on Echodyne meeting agreed performance targets. To fund the deal, Shield AI is raising $2.5 billion: $1 billion in Series H funding at a $28.8 billion post-money valuation, co-led by Disruptive and Innovation X Capital, and $1 billion in structured equity from funds managed by Blackstone, plus $500 million in debt financing led by JPMorgan Chase. The companies expect the acquisition to close in early 2027, subject to regulatory approvals.
The acquisition follows a $250 million contract awarded to Echodyne in September by JIATF-401, the Defense Department’s national counter-drone task force, to supply counter-drone technology to military forces over 36 months. Echodyne CEO Eben Frankenberg told Defense News in July that demand for radar capable of tracking drones is "red hot" and could grow tenfold by 2030, noting that the company's technology can track small quadcopters and over 1,000 objects at a time.
Shield AI is known for developing the V-Bat vertical takeoff and landing drone—which has assisted the U.S. Coast Guard with maritime drug interdiction reconnaissance—and the X-Bat, an AI-piloted VTOL fighter jet unveiled in 2025. The company also produces Hivemind autonomy software, an AI piloting system designed for multi-agent teaming and swarming across unmanned aircraft, drone boats, and spacecraft.
Shield AI CEO Gary Steele stated that buying Echodyne supports the company's plan to build three business units focusing on autonomy software, autonomous systems, and mission systems. Frankenberg stated that hundreds of customers rely on Echodyne radars to track drones, protect infrastructure, and secure borders, adding that joining Shield AI will allow both companies to deliver more value across defense, government, and commercial sectors.
