Russia’s War Transforms Ukraine into a World-Leading Military Producer

Executive Summary:

• Russia’s 2022 invasion triggered a surge in Ukraine’s defense sector, experiencing a 350 percent growth since 2022.
• Ukraine leads globally in tactical and long-range drones, aiming to become the world’s “drone capital.” Upcoming artificial intelligence (AI)-driven swarms are anticipated to replace one-operator systems, transforming the efficiency and autonomy of warfare.
• Initiatives such as Brave1, Defense City, and Test in Ukraine connect Ukrainian firms to Western investors and allow North Atlantic Treaty Organization (NATO) partners to trial weapons in live combat conditions for rapid integration.
• Low-cost, rapid-production systems such as AI-driven drones, robotic ground vehicles, and long-range missiles such as the FP-5 give Ukraine asymmetric advantages, destroying Russian assets while strengthening European security integration.
• Ukraine’s defense sector underpins European security and rearmament, supplying cost-effective, battle-proven technologies that enhance NATO, solidifying Ukraine as Europe’s defensive backbone.

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Introduction

Russia’s full-scale invasion of Ukraine on February 24, 2022, has transformed Ukraine into possessing the world’s most innovative defense sector (see EDM, October 8, November 8, 2024). Since 2022, Ukraine’s defense sector has experienced a 350 percent growth, with a notable breakthrough in 2023–2024, when investment increased by 900 percent, according to various estimates ranging from $35 to $50 million (UBN, April 22). Only 26 percent of Ukraine’s defense companies operated before 2022.

Growth of Ukraine’s defense sector will continue because Russia’s maximalist goals have not changed, and international attempts at brokering peace have failed. EU foreign policy chief Kaja Kallas said, “A strong Ukrainian military is the main security guarantee for Europe as Russia shows no sign of ending its war” (UBN, September 4).

Drone Production and Technological Innovation

Ukraine is the largest producer of tactical and long-range drones in the world, and after the war ends, it will become the “drone capital of the planet” (Texty.org.ua, March 12). In 2025–2026, Ukraine’s defense sector is expected to undergo even greater rapid expansion, transitioning from “one drone-one operator” to artificial intelligence (AI)-driven drone swarms (Kyiv Independent, February 4). The Ukrainian government’s Brave1 platform supports 1,500 technical companies with $30 million in grants. These include 140 electronic warfare manufacturers, of whom three are made to North Atlantic Treaty Organization (NATO) standards, and ground unmanned vehicles, 40 of which are built to NATO standards (Kyiv Independent, February 4).

Californian company CX2 co-founder Nathan Mintz admitted, “No U.S. company is keeping up with Ukraine” (Texty.org.ua, March 12). The U.S. is slower to deliver, build, and update its military infrastructure. Mintz also said, “Many U.S. companies that brought drones to Ukraine watched them fall out of the sky or fail to complete missions’ (Texty.org.ua, March 12). CX2’s software and sensors are used in Ukrainian defense company Skyfall’s long-range drones.

Ukraine is “emerging as the epicenter of a defense revolution,” according to the Kyiv Independent, ranking among the top five world arms producers (Kyiv Independent, March 14). On September 16–17 of this month, Brave1 organized the Defense Tech Valley summit in Lviv, the largest investment summit in defense technology in the world, attended by 5,000 participants.

Ukraine’s defense sector is operating in war conditions, “so we’re thinking differently,” Myhaylo Samus, director of the New Geopolitics Research Network think tank in Kyiv, said. “We have motivation that’s not only financial,” as “we have the main task of giving everything we can to our armed forces, to stop Russians” (EuromaidanPress, January 31).

Production Dominance and Industrial Organization

Ukraine’s defense sector produces 60 percent of the military equipment used by its armed forces (X/blyskavka_u, September 5; Kyiv Independent, September 7). Europe is replacing the sending of military equipment to Ukraine with financing increased production in Ukraine.

Ukraine produces more artillery shells than all of NATO’s 32 members and Europe. Ukrainian Armor produces NATO-standard 155 mm shells, propellant, fuels, and primers under license from the Czechoslovak Group company (Czechoslovak Group, July 8).  Since 2022, domestic production of armored personnel carriers has increased by 400 percent, artillery by 200 percent, ammunition by 150 percent, and anti-tank weapons by 100 percent. In 2022, Ukraine produced only one Bohdana howitzer, similar in specifications to the French Caesar, but by 2025, the Kramatorsk Heavy Duty Machine Tool Building Plant was producing 20 each month. Ukrainian defense companies deliver howitzers in 60 days for $2.5 million compared to a several-year wait and a cost of $4.3 million in the West (EuromaidanPress, January 31).

The majority of Ukraine’s defense sector is comprised of private companies, which offer autonomy, flexibility, and a greater ability to innovate, making them attractive to investors, businesses, and innovation partners. Bureaucracy is minimal, Ukrainian military equipment is tested as prototypes and built for the battlefield, and Ukrainian armed forces—not bureaucrats or generals—place orders.

The Nezlamni Fund, co-founded by the Ukrainian taxi company UKLON, launched the Frontline defense company in 2023, which specializes in robotics for Ukraine’s armed forces (Frontline, accessed September 24). Frontline designed the Burya 40mm automated grenade launcher turret, which was added to the Estonian Milrem Themis ground unmanned vehicle (Kyiv Independent, August 12). Volunteer charity United Angels Network supports defense start-ups in military robotics (UBN, January 24). U.S. company MITS Capital has invested in Ukrainian defense company Tencore that specializes in military robotics (MITS, July 11).

There are over 500 private defense companies in Ukraine (UNN, January 14, 2024). The Ukrainian Council of Gunsmiths comprises 270 members, 100 of whom are affiliated with the National Association of Ukrainian Defense Industries and 80 with Technological Forces of Ukraine. The Ukrainian Council of Gunsmiths and Technological Forces of Ukraine are led by Valentyna Vedrovska and Kateryna Mykhalko, respectively, a reflection of the high proportion of women in Ukraine’s military and security sector (Oboronka, August 19). Ukraine’s defense sector differs from the state-dominated military-industrial complex that existed in the former Soviet Union, which continues to exist in Russia. Ukraine’s defense sector is an ecosystem of small-sized factories and workshops, with most parts produced in Ukraine.

Launching military production is not very expensive and is often undertaken in cooperation with Ukrainian charities, foreign governments, and investors. Ukraine’s private defense sector is more able to adapt to technological changes than Russia’s state defense sector. Ukraine’s innovates faster and operates without government interference. As private companies, they can develop new military equipment quickly and autonomously from the government, which responds to the rapidly changing dynamics on the battlefield. Maxon Systems took only 7 months to launch a start-up and build an anti-drone interceptor used on the battlefield for $3,500, compared to $20,000 for a Shaheed drone (DefenderMedia, August 15).

Ukraine’s Defense Procurement Agency (AOZ) was established in January 2024 as the sole organization within the Ministry of Defense responsible for procuring military equipment for Ukraine’s armed forces (Ukrainska Pravda, January 8). Ukrainian defense companies test prototypes within just one month. They do not require government contracts or approval. Instead, they can raise private investment and are offered various government incentives and grants and operate in an open market of innovation. Maryna Bezrukova, chief executive officer of the AOZ, writes, “This launched the defense procurement reform, as the system required radical changes due to its inefficiency and excessive bureaucracy” (Ukrainska Pravda, January 8). The AOZ has ensured lower prices for military equipment and a decline in the number of intermediaries seeking to profit from arms trade (Ukrainska Pravda, January 8).

The government created Brave1 and Defense City to assist defense companies (see EDM, September 17; Brave1, accessed September 24). Brave1, which brings together 85 percent of Ukraine’s defense companies, connects them to foreign investors and cooperates with the European Defense Innovation Office to provide grants for defense start-ups and facilitate the integration of Ukrainian defense companies into the European market. Ukrainian military units can outline the problems they need to overcome in Brave1, and defense companies can respond with ideas and proposals. Dot Chain Defense, launched in July, is a digital marketplace where military units can order military equipment (Ukrainian Ministry of Defense, July 7).

Defense City was created in August after changes to taxation, customs, and other laws that provide defense companies with tax, land tax, and environmental tax breaks, faster customs clearance, and more effortless transfer of foreign military technology (Oboronka, September 3).

Ukraine’s ten leading drone makers include Vyriy, which produces Molfar (a pre-Christian Slavic myth of paradise); Skyfall, which produces Baba Yaga (Vampire); TAF, which produces Kolibry 7 and 8; Ukrainian Special Systems, which produces the Shark PD2 light aircraft to counter drones in cooperation with the Czecho-Slovak Shark; Aero company; and Anthlon, which produces Avia-Furia and Hrim (Thunder) (Kyiv Independent, February 14; Militarnyy, June 22). Other leading drone producers are UkrJet, which produces UJ22, UJ26 Bober (Beaver); Terminal Autonomy, which produces AQ100 Bayonet and AQ400 Scythe; Antonov, which produces AN-196 Lyuty (Furious); Air Logix; and Skyeton, which produces the Raybird reconnaissance drone in cooperation with the Slovakian Tropozond company (Ukrayinska Pravda, May 13, 2024; Kyiv Independent, February 14). Ukrainian defense company Tencore produces drones, missiles, electronic warfare systems, and ground robotics. Ukrainian charity Klyn Drones produces quadcopters for surveillance, logistics, mining, and military attacks.

International Partnerships and European Integration

As Ukraine’s domestic defense industry expands, it is increasingly partnering with foreign countries. For example, Sine Engineering produces radios and navigation software for drones used by the Ukrainian military and exports its products to the United States and Europe. The Turkish Bayraktar company has built a factory in Ukraine to build Bayraktar drones. Bayrak also produces the Kizilelma drone, which uses a Ukrainian turbojet produced by Ivchenko-Progress that can fly at supersonic speeds and exhibits high maneuverability (Defense Express, June 18). Bayraktar drones are active along Ukraine’s Black Sea coast against Russian military objects. Japanese Rakuten collaborates with Ukrainian defense companies, including Skyfall Industries, Swarmer, Durarf Engineering, and Griselda Intelligence Platform.

U.S. Investment and Transatlantic Support

U.S. company Green Flag Ventures has invested in eight Ukrainian defense companies, including Himera, Kara Dag, Swarmer, Falcons, and Astra Nav, with plans to increase this to 25. Green Flag Ventures said, “We have a pipeline larger than we can manage. There isn’t enough capital in the ecosystem for all the promising pre-seed and seed-stage companies, many of which have [letters of intent (LOIs)] or purchase orders” (UBN, April 22). American businessperson Perry Boyle has invested in 13 Ukrainian defense companies with plans to increase this number to 23 (Kyiv Post, September 23).

The United States is planning a $100 billion deal with Ukraine in exchange for ownership rights to certain Ukrainian military technology—the first time the United States has purchased military equipment from a non-NATO state (Ekonomichna Pravda, July 25). The U.S. Department of Defense has contracts with two U.S.-Ukrainian partners to build long-range drones, who are on the list of approved suppliers to the U.S. military (Texty.org.ua, March 12).

In March, the National Aeronautics and Space Administration (NASA) began working with Ukrainian robots produced by the Ukrainian defense company DroneUA. Ukraine is assisting Taiwan in building drones. “Testing our solutions in the United States paves the way for lasting collaboration with NASA. This proves that Ukrainian innovations are shaping the future,” said Valerii Iakovenko, DroneUA’s co-founder (DroneUA; Kyiv Independent, March 4). Ukrainian drone producers aim to capture 5 percent of the U.S. agricultural market, valued at $135 million, with some drones already in use in Pennsylvania (UBN, May 5).

U.S. Red Cat Holdings will assemble and sell Ukrainian Magura V7 sea drones in the United States. Ukraine’s original sea drones were used to destroy a third of the Black Sea Fleet (see EDM, August 13, October 8, 2024; see Order of Battle of the Ukrainian Armed Forces, June 27). The next-generation Magura V7 sea drone is equipped with Sidewinder-armed air-to-air missiles, which can be used to defend itself against Russian air attacks (Defense Express, May 17). Ukraine is the first country to use a sea drone to shoot down two Russian jets in the Black Sea (Suspilne Novyny, May 4). U.S. company Bell is investing in helicopter production in Ukraine (Militarnyy, July 27).

Ukraine’s Role in European Security

Ukraine contributes to European security by testing military equipment on the battlefield, which NATO armies can then utilize. At a time of uncertainty regarding the U.S. commitment to the Trans-Atlantic alliance, Ukraine’s defense industry is the best means of achieving Europe’s strategic autonomy. Concerned that Ukraine may lose access to the U.S. company Starlink, which provides satellite communications and internet services, Denmark is exploring alternatives, and Germany is funding Ukraine’s access to the French Eutelsat (Reuters; Kyiv Independent, April 4; Danish Ministry of Defense, July 14).

With lower costs, battle-tested equipment, and world-leading innovation, Ukraine is becoming the arsenal of the European Union and European NATO. European Commissioner for Defense Andrius Kubilius said, “Given that Ukraine’s security is also the security of the EU and Europe, Ukraine and its impressive defense industry will actively participate in a joint order under the SAFE [Security Action for Europe] framework” (UBN, March 24). The Group of Seven (G7) has an Extraordinary Revenue Acceleration (ERA) mechanism with a fund of $50 billion for the purchase of military equipment (The White House Archives, October 25, 2024). NATO has a Prioritized Ukraine Request List allowing its members to buy U.S. weapons for Ukraine (NATO, August 4).

Ukrainian military experience is vital for Ukraine’s security guarantees and Europe’s defense security in preparation for a potential future military confrontation with Russia. The launch of 19 Russian drones into Poland and Russian jets flying over Estonian airspace have alerted the European Union and NATO to the need to integrate Ukrainian military technology and training (see EDM, September 15). NATO’s use of expensive $400,000 AIM-9 Sidewinder-armed air-to-air missiles (or $1 million Patriot missiles) to shoot down cheaper $10,000 Russian drones is impractical and indicates the urgent need to build and use Ukraine’s far cheaper $1,000 interceptor drones (Kyiv Independent, September 11). Ukraine reportedly destroys over 80 percent of the hundreds of missiles and drones fired at it by Russia each night, while Poland destroyed only 4 out of 19 drones (Kyiv Independent, June 22; Polskie Radio, September 10).

A Polish-Ukrainian training center is to be opened in Poland using Ukrainian instructors to discuss the implementation of the Ukrainian drone industry (United24 Media, September 25). EU leaders are looking to Ukraine to assist them in building a drone wall of Europe’s borders with Russia, further integrating Ukraine and the European defense sectors (Euromaidan Press, September 23).

Ukraine appears distrustful of vague security guarantees such as those in the 1994 Budapest Memorandum (Budapest Memorandum, December 5, 1994). The United States is blocking Ukraine’s entry into NATO and is unwilling to provide troops for Ukrainian security guarantees (Ukrainian World Congress, October 24, 2024; RBC-Ukraine, August 30). Bolstering Ukraine’s armed forces and defense sector is the best security guarantee against future Russian military aggression by transforming Ukraine into an indigestible porcupine. Ukrainian President Volodymyr Zelenskyy is seeking for Europe to purchase $1 billion of arms for Ukraine from the United States each month, especially air defense, and to invest in Ukrainian defense companies (YouTube/@PresidentGovUa, August 25).

Ukraine is researching the production of an air defense system analogous to the U.S. Patriot system. Ukraine has received five Patriot air defense systems, three from Germany, one from the United States, and one from Romania. Spain and the Netherlands have supplied Patriot launchers or missiles. Metinvest, Ukraine’s largest steel maker, has built a shield for the control module of Ukraine’s Patriot systems (Kyiv Independent, January 3). Estonian company Frankenburg Technologies secured an investment from London-based Blossom Capital II LP and Shellona Ltd. for anti-air missiles and anti-drone equipment (UBN, March 13). Saab-AB is cooperating with the Ukrainian defense company Radionics on military electronics, sensors, and radars, which are vital for air defense (Militarnyy, March 12).

Ukrainian Defense Minister Denys Shmyhal said Ukraine is “ready to share our unique combat experience, technology, and innovations with our partners through joint ventures, transfer licenses, and open production facilities in partner countries” (UBN, July 23). The integration of Ukrainian and European defense companies is “mutually beneficial” for Ukraine and Europe by stimulating innovation, production, and investment in defense companies. Ukraine receives funding for its defense sector that boosts its economy and military, while Europe is assisted in its rearmament in the face of an imperialist Russia. Kubilius said, “We can leverage our industrial capabilities and mass production to support Ukraine. Ukrainians can teach us what modern warfare entails” (UBN, March 24).

Technological Integration With the European Union

The European Union’s ReArm Europe Plan/Readiness 2030 unlocks billions of euros in defense spending. The European Union’s SAFE instrument supports investment in defense production and joint defense projects with Ukraine (UBN, April 23). Nineteen EU members have requested SAFE loans to assist Ukraine (UBN, September 2). The European Union’s European Defense Industrial Program (EDIP) is allocating 1.5 billion euros ($1.76 billion) to the end of 2027, with 300 million euros ($352 million) dedicated to Ukraine’s defense sector (UBN, June 25).

Ukrainian Minister of Digital Transformation Mykhaylo Fedorov said, “Ukrainian technologies are effective everywhere—on land, in water, and even in space” (Kyiv Independent, March 4). Lithuanian Defense Minister Dovile Sakaliene agreed, saying Ukraine became a “world-class player due to its high-level expertise, based on direct battlefield experience, the motivation and competence of engineers, and the future-oriented mindset of key decision-makers” (Kyiv Independent, March 2).

In 2026, Ukraine is expected to receive $120 billion in military aid, with half of the funding coming from its European allies. Ukraine is expecting to generate between $10 and $30 billion from weapons sales abroad that began this year (UBN, July 23). Ukraine has sufficient capacity to increase its domestic military production from its current 55 percent usage. Ukraine is expected to produce 4.5 million FPV (first-person view) drones this year, which the Ministry of Defense will purchase for military purposes. Ukraine has the capacity to increase production to 8–10 million drones per year.

In 2025, Ukraine began exporting its military products after ensuring there was a sufficient supply for its military needs and producing equipment abroad where it was safe from Russian bombing. Ninety-seven percent of defense companies are ready to export their products (UBN, September 1). The Ukrainian parliament compiled a list of countries to which Ukrainian military products could be exported, prioritizing NATO and EU members. Ukraine’s AOZ caps prices, provides legal documents and transportation, checks the buyer’s record for any corruption, and blocks any attempts to export to Russia, Belarus, and Iran (Kyiv Independent, July 8). Exports would bring in financing to Ukraine’s defense sector and reduce Ukraine’s trade deficit.

With the United States and Germany opposed to their missiles being fired into Russia, Ukraine has expanded its indigenous missile production. Germany continues to refuse to send the long-range Taurus missile to Ukraine, despite Friedrich Merz’s promise to do so during the 2025 election campaign (Euromaidan Press, July 12). Instead, Germany is investing in Ukraine’s long-range missiles. It has funded Ukraine’s first hypersonic missile, the Hrim-2, which has double the payload of ATACMs (Army Tactical Missile System) and is used to destroy bunkers, logistics hubs, air bases, and ammunition depots (Euromaidan Press, June 23). Launched from a mobile vehicle with a 450-mile range, Hrim-2 can be quickly moved to escape counterfire. At least ten Ukrainian defense companies are building various types of missiles (UBN, September 16).

Denmark, Norway, and the “Danish Model” of Cooperation

In July, Ukraine and Denmark signed an agreement to produce military equipment in Denmark (Ukrainian Government, July 4). Minister for Strategic Industries Herman Smetanin said:

A year ago, Denmark became the first country to finance the production of weapons by Ukrainian enterprises. Today, Denmark has become the first country to which Ukraine exports its domestic defense technologies for production, scale-up, and supply to the Ukrainian army. This signing is a historic moment and a unique case for the Ukrainian defense industry (Ukrainian Government, July 4).

Ukraine has also outsourced military production to Norway (Norwegian Government, November 15, 2024). Additionally,Russian Ambassador to Denmark Vladimir Barbin stated in response, “If Ukraine produces rocket fuel for cruise missiles on Danish soil, it will become increasingly difficult not to view Denmark as a direct participant in the conflict” (TASS, September 3). A day later, Russia attacked a Danish humanitarian demining group in Chernihiv oblast, killing two and injuring eight people (Obozrevatel, September 5). Later that month, many unidentified drones flying over Denmark forced the closure of its airspace (Euronews, September 26).

Denmark has pioneered military cooperation with Ukraine. Of the $436 million in military aid given to Ukraine in 2024, 80 percent was from Denmark (Center for Eastern Studies, July 25). The “Danish Model,” which provides financial assistance from government budgets and interest accrued on frozen Russian assets to Ukraine’s defense sector, is also pursued by the United Kingdom, European Union, the three Baltic states, Norway, Sweden, Iceland, the Netherlands, and Canada (Ukrainian Ministry of Defense, June 5).

The Ukrainian defense company FirePoint plans to open a military plant in Denmark, the first outside Ukraine, to produce rocket fuel for both domestic use and export, aiming to generate revenue (Militarnyy, September 4; see EDM, September 17). Denmark is producing long-range drones, with half of them being donated to Ukraine and the other half for domestic use (Kyiv Independent, July 25). Ukraine has also launched a joint drone production line in Denmark (Kyiv Independent, September 5).

The United Kingdom and Western European Partnerships

The United Kingdom’s ADS Group, uniting aerospace, defense, security, and space companies, is working with the Ukrainian Gunsmiths Council. A proportion of British-produced air defense and multirole missiles and launchers are sent to Ukraine (UBN, June 25). Ukrainian Skyeton and British Prevail Solutions defense companies are jointly manufacturing Raybird drones in the United Kingdom and supplying them to Ukraine (UBN, July 3). Ukrspecsystems is set to jointly produce reconnaissance drones in the United Kingdom (Kyiv Post, September 8). Skyeton and Prevail Solutions will jointly produce high-altitude drones in the United Kingdom (Skyeton, July 2). Next year in the United Kingdom, Ukrainian defense company Ukrspecsystems, which produces eight types of drones, will launch a new production factory and training site (EuromaidanNews, September 8). The United Kingdom’s largest unmanned aerial vehicle (UAV) factory was scheduled to open in Swindon in 2026, built by Tekever, a Portuguese company, to produce AR3 drones (Tekever, accessed September 26). The United Kingdom government has purchased many of its drones for Ukraine (Ukrinform, June 24). A huge explosion shook an existing military warehouse in Swindon (BBC, September 25).

Ukrainian defense company FirePoint has produced the FP-1 drone and launched Ukraine’s most advanced Flamingo FP-5, FP-7, and FP-9 long and medium-range missiles. The FP-5 uses a Ukrainian Ivchenko AI-25TL turbofan engine and is the “world’s largest and longest-range ground-launched cruise-missile systems” with the system “designed as a low-cost solution, incorporating commercial off-the-shelf and repurposed components” (IISS, September 5). The FP-5, whose first use against Russia was in August, has a 2,000-mile range and carries a 1,150-kilogram warhead (Militarnyy, August 31).

U.K.-French Storm-Scalp and Ukrainian Neptune missiles have a shorter range than the FP-5. Ukraine currently produces one FP-5 per day, with plans to increase this number, depending on Western financing, from two to seven missiles per day (Kyiv Post, August 21, September 24). FP-7 has a 124-mile range and a 150-kilogram payload, while the FP-9 has a 530-mile range and an 800-kilogram payload (Kyiv Independent, September 5).

French Foreign Minister Jean-Noël Barrot said, “From the French side, there is such great interest and desire to cooperate with Ukrainian drone manufacturers.” Their visit to Ukraine “reflects the shared intention to speed up cooperation and launch joint production of weapons and drones in Ukraine” (Kyiv Independent, July 22). Renault has returned to military production for the first time since 1945 and has discussed producing drones in Ukraine (Le Monde, June 15). Thales cooperates with the Ukrainian state company Ukroboronprom in air defense, radar, electronic warfare, tactical communications, and electronic systems (Government of Ukraine, February 15).

Nordic-Baltic and Central European Defense Network

The eight Nordic-Baltic countries—Norway, Iceland, Denmark, Sweden, Finland, Estonia, Latvia, and Lithuania—have been particularly active in supporting Ukraine’s defense companies (UBN, June 23). They launched a drone coalition for Ukraine in February 2024, which unites nine NATO members. Denmark is collaborating with Ukraine on the Bohdan howitzer, as well as tactical, reconnaissance, and long-range drones, loitering munitions, and electronic warfare. Norwegian Radionor Communications and Kongsberg Defense and Aerospace (KDA) are enhancing Ukraine’s air defense, specifically the NASAM (National Advanced Surface-to-Air Missile System). Finnish Double Tap Investments invested in Vyrok reconnaissance and strike drones through the Ukrainian defense company Black Forest Systems (Dev.ua, February 17; Ministry of Defense of Ukraine, July 10). Finnish Summa Defense cooperates with Ukrainian Kort, Elf Systems, and SkyAssist companies on ground, air, and sea drones (Militarnyi, November 28, 2024).

Ukraine produces independently, and with foreign investment and partners, personnel carriers, different types of drones, ammunition, and light military buggies, which have speeds of up to 90 miles per hour that can outrun drones. Lithuania is cooperating with Ukraine in the building of the Palianytsia long-range drone missile (Kyiv Independent, September 6, 2024). Latvia is producing the Patria armored personnel carrier for Ukraine (Euromaidan Press, September 17). Spanish Technove and Ukrainian Prakitika jointly produce the Djura and Kozak armored personnel carrier (Kyiv Independent, April 15). These vehicles serve as troop carriers and medical evacuation units, featuring advanced protection and enhanced mobility, making them ideal for special forces. Ukrainian A3Tech manufactures demining equipment for Croatian DOK-ING (DOK-ING, September 12). MITS Capital and Green Flag Ventures have also invested in Estonian-Ukrainian Teletactica to build electronic warfare-resistant communications systems (Kyiv Post, July 17).

Foreign Companies and Ukraine’s Defense Industry

At least 40 Western defense companies are working with Ukraine, including from the United States (Lockheed Martin, Bell, Northrop Grumman, Raytheon Technologies), United Kingdom (BAE Systems, Tekever), Germany (Rheinmetall, KNDS, Helsing), France (Thales, Nexter, Renault), Türkiye (Baykar), Italy (Leonardo), Sweden (Saab), Norway (Radionor Communications, Kongsberg Defense and Aerospace), Denmark, Netherlands, Czechia (Colt), Poland, Lithuania, and Canada (Roshel) (Baykar, October 28, 2022; BAE Systems, April 10, 2024; Thales, June 18, 2024; Kyiv Post, July 12, 2024; Colt, July 16, 2024; KNDS, October 1, 2024; RTX, January 16; Helsing, February 12; SAAB, March 12; The New Voice of Ukraine, June 5; Kongsberg, June 22; Ukrainian Defense Ministry; Leonardo, July 10; Ukrainska Pravda, July 25; Tekever; Rheinmetall, accessed September 24). Their defense companies are testing prototypes on the battlefield, investing in Ukrainian defense companies, and operating repair and maintenance plants.

Eighty members of GICAT visited Ukraine and met with 200 Ukrainian defense companies. GICAT unites 480 French companies in the defense and security sector, undertaking research and development, marketing, and joint production. GICAT and the Ukrainian Council of Gunsmiths signed a memorandum on strategic cooperation during the July France-Ukraine Defense Innovation Forum (Ukrainian Council of Gunsmiths, July 21).

German companies have been at the forefront of boosting military production and military cooperation with Ukraine and plan to increase their investments (UBN, February 17). Rheinmetall has maintenance and repair plants, as well as anti-aircraft production facilities, and annually produces 300,000 artillery shells for Ukraine (Euromaidan Press, August 11). Rheinmetall will provide Ukraine with Skyranger 35 air defense systems, which could be mounted on Leopard tanks (Kyiv Independent, September 9). KNDS, manufacturer of Leopard 2 tanks, has a network of military repair plants (KNDS, October 1, 2024). Hensoldt is collaborating with a Ukrainian defense company on radar systems (Hensoldt, July 24). Quantum Systems, with funding from British venture capital firm Balderton Capital, has research and development offices and produces 80 AI-driven Vector reconnaissance drones each month in Ukraine (Balderton, May 6; UBN, May 7). Helsing is integrating AI technology into Ukrainian defense companies and producing AI-driven strike drones. Spotify founder Daniel Elk invested 600 million euros ($704 million) into Helsing’s Ukrainian production (UNN, June 17). Germany has been central to boosting Ukraine’s air defense, and Diehl Defense supports the IRIS-T air defense system that has been transferred to Ukraine (Ukrinform, March 9).

Poland’s UNIMOT and PZLD jointly produce drones and anti-drone interceptors with Ukrainian defense companies (Kyiv Independent, July 29). Poland’s WB Group produces the FlyEye drone in Ukraine (UBN, September 3).

Ukraine is open to Western defense and software companies testing their prototypes. Fedorov stated that Ukraine has millions of hours of combat footage, and “the data we have is priceless for any country” (Kyiv Independent, August 27). Helsing sent 6,000 medium-range HX-2 AI-powered and 4,000 HF-1 strike drones to Ukraine. Following the success of their testing on the battlefield, it is now supplying thousands to Ukraine (President of Ukraine, December 2, 2024). The HitchHiker interceptor drone, developed by U.S. companies IronNet (supplying defense against cyberattacks) and Asterion Systems (supplying tracking, targeting, and destruction capabilities), received a positive evaluation after being tested on the Ukrainian frontline (United24Media, November 30, 2024). The Finnish company Insta tested its Steel Eagle extended-range drone in Ukraine and incorporated Ukrainian-made parts (Insta, January 29).

Ukrainian Battlefield Innovation

During the LANDEURO conference, organized by the Association of the U.S. Army (AUSA) in Germany and attended by 2,000 participants, Ukraine’s Brave1 launched the Test in Ukraine platform (UBN, July 18). The platform provides facilities for testing technologies in real battlefield conditions in Ukraine, utilizing feedback from the military, a fully equipped testing ground, and connections with Ukrainian manufacturers for joint production and faster deployment (TestinUkraine). NATO and Ukraine have already created a joint training center, and Ukrainian defense companies are working toward standardization with NATO military equipment (NATO, September 24). Ukraine is producing the Bren2 rifle under license from Ceska Zbrojovka (Colt, February 23, 2024).

Ukraine is a leader in developing the Tryzyub (Trident) laser killer fitted on a truck bed and used against drones, glide bombs, cruise and ballistic missiles, jets, and helicopters (Militarnyi, April 13). Its competitors are the South Korean Skylight and British Dragonfire. One of the most feared Ukrainian inventions is the Jonik magnetic-influence fuse, which is used to create proximity-activated booby traps (VKontakte, September 19).

Russia’s military budget of $150 billion is three times that of Ukraine. Drones compensate for Ukraine’s smaller population and armed forces in providing coverage of the long 750-mile frontline through kill zones. AI-driven drones require only three soldiers—planner, operator, navigator—as opposed to nine previously. As a democracy, Ukraine is also sensitive to its military casualty rates. Drones can deliver grenades, mortar rounds, mines, thermobaric charges, and cluster munitions. They account for about three-quarters of Russian casualties, which are between seven and ten to one Ukrainian.

In kill zones, it is difficult to move vehicles, resupply troops, and evacuate wounded. Ground robotic unmanned vehicles were initially used for mining and demining, but are increasingly used to evacuate wounded soldiers and deliver food, water, medical supplies, ammunition, as well as large aerial drones, quadcopters, and hexacopters. By the end of 2025, the Ukrainian armed forces are expected to have 15,000 unmanned ground vehicles (Ekonomichna Pravda, March 31). Currently, they are used in 90 percent of their work for logistics, but this is changing to a more balanced use. On December 20, 2024, Ukraine was the first country in history to use only unmanned ground vehicles to clear mines and mounted with machine guns and FPV drones to attack Russian forces (Suspilne Novyny, December 21, 2024).

AI and the Future of Warfare

By the end of 2025, at least 90 percent of Ukrainian drones are expected to be driven by Artificial Intelligence (AI) (Kyiv Independent, August 27). AI-driven drones have a higher success rate at hitting their targets than FPV drones. After locking onto their targets, AI-driven drones flying at higher altitudes switch to AI mode, making them not susceptible to electronic warfare. Ukraine is using drone swarms to hunt down Russian reinforcements and supplies with no escape routes, which has created the largest encirclement of Russian troops yet in Pokrovsk, trapping enemy soldiers in three separate pockets with no escape routes (Euromaidan Press, September 29).

The Ukrainian defense company Swarmer, with investment from U.S. company Radius Ventures, has developed software that enables drones to autonomously determine which targets at the base to strike first (Ukrainska Pravda, September 16). A group of three drones could include one reconnaissance drone and two attack drones. AI technology will enable the sending of swarms of 100 drones.

Bomber AI-driven drones have a significantly extended range of 1,100 miles and a higher payload to target ammunition dumps, military headquarters, repair workshops, radars, and air defense systems behind Russian lines. One of the Ukrainian bomber drones is the AN-196 Lyutyy, 600 of which were financed by Germany. Lyutyy accounted for 80 percent of Ukrainian attacks and damaged and destroyed 20 percent of Russian oil refineries in 2024–2025 (Euromaidan Press, July 7).

Ukraine will build 100,000 long-range drones this year. Swarmer and disinformation software company Osavul established a joint venture in AI-driven long-range drones  (UBN, November 26, 2024). U.S. company Auterion’s Skynode minicomputer is installed on an inexpensive drone produced by Ukrainian defense companies Vyriy and Sine Engineering (Ukrainska Pravda, November 18, 2024).

Ukrainian defense company Buntar Aerospace, which received a $3 million investment from Ukraine, the European Union, and the United States, is building what Ivan Kaunov, its director, describes as the “Cadillac of Ukrainian surveillance drones,” which is “high-cost, premium quality, and repeat usage.” Its latest model, the Buntar-3, which costs $200,000, remains inexpensive compared to the cost of similar Western drones (UBN, November 26, 2024).

The Fourth Law Ukrainian defense company is a leading producer of AI-driven drones, with investments from European, U.S., and Canadian sources (Militarnyi, July 15). The Ukrainian company 3DTech is producing the Predator Shooter reusable interceptor mounted on a drone and firing 12-gauge shells (Militarnyi, July 25).

Ukraine’s defense sector is leading the world in the production of air, ground, and sea drones, as well as interceptor drones, and has established a leading position in the production of both short- and long-range missiles. Ukraine deploys 170 different ground, air, and sea drones on the battlefield, with a growing tendency for them to be AI-driven and utilize robotics (Kyiv Independent, August 27).

Ukraine’s partnership with European governments and defense companies, combined with its battlefield experience, is driving a technical revolution in military equipment and is indispensable for the security of Europe and NATO members.