In April 2024, a demonstration of Shield AI’s V-BAT drone for U.S. Navy officers near Fort Stockton, Texas, was intended to showcase the aircraft’s autonomous capabilities and secure crucial military contracts. The V-BAT, a 12-foot-long vertical takeoff and landing drone designed to operate without GPS, represented the company’s primary revenue driver. But the event took a serious turn when the drone tipped over during landing. A service member approaching the aircraft suffered partial amputation of three fingers after contact with its spinning blades. The Naval Special Warfare Command later confirmed the injury, noting the individual made a full recovery after four months.
Shield AI, founded in 2015 by brothers Ryan and Brandon Tseng, had built a reputation as a leading contender in the competitive military drone market, rivaling companies such as Anduril and AeroVironment. The startup, valued at $5 billion, had raised hundreds of millions from investors including Andreessen Horowitz, USIT, and L3Harris. Its autonomous piloting software, Hivemind, had flown fighter jets, but the V-BAT remained the company’s commercial centerpiece. Brandon Tseng told Congress in 2023, “I have personally led the effort to scale revenues from zero to hundreds of millions of dollars in the defense sector, something maybe only three to five people have achieved in the past 30 years.”
The incident with the Navy exposed longstanding safety concerns. Internal documents and accounts from former employees indicated that hazards had been flagged years earlier. In 2022, a quality assurance manager reported the danger of propeller strikes during blower handling. In 2023, an employee’s shirt was shredded after being sucked into a propeller during a test flight. Several employees claimed they were fired or resigned after raising safety issues, with one stating, “You either had to do what you were told, or you would be let go… Even though we knew from experience what they wanted us to do was unethical.”
Ryan Tseng acknowledged the Navy mishap, stating, “It’s the opposite of our mission if somebody gets hurt. We exist to protect service members and civilians.” He emphasized that numerous safety improvements had since been made, including new landing gear that eliminated the need for human assistance during takeoff and landing, warning stickers near fan ducts, and mandatory flight suits for operators. Tseng said the V-BAT now retains “a perfect record of no injuries when following trained procedures” and has passed two Pentagon safety audits.
Despite these measures, the incident delayed customer decisions and impacted Shield’s financial projections. The company had anticipated more than $400 million in revenue for 2024, aiming for profitability by 2025. Those targets are now out of reach, though Tseng reported recent contracts worth over $100 million with European governments, including deliveries to Ukraine, and a five-year U.S. Coast Guard deal potentially worth $200 million.
Shield’s path to the V-BAT began with its Nova quadcopter, designed to autonomously navigate buildings in combat zones. While Nova secured early Pentagon interest, shifting U.S. military priorities toward China reduced demand. In 2021, Shield acquired Martin UAV, developer of the V-BAT, and integrated Hivemind software to enable multi-drone control. However, the V-BAT’s maturity was overestimated. Former employees cited cracked fuselages, faulty fuel systems, and multiple crashes during demonstrations, including losses over the ocean. Tseng admitted, “The V-BAT was not as… mature as I had thought it was when we acquired the company.”
A recent overhaul has improved the aircraft’s endurance to over 13 hours, range to more than 80 miles, and payload capacity to 40 pounds. In Ukraine, V-BATs have flown more than 150 missions. Shield also announced partnerships with Palantir for autonomous system control and Airbus for integrating Hivemind into helicopters. The company claims $1.9 billion in credible sales opportunities.
Following the Navy incident, Tseng offered to step down as CEO, and in April 2025, Gary Steele, former head of Splunk and Proofpoint, was named his successor. Tseng will serve as co-president alongside Brandon, focusing on global customer relationships. Brandon Tseng reaffirmed his commitment, stating he plans to remain “forever, until our mission is accomplished at grand scale.” L3Harris spokesperson Sara Banda summed up investor sentiment: “Shield AI is proving that autonomy at scale is not only possible but inevitable.”