The Drone Decade Building the Infrastructure of the Future

Sure, great. And Tim, firstly, thanks for having me. And I love this conversation around drones, and also to share some insights into what we're doing at Ondas. I'll talk a little bit about sort of how that evolved. But I will highlight that we've invested significant time, money, and capital to really build some exceptional technology platforms, which is really the launching point of what I think is a really big business opportunity. But for us at Ondas, it really started with our other business, which is Ondas Networks, a wireless business. So Ondas Networks is providing wireless technology to critical industrial markets, and that means railroads, utilities, oil and gas — really these industrial markets. And you know, when we're providing this wireless pipe, it's essentially an upgrade. So we started thinking about, okay, if we're bringing a bigger data pipe, a wireless pipe to these critical markets, how do we fill that up? What are the use cases at the edge? And I kept coming back to the drone. I saw the railroads, I saw these utilities. They were trying to utilize drones for security, for inspection. And it was clear that it was creating a tremendous amount of value, but at the same time it was complex. They needed to integrate these into their operations. So in any event, again, on the wireless side it was two networks. There was the command and control, how the drone navigates. But then there's also the payload. When you're going out with a drone, you're collecting data. That might be video, it might be lidar, it might be thermal imaging. And that has to be analyzed, it has to be brought back for intelligence that's actionable. So that got us involved. We made an acquisition of American Robotics in basically Baltimore, and then we acquired Airobotics based outside of Tel Aviv, Israel. And that really gave us the platform technology that we have today. And as time has gone on, what we've seen is that really these are dual-use markets. When you're talking about security and intelligence and inspection for drone platforms like ours, you know, security is relevant for critical infrastructure, but it's homeland security, and of course military. So now we're active in dual-use markets with these dual-use technology platforms, and really, you know, turning the corner here and seeing a big growth opportunity.

A great question. So firstly, drones have tremendously widespread use cases, and that ranges from, say, public safety — we call that drone as first responder — to some of the industrial markets I just mentioned. Logistics and delivery, that's a massive market that's starting to see some maturation. Of course, then there's military and homeland security. Where we're focused is on that security and intelligence layer. And, you know, I would say specifically we're seeing a huge maturation in technology. That's particularly true for Ondas and our technology platforms, but it's also the case for the industry. So I think people might be underestimating how mature the technology stacks are. And then when you put on top of that the policy, right? The policy which has come from the White House relative to demand. The Department of Defense is leading the charge here and really sort of trying to transform the capabilities of the military, for example. You're seeing it with public safety and law enforcement, where they're deploying drones as first responders. That's hugely valuable. It really is a case where the drones are saving lives. And that's sort of really been a catalyst, and as we're seeing the markets mature and the technologies mature in parallel, regulations come on board, we're really setting the stage for a multi-year — in fact, I'd say it's a 10-plus-year investment cycle. It's going to be powerful.

Yeah, that's really important, and you got to sort of step back and maybe even acknowledge or remember that, you know, we've seen drones flying now for a decade or decades, and a lot of them started out as sort of consumer products, right? The toys, as some people would refer to them. And then that advanced where you saw, let's say, public safety — police officers started to say, 'Hey, these drones could be useful.' And they put them in their trucks or their cars, and then they brought them to the crime scene or an accident to put eyes in the sky. That was valuable. But again, that was on the continuity of how this technology is being used. And in parallel, we've seen significant advancements in all aspects of the drone, including batteries, the motors, payloads, right? The quality of that sensor, whether it's a video camera, a lidar sensor, etc. All that's critically important, but I think where we see the industry really being poised to meet the opportunity is related to autonomy. And so when you're putting together — this is really the deep integration of physical AI. So it's sensors, it's compute, it's software, right? So it's that integration. And in terms of the industry and companies like Ondas, that's getting it out there, it's iterating, right? It's sort of failing, right? A lot of times when you're introducing those autonomous systems, you have to crash it more than a few times to perfect it. But now we're there, and the rate of change or the rate of maturation of these technologies is up and to the right. And you see that with physical AI, right? The bigger your data libraries, the more experiences you have, machine learning tools around computer vision — all makes this work better and better and better. So that's really what it is. I wouldn't point to, say, the batteries or the motors or even the sensors. It's really that physical AI and the integration of all these capabilities. And now we're in the field and it's scalable. At the same time, I'll add this: it's not just about developing the technologies themselves, we in parallel have been developing the use cases, right? So you get a drone out there that's flying, you make it autonomous. The hardest thing is to make it land every time, right? The little drone will take off, then comes back and lands. But then you have to make it valuable, right? And that gets into the payload and how you specialize that, how you specialize the data analytics, say, for a certain use case. So all of that is really, you know, hitting that point of inflection, and it's quite exciting.

You know, I think everything needs to sort of continue to mature in parallel. And like I said, I do believe that the technology is mature, the use cases are very valuable, the ROI is there. But all of that's going to get better and better as we get more scale. Some of the bottlenecks you see to industry growth are really somewhat, I'd say, structural, but in the sense that they're solvable. So today we have a supply chain in the US that is small, right? And that reflects a small sector. And at the same time, there's drone services that you need to deploy these technologies. Even autonomous drones, we have to have field support, sustainment. It's folks who are installing and maintaining systems, for example. All of that needs to get scale. And I think I'd say I'm quite optimistic about it, but it isn't the headlines, right? So there's a lot of folks who look at the industry and say, 'Okay, it's in the tens of billions of dollars of TAM, right? Total addressable market.' And they say, 'Okay, well, how do we do that when we don't have that supply chain mature? How do we do that when you don't have the scale with the field services to support this?' And the infrastructure around some of the airspace awareness tools with it, whether it's radar or air traffic management and things like that. And what I like to remind people is that we don't have to build a $10 billion industry in 12 months, right? There's going to be a process, and as we're doing this and investing behind it, a lot of those perceived bottlenecks, they'll be maturing in parallel, right? There'll be investments in the supply chain, there'll be companies that come, and Ondas will be doing this ourselves, maturing the field support. So we have folks in the field who can support these valuable technologies on behalf of customers. Of course, regulations continue to improve. So you think of it as sort of industries — all of this has to come and mature together, and I think we've seen that many, many times in many technology adoption curves.

Yeah, great question. And when we talk about autonomy, we're talking about drone infrastructure. So our systems essentially operate out of docks, right? We install these docking stations. They're typically at critical locations, whether it's an airport, a maritime port, a data center. It might be at a military base or a border. We're protecting some population center or critical asset, government building, etc. And you know, to develop that autonomy where you're having remote operations, this infrastructure is deployed as fleets. So, you know, there's scale here. And if you have to have one pilot to every drone, you don't get scale, right? That's not just a cost, which is significant — one pilot to one drone — but it's also the infrastructure, the maintenance, all of that, right? So you have to be truly autonomous, it has to be infrastructure, and you have to be able to operate that infrastructure from a remote location that can be centralized, right? So one pilot to many, essentially overseeing these flights. So again, that takes time, right? To perfect that so you're truly autonomous, because if the drone doesn't land every single time, it's not autonomous. It breaks down in that labor component. It's not reliable. So, you know, coming back to sort of how did we get there — it's through iterations, it's through working with customers in the field. And I'd say, you know, I think we're certainly very pleased with where we're at because we're starting to see that inflection point. You know, one example, Tim, is we have a customer, a public safety customer in Dubai, who are deploying fleets. So we have a dozen of our docking stations used for emergency response, surveillance, and situational awareness. And that is all 12 of those docks — they're about halfway through the ubiquitous citywide coverage, all of them being controlled and operated from a single command center. So that's scale. And it's just, you know, about the iterations — getting it perfected, getting it better every day.

Yeah, so firstly, I'd say you're seeing regulations, and I'm talking about the permissiveness of commercial drone operations, autonomous operations at scale. Our regulations are rapidly improving, and that's reflecting rapid improvement in the technology, right? And the demonstration of safe drone operations and safe drone integration into our national airspace. And to that point, the FAA has been very active and engaged with industry to get the regulatory process moving up and to the right, right? The Trump administration has been very deliberate. They're seeing the value of the drone economy to our national economy and to our national security. So there's been a couple of executive orders going back to June which have really encouraged the FAA to accelerate those regulations. And we're at the moment where we believe within the next 12 months, in fact less than 12 months, we're going to have new rules that allow beyond visual line of sight operations for drones at scale. So that's critically important. Some of the things you're going to see, Tim, are — there's going to be some infrastructure around airspace awareness tools, and that's radar or other sensors that are part of the equation from a FAA standpoint. But you're also — I don't think you necessarily look at this like you look at commercial aircraft, right? We're talking about particularly where we play in these security and inspection markets, the intelligence markets. So for example, shielded operations where you're going to fly lower to the sky, where commercial aircraft aren't allowed to begin with. Well, so, you know, there's going to be many different perspectives like that that are part of this rule, and I think the bottom line is the industry and the regulators like the FAA are certainly up to the task of solving this challenge. And that's why, you know, you're seeing so much excitement here about this growth curve, because the regulatory capabilities here, or permissions we're going to get, is only going to support that S curve of adoption.