DefenCe tech startup, Shield AI, has expanded its latest funding round with another $300m in equity and debt, bringing its total Series F to $500m, TechCrunch has reported.
According to TechCrunch, this total amount reflects $200m in equity closed in November, $100m in new equity raised at the Series F price and $200m in debt. The debt provider is Hercules Capital; Shield declined to specify the source of the additional equity. The company’s valuation now stands at $2.8bn, up from $2.7bn in November.
Shield AI said it was building an “AI pilot” to turn aircraft into autonomous systems. Its flagship product, Hivemind, will let teams of aircraft operate independently of remote operators, communications, or GPS. Shield CEO and cofounder Ryan Tseng credits the capability to recent advances in computers.
“AI pilots are becoming a strategic conventional deterrent in class with our aircraft carriers and guided missile submarines,” he said in a statement. “But interestingly, it’s the first strategic deterrent that is software-defined and has only recently become possible because of advances in AI and computing power. That’s a huge paradigm shift for aerospace and defense.”
While venture debt gets a bad wrap, it can make a lot of sense – especially for late-stage companies that need an injection of capital to reach the finish line (like profitability or exit). As opposed to being a last-ditch survival mechanism for struggling companies (as it sometimes can be for early-stage startups), venture debt at a later stage can be a smart way to capitalize on a late-stage growth company.
The San Diego-based company recently launched V-BAT Teams, a software product that operates with Hivemind and enables teams of V-BAT drones to execute missions autonomously and in coordination.
In recent testimony before the U.S. Senate, president and cofounder Brandon Tseng stressed the importance of AI-piloted systems to the country’s overall deterrence strategy, saying, “We believe AI-piloted systems will be the greatest military deterrent of our generation. We must get it right.” However, he added that incorporating AI pilots into the DOD’s force structure had been “difficult and murky.”
“As we observe new types of warfare, where the large exceptional military arsenals we have built can be incapacitated by small, cheaply built adversary armaments, we need the DoD to change the way it builds its force of the future: switching the paradigm away from what worked in the past and focusing its resources on the next game-changing technological assets,” he said. “Adopt AI pilots too slow, and we will fail. Bold actions are required if we are to win.”
