US drone stocks surge on talks of government deal, while banned Chinese drone giant fights to clear its name
China-based market leader DJI still finds itself boxed out of the US market amid reports of a Trump administration deal to boost domestic drone production.
All is fair in love and war, unless you are a Chinese drone company.
A report today from The Wall Street Journal says that the US government is in talks to provide funding to a small group of the few American drone companies, which may include equity and debt positions. Shares of Florida-based Unusual Machines surged over 30% in premarket trading. It’s one of the companies mentioned in the report, and it also happens to have the president’s son Donald Trump Jr. as an investor and board member. While not mentioned as a possible recipient of government funding, other drone-linked stocks like Red Cat Holdings, Kratos Defense, AIRO Group Holdings, and AeroVironment also jumped in premarket trading. Privately held Neros Technologies, which is backed by Sequoia Capital, and Performance Drone Works were also highlighted as possible recipients of government funds in the WSJ report.
The Trump administration has announced plans for equity or warrant stakes in rare earth companies, Intel, defense contractor L3Harris, and most recently, the quantum computing industry.
While it seems like a good time to be in the drone business as the US military scrambles to build a domestic supply chain for the newly crucial battlefield technology, DJI, the China-based global leader in nonmilitary, quadcopter-style drones, still finds itself boxed out of the US market.
In December 2025, the Federal Communications Commission banned all foreign-made drones, citing “an unacceptable risk to the national security of the United States.” In February, DJI sued the FCC to fight the ban, saying that the company “has never been given the chance to provide information to address or refute any concerns.”
Today, DJI published a report showing the results of a thorough study by US cybersecurity firm OnDefend, which was commissioned by DJI. After five months of adversarial testing of the DJI Air 3S and DJI Matrice 4E drone platforms, OnDefend found no evidence of transmitting data back to China, supply chain tampering, or unauthorized backdoors in the hardware or software.
Adam Welsh, head of global policy at DJI, said in a statement:
“These findings confirm what DJI has consistently maintained: our products are secure, our data practices are transparent, and the concerns underlying our FCC Covered List designation are not supported by technical evidence. We commissioned this independent assessment because we believe facts should inform policy decisions. We are calling on the FCC to consider these findings carefully as part of our ongoing appeal, and we remain committed to engaging constructively with relevant authorities.”
DJI is estimated to have a dominant share of the nonmilitary drone market. Its products are used by first responders, farmers, infrastructure inspection firms, and many other small businesses. With few US-built alternatives matching the quality of DJI’s hardware and software, over 3,000 public comments were filed in opposition to the FCC’s rule on the agency’s website.
