Pentagon Backs $450M Loan to Build Attack Drones on U.S. Soil

The Department of War is putting up to $450 million behind a California drone maker in a bid to build America’s attack drones, and the parts inside them, on U.S. soil, according to a Monday announcement from the department’s Office of Strategic Capital.

The office said it signed a conditional loan commitment of up to $450 million with Neros, a Torrance, California, company that designs and builds low-cost small drones, according to the department’s release, which sUAS News republished in full. Neros said in a statement distributed by PR Newswire that it is adding $165 million of its own equity, bringing the total project to $615 million.

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— Department of War CTO (@DoWCTO) November 2, 2026

The department framed the deal as a direct step under President Donald Trump’s Executive Order 14307, “Unleashing American Drone Dominance,” according to the release. The goal, the Office of Strategic Capital said, is to expand domestic manufacturing and reduce reliance on foreign-made components.

Motors, radios and batteries made at home

According to the department, the money will support Neros’ plans to build complete drone systems and ground control stations along with key components such as motors, radios, flight electronics, sensors and batteries. The release said the Torrance plant will also supply parts that comply with U.S. defense procurement law to other American and allied drone makers.

“Neros has already demonstrated an ability to design, manufacture, and deliver exceptional small unmanned aircraft systems,” David A. Lorch, director of the Office of Strategic Capital, said in the release. “OSC’s investment will turbocharge Neros’ ability to manufacture drones and components critical for the production of drone systems.”

“Achieving Secretary Hegseth’s mandate for American drone dominance requires a secure and resilient industrial base here at home,” Under Secretary of War for Research and Engineering Emil Michael said in the same release.

Neros CEO and co-founder Soren Monroe-Anderson said in the company’s statement that “this capital puts Neros on the path to one million drones per year by 2028, and accelerates America toward drone dominance on a global scale.”

A company built without Chinese parts

Defence Blog reported that Neros, founded in 2023 by former drone racers, makes the Archer, a first-person-view attack quadcopter built without Chinese parts and approved under the Pentagon’s Blue UAS program. The outlet reported that the Marine Corps has made the Archer its program of record for one-way attack drones, that the Army awarded the company a contract worth up to $500 million in July, and that the department ordered 14,000 attack drones from Neros in September.

Inside Defense reported that Neros has been competing in the Pentagon’s $1.1 billion drone competition.

The loan is not final. The department said Neros must still meet financial, legal, technical, investment and due-diligence requirements before the deal closes, and Defence Blog reported that neither side disclosed the loan’s interest rate or term.

It is the office’s second large drone loan this year. Defence Blog reported that the Office of Strategic Capital offered up to $820 million to Performance Drone Works of Huntsville, Alabama, on July 31 to mass-produce drone components.

For conservatives who have warned for years that America’s military supply chain runs through Beijing, the deal is a concrete test of whether the administration’s drone push can turn into factories and production lines at home.

Sources

• Department of War release via sUAS News
• Neros statement via PR Newswire
• Defence Blog
• Inside Defense
• Department of War CTO on X

Reporting by Daily Beltway.