Editor’s Note: Francesco Salesio Schiavi is a Middle East international relations specialist focused on security, defense, and governance in the Levant and the Gulf. He is a non-resident fellow at the Middle East Institute of Switzerland (MEIS), an advisor to the Rome Office of TRENDS Research & Advisory (UAE), and an associate fellow at the Bourse & Bazaar Foundation in London.
By: Middle East Program Team
Since July, a small warehouse in the United Arab Emirates has been turning out low-cost interceptors designed to knock Iranian drones out of the sky. The facility, run by an Emirati contract manufacturer on behalf of Powerus, a start-up based in West Palm Beach, Florida, produces around 30 Guardian counter-unmanned aircraft system (C-UAS) interceptors a day, with plans to reach 100. Each unit costs roughly $5,000.
The plant is modest in scale, but it illustrates a broader shift in how the United States supplies its Gulf partners with unmanned systems. As the Iran war has made low-cost, expendable drones a priority across the region, both to shoot down enemy drones and to strike targets, American firms are increasingly meeting that demand by producing or co-producing them in the Gulf rather than exporting finished systems.
Raytheon is building its Coyote interceptors in the UAE, Kuwait is acquiring Anduril’s Roadrunner-M interceptor drone, and Saudi Arabia is producing, with a Utah-based partner, the SKYWASP long-range one-way attack drone, which reportedly saw its first combat use in September.
Gulf Cooperation Council (GCC) states have spent years pushing for greater defense autonomy and supplier diversification, and the war has strengthened both impulses. Since February, Gulf states have signed new drone and air-defense agreements not only with American firms but with numerous partners, especially – but not limited to – Ukraine. Yet across this expanding roster of suppliers, diversification is not displacing American influence so much as coexisting with it: production and sourcing multiply, while the most consequential design, software, and export authorization remain concentrated in U.S. hands. In the UAE, for example, the emerging picture is of a defense-industrial relationship with Washington that is deepening rather than weakening. While Gulf states are localizing drone production and broadening their supplier base, the partnership with Washington remains at the center of the region’s drone build-up.
A Cost Problem Becomes an Industrial One
The UAE was the most heavily targeted GCC state after the U.S. and Israel attacked Iran in February. More than 500 ballistic missiles and over 2,200 Iranian drones have been fired at the Emirates between February and April, killing at least 15 people and shutting down an oil refinery. Emirati air defenses initially relied on Patriot PAC-3, THAAD, and KM-SAMs interceptors costing millions of dollars each to destroy Shahed drones worth about $80,000, an exchange ratio widely described as unsustainable.
The Guardian is designed to close that gap. Based on a Ukrainian design that proved effective against Russian Gerans, it uses 3D-printed components, off-the-shelf microchips, and GPS modules that snap together for quick assembly. According to the company’s website, it has a range of 15 kilometers and 28 minutes of endurance.
It is not a replacement for high-end systems. The Guardian cannot intercept ballistic missiles, and the two interceptors are widely seen as complements rather than substitutes for the PAC-3. Iran is also likely rebuilding its missile stockpile and could soon field jet-powered Geran-3 and -4 drones, raising the prospect of the kind of Russian-style drone salvos Ukraine has faced.
Powerus says affiliated factories make roughly 3,000 interceptors a month and aim to reach 15,000 a month worldwide by mid-2027 through a network of partner plants. That network already includes a partnership with India’s Paras Defence, a $22.3 million commercial contract to protect oil and gas infrastructure in the Middle East, and a U.S. Air Force contract worth up to $90 million. Brett Velicovich, the company’s co-founder, told the New York Times that the model reflects where the industry is heading: “Production has to sit close to where it’s needed.” Powerus is also due to merge with Nasdaq-listed Aureus Greenway Holdings, in which Donald Trump Jr. and Eric Trump hold an indirect stake; the company says the Trump sons have no involvement on the business side, and the White House denies conflicts of interest.
Powerus is not alone. In April 2025, Raytheon and the UAE’s Tawazun Council signed a term sheet to introduce production of the Coyote C-UAS interceptor. A production and assembly facility at Tawazun Industrial Park in Abu Dhabi was subsequently inaugurated. The Coyote reportedly costs $126,500 per interceptor. Emirati demand for the system was underscored in March when the State Department approved a $2.1 billion sale of ten Fixed Site-Low, Slow, Small Unmanned Aircraft Integrated Defeat System (FS-LIDS) systems, including 240 Coyote Block 2 interceptors, radars, and command-and-control equipment. Washington invoked emergency authority to bypass congressional review.
Kuwait’s approach differs in form but points in a similar direction. On June 5, the State Department approved a potential $1.98 billion sale of counter-UAS platforms centered on Anduril’s Roadrunner-M interceptor drone and Anvil kinetic interceptor, together with Pulsar electronic warfare systems, Sentry surveillance towers, and the Lattice command-and-control software. Kuwait, which by early July had reported intercepting more than 1,450 missiles and drones since February, is buying rather than localizing. But the package effectively ties its emerging counter-drone layer to a U.S. architecture built to detect, track, and defeat drones as a single system. Kuwait is also hedging. Alongside U.S. suppliers, it has expanded drone cooperation with Ukraine and the United Kingdom.
Washington has lowered some barriers to this cooperation. In September 2025, the State Department reinterpreted its export controls so that military drones are treated like fighter jets rather than missile systems, sidestepping the Missile Technology Control Regime. The change cleared the way for the sale of more than 100 MQ-9 drones to Saudi Arabia and allowed products from firms such as General Atomics, Kratos, and Anduril to be handled as foreign military sales. This mainly concerns larger, longer-range platforms rather than $5,000 interceptors, but it reflects a broader willingness to ease the transfer of unmanned systems to Gulf partners.
Saudi Arabia applies the same logic to offense. On May 25, Semafor revealed that SR2Vector, a joint venture between Utah-based Vector Defense and Saudi start-up SR2 Defense Systems, is developing a production facility near Riyadh for the SKYWASP, a one-way attack drone modeled on Iran’s Shahed-136 with a reported range of 1,500 kilometers. The project combines American engineering, Saudi financing, and local production, and is meant to serve export customers as well as the kingdom.
The system may already have seen combat. In mid-September, open-source intelligence showed SKYWASP drones striking Houthi targets in Yemen after a flareup of fighting there. The footage could not be independently verified, and it remains unclear who launched the drones and against what targets. If confirmed, it would mark a fast transition from announcement to operational use for a U.S.-Saudi joint venture, and a reminder that the same cost logic driving Gulf interceptor production applies in reverse: a domestically produced, Shahed-style strike drone is attractive precisely because it is cheap to build and expensive to defend against.
Powerus’s reach also extends toward Riyadh’s closest new defense partner. On September 16, the company signed a memorandum of understanding with the Pakistan Army that includes an initial drone-related order. Velicovich described the goal as “a joint technology relationship” and said the company was exploring ways to build technology in Pakistan. Pakistan is not a Gulf state, but it has been bound to Saudi Arabia since September 2025 by a mutual defense pact as well as historic ties. The deal suggests the start-up model could extend to the wider network of Gulf security partners.
What is being localized is largely manufacturing capacity rather than technological sovereignty. Under Powerus’s arrangement, the company retains responsibility for design, engineering, and technical standards, while the regional partner provides manufacturing capacity. Powerus supplies the training, components, and software, and the workforce is mostly Filipino and Chinese, according to the New York Times. Production is conducted “in accordance with applicable U.S. export control laws and authorizations.” Powerus itself lists among the risks to the arrangement that export licenses “may be delayed, denied, suspended, revoked or made subject to conditions.”
Washington, in other words, retains the levers that matter most. The Gulf gains speed, volume, and shorter delivery timelines, but not necessarily the intellectual property or industrial depth that real strategic autonomy would require.
Washington is not the only government moving in this direction. Since Ukraine’s president announced in March that Kyiv had signed a defense-technology agreement with Saudi Arabia, the UAE, Qatar, Bahrain, and Kuwait have all requested thousands of Ukrainian interceptor drones. In June, Kuwait went a step further and activated a bilateral defense agreement with Ukraine first signed in 2018, covering training, logistics, and equipment procurement, an arrangement framed less as a break from Western suppliers than as a low-cost complement to them. More than 200 Ukrainian military specialists have deployed to the UAE, Saudi Arabia, and Qatar to help train crews against drone attacks.
Other suppliers are entering the market. On April 10, the U.K. Ministry of Defense announced that the British start-up Cambridge Aerospace would supply “hundreds” of new interceptor missiles and launchers to Gulf partners, with first deliveries beginning in May and follow-on shipments over the next six months. The system Skyhammer is designed specifically to counter one-way attack drones, with a reported range of over 18 miles, and the contract also covers integration, technical support, and end-user training. Japan has taken a narrower step in the same direction, opening its defense-export list in April to a handful of eligible states for the first time in decades — of which, in the GCC, only the UAE so far qualifies.
None of this diversification has displaced the United States as the Gulf’s principal supplier. European and Asian interceptors remain a fraction of the volume moving through U.S. channels, and none yet match Washington’s layered architecture of radars, command-and-control software, and high-end batteries. The pattern is less a rotation away from American suppliers than a hedge built around them; Gulf states intend to keep buying from Washington while broadening their supplier base and building some capacity at home. The Guardian’s Ukrainian origins, like the SKYWASP’s debt to Iran’s Shahed-136, are a reminder that even the American firms in this space often adapt combat-proven foreign designs rather than originate them.
Low-cost unmanned systems may become a template for how Gulf localization, diversification, and U.S. influence coexist. Gulf states gain a domestic production footprint and cheaper alternative suppliers, while Washington keeps the design authority, software, and licensing that matter most. The tension is managed, not resolved, and how long it holds depends on whether Gulf partners move from assembly toward design.
Middle East
Editor’s Note: Francesco Salesio Schiavi is a Middle East international relations specialist focused on security, defense, and governance in the Levant and the Gulf. He is a non-resident fellow at the Middle East Institute of Switzerland (MEIS), an advisor to the Rome Office of TRENDS Research & Advisory (UAE), and an associate fellow at the Bourse & Bazaar Foundation in London.
By: Middle East Program Team
Since July, a small warehouse in the United Arab Emirates has been turning out low-cost interceptors designed to knock Iranian drones out of the sky. The facility, run by an Emirati contract manufacturer on behalf of Powerus, a start-up based in West Palm Beach, Florida, produces around 30 Guardian counter-unmanned aircraft system (C-UAS) interceptors a day, with plans to reach 100. Each unit costs roughly $5,000.
The plant is modest in scale, but it illustrates a broader shift in how the United States supplies its Gulf partners with unmanned systems. As the Iran war has made low-cost, expendable drones a priority across the region, both to shoot down enemy drones and to strike targets, American firms are increasingly meeting that demand by producing or co-producing them in the Gulf rather than exporting finished systems.
Raytheon is building its Coyote interceptors in the UAE, Kuwait is acquiring Anduril’s Roadrunner-M interceptor drone, and Saudi Arabia is producing, with a Utah-based partner, the SKYWASP long-range one-way attack drone, which reportedly saw its first combat use in September.
Gulf Cooperation Council (GCC) states have spent years pushing for greater defense autonomy and supplier diversification, and the war has strengthened both impulses. Since February, Gulf states have signed new drone and air-defense agreements not only with American firms but with numerous partners, especially – but not limited to – Ukraine. Yet across this expanding roster of suppliers, diversification is not displacing American influence so much as coexisting with it: production and sourcing multiply, while the most consequential design, software, and export authorization remain concentrated in U.S. hands. In the UAE, for example, the emerging picture is of a defense-industrial relationship with Washington that is deepening rather than weakening. While Gulf states are localizing drone production and broadening their supplier base, the partnership with Washington remains at the center of the region’s drone build-up.
A Cost Problem Becomes an Industrial One
The UAE was the most heavily targeted GCC state after the U.S. and Israel attacked Iran in February. More than 500 ballistic missiles and over 2,200 Iranian drones have been fired at the Emirates between February and April, killing at least 15 people and shutting down an oil refinery. Emirati air defenses initially relied on Patriot PAC-3, THAAD, and KM-SAMs interceptors costing millions of dollars each to destroy Shahed drones worth about $80,000, an exchange ratio widely described as unsustainable.
The Guardian is designed to close that gap. Based on a Ukrainian design that proved effective against Russian Gerans, it uses 3D-printed components, off-the-shelf microchips, and GPS modules that snap together for quick assembly. According to the company’s website, it has a range of 15 kilometers and 28 minutes of endurance.
It is not a replacement for high-end systems. The Guardian cannot intercept ballistic missiles, and the two interceptors are widely seen as complements rather than substitutes for the PAC-3. Iran is also likely rebuilding its missile stockpile and could soon field jet-powered Geran-3 and -4 drones, raising the prospect of the kind of Russian-style drone salvos Ukraine has faced.
Powerus says affiliated factories make roughly 3,000 interceptors a month and aim to reach 15,000 a month worldwide by mid-2027 through a network of partner plants. That network already includes a partnership with India’s Paras Defence, a $22.3 million commercial contract to protect oil and gas infrastructure in the Middle East, and a U.S. Air Force contract worth up to $90 million. Brett Velicovich, the company’s co-founder, told the New York Times that the model reflects where the industry is heading: “Production has to sit close to where it’s needed.” Powerus is also due to merge with Nasdaq-listed Aureus Greenway Holdings, in which Donald Trump Jr. and Eric Trump hold an indirect stake; the company says the Trump sons have no involvement on the business side, and the White House denies conflicts of interest.
Powerus is not alone. In April 2025, Raytheon and the UAE’s Tawazun Council signed a term sheet to introduce production of the Coyote C-UAS interceptor. A production and assembly facility at Tawazun Industrial Park in Abu Dhabi was subsequently inaugurated. The Coyote reportedly costs $126,500 per interceptor. Emirati demand for the system was underscored in March when the State Department approved a $2.1 billion sale of ten Fixed Site-Low, Slow, Small Unmanned Aircraft Integrated Defeat System (FS-LIDS) systems, including 240 Coyote Block 2 interceptors, radars, and command-and-control equipment. Washington invoked emergency authority to bypass congressional review.
Kuwait’s approach differs in form but points in a similar direction. On June 5, the State Department approved a potential $1.98 billion sale of counter-UAS platforms centered on Anduril’s Roadrunner-M interceptor drone and Anvil kinetic interceptor, together with Pulsar electronic warfare systems, Sentry surveillance towers, and the Lattice command-and-control software. Kuwait, which by early July had reported intercepting more than 1,450 missiles and drones since February, is buying rather than localizing. But the package effectively ties its emerging counter-drone layer to a U.S. architecture built to detect, track, and defeat drones as a single system. Kuwait is also hedging. Alongside U.S. suppliers, it has expanded drone cooperation with Ukraine and the United Kingdom.
Washington has lowered some barriers to this cooperation. In September 2025, the State Department reinterpreted its export controls so that military drones are treated like fighter jets rather than missile systems, sidestepping the Missile Technology Control Regime. The change cleared the way for the sale of more than 100 MQ-9 drones to Saudi Arabia and allowed products from firms such as General Atomics, Kratos, and Anduril to be handled as foreign military sales. This mainly concerns larger, longer-range platforms rather than $5,000 interceptors, but it reflects a broader willingness to ease the transfer of unmanned systems to Gulf partners.
Saudi Arabia applies the same logic to offense. On May 25, Semafor revealed that SR2Vector, a joint venture between Utah-based Vector Defense and Saudi start-up SR2 Defense Systems, is developing a production facility near Riyadh for the SKYWASP, a one-way attack drone modeled on Iran’s Shahed-136 with a reported range of 1,500 kilometers. The project combines American engineering, Saudi financing, and local production, and is meant to serve export customers as well as the kingdom.
The system may already have seen combat. In mid-September, open-source intelligence showed SKYWASP drones striking Houthi targets in Yemen after a flareup of fighting there. The footage could not be independently verified, and it remains unclear who launched the drones and against what targets. If confirmed, it would mark a fast transition from announcement to operational use for a U.S.-Saudi joint venture, and a reminder that the same cost logic driving Gulf interceptor production applies in reverse: a domestically produced, Shahed-style strike drone is attractive precisely because it is cheap to build and expensive to defend against.
Powerus’s reach also extends toward Riyadh’s closest new defense partner. On September 16, the company signed a memorandum of understanding with the Pakistan Army that includes an initial drone-related order. Velicovich described the goal as “a joint technology relationship” and said the company was exploring ways to build technology in Pakistan. Pakistan is not a Gulf state, but it has been bound to Saudi Arabia since September 2025 by a mutual defense pact as well as historic ties. The deal suggests the start-up model could extend to the wider network of Gulf security partners.
What is being localized is largely manufacturing capacity rather than technological sovereignty. Under Powerus’s arrangement, the company retains responsibility for design, engineering, and technical standards, while the regional partner provides manufacturing capacity. Powerus supplies the training, components, and software, and the workforce is mostly Filipino and Chinese, according to the New York Times. Production is conducted “in accordance with applicable U.S. export control laws and authorizations.” Powerus itself lists among the risks to the arrangement that export licenses “may be delayed, denied, suspended, revoked or made subject to conditions.”
Washington, in other words, retains the levers that matter most. The Gulf gains speed, volume, and shorter delivery timelines, but not necessarily the intellectual property or industrial depth that real strategic autonomy would require.
Washington is not the only government moving in this direction. Since Ukraine’s president announced in March that Kyiv had signed a defense-technology agreement with Saudi Arabia, the UAE, Qatar, Bahrain, and Kuwait have all requested thousands of Ukrainian interceptor drones. In June, Kuwait went a step further and activated a bilateral defense agreement with Ukraine first signed in 2018, covering training, logistics, and equipment procurement, an arrangement framed less as a break from Western suppliers than as a low-cost complement to them. More than 200 Ukrainian military specialists have deployed to the UAE, Saudi Arabia, and Qatar to help train crews against drone attacks.
Other suppliers are entering the market. On April 10, the U.K. Ministry of Defense announced that the British start-up Cambridge Aerospace would supply “hundreds” of new interceptor missiles and launchers to Gulf partners, with first deliveries beginning in May and follow-on shipments over the next six months. The system Skyhammer is designed specifically to counter one-way attack drones, with a reported range of over 18 miles, and the contract also covers integration, technical support, and end-user training. Japan has taken a narrower step in the same direction, opening its defense-export list in April to a handful of eligible states for the first time in decades — of which, in the GCC, only the UAE so far qualifies.
None of this diversification has displaced the United States as the Gulf’s principal supplier. European and Asian interceptors remain a fraction of the volume moving through U.S. channels, and none yet match Washington’s layered architecture of radars, command-and-control software, and high-end batteries. The pattern is less a rotation away from American suppliers than a hedge built around them; Gulf states intend to keep buying from Washington while broadening their supplier base and building some capacity at home. The Guardian’s Ukrainian origins, like the SKYWASP’s debt to Iran’s Shahed-136, are a reminder that even the American firms in this space often adapt combat-proven foreign designs rather than originate them.
Low-cost unmanned systems may become a template for how Gulf localization, diversification, and U.S. influence coexist. Gulf states gain a domestic production footprint and cheaper alternative suppliers, while Washington keeps the design authority, software, and licensing that matter most. The tension is managed, not resolved, and how long it holds depends on whether Gulf partners move from assembly toward design.
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