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Illustration: Sarah Grillo/Axios

Alarmed at the prospect of relying on Chinese-made drones for public safety and monitoring critical industries, U.S. investors and the federal government are newly backing a domestic drone industry of hardware and software companies.

The big picture: The moves come as the industry continues to be led by DJI, a Chinese hardware maker — and as concerns grow both in China and the U.S. about reliance on the other country's technology.

Driving the news:

  • Skydio, a U.S. firm best known for its self-navigating selfie drones, announced $100 million in fresh funding, several executive hires and new products aimed at expanding its presence in the commercial market.
  • The U.S. government is giving $13 million to five U.S. companies that are part of the drone industry as part of the COVID-related CARES Act. Skydio received $4 million, with AirMap, ModalAI, Graffiti Enterprises and Obsidian Sensors also receiving funding.

The big picture: Today's global tech industry builds many of its biggest products through a complex interdependence between the U.S. and China, with the U.S. leading the market for core technologies like chips and operating systems and China leading in hardware manufacturing.

  • Amid increasing tensions, both countries have taken long- and short-term measures designed to reduce such dependencies.

Skydio's first two drones were aimed primarily at consumers and designed to follow people around as they ran or tackled the ski slopes.

  • The company's pivot to the enterprise market could mean major cost savings for businesses looking for an alternative to the primarily non-autonomous drones offered by DJI, Skydio CEO Adam Bry suggested. Up to 80% of the costs in commercial drone programs are spent on training human pilots.

Yes, but: Other U.S. firms, such as GoPro, have tried unsuccessfully to compete with DJI head-on.

  • "It's not enough to be made in the U.S.," Bry told Axios.
  • But Skydio's focus on creating the software that allows drones to fly autonomously is a bet on where the industry is headed. "Over time more and more of our devices become completely defined by software," Bry said.

In other words, the future of the drone industry will resemble the arc of the computer and phone businesses, in his view.

Between the lines: Drones are seen as essential to national security given their role in tasks like inspecting bridges, cell towers and power infrastructure as well as their use in emergencies.

  • Critics of DJI, citing fears that Beijing could use drones to spy on or even attack U.S. infrastructure, say that's why the U.S. shouldn't be relying on Chinese drones. (DJI has long maintained its drones pose no risk, noting that government agencies and cybersecurity experts have vetted its gear and found no evidence of security flaws or backdoors.)
  • Skydio wants to play a role in those areas, but also announced Monday a series of principles around use cases it wants to avoid, including banning sales to regimes it deems repressive and barring the use of weapons in conjunction with its drones.

Go deeper

Sep 22, 2020 - World

Beijing draws Chinese companies even closer

Illustration: Annelise Capossela/Axios

Chinese Communist Party Secretary Xi Jinping announced last week that the party must strengthen its leadership over private companies, and that entrepreneurs must meet the party's needs. 

Why it matters: Xi's new announcement will increase fears that Chinese businesses may serve as a Trojan horse for the CCP.

Biden will reverse Trump's attempt to lift COVID-related travel restrictions

Photo: Tasos Katopodis via Getty

The incoming Biden administration will reverse President Trump's last-minute order to lift COVID-19 related travel restrictions, Jen Psaki, the incoming White House press secretary, tweeted.

Why it matters: President Trump ordered entry bans lifted for travelers from the U.K., Ireland, Brazil and much of Europe to go into effect Jan. 26, but the Biden administration will "strengthen public health measures around international travel in order to further mitigate the spread of COVID-19," Jen Psaki said. Biden will be inaugurated on Wednesday, Jan. 20 and Trump will no longer be president by the time the order is set to go into effect.

Dominion sends cease and desist letter to My Pillow CEO Mike Lindell

Photo: Stephen Maturen/Getty Images

Dominion Voting Systems on Monday sent a cease and desist letter to My Pillow CEO Mike Lindell over his spread of misinformation related to the 2020 election.

Why it matters: Trump and several of his allies have pushed false conspiracy theories about the company, leading Dominion to take legal action. It's suing pro-Trump lawyer Sidney Powell for defamation and $1.3 billion in damages, and a Dominion employee has sued Trump himself, OANN and Newsmax.