Ukraine's drone makers can win Pentagon money. The price is becoming American companies.

To reach the Pentagon's $1.1 billion Drone Dominance program, Ukraine's combat-shaped drone firms must register as US companies, hand signing authority to US citizens, build on American soil, and open their technical files. The capability crosses the Atlantic; the ownership and the intellectual property mostly stay behind.

When the United States signed a contract this month to buy 2,000 Ukrainian-designed F10 FPV drones, the headline read like a win for Kyiv's war economy. The supplier on that contract, though, is not a Ukrainian company. It is Ukrainian Defense Drones Tech Corporation, a US-registered entity that fronts the Ukrainian maker F-Drones, because the Pentagon's procurement framework does not permit direct purchases from a Ukrainian supplier at all. To sell the drone it designed under fire, F-Drones first had to become, on paper, American.

The distance between that headline and the paperwork under it is the real story of Ukraine's entry into the US defense market, and a Defense Express analysis carried by Euromaidan Press on June 6 lays out how steep the terms run. The reporting calls them draconian, a label that fits the mechanics it describes.

Two Ukrainian names in a $1.1 billion contest

The Drone Dominance program launched on December 17, 2025, and runs in four six-month phases through January 2028, the Ukrainian outlet The Defender reported. Each phase is a live fly-off: military operators put competing drones through mission scenarios, the Pentagon buys from the winners, and the order sizes climb as unit prices fall. Phase 1 ran February to July 2026, about 30,000 units at roughly $5,000 each, $150 million split among up to 12 vendors. Phase 4, in 2027 and 2028, scales to 150,000 units at $2,300 each. Across the program the Department of War wants roughly 300,000 cheap, one-way attack drones by the end of 2027 for $1.1 billion in contracts, per DroneXL's account of the Washington Post reporting.

Two Ukrainian makers cleared the first cut. Ukrainian Defense Drones, carrying F-Drones' hardware, and Skycutter, the British partner of Ukraine's SkyFall, were among the 11 firms that advanced from the opening Gauntlet at Fort Benning, Georgia. Skycutter topped that leaderboard at 99.3 points out of 100 with SkyFall's Shrike 10 fiber-optic drone, The Defender said. For the second phase opening in August, 48 companies fielding some 78 designs qualified; F-Drones and General Cherry are both back, joined by newer Ukrainian entrants Stellarion, BlueBird Tech, and Grim Tech.

The capability the Pentagon is paying for

The draw for the Pentagon is experience its own industrial base never accumulated: three years of drone iteration under daily combat. A soldier with a $300 controller and a $500 payload can disable a multimillion-dollar armored vehicle, DroneXL noted, and that asymmetry is the whole argument behind the program. Ukraine now builds on the order of 4 million drones a year, against roughly 100,000 small drones the United States built in 2025. Much of the doctrine Washington wants was worked out at the front in Ukraine and in Iran's strikes across the Gulf rather than in a US laboratory.

That combat record explains the unusual field of bidders. The same contest that includes two battle-tested Ukrainian manufacturers also includes a firm that once monitored grass on golf courses and a startup run by a 23-year-old former drone-racing champion, the Washington Post found. The skills the military wants came out of the consumer and racing worlds, and out of a war, faster and cheaper than a prime contractor could deliver. On the demand side, that combat-shaped capability is something the primes cannot produce on command. The supply side is where it turns expensive for Kyiv.

What the paperwork actually requires

To bid on most US defense contracts a company has to be American, and standing up that entity is a gauntlet of its own. Per the Defense Express analysis, the new US firm needs UEI and CAGE identifiers, must file a Certificate Pertaining to Foreign Interests with the Defense Counterintelligence and Security Agency, register as a defense manufacturer, prove it uses no prohibited Chinese components, clear cybersecurity review, and meet classified-access standards.

How painful that registration gets depends on foreign ownership, which the analysis sorts into four tiers:

1. 100% foreign-owned: approval measured in years, and the security agency is unlikely to clear it for classified work at all.
2. Majority foreign-owned: a Special Security Agreement, under which independent US-citizen directors control classified programs and foreign owners are walled off from classified information.
3. Below 50% foreign-owned: a Security Control Agreement, under which a US citizen officially heads the company and registration takes months rather than years.
4. Below 5% foreign-owned: the only level that avoids the extra regime entirely.

In practice that reshapes who controls the company. The right to sign contracts and correspond with the Defense Department can pass to US-citizen executives. Proving the "no Chinese components" rule requires disclosing at least part of the technical documentation to US authorities, and production has to be set up or duplicated on US soil, creating American jobs. Little of it happens without lobbying, which is why foreign firms usually enter through a large US partner rather than alone.

Kongsberg, Rheinmetall, BAE wrote the template

Ukraine is not the first to meet these rules. Defense Express points to Norway's Kongsberg, which sold its Naval Strike Missile into the US not directly but through Raytheon: the American firm promoted the weapon as armament for the Littoral Combat Ship in exchange for technology transfer, US localization, and final assembly on American soil. Germany's Rheinmetall bought its way in instead, acquiring the US firm Loc Performance Products for $950 million, its certificates and production lines included, to chase the Bradley replacement. Britain's BAE Systems has operated inside the US base since the 1990s through a Special Security Agreement, building the M109 howitzer and the Bradley under an independent American directorate.

Ukraine's makers are walking the same path on a startup's clock. F-Drones entered through Ukrainian Defense Drones Tech Corp and swapped many components for European and American parts to satisfy NDAA rules, finishing sixth among the phase-one finalists. General Cherry now competes as Wilcox Cherry Defense LLC, a joint venture with America's Wilcox Industries struck in March. BlueBird Tech had to confirm it already had staff at a US production site before it could even apply. The route works, but its cost lands on the country that supplied the know-how.

The intellectual property is the real prize

On intellectual property, the interests split. "Both American and European partners are more interested in intellectual property than in the product itself," Ihor Fedirko, executive director of the Ukrainian Council of Defence Industry, told The Defender. Ukraine is not currently exporting the IP behind its drones, he said, and that refusal has become the bottleneck holding up a US-Ukraine "Drone Deal" and most joint ventures. The draft memorandum sat unsigned in early June, with President Volodymyr Zelensky saying on June 1 that the agreement needs President Donald Trump to say yes.

Fedirko's bind runs to the heart of the problem. "Without integration with Europe and the United States, we will lose 90% of our defence industry after the war ends," he said, while defending the choice to keep the IP at home because "everything we have and will retain is our experience." Ukraine needs American capital and the world's largest defense market to keep its drone industry alive after the shooting stops, and the price of admission is partial disclosure of the very designs that make it worth courting.

The US patent regime adds another layer. A Steptoe legal analysis of the Pentagon's Defense Patent Holiday, a program offering no-fee licenses to more than 500 government-developed drone patents before a July 22 deadline, warns that improvements a company builds on that technology fall under data-rights clauses giving the government automatic rights, and that under Section 1498 a firm whose patents are later used by the government is limited to suing for compensation rather than blocking the use. For a startup whose value is its designs, that narrows what those designs are ultimately worth.

What stays in Ukraine

Washington's ambition is also moving past buying hardware toward owning the suppliers themselves. Through its Office of Strategic Capital, the Pentagon is weighing equity stakes in drone makers and, per a recruiting document reported by Foreign Policy, plans to deploy up to $200 billion over three years into strategic firms. The reference case is the $400 million it put into rare-earth miner MP Materials for a 15% stake. A second pull is regulatory: on January 1, 2027, a federal ban on Chinese-made drone components takes full effect across US government programs, where the Pentagon has accounted for under 2% of federal drone purchases. The civilian and federal demand that opens then dwarfs the Pentagon's own buying, and the rules are written so it runs on US-owned, US-built systems.

For Kyiv the trade is lopsided on both sides of the ledger. Ukraine has a drone industry shaped by daily combat and already producing at a scale the US cannot match; what it lacks is the capital and the market access that only Washington controls. The capability will flow west regardless, because Ukraine needs the revenue and the post-war survival route Fedirko described. What stays in Kyiv, and what migrates into US-owned entities and US data rights along with the hardware, will decide whether Ukraine ends the war with a defense industry or with a licensing business.

Three things will signal which way it goes: whether Zelensky and Trump sign the Drone Deal and on whose IP terms; whether F-Drones' export license clears the Ukrainian commission now reviewing it; and how far the phase-two localization rule, which already requires batteries and motors from allied countries, tightens as the contest scales toward 2028.