Shield AI raises its enormous Series F funding to $2.8 billion by adding $300 million in debt and equity.

Defense tech startup Shield AI has expanded its Series F funding round, securing an additional $300 million in equity and debt, raising the total round to $500 million. The funding comprises $200 million in equity closed in November, an additional $100 million in new equity at the Series F price, and $200 million in debt provided by Hercules Capital. Shield AI, with a current valuation of $2.8 billion, is focusing on developing an "AI pilot" technology to transform aircraft into autonomous systems.

The company's flagship product, Hivemind, enables teams of aircraft to operate independently, free from remote operators, communications, or GPS reliance. Shield AI CEO and co-founder Ryan Tseng attributes this capability to recent advancements in computing. He emphasizes the strategic importance of AI pilots in defense, likening them to conventional deterrents like aircraft carriers and guided missile submarines.

Tseng notes that AI pilots represent a significant paradigm shift in aerospace and defense, serving as a software-defined strategic deterrent made possible by recent advances in AI and computing power.

Venture debt, often criticized, is deemed a sensible choice for late-stage companies like Shield AI. It provides a capital injection for companies aiming to reach milestones such as profitability or exit. In Shield AI's case, the additional funding will likely support its growth and development efforts in the defense tech sector.

The San Diego-based company has recently introduced V-BAT Teams, a software product operating in conjunction with Hivemind. This software enables teams of V-BAT drones to execute missions autonomously and collaboratively.

In testimony before the U.S. Senate, Shield AI's president and co-founder, Brandon Tseng, emphasized the pivotal role of AI-piloted systems in the nation's overall deterrence strategy. He highlighted the significance of adapting to new types of warfare and the urgent need for the Department of Defense (DoD) to incorporate AI pilots into its force structure. Tseng stressed that bold actions are necessary for success in this evolving landscape of technological assets.