The FBI’s disruption of a plot to attack the UFC event at the White House using explosive-laden drones made headlines overnight. But for those of us working at the intersection of deep-tech and federal funding, the urgency of counter-drone technology was already undeniable, and the funding was already moving. This article is adapted from a Grant Engine webinar for US companies working in the counter-UAS space. We cover how DoW priorities have shifted, why small drones are such a hard problem, and where the money is right now.
How DoD Counter-UAS Funding Priorities Shifted in Recent Years
Josh: If you look back over the last eight years or so, the DoW’s relationship with drones has gone through three pretty distinct phases. The first was all about hardware replacing Chinese-manufactured drones, building American platforms. Fly faster, carry more, go longer. Blue UAS, DIU that whole push. Then around 2021 the conversation shifted to software. Hardware got commoditized, the edge became the algorithm. GPS-denied navigation, AI autonomy, swarm coordination. And now the whole thing has flipped it’s not about building better drones anymore. It’s about stopping them.
Zev: And with each one of those shifts, the funding priorities and budget allocations shifted with them. Where the DoW focuses, the money follows and right now it is firmly behind counter-UAS. There are more programs available now than there were even a year or two ago.
The Small UAS Threat: What US Allies Are Facing
Josh: Recently the US has been watching very closely how its allies have been dealing with the UAS threat. And there are really two very different stories: the large UAS threat, and the small UAS threat. In April 2024, Iran launched over 300 aerial threats at Israel: large UAS, cruise missiles, ballistic missiles. The US, Israel, Jordan and allied nations intercepted over 99% of them. For large UAS, the playbook proved that it works. But then look at what’s been happening in Ukraine, where small and cheap drones are taking out multimillion-dollar armored vehicles every single day. And on Israel’s northern border, Hezbollah running a persistent small drone campaign that forced the evacuation of entire communities and caused real casualties. Same era, completely different threat profile, where the existing counter response to smaller and cheaper UAS doesn’t work at scale.
Zev: And the way the DoW looks at that second picture is that’s what our troops are going to face. The US has always struggled with asymmetric warfare whether it was the jungles in Vietnam or dealing with IEDs, this has always been a struggle where cheap, cost-effective tools end up paralyzing multi-million dollar assets. And so the DoW is trying to get ahead of that quickly and as effectively as possible. The large drone problem has been solved or at least well managed. The small drone problem hasn’t. And when the DoW identifies a gap that significant, especially one playing out in real time on the evening news, the response is to fund it aggressively and fund it fast.
Why Small Drones Are a Fundamentally Different Defense Problem
Zev: Let’s talk about why the existing playbook doesn’t work for smaller UAS.
Josh: Intuitively you’d think we have Patriot batteries, we have rapid-fire anti-aircraft systems on ships, we have some of the most sophisticated air defense systems in the world. Why can’t we just use what we have?
Zev: It’s a cost mismatch an economics issue. When you have a $500 drone, or thousands of $500 drones shot out in a swarm, no matter how amazing your missile is, you’ve already lost by using that ammunition on a $500 asset. By getting you to bleed dollars into their low-cost attacks, they’ve already swung the balance of where the battle is being fought.
Josh: Right you can’t sustain hundreds of thousands of dollars of missiles for every $500 drone that comes in.
Zev: Exactly. And now we’re seeing an even bigger issue. A lot of the existing defense against low-cost drones relied on jamming and spoofing. But with fiber optic drones where the operator is connected via cable with no wireless signal and no RF emissions your jammer does nothing, your RF detection sees nothing. We’re starting to see a tangible lack of readiness to defend against those kinds of systems. And on top of all that, this threat shows up everywhere ships, forward bases, convoys, fixed installations. Whatever the solution is, it has to work across all of those environments.
Josh: So it’s not one problem, it’s four problems at once.
Zev: And that’s why the DoW is funding across all of them.
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JIATF 401: The DoW’s Centralized Counter-Drone Buying Office
Josh: How has the DoW responded to all of this organizationally?
Zev: In August 2025, Secretary Hegseth stood up JIATF 401 Joint Interagency Task Force 401. It replaced the old Joint C-UAS Office, but with something the JCO never really had: real acquisition authority and a direct line to the Deputy Secretary. This is now the DoW’s centralized counter-drone buying office.
Josh: They couldn’t have revamped the program and come up with a simpler name…?
Zev: (laughs) Welcome to the DoW. They committed $600 million to procure new C-UAS technologies and launched a Commercial Solutions Opening a CSO with four specific areas of interest: mobile systems, fixed-site, command and control, and integrated layered defense. A CSO is designed for mature R&D so if you have a working solution, this is the vehicle to get it in front of the DoW with real funding behind it.
Josh: And this is already moving.
Zev: Already moving. And here’s the thing the CSO is technically open until 2028, but programs like this fund the best technology as it comes in until the budget runs out. The CSO only dropped in February of this year, so there’s still runway but the companies that move early are the ones that get funded.
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PROGRAM SUMMARY: JIATF 401 Commercial Solutions Opening (CSO)
Sponsor: Joint Interagency Task Force 401 (DoW)
Vehicle: Commercial Solutions Opening (CSO)
Total Commitment: $600M
Max per effort: Up to $50M
Who can apply: Large and small businesses, mature R&D solutions (TRL 6+) Open until: 2028 (rolling fund as you go, don’t wait)
4 Areas of Interest: Mobile C-sUAS | Fixed-site C-sUAS | C2 & sensor fusion | Integrated layered defense
Status: Currently accepting solutions
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Two Open Funding Windows Specifically for Small Businesses
Josh: The JIATF 401 CSO is a fantastic program and it’s open for both large and small C-UAS companies. But let’s talk about two programs that are specifically for small businesses.
Zev: When we talk about the CSO, it’s a contracting vehicle that large businesses, academia, and small businesses can go after. But if you’re a new entrant in the space and you’re a small business, you’re best positioned to first focus on some of these smaller, easier-to-bite programs like the Navy SBIR and NATO DIANA. Two very different vehicles, one from the US Navy, one from NATO. Both have real funding and a direct path to fielding.
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Navy SBIR: The Open Topic C-UAS Opportunity
Zev: The first is a SBIR Small Business Innovation Research open topic from the Department of the Navy. Joint NAVAIR and NAVSEA, specifically for C-UAS. Phase I is $200,000 for six months, with an option for additional Phase I funds of up to $115,000. Phase II is probably in the range of $1 million to develop and demonstrate a working prototype. And it’s a higher funding ceiling than the Navy usually offers which is worth noting.
Josh: What are they actually looking for technically?
Zev: They list four areas AI-powered target recognition, swarm detection and behavioral analysis, non-kinetic defeat systems for naval platforms, and AI that can detect drones using adaptive camouflage. But honestly I wouldn’t pay too much attention to that if your solution looks different.
Josh: So it’s really an open topic.
PROGRAM SUMMARY: NAVAIR & NAVSEA SBIR Open Topic (DON26BX03-NP002)
Sponsor: Department of the Navy (NAVAIR & NAVSEA)
Vehicle: SBIR Open Topic
Phase I Base: $200,000 / 6 months
- Phase I Option: +$115,000 / 6 months
Phase II: ~$1M harden, ruggedize, marinize for operational prototype
Deadline: July 22, 2026
Who can apply: US small businesses at any stage of C-UAS development
Open topic: No narrow spec you bring your solution
Path to fielding: Phase III Navy adoption contract
NATO DIANA 2027: The C-UAS Funding Opportunity Most US Companies Don’t Know About
Zev: The second opportunity is NATO DIANA the Defence Innovation Accelerator for the North Atlantic. And I’d be willing to bet this one is off the radar for most companies in this space. Two of their 2027 challenges are directly relevant to C-UAS: scalable and adaptable countermeasures for air defence, and multi-domain autonomy of uncrewed systems. Selected companies get €100,000 through the accelerator programme, with a competitive path to €300,000 more in Mission Track funding.
Josh: And I’d note most US companies assume this is for European companies.
Zev: Common misconception. US companies are fully eligible. You need to be TRL 4 or above and incorporated as a company. But here’s what I think is underappreciated about this program if you’re a US small business, there’s obviously a gigantic customer in the DoW. But that is not the entirety of the market. This program gives you unparalleled access to all of those other allied nations’ militaries. Countries that are watching Ukraine deal with this issue right now and wondering how they’re going to manage it. This gives you a foot in the door with military stakeholders across 32 NATO member nations and the program is specifically designed to move solutions toward adoption across the alliance.
Josh: So beyond the euros, you’re getting exposure to allied defense organizations that most small US companies would never otherwise get in front of.
Zev: Exactly. The funding is the entry point. The network is the real value.
PROGRAM SUMMARY: NATO DIANA 2027 Air Defence Challenge
Sponsor:NATO Defence Innovation Accelerator for the North Atlantic (DIANA) Relevant Challenges: Scalable & Adaptable Countermeasures for Air Defence | Multi-Domain Autonomy of Uncrewed Systems
Accelerator Funding: €100,000
Mission Track: Up to €300,000 additional (competitive down-select)
Follow-on: Rapid Adoption Service prototype contracts with NATO member militaries
Deadline: July 3, 2026 URGENT
Eligibility: Companies only, TRL 4+, all NATO-allied nations including US companies
Programme starts: January 2027
Action Plan for C-UAS Companies Seeking Federal Funding
Josh: Let’s lay out a potential plan of action for a company in the C-UAS space looking to get non-dilutive funding. Zev, walk us through it.
Zev: First if DIANA is a fit, move today. July 3rd is two weeks away and that’s not a lot of runway. Second, engage the Navy SBIR it’s an open topic, so by definition if you’re working in counter-UAS you’re relevant. You’ll need to tailor your submission toward the end user, but it’s very doable. And third, keep your eyes on the broader landscape. JIATF 401 is just one example C-UAS is a top priority right now and new opportunities are going to keep coming. Programs like the CSO fund until the budget runs out, so positioning early matters.
Josh: At Grant Engine we help companies identify relevant opportunities and build proposals that are tailored toward the end-user and the agency funding the program. Not every company is going to be relevant but if you are, this could be a fantastic way to not only raise non-dilutive capital but also eventually land a DoW customer or an allied customer through NATO. The urgency here was real before the FBI disrupted a plot to attack the UFC event at the White House with explosive drones. Counter-UAS is a high priority, it will likely translate into many more opportunities in the near and long term, and the companies that get in early are the ones that shape those programs.
If you want to talk through whether any of these opportunities are a fit for your company, reach out by email or book a call directly.
Josh Bar-on & Zev Orzy are dual-use specialists at Grant Engine, helping deep-tech companies identify and win non-dilutive federal funding in the dual-use and defense space. Contact: josh@grantengine.com
