Defense technology startup Shield AI valued at $12.7 billion in latest funding round

Shield AI is raising $2 billion in a new funding round at a $12.7 billion valuation, as the defense technology startup looks to expand its artificial intelligence-powered software amid growing use of autonomous tools during conflicts.

The startup said on Thursday the Series G round was led ‌by Advent ⁠International and ⁠co-led by JPMorganChase's Strategic Investment Group, with participation from existing investors ​including Snowpoint Ventures and Riot Ventures.

Shield AI said Blackstone-managed funds are investing $500 million in preferred equity as part of the financing, while also committing an additional $250 million delayed draw facility that could bring its total investment to $750 million.


The use ⁠of autonomous ‌technologies in the U.S. and Israel's coordinated ​strikes against ​Iran and Russia's invasion of Ukraine has boosted ⁠demand for tools made by companies that specialize ​in autonomous flight software.

Shield AI's Hivemind software allows drones and aircraft to operate in GPS-denied environments and has been tested on several platforms, including the F-16 fighter jets and the U.S. Air Force's uncrewed weapon system called Collaborative Combat Aircraft.

Shield AI plans to use a portion ‌of the funds to buy simulation software maker Aechelon Technology from private equity firm Sagewind Capital, it said, without disclosing financial terms ⁠of the deal.

"The acquisition of Aechelon will accelerate the work we are doing with Hivemind, particularly in simulation like the Department ​of War's JSE (Joint Simulation Environment)," Shield AI CEO Gary Steele said in a statement.

The JSE is a high-fidelity virtual combat range used by the U.S. military to test aircraft, autonomous systems and tactics against realistic battlefield threats.