The war in Ukraine just proved something that shook the entire defense world: lots of cheap, "expendable" things are beating the few expensive ones — and as the economics of the battlefield flip upside down, defense budgets are starting to flow a new way. This is the story of unmanned weapons, the chase to shoot down cheap drones, and the upstart companies taking on the industry's old giants.
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MUFG Bank to Soon Finalize Its Stance on Defense-Related Lending
It was learned on the 17th that MUFG Bank is moving toward finalizing its internal stance in the near future regarding lending to defense-related companies. The direction is to judge the feasibility of lending on a case-by-case basis according to growth potential and other factors, while taking into account whether such lending is consistent with the government's security policy. The defense industry is one of the 17 fields that the government has positioned as a strategic investment target in its growth strategy, and a policy has been set out to support startups and others through public-private investment with the aim of strengthening the technological and production foundations for dual-use goods such as drones.
CAE Signs Drone Training MoU With Poland's WB Electronics
CAE signed a memorandum of understanding with Polish defense technology company WB Electronics on September 8 at the MSPO 2026 exhibition in Kielce, Poland, pairing CAE's simulation and synthetic training expertise with WB Electronics' unmanned and autonomous platforms to train operators for defense forces in Canada, Poland, and allied nations. The deal followed CAE's August 12 report of its Q1 fiscal 2027 quarter, in which Defense revenue climbed 8.3% year over year to $531.8 million and adjusted segment operating income margin ticked up to 9.5% from 9.4%, while consolidated revenue rose 6.8% to $1,173.4 million and free cash flow swung to a positive $104.0 million from negative $134.7 million a year earlier. Operating income fell 35.1% to $86.8 million on $48.3 million in restructuring costs, and earnings per share dropped to $0.10 from $0.18, with Civil's adjusted segment operating income margin falling to 16.5% from 20.2%. Defense order intake fell 26.1% year over year to $451.9 million, pushing the quarter's book-to-sales ratio to 0.85 times, and management's fiscal 2027 outlook calls for Civil revenue to be flat to slightly down. CAE repurchased and cancelled 1,107,279 shares for $39.0 million during the quarter and is pursuing a transformation plan targeting $125 million to $150 million in annual run-rate savings by fiscal 2030, with total charges expected to reach $200 million to $250 million.
Trump Hopes Iran War Is Near Its End, but Saudi-Houthi Clashes Rage, Risking 4% of Oil Supply
US President Donald Trump told reporters on the evening of Wednesday, September 16, that he hopes the war with Iran, now dragging into its seventh month, is nearing an end, saying Iran wants a deal and that he had been contacted directly by Iran, though he did not disclose further details. The remarks came amid escalating tensions after the Saudi Arabian air force launched strikes in Yemen and Houthi rebels retaliated by firing missiles and sending drones to attack various Saudi cities, including the Red Sea oil port of Yanbu and the Khamis Mushait air base in the south, according to a statement by Yahya Saree, spokesman for the Houthi military. The war erupted on February 28, when the United States and Israel launched attacks on Iran, before Tehran fired back at Israel and US bases in the Persian Gulf countries. The attack on Saudi Arabia that damaged the East-West oil pipeline has prompted oil traders to warn that if the pipeline is forced to halt shipments for an extended period, as much as 4% of global oil supply could be lost. Saudi authorities have not yet specified when the pipeline will be able to resume operation. The spread of the war into Yemen is also compounding the global energy shortage, after the earlier conflict cut off shipping through the Strait of Hormuz, which once carried one-fifth of the world's crude oil and liquefied natural gas. As a result, Brent crude traded at around 108 dollars a barrel on Wednesday, near its highest level since May, while US retail diesel prices surged to a record high of more than 6.30 dollars a gallon, which is becoming major political pressure on the Republican Party ahead of the midterm elections in November. Axios reported, citing sources, that President Trump is scheduled to meet with leaders of the Gulf Cooperation Council, or GCC, which comprises Saudi Arabia, the United Arab Emirates, Qatar, Bahrain, Kuwait and Oman, on the sidelines of the United Nations General Assembly in New York next Tuesday, September 22, to discuss the next steps in the war with Iran. The conflict between the Saudi-led alliance and the Houthis, which has been underway since 2015 and had once calmed under a ceasefire agreement, flared up violently again after the Houthis declared a maritime blockade on Saudi Arabia last July.
Houthis claim Saudi Arabia dropped 40 bombs on Yemen in 24 hours, say they shot down an F-15
The Houthi group in Yemen said on Wednesday, September 16, that Saudi Arabian warplanes carried out 40 airstrikes across three Yemeni provinces over the past 24 hours. Yahya Saree, the Houthis' military spokesman, said in a statement on X that F-15 fighter jets taking off from King Khalid Air Base in southwestern Saudi Arabia launched strikes on the southwestern province of Taiz, the northeastern province of Marib and the northwestern province of Hajjah. Saudi Arabia has not yet commented on the claim, and there is still no information on deaths, injuries or damage from the reported strikes. Xinhua reported that the latest claim came as cross-border clashes intensified, with the Houthis saying on Wednesday morning that they had fired several missiles and sent several drones at a Saudi Aramco facility in the western Saudi city of Yanbu, as well as firing several ballistic missiles at an air base in the city of Khamis Mushait. They also claimed to have shot down a Saudi F-15 fighter jet with a domestically produced surface-to-air missile over the northeastern Yemeni province of Marib, a report Saudi Arabia has likewise not confirmed or commented on. A Yemeni military official told Xinhua that heavy fighting continued on Wednesday around the Kahbub mountains in the southern province of Lahij, a strategic point near the Bab el-Mandeb strait, with five government soldiers and 10 Houthi fighters killed and several others wounded on both sides.
Tokyo Keiki target price raised to 13,300 yen by Marusan Securities
Marusan Securities has maintained its "Buy" rating on Tokyo Keiki and raised its target price to 13,300 yen. The move reflects the company's upward revision of its full-year company plan on growth in marine and port equipment as well as defense and communications equipment, and the brokerage also expressed the view that over the medium term new areas for the company, such as unmanned asset-related business and work for Australia's next-generation general-purpose frigates, will drive an acceleration in earnings growth. Buying in defense-related names today also provided support.
Drone strike hits Saudi Arabia's Petroline pipeline, risking global energy crisis
A drone attack struck Saudi Arabia's East-West oil pipeline, known as Petroline, a 1,200-kilometre conduit that carries crude from production fields in the east across the Arabian Peninsula to the port of Yanbu on the Red Sea coast, forcing Saudi Arabia to temporarily suspend operations on the pipeline. Petroline is regarded as a strategic bypass route that allows Saudi Arabia to export crude to world markets without passing through the Strait of Hormuz, which is facing a blockade crisis from war that has sharply reduced the volume of oil shipped through the usual route. At the same time, global oil inventories are plunging to their lowest level in more than three decades. Leading analysts and research institutions warn unanimously that if repairs to this infrastructure take several weeks, or if the threat of drone attacks persists, the world could enter a genuine energy catastrophe, because millions of barrels per day of export volume would vanish from the system, and Brent crude could surge to 150 dollars a barrel if strategic reserves worldwide are drawn down to exhaustion, which would in turn drive up shipping costs, the cost of living and consumer goods.
Saudi Arabia aims to restart half of major oil pipeline within days
Saudi Arabia is aiming to restore roughly half of the capacity of a major oil pipeline that was shut down after last week's drone attack, according to people familiar with the matter. Saudi Aramco, the state oil company, is working to partially restore the pipeline's throughput by bypassing the damaged section, the people said, speaking on condition of anonymity because the information is not public.
AWS Says Customer Data Lost in Bahrain Region After Drone Strikes
Amazon Web Services has told customers it cannot recover data and resources hosted solely in its Bahrain cloud region, following damage caused by Iranian drone strikes more than six months ago. The company said the impact extended across multiple availability zones, the separate groups of data centers within a single region, and that the scale of the damage exceeded the resiliency measures built into its regional infrastructure. In a separate update, AWS said it is also unable to restore data and resources hosted exclusively in one affected availability zone in the United Arab Emirates, and that replacement infrastructure is being deployed with additional updates expected in the coming months. AWS added that affected customers have largely shifted workloads to other regions and relied on backups where available, and said it remains committed to supporting customers in Bahrain over the long term with another update expected early next year. Amazon has not disclosed a financial impact from the incident.
Fed Expected to Hike Rates as AWS Loses Gulf Data Access
The Federal Open Market Committee is widely expected to raise its benchmark rate to 3.75%-4.00% from 3.50%-3.75% at its September meeting, with a strong August jobs report and hotter-than-expected core CPI supporting the move. Amazon Web Services said it cannot restore access to resources and data hosted exclusively in its Bahrain region after Iranian drone strikes damaged infrastructure, affecting multiple Availability Zones and exceeding what its regional and multi-AZ services were designed to withstand, while one data-hosting zone in the United Arab Emirates also remains affected. SoftBank Group's five-year credit default swaps hovered near a three-year high at around 383.2 basis points, near their highest level since 2023, as investors assessed its funding plans for OpenAI, to which SoftBank has committed $64.6B. OpenAI has held early discussions with large investors about a new capital raise that could value the company at about $1.2T before an IPO, talks initiated by investors that could fund acquisitions and give the company flexibility to delay its IPO by one or two quarters. The Trump administration has appealed a federal court ruling by Judge Beryl Howell blocking the EPA from sending California's vehicle-emissions rules to Congress for potential repeal, a dispute involving stricter standards for cars, trucks, and lawn and garden equipment.
AEVEX Wins Up to $92.2M SkyRange Contract for Hypersonic Testing
AEVEX Corp. announced it has been selected for a contract valued at up to $92.2 million over the next three years to support the Department of War Test Resource Management Center SkyRange program. SkyRange is the Department of War's flagship initiative to modernize hypersonic flight test infrastructure, replacing fixed and ship-based range assets with high-altitude airborne platforms that collect, relay, and distribute real-time telemetry data. Under the contract, AEVEX will provide airborne range integration and engineering services, flight operations support across Western U.S. and Pacific test corridors, airborne telemetry relay and resilient communications architecture support, payload and mission systems integration, and distributed range networking, instrumentation, and mission data support. Mike Jackson, Senior Vice President of Global Solutions at AEVEX, said the award positions the company to deliver critical support to hypersonic test operations and strengthens the next generation of the Department of War's test and evaluation enterprise. SkyRange was established to repurpose unmanned aircraft, including former RQ-4 Global Hawks, into Range Hawk platforms equipped with specialized upward-looking sensors and instrumentation to track hypersonic vehicles in flight.
World News Roundup: UN Flags Major War as Global Risk, Saudi Arabia Issues Alert, South Korean Court Orders North Korea to Pay 44.6 Billion Won
A United Nations survey found that people around the world are increasingly worried that a large-scale war is a global risk that could materialize in the near future. Meanwhile, Saudi Arabia declared a security alert covering multiple areas on Tuesday, September 15, including the city of Mecca and the city of Jeddah, after being repeatedly attacked over the past week by Iran-aligned armed groups. A South Korean court ordered North Korea to pay 44.6 billion won, or 32.5 million US dollars, in damages to the South Korean government over the destruction of the inter-Korean liaison office building in 2020, marking the first time in history that the South Korean government has sued North Korea and won. Meanwhile, the US Congressional Budget Office disclosed that the war between the United States and Iran over the past six months has already consumed more than 38 billion US dollars in budget spending, with that figure expected to rise by another 3 billion US dollars per month, and it could push inflation up by 0.5% during the first three months of 2027. Separately, Finance Minister Ekniti Nitithanprapas said in an interview with Bloomberg Television yesterday that Thailand may impose an excise tax of around 30% on fully imported electric vehicles, the first disclosure of the rate that could be used to encourage automakers to produce in the country.
Saudi Arabia says it intercepted Houthi drone before it reached Mecca; Houthis deny involvement
Saudi Arabia said it intercepted and destroyed a Houthi drone before it entered the airspace over the city of Mecca, issuing an alert in the holy city for the first time since 2017. Major General Turki Al-Maliki, spokesman for the Saudi-led coalition that has been at war with the Houthis since 2015, said the attack was intended to provoke the feelings of millions of Muslims and stressed that the security of this holy city is a red line. For his part, Houthi spokesman Hazem Al-Assad denied responsibility for the incident, calling it the same old lie that no one believes anymore. Meanwhile, the Organisation of Islamic Cooperation condemned the attack as an evil act, denouncing the attacks on Mecca and the Medina region as well as the Houthis' continued aggression against Saudi Arabia. The latest incident marks the first expansion of the fighting into Islam's holy city since the Middle East conflict erupted in late February, and it escalates the conflict in Yemen, which is testing the defence agreement that Saudi Arabia, Turkey and Pakistan signed together last month. After the United Nations brokered a ceasefire in April 2022, the situation deteriorated again when the Houthis declared a blockade on Saudi maritime shipping in July, seized strategic points along the Red Sea coast near the Bab el-Mandeb Strait, and attacked the country's East-West oil pipeline last week.
US warns citizens to reconsider travel to Saudi Arabia over Iranian drone and missile fears
The US State Department issued a warning urging American citizens to reconsider travel to Saudi Arabia, citing heightened security risks from Iranian drone and missile attacks. The travel advisory, published on Tuesday, September 15, stated that the United States and Iran began hostilities on February 28, 2026, and that since then Iranian drone and missile threats targeting US interests have occurred continuously. The warning also stated that the Houthis have threatened to attack Saudi Arabia again, adding that debris falling from intercepted drones and missiles also poses a risk. American citizens living and working near energy infrastructure and military bases may face increased risk, particularly in areas near the Yemeni border, which the department has designated as a Level 4 warning area, or do not travel, the highest warning level. Xinhua reported that the advisory came after Saudi Arabia announced warnings in Mecca and other areas, citing attacks by the Houthis, and Saudi authorities said they intercepted and destroyed Houthi drones in southern Mecca on Tuesday evening before the drones could penetrate the no-fly zone over the holy city. The Houthis later denied the allegations.
Zelensky Invites Takaichi to Visit Kyiv for Defense and Drone Talks
Ukrainian President Volodymyr Zelensky has extended an invitation to Japanese Prime Minister Sanae Takaichi to visit Kyiv, the capital of Ukraine, to discuss cooperation on defense and drone technology. Esuke Mori, Speaker of Japan's House of Representatives, disclosed this on Tuesday, September 15, and told Kyodo News that he will convey the invitation to Prime Minister Takaichi in an appropriate manner. Former Prime Minister Fumio Kishida visited Kyiv in 2023, but Takaichi, who took office last October, has not yet traveled to the Ukrainian capital. Mori said Zelensky is seeking bilateral cooperation on drones and unmanned surface vessels, a sector where Ukraine is rapidly advancing technological innovation, and that Japan should be open to and consider cooperation in such areas, stressing that Japan should join forces with other countries to increase pressure on Russia. Zelensky said via social media that Ukraine always welcomes Takaichi, and revealed that the two sides had discussed energy support for Ukraine ahead of winter, as well as defense cooperation.
AeroVironment Partners With Nominal to Digitize Production and Test Data
AeroVironment announced a new collaboration with software provider Nominal to overhaul production and test data management across its autonomous and counter-UAS hardware programs. The partnership focuses on digitizing real-time manufacturing and test data, with Nominal's integrated platform expected to support AeroVironment as it scales output of mission-critical systems for domestic and international customers. AeroVironment is a US defense technology provider with a US$7.8b market cap that builds robotic systems and related services for government agencies and commercial clients worldwide. The company's strategic focus on modular, interoperable, and software-defined platforms, including the newly launched AV Halo open software ecosystem, aligns with the accelerating adoption of AI-powered autonomy and network-centric warfare. The move is seen as addressing operational discipline concerns, including margin pressure after the BlueHalo deal and internal control questions, by centralizing test data from early R&D through end-of-line checks.
AeroVironment Signs Long-Term Agreement With Attalon for Valaris Laser Platform
AeroVironment has executed a long-term agreement with Attalon for delivery of Attalon's Valaris high-energy laser platform across AeroVironment's expanding portfolio of high-energy laser programs. The agreement supports AeroVironment's LOCUST and broader high-energy laser product line as demand for deployable directed energy capabilities continues to grow, with Attalon supplying the mission-ready laser subsystems needed to scale those systems from development and demonstration into sustained operational use. Mary Clum, AeroVironment's president of Space, Cyber, and Directed Energy, said the LTA lets the company proactively scale LOCUST production capabilities ahead of immediate demand, and called Attalon's Valaris S beam-combining laser subsystem central to that effort. To support the agreement and AeroVironment's growing high-energy laser product line, Attalon is investing $15 million to expand production capacity, grow its skilled workforce, and add capital equipment. Attalon Chief Executive Officer John Bergeron said directed energy has reached the moment when delivering capability at production scale, and sustaining it through its service life, becomes the defining challenge.
Swarmer's Ratel Robotics Deal Could Drive $200M in 2027 Revenue
Swarmer, Inc. could reach $200 million in pro forma revenue and $20 million in adjusted EBITDA in 2027 through its pending acquisition of Ukrainian unmanned-ground-vehicle maker Ratel Robotics, according to a research note from Lucid Capital Markets. Swarmer, whose non-executive chairman is Blackwater founder Erik Prince, has a definitive agreement to buy Ratel for up to $224 million, and the note cites $86 million in secured contracts and roughly 37% of Ukrainian government UGV procurement spending. The company will pay about $7.2 million in cash and 1.1 million shares at closing, with most of the remainder tied to Ratel meeting earnout targets. Swarmer held roughly $25 million in cash at the end of the second quarter and raised another $18 million through its equity line as of Aug. 17, giving it about $43 million in pro forma cash. Lucid set a $60 price target based on 24 times EV/sales of an estimated $40 million in 2028 revenue excluding the Ratel deal, while on a pro forma basis, assuming Ratel hits its earnouts, Swarmer could trade at around 4 times 2027 EV/sales and 35 times 2027 EV/EBITDA, compared with an average of 5.5 times 2027 EV/sales for peers including Ondas Holdings, Red Cat Holdings, Unusual Machines and Draganfly.
RTX CEO Calio Sees Defense and Aerospace Demand Driving Cash-Flow Growth
RTX Chairman and Chief Executive Chris Calio said strong demand for air travel and rising global defense spending should support the aerospace and defense company's growth for years, speaking Tuesday with Morgan Stanley analyst Christine Liwag at the firm's 14th Annual Laguna Conference. Calio said RTX has a backlog of about $289 billion, a figure that does not include five framework agreements covering major munitions programs or a recently awarded seven-year, $23 billion Tomahawk contract, and that volumes under the five agreements could rise by two to four times. About 48% of Raytheon's backlog is international, up four percentage points from a year earlier, and sensors and effectors account for about 70% of the unit's sales, with the Coyote counter-drone system having recorded more than 600 drone defeats in operational settings. On the commercial side, RTX expects to deliver a record number of geared turbofan engines this year, and GTF maintenance output rose 40% from a year earlier in the second quarter, helping reduce aircraft-on-ground levels by 25% since the end of 2025. RTX continues to target a medium-term operating margin of 19% to 20% at Collins Aerospace and expects 2026 free cash flow of about $8.6 billion at the midpoint of its forecast, with Calio describing the dividend as sacrosanct.
Iran War Cost Reaches $33.4B as U.S. Munitions Shortfalls Mount
The Iran war has cost an estimated $33.4B as of June 29, according to a report on Operation Epic Fury from the Lead Inspector General of the Department of Defense submitted to Congress. That total comprises $22.3B for expended munitions, $7.4B of cumulative obligations for incremental Operation Epic Fury costs, and $3.7B in equipment losses, and it excludes costs for infrastructure repairs. The munitions expenditure has resulted in strategic inventory shortfalls and revealed industrial base bottlenecks for munitions resupply, according to the Office of the Under Secretary for Acquisition and Sustainment. Iranian strikes destroyed or damaged dozens of U.S. aircraft and drones, including four F-15E fighter jets, one F-35A and one A-10, with the F-35A costing roughly $92M per plane and the F-15E over $60M per unit, while hundreds of buildings at U.S. bases across Kuwait, Bahrain, Qatar, the United Arab Emirates, Saudi Arabia, Iraq, Oman and Jordan were also damaged. Damage to U.S. diplomatic facilities in Iraq, Kuwait, Saudi Arabia and the UAE is estimated at about $184M, and the report noted seven U.S. service members killed in action from Feb. 28 to June 30, seven killed in non-hostile events during Operation Epic Fury combat operations, and 417 wounded in action.
Houthis Launch New Attacks on Saudi Arabia, Disrupting Global Oil Exports
Yemeni officials revealed that the Iran-backed Houthi rebels have launched a new wave of attacks on targets in Saudi Arabia, while advancing to seize trench-digging positions along the Red Sea coast, forcing the Saudi government to urgently convene an emergency meeting in Riyadh to find a rapid response. Meanwhile, the Gulf Arab states announced they are postponing negotiations with Iran, deepening fears that the war will widen and disrupt global oil exports. Mohsen Rezaei, secretary of Iran's Supreme National Security Council, said on the morning of September 15 via X that the stakes over oil and the strategic strait have now changed, and stressed that there will be no negotiations whatsoever until Iran's conditions are met. On the same day, the yield on 10-year U.S. Treasury bonds surged to its highest level in 19 years, or since 2007, as investors heavily sold off bonds ahead of the Federal Reserve meeting. Meanwhile, China's National Bureau of Statistics reported that China's retail sales rose only 0.4% in August year-on-year, slowing from a 0.6% rise in July and below analysts' expectations of a 0.8% increase. Industrial output in August jumped 5.2%, accelerating from a 4.5% rise in July and stronger than analysts' expectations of a 4.8% increase. Anthropic launched the Claude for Financial Advisors toolset to help financial advisors by connecting the Claude chatbot to investment data analysis systems and wealth management software from leading firms such as BlackRock, Charles Schwab, and Addepar.
AeroVironment Shares Jump 5.7% on Nominal Data Platform Deal
AeroVironment shares jumped 5.7% in the afternoon session after Nominal announced a strategic collaboration with the aerospace and defense company to supply test and operations data platform infrastructure supporting defense hardware production across multiple programs. Under the agreement, AeroVironment adopted Nominal's data platform to unify and manage engineering test capture, cross-team reviews, and manufacturing traceability across its uncrewed aircraft and counter-UAS operations. The collaboration is designed to power accelerated test and production data for mission-critical hardware at scale across the company's various development programs. The move comes four days after the stock gained 10.4% on record second-quarter revenue of $480.5 million, up 5.7% year-over-year and above analyst estimates of $457.6 million, alongside a record funded backlog of $1.5 billion, up 37% from a year earlier. AeroVironment is down 39.6% since the start of the year and trades at $154.84 per share, 62.2% below its 52-week high of $409.83 from October 2025.
Ouster Launches Rev8 OS1 Max Native Color Lidar for High-Altitude Drone Mapping
Ouster announced surging customer momentum for its Rev8 OS1 Max native color digital lidar, which the company calls the world's first native color lidar, with payload integrators and drone OEMs across the aerial mapping market selecting the sensor for utility corridor inspection, infrastructure management, and defense applications. Powered by Ouster's L4 Max chip, the Rev8 OS1 Max pairs 256 channels of survey-grade 3D range data with native 48-bit color, reaching ±0.25 cm 1σ precision and ±1.25 cm accuracy, twice the precision and accuracy of the previous Rev7 generation, with a spot size up to 50% smaller than Rev7 and 200 meters of range at 10% reflectivity. The sensor carries IP68 and IP69K ingress protection, 100 G shock resistance, and an operating range of -40 °C to +85 °C, and is designed and developed in the U.S. to comply with the statutory supply chain security standards under §164 of the FY2025 National Defense Authorization Act, with Build America, Buy America Act certified versions also offered. Flyability is evaluating Ouster's Rev8 OS0 lidar to unlock native color 3D mapping in hazardous and GPS-denied industrial environments, building on five years of joint innovation, while GeoCue is pairing its TrueView payloads with the Rev8 OS1 Max. Ouster is showcasing the Rev8 OS1 Max at INTERGEO in Munich from September 15-17 in Hall B5 at Booth B5I018.
Dollar Strengthens on Middle East Crisis, Oil Surge Fuels Safe-Haven Buying
The US dollar strengthened against major currencies in New York foreign exchange trading on Monday, September 14, as tensions in the Middle East pushed oil prices sharply higher and investors rushed to buy the dollar as a safe-haven asset. The dollar index rose 0.27% to 99.388, with the dollar strengthening against the yen to 154.05 yen from 153.72 yen on Friday, and strengthening against the Canadian dollar to 1.3902 Canadian dollars from 1.3865 Canadian dollars. The euro weakened to 1.1557 dollars from 1.1596 dollars, while the pound weakened to 1.3511 dollars from 1.3525 dollars. WTI and Brent crude prices jumped more than 1% and closed above 100 dollars per barrel after Saudi Arabia announced the shutdown of the East-West Pipeline following a drone attack originating from Iraq, while Houthi rebels opened a new round of fighting by firing long-range missiles and sending dozens of drones to attack an air base in southwestern Saudi Arabia. The dollar also drew support from the yield on 10-year US Treasury bonds, which surged past 5% amid inflation concerns. The CME Group's FedWatch Tool indicated that investors assign a 90% probability that the Fed will raise interest rates by 0.25% after its meeting concludes on Wednesday, September 16.
UAE Reviews 5-Gigawatt AI Data Center Plan as War Threats Escalate
The United Arab Emirates is reviewing its strategy for a 5-gigawatt AI data center project, an infrastructure undertaking valued at 1 billion dollars, after conflict with Iran spilled over and undermined security stability in the Persian Gulf region. The project, designed to be centralized on a 26-square-kilometer site in Abu Dhabi and intended as one of the largest technology infrastructure projects outside the United States, must urgently shift from centralization to risk diversification. The UAE government and major capital groups such as G42 are driving this strategic adjustment. Key triggers include attacks on Amazon Web Services cloud and data center infrastructure earlier this year, as well as Iran's military revealing coordinates and warning that the Stargate UAE project could become a strategic target. New protective measures under consideration include distributing data centers across multiple locations nationwide, embedding some structures underground, using natural mountain interiors, installing air defense systems and electronic jamming systems, and employing special reinforced-concrete construction materials resistant to explosive force. Meanwhile, the first phase of the project, Stargate UAE, valued at 30 billion dollars, continues under cooperation with partners from the United States, in order to preserve an advantage in accessing Nvidia's advanced AI chip technology in exchange for reducing technology ties with other major powers under global strategic conditions.
Boeing wins up to $552.1M Navy contract modification for MQ-25 aircraft
Boeing has received a not-to-exceed $552.1M undefinitized U.S. Navy contract modification for MQ-25A Stingray aircraft. The deal covers three Lot One aircraft and long-lead components for three Lot Two aircraft. The Navy will initially commit $164.4M, including $100M from fiscal 2025 funds and $64.4M from fiscal 2026 funds. Work is expected to be completed by July 2031, with Naval Air Systems Command as the contracting activity.
Crude oil surges: WTI breaks above $103, Brent tops $108, after Saudi Arabia shuts East-West Pipeline
Global crude oil prices continued to climb, with West Texas Intermediate for October delivery up $3.04, or 3.04%, to $103.09 a barrel, and Brent crude for November delivery up $3.47, or 3.32%, to $108.80 a barrel, after Saudi Arabia announced the closure of the East-West Pipeline amid attacks by the Houthis. The East-West Pipeline is 1,200 kilometres long and allows Saudi Arabia to transport crude oil without passing through the Strait of Hormuz. Over the past several months, the pipeline has carried about 4 to 5 million barrels per day, or roughly 4 to 5% of global oil supply. Meanwhile, Crown Prince Mohammed bin Salman of Saudi Arabia discussed the latest regional situation during a meeting with Admiral Brad Cooper, commander of United States Central Command, in Jeddah. Reuters reported that the Crown Prince sought military assistance from President Donald Trump to strike the Houthis in Yemen, but President Trump declined to authorise US forces to attack the Houthis directly. The Houthis said they fired long-range missiles and sent dozens of drones to attack an air base in southwestern Saudi Arabia, and had earlier seized the port city of Mokha, pushed south to the Bab el-Mandeb Strait, and captured Mayun Island in the middle of the strait, giving them greater control over the shipping route linking the Red Sea to the Gulf of Aden. Iranian Foreign Ministry spokesman Ismail Baghaei said a meeting of Iranian and Arab Gulf foreign ministers scheduled for today in Oman was postponed at Saudi Arabia's request, and rejected reports that the postponement stemmed from the situation between Saudi Arabia and the Houthis as incorrect. The Financial Times had earlier reported, citing sources, that Arab Gulf and Iranian foreign ministers were due to meet on 14 September in Salalah, Oman, to discuss an interim agreement on managing shipping through the Strait of Hormuz. The talks, initiated by Oman, would be the first meeting of senior diplomats from the six member states of the Gulf Cooperation Council with Iran since the United States and Israel launched attacks on Iran on 28 February.
Saudi Crown Prince Discusses CENTCOM Commander Amid Houthi Tightening Grip on Bab el-Mandeb Strait
Saudi Crown Prince Mohammed bin Salman bin Abdulaziz Al Saud discussed the latest regional situation and bilateral relations between Saudi Arabia and the United States during a meeting with Admiral Brad Cooper, commander of United States Central Command, or CENTCOM, in Jeddah today. The meeting took place amid intense clashes between the Houthi group in Yemen and Saudi Arabia. Reuters reported that Crown Prince Mohammed bin Salman asked President Donald Trump for military assistance to strike the Houthis in Yemen, but President Trump declined to approve direct U.S. military strikes on the Houthis. Meanwhile, the Houthis disclosed today that they fired long-range missiles and sent dozens of drones to attack an air base in southwestern Saudi Arabia. In addition, last Thursday the Houthis seized the strategic port city of Mokha, then pushed south into the Bab el-Mandeb Strait on Friday and captured Mayun Island, located in the middle of the strait, enabling the Houthis to tighten their control over the Bab el-Mandeb Strait, which is vital to shipping and connects the Red Sea to the Gulf of Aden.
Terra Drone to Localize Flight Controllers for Defense Drones
Terra Drone announced on the 14th that it has developed its own flight controller for defense drones and will localize production. Following batteries, the company aims to build a system for producing the core component that serves as the drone's "brain" in Japan, moving away from overseas dependence. The controller is being developed on the premise of being installed in 300 units of a general-purpose defense drone that the company won an order for from the Acquisition, Technology & Logistics Agency in May for approximately 115 million yen and is scheduled to deliver by the end of September this year, and it is also planned to be installed in 1,767 units scheduled for delivery in March next year. According to the Ministry of Economy, Trade and Industry, about 90% of Japan's industrial drone market is made up of overseas products, with components also dependent on China, Taiwan and elsewhere, and for defense use, from the standpoints of geopolitical risk, export controls and cybersecurity, a system capable of managing and mass-producing airframes and key components domestically is essential. The company's consolidated final profit and loss for the February-July 2026 period, announced the same day, showed a loss of 680 million yen, compared with a loss of 394 million yen in the same period a year earlier, as selling, general and administrative expenses swelled due to the expansion of its defense business structure, subsidy income also decreased, and an extraordinary loss was recorded. It left unchanged its forecast of a final loss of about 1.2 billion yen for the fiscal year ending January 2027, and sales from the defense business are not factored into its full-year consolidated earnings forecast for the fiscal year ending January 2027. President Toru Tokushige said at a briefing that sales from the defense business will be "recognized from the third quarter, the August-October period, and accordingly, full-year consolidated earnings are expected to exceed the initial forecast." The company also announced the same day that it will invest through a European group company to make a Ukrainian company that handles interceptor drones a consolidated subsidiary, aiming to expand its defense business by incorporating a product lineup that intercepts the Ukrainian company's small unmanned aircraft. It also announced that it will consider commercializing a high-speed interceptor drone in anticipation of dealing with the jet-engine-equipped attack drone Shahed, and it is also considering establishing a joint venture with a Czech company that develops defense drone systems.
North Korea Conducts Missile and Attack Drone Drills After US-Japan-South Korea Wrap Up Freedom Edge Exercises
North Korea revealed on September 14 that it had held drills involving ballistic missiles, cruise missiles, and attack drones, just one day after Japan, South Korea, and the United States completed their military exercises. Earlier, South Korea's Joint Chiefs of Staff disclosed on Saturday, September 12, that South Korea had detected the launch of multiple missiles from the Wonsan area on North Korea's east coast toward the Sea of Japan, with the missiles traveling about 250 kilometers. The Korean Central News Agency reported that Kim Jong Un, North Korea's leader, did not attend this live-fire drill, which was commanded by Pak Jong Chon, vice chairman of the Central Military Commission of North Korea's ruling party, and Yu Chang Son, head of the North Korean military's artillery bureau. Kyodo News reported that this drill, which included the use of large multiple rocket launchers, aimed to familiarize the military with the operating procedures of an integrated personnel control system and to enhance the strategic counter-response readiness of attack units at all levels. Meanwhile, Rodong Sinmun, North Korea's official newspaper, did not report on the drill last Saturday and has not published any article about the country's missile launches since August, in contrast to the traditional practice of state media, which usually announces missile launch news the following morning. Japan, South Korea, and the United States completed the five-day Freedom Edge exercise on Friday, September 11, which focused on real-time information sharing and the integration of air, maritime, missile defense, cyber, and medical capabilities.
Asian stocks open lower, oil surges after Saudi Arabia shuts East-West Pipeline
Asian stock markets opened mostly lower after Saudi Arabia announced the closure of the East-West Pipeline, a key route for transporting oil without passing through the Strait of Hormuz, following a drone attack from Iraq on September 10. The Nikkei opened at 63,659.53 points, down 351.81 points or 0.55%. The Hang Seng opened at 24,701.18 points, down 104.45 points or 0.42%, and the Shanghai Composite opened at 3,867.02 points, down 21.09 points or 0.54%. The KOSPI fell 2.92%, while the S&P/ASX 200 edged up 0.16%. West Texas crude jumped 2.8% to 102.87 dollars per barrel, and Brent crude rose 3.1% to 107.87 dollars per barrel. The Saudi Ministry of Energy said the pipeline closure was a precautionary measure but did not disclose the extent of the damage or how long it would remain shut. Meanwhile, the Iraqi government ordered the dismissal of the military commander responsible for operations in Maysan province and launched an operation to track down those behind the attack. A meeting of foreign ministers from the Arab Gulf states and Iran, originally scheduled for today in Salalah, Oman, has been postponed. Investors are also watching this week's monetary policy meetings of the Fed and the BOJ amid expectations that interest rates could be raised, and are awaiting key Chinese economic data on September 15, including August home prices, industrial production, retail sales, fixed asset investment, and the unemployment rate.
LightPath Posts 92.7% Revenue Jump, $110.9 Million Backlog After China Exit
LightPath Technologies reported fiscal fourth-quarter and full-year results on September 10 that showed annual revenue climbing 92.7% to $71.7 million from $37.2 million, with the fourth quarter alone hitting a record $21.2 million, up 73.8% year over year. Full-year gross margin expanded to 36% from 27.2%, and the fourth quarter came in at 39.4%, as assemblies, modules and cameras rose to 44% of annual sales, while backlog finished at $110.9 million, up 197% from $37.4 million a year earlier, with $85.6 million scheduled for delivery within 12 months. Weeks after the fiscal year closed, the company booked another $24 million in counter-UAS orders, and LightPath also completed its exit from China by selling its subsidiary there for $4.5 million paid out over five years. The fourth-quarter net loss narrowed to $4.1 million from $7.1 million a year earlier, but full-year operating expenses jumped to $45.5 million from $22 million, including a $15.6 million noncash charge tied to G5 Infrared outperforming its earnout targets. CEO Sam Rubin said the Army pushed its Next Generation Short Range Interceptor timeline out by several months and that the redesign of G5's cooled cameras to use Black Diamond glass instead of germanium is behind schedule, while detector lead times have stretched from roughly six months to ten months or more. Hedge fund ownership fell to 20 funds from 27 in the prior quarter, short interest sits at 15.44% of float, and LightPath enters fiscal 2027 with $93.2 million in cash and no meaningful debt.
US imposes tariffs of up to 100% on drone imports, Thailand's exports at risk
The United States has announced additional import tariffs on unmanned aircraft systems and components under Section 232 of the Trade Expansion Act of 1962, with US President Donald Trump issuing a formal proclamation on August 13, 2026, citing national security grounds. Mrs. Arada Fuengthong, Director-General of the Department of Foreign Trade under the Ministry of Commerce, disclosed that the additional tariff rates are divided as follows: goods in Annex I are subject to a 100% tariff, covering unmanned aircraft with a maximum takeoff weight exceeding 25 kilograms, unmanned aircraft equipped with thermal imaging cameras, unmanned aircraft operating bases, and certain key components, effective from September 3, 2026. Goods in Annex II are subject to a 25% tariff, covering unmanned aircraft with a maximum takeoff weight not exceeding 25 kilograms, also effective from September 3, 2026. Goods in Annex III are subject to a 25% tariff on certain components, taking effect from February 9, 2027, or 180 days after the announcement, in order to allow opportunities to relocate or expand production in the United States. Annex IV is a reference document comparing the normal customs classifications of the controlled goods in Annexes I through III with the customs classifications in Chapter 99 of the Harmonized Tariff Schedule of the United States, which operators must verify before exporting. In addition, the United States has set a maximum total tariff rate of 15% for goods from the European Union, Japan, South Korea, Taiwan, Switzerland, and Liechtenstein, and no more than 10% for the United Kingdom, if the specified conditions are met. Thailand is not among the countries granted these special tariff rates. Arada added that Thai export statistics for unmanned aircraft and components reflect that the United States is a key export market. Between 2023 and 2025, Thailand exported unmanned aircraft under tariff heading 8806 to the United States worth 0.78 million dollars in 2023, rising to 3.28 million dollars in 2024 and 8.64 million dollars in 2025, an average annual growth rate of 232.82%. Meanwhile, exports of components under tariff heading 8807 to the United States were worth 75.78 million dollars in 2023, rising to 75.84 million dollars in 2024 and 86.55 million dollars in 2025, reflecting that the measure could significantly affect Thai operators. The Department of Foreign Trade therefore urges Thai operators exporting products related to UAS systems, including unmanned aircraft components, to thoroughly check the lists of goods in Annexes I through IV in order to plan to mitigate the impact of the measure, particularly in terms of cost management and pricing.
North Korea fires multiple missiles into Sea of Japan after trilateral drills conclude
North Korea fired multiple missiles into the Sea of Japan today, after South Korea, Japan and the United States wrapped up their trilateral joint drills. South Korea's Joint Chiefs of Staff said the missiles were launched from the Wonsan area in eastern North Korea at about 05:20 and flew roughly 250 kilometres. The Freedom Edge exercise ran from Monday to Friday and covered real-time information sharing as well as coordination of air, maritime, missile defence, cyber and medical capabilities. Earlier, North Korean Defence Minister Kim Song Gi criticised the drills as a major security threat, pledging to take strong and appropriate countermeasures. The latest launch came three weeks after North Korea fired about 12 short-range ballistic missiles eastward from an area near Pyongyang on 20 August.
Saudi Arabia Holds Off Retaliation for Drone Strike on East-West Pipeline After Tracing Origin to Iraq
Saudi Arabia's Ministry of Foreign Affairs said on Friday, September 11, that the drone attack on the East-West Pipeline, which injured people and damaged the pipeline, originated from Iraqi territory. The pipeline is a project in which Saudi Arabia has invested heavily, and it is used to transport crude oil from the country's eastern oil fields to Yanbu, a port city on the Red Sea, allowing Saudi Arabia to ship oil without passing through the Strait of Hormuz. The ministry said the government had decided to hold off on retaliating for the attack for now, at the request of the Iraqi prime minister, to give the Iraqi government the opportunity to take the necessary measures to prevent attacks on Saudi Arabia from Iraqi territory. It condemned the attack and said Saudi Arabia reserves the right to take all appropriate action to protect the country's sovereignty, security, facilities, and people. The Iraqi military welcomed Saudi Arabia's decision to hold off on retaliation, condemned any attack that threatens Saudi Arabia's security, and said it had ordered an investigation into those behind the incident.
Palantir CEO Alex Karp to Personally Back Mykhailo Fedorov's New Defense Tech Startup
Palantir Technologies CEO Alex Karp is set to become the first major investor in a new defense technology company launched by Mykhailo Fedorov, Ukraine's former defense minister who was dismissed by President Volodymyr Zelenskyy in July after roughly five months in the role. In a video Fedorov posted on social media, Karp said the two had worked together for five years and called the venture one that could be "defining for the world," bringing Ukraine's wartime experience to allied countries as a commercial product. Bloomberg reported early priorities would include battlefield robotics, jet-powered interceptor drones, and low-cost AI-guided missiles, though neither the investment amount nor the startup's name has been disclosed, and Fedorov's press office said further details on the Palantir relationship would come gradually. The investment is Karp's personal bet rather than a confirmed Palantir corporate investment, and Palantir did not immediately respond to a request for comment. The news lands as Palantir's own government business thrives, with second-quarter U.S. government revenue up 90% year over year to $809 million, part of overall revenue that grew 93% to $1.935 billion.
Draganfly wins five-year Canadian military drone contract
Draganfly has been awarded a five-year contract by the Canadian government to supply uncrewed aircraft systems and training to the Canadian armed forces. The company will provide 100 low-cost tactical intelligence, surveillance, and reconnaissance uncrewed aircraft systems, along with associated ground control stations, payloads, data links, support equipment, documentation, spare parts, and training. Under the terms of the contract, the Canadian government holds an option to order another 4,900 UAS systems for a contractual value of CAD24.25M, or $17.5M, which would bring the total number of UAS systems from Draganfly to 5,000. Shares are about 6% higher ahead of Friday's open, positioning Draganfly to trade in the green for the first time this week.
Crude oil closes above $100 after worst attack on cargo ships since US-Iran war
West Texas and Brent crude futures both closed above $100 a barrel as investors feared that supply tightness would intensify, after reports of the largest attack on cargo ships since the war between the United States and Iran began in late February. Meanwhile, President Donald Trump of the United States insisted he does not regret deciding to launch war against Iran, and Scott Bessent, the US Treasury Secretary, revealed on Thursday, September 10, that the US government will sanction a major bank next week to pressure Iran into ending a war that has lasted more than six months. The news website Axios reported, citing two US officials, that Prince Mohammed bin Salman, Crown Prince of Saudi Arabia, called President Trump twice last Thursday to urge the United States to launch strikes on the Houthis, but President Trump rejected the request. On the economic front, The Wall Street Journal reported that the US Department of Defense is negotiating a loan of about $5 billion for Fluidstack, an AI cloud startup, to strengthen the US data center supply chain. Meanwhile, Micron Technology announced total compensation for direct production-line employees in Taiwan of up to the equivalent of 35 to 68 months' salary, or at least NT$1.7 million in cash, for fiscal year 2026, and Samsung Electronics and Qualcomm have still not reached an agreement to hire Samsung to produce processor chips using 2-nanometer technology, as they cannot agree on price, which could push production back to next year.
Ukraine says Russia risks total manpower exhaustion by 2028 after casualties outpace new recruitment
Lieutenant General Oleh Ivashchenko, head of the intelligence directorate at Ukraine's Ministry of Defence, assesses that the Russian military's manpower and military resources could face complete exhaustion by 2028, as troop morale has fallen sharply and battlefield casualties outpace new recruitment. Ivashchenko told The Times that Russia still has military and economic resources for next year, but that Russia's resources are expected to stretch only another 16 months. Russia recruits roughly 1,000 new personnel per day, sometimes as many as 1,200, but yesterday casualties reached 1,410, and the day before stood at 1,511, of which about 60 percent were killed in action. Meanwhile, a Russian drone struck a shopping mall in the city of Pavlohrad in southeastern Ukraine, killing at least 5 people and injuring 67 others. Officials said shops and vehicles were damaged in the attack, which took place in broad daylight at a time when many people were on the streets, and among the injured were children aged 13, 14 and 15.
Trump Says He Has No Regrets About Starting the Iran War, Predicts It Will End After the Midterms
US President Donald Trump said he has no regrets about starting the war with Iran and insisted that if he had to do it again, he would do exactly the same thing. In an interview with Fox News anchor Laura Ingraham on Thursday local time, Trump said he would certainly keep striking Iran even if it hurts the midterm elections, and said the war will end immediately once the midterms are over, with oil and gas prices falling as well. The remarks came as markets brace for a war that could drag on longer, after the Wall Street Journal reported that senior White House advisers had discussed with Trump the possibility that the war could outlast his current term in office. Treasury Secretary Scott Bessent signaled that sanctions against a major bank would be announced on Monday, saying his team had already sanctioned and shut down the Dubai branch of Egypt's second-largest bank over allegations it provided 1.8 billion dollars to Iran, and Turkey's largest bank was also sanctioned for providing financial support to Iran.
AeroVironment Q2 Revenue Beats Estimates on Record Defense Contract Wins
AeroVironment reported second-quarter CY2026 revenue of $480.5 million, up 5.7% year on year and ahead of analyst estimates of $457.6 million, while adjusted earnings per share of $0.59 far exceeded the $0.25 consensus. The company reconfirmed full-year revenue guidance of $2.18 billion at the midpoint, which came in 0.7% below analysts' estimates, and reiterated full-year adjusted EPS guidance of $3.18 at the midpoint, though its EBITDA guidance of $315 million at the midpoint fell short of the $318.2 million analysts expected. Management pointed to major U.S. Army awards, including a $465 million Enduring High-Energy Laser program for its LOCUST directed energy platform, a $117 million Long-Range Reconnaissance contract for its P550 unmanned system, and a $51 million award for Switchblade 600 loitering munitions, alongside international orders such as a Puma procurement for Germany's LARUS program and the first direct commercial sale of the LOCUST laser weapon system to an international ally. AeroVironment ended the quarter with a record $1.5 billion funded backlog, up 37% year on year, providing 86% revenue visibility to the midpoint of full-year guidance, and is expanding capacity through a $100 million innovation center in Southern California, added production space in Salt Lake City, and new or expanded operations in Albuquerque and Huntsville. Chief Financial Officer Sean Woodward cautioned that the pace of government budget approvals remains a potential risk factor even as visibility stays high.