Perennial Autonomy Wins $500M Pentagon Contract for Merops Counter-Drone Interceptors Proven in Ukraine

The Pentagon’s Joint Interagency Task Force 401 (JIATF-401) has awarded Perennial Autonomy a three-year contract with a $500 million ceiling to deliver AI-enabled counter-drone systems across the US military. The contract covers three platforms: Merops interceptor drones, Bumblebee ISR quadcopters, and Hornet midrange strike drones.

All three systems are already deployed with US forces operating in CENTCOM, where they are being used to counter Iranian Shahed one-way attack drones in the Gulf theatre.

Perennial Autonomy was originally launched by former Google CEO Eric Schmidt as Project Eagle. The company developed the Merops interceptor specifically for Ukrainian forces to counter Russia’s Shahed-series drones, and the system has downed thousands of Russian one-way attack drones over the past two years in Ukraine.

The US military is now using the same interceptors against the same Iranian-designed drone in a different theatre.

The cost arithmetic is central to the contract’s logic. Army Secretary Daniel Driscoll told lawmakers that the Merops currently costs roughly $15,000 per unit, while a Shahed costs between $30,000 and $50,000.

That makes each successful intercept cost-positive for the defender – a reversal of the economics that have plagued traditional air defence, where a single Patriot interceptor costing several million dollars is expended against a drone worth a fraction of that.

Army Brigadier General Matt Ross, JIATF-401 director, called drones “the defining threat of our time” and stated the need to “deploy and scale low-cost, attritable air-to-air drone interceptors at all our facilities at home and abroad.”

The contract sits within the Pentagon’s broader Drone Dominance initiative, a $1.1 billion program launched in December 2025 to equip US forces with cheap, disposable drones. Ukrainian companies were invited to participate, and a separate US-Ukraine memorandum is being drafted to route Ukrainian drone technology into joint ventures on American soil.

Perennial has also opened manufacturing operations in Europe through a partnership with Twentyfour Industries to produce the Merops interceptor in Germany. A separate $5.2 million contract for the Bumblebee V2 was awarded in January, and the Army tested the Hornet midrange strike drone in March.

The $500 million award is the largest single counter-drone contract the Pentagon has issued to date. It validates a procurement model in which weapons are tested at scale in one theatre – Ukraine’s four-year air war against Russian Shaheds – and then acquired for use in another, without the multi-year development cycles that have historically governed US defence procurement.

The contract comes as the Iran war has exposed the limits of traditional missile-based air defence against mass drone salvos. The US lost over $1.3 billion in equipment at Prince Sultan Air Base in Saudi Arabia – including an E-3G Sentry airborne early warning aircraft and KC-135 tankers – before turning to Ukrainian counter-drone technology. The Pentagon also deployed Ukraine’s Sky Map acoustic detection platform at the base, with Ukrainian officers training American warfighters on the system.

Perennial’s Merops is one of several interceptor drones now competing for NATO procurement. Ukrainian-built alternatives – including the STRILA at $2,300 per unit and the P1-SUN, which won the Pentagon’s Drone Dominance initial competition – offer even lower price points but lack the Merops’ track record at CENTCOM scale. The broader interceptor drone market is being shaped by a single question: whether defence establishments will continue spending millions per intercept on traditional SAMs, or shift to expendable platforms costing thousands.