Taiwan’s Aerospace Industrial Development Corp. signed a formal agreement with US defense technology firm Shield AI to jointly develop unmanned aerial vehicles, marking another step in Taiwan’s efforts to strengthen its defense capabilities through international partnerships.
AIDC announced Monday that the company and Shield AI have signed a formal Teaming Agreement to enhance Taiwan’s aerospace industrial base and improve collaborative technological innovations. The arrangement focuses on maintenance, training, and potential technology integration for Shield AI’s V-BAT vertical takeoff and landing drones.
Shield AI’s V-BAT aircraft has gained attention for its performance in Ukraine, where the company has completed more than 130 sorties alongside Ukraine’s Unmanned Systems Forces in harsh electronic warfare environments. The aircraft demonstrated its ability to operate in GPS-denied conditions during testing that included flying 95 kilometers into contested territory.
Under the partnership, AIDC will handle local maintenance and support for Shield AI’s products in Taiwan, potentially reducing logistics costs and response times. Shield AI will provide training and cultivate engineering technology talent in Taiwan to build technology capabilities, according to the companies’ statements.
The collaboration represents AIDC’s broader strategy as leader of the Taiwan Excellence UAV Overseas Business Alliance, which includes local companies such as Thunder Tiger, Coretronic, and Evergreen Aviation Technologies. AIDC became the first local company to receive cybersecurity certification from the US Department of Defense in May, according to Taiwan’s Ministry of Economic Affairs.
Financial details of the agreement were not disclosed. However, the partnership positions both companies to potentially integrate Taiwan-manufactured components into future drone systems, which could boost local content ratios and support Taiwan’s domestic aerospace industry development goals.
The partnership follows another major Asian aerospace deal for Shield AI. Hanwha Aerospace led a $240 million funding round for the American company in March, valuing Shield AI at $5.3 billion. The Korean defense giant has been aggressively expanding into unmanned systems, including partnerships with General Atomics for Gray Eagle drones and a previous $22.5 billion won investment in US drone company Fortem Technologies in 2023.
The dual partnerships with both Korean and Taiwanese aerospace companies highlight Shield AI’s strategy to penetrate the Asia-Pacific defense market through local manufacturing relationships. Both Hanwha and AIDC represent the largest defense contractors in their respective countries and compete for similar regional export markets.
The timing coincides with Taiwan’s ongoing military modernization efforts and Shield AI’s broader expansion across the Asia-Pacific region. Shield AI President Brandon Tseng described the AIDC partnership as aimed at “accelerating Taiwan’s local drone and aerospace industry as they ramp up next generation deterrence capabilities.”
