The Trump administration is moving to strengthen America’s drone industry through funding-deal talks with several U.S. drone companies as part of an effort to boost domestic production of the next generation of battlefield technology, according to The Wall Street Journal.

The talks followed months of discussions between Pentagon officials and private-sector drone manufacturers as the administration ramps up efforts to reduce America’s dependence on foreign-made drone technology and rebuild critical defense supply chains inside the United States.

The negotiations have involved the Pentagon’s Office of Strategic Capital — a lending office established during the Biden administration that provides financing to companies considered vital to national security.

Some of the proposed arrangements could include both debt financing and equity investments through separate funding mechanisms, potentially giving the U.S. government ownership stakes in strategically important drone firms, sources reportedly said.

Among the companies being considered for possible Pentagon backing are Performance Drone Works, which secured an Army contract for reconnaissance drones; Unusual Machines, a drone parts supplier that lists Donald Trump Jr. as both a shareholder and advisory board member; and Neros Technologies, a startup backed by Sequoia Capital that develops small first-person-view drones.

Previous Pentagon investments have included conditional loans tied to production benchmarks before funding is released. The Office of Strategic Capital reportedly has approximately $210 billion in lending authority and has also invested heavily in critical minerals tied to national defense.

A War Department official told the Journal that the department would not comment on “pre-decisional matters that remain subject to change. Any final decision from the Department will be shared in a formal announcement at a later date.”

The goal of the proposed funding is to help American drone manufacturers rapidly scale up production capacity while driving down prices for military systems, according to the Journal’s sources.

The funding would not be used to directly purchase drones.

The effort complements the Pentagon’s Drone Dominance initiative, a $1.1 billion program designed to build an arsenal of roughly 300,000 low-cost attack drones by the end of 2027 as the U.S. military races to modernize for future conflicts.

Pentagon officials have repeatedly warned that the United States must dramatically increase manufacturing output to compete with adversaries and meet department goals.

Many American-made drones currently cost tens of thousands of dollars more than the Pentagon’s target price of approximately $5,000 per unit under the Drone Dominance program.

Ukraine, by comparison, reportedly produced approximately 4 million drones last year amid its ongoing war with Russia.

According to a 2025 estimate, the United States currently has the capacity to build roughly 100,000 drones annually.