WSJ: Ukrainian delegation in Washington seeks billion-dollar defence pact on drones

A high-level Ukrainian delegation is in Washington this week for negotiations with the Trump administration on a landmark defence agreement that would see Kyiv share its drone technology with the United States in return for royalties or other compensation, officials from both sides confirmed.

According to the Wall Street Journal, the prospective deal, backed by both President Donald Trump and Ukrainian President Volodymyr Zelenskyy, is being described as a milestone in bilateral security ties. 

For years, Ukraine has relied heavily on U.S. arms supplies, most recently through an arrangement under which the Trump administration sells weapons to European nations that then transfer them to Kyiv. This new agreement would represent a shift, enabling Washington to draw on Ukraine’s battlefield-tested expertise in producing and deploying drones.

While U.S. defence companies manufacture some advanced unmanned systems, Ukraine is considered far ahead in mass-producing inexpensive, effective drones that have proved decisive against Russian forces. “It is just a reality that we need Ukrainian drone tech in the U.S.,” said William McNulty, a partner at UA1, a U.S. venture capital firm that has invested in eight Ukrainian defence companies.

The agreement carries political weight as well. Trump has expressed frustration with Russian President Vladimir Putin’s refusal to pursue a peace settlement while intensifying strikes on Ukraine. Kyiv, meanwhile, sees deeper cooperation with Washington as crucial to securing long-term U.S. support. Zelenskyy said on September 27 that the drone talks are emerging as part of a wider “megadeal” under which Ukraine is seeking to buy tens of billions of dollars’ worth of American weapons, including long-range missiles to expand its strike capability.

American officials say the drone deal would allow U.S. forces to capitalise on Ukraine’s competitive edge in unmanned aerial vehicles while Kyiv uses compensation to pay for high-end U.S. systems such as the Patriot antimissile defence, Himars rocket launchers, Army Tactical Missile Systems (ATACMS), and advanced fighter aircraft. The Pentagon has restricted Ukraine’s use of Atacms against Russian territory since Trump took office, but officials have authorised intelligence sharing to support Kyiv’s own long-range drone strikes on Russian energy facilities.

Several models are being discussed to facilitate the technology transfer. Options include Ukrainian firms supplying prototypes and technology to American companies in exchange for royalties, the establishment of Ukrainian subsidiaries in the United States to produce drones locally, or direct U.S. military purchases from Ukrainian manufacturers. With more than 300 drone firms operating in Ukraine, industry representatives warn that any deal must account for private ownership and intellectual property rights.

Another issue is the widespread use of Chinese components in Ukrainian drones, which U.S. companies cannot employ due to security requirements. Despite such hurdles, Washington has long recognised Ukraine’s pioneering role in drone warfare. After Ukraine’s failed 2023 counteroffensive, then-national security adviser Jake Sullivan commissioned assessments that highlighted the importance of scaling both short- and long-range drones. The Biden administration subsequently allocated $1.5 billion to bolster Ukraine’s UAV and missile programs, including critical components unavailable domestically.

Former officials say those efforts are now paying dividends. “We believed it would be strategically impactful for Ukraine to possess a sustainable and massive supply of effective domestically produced drones,” said David Shimer, who served as director for Ukraine policy on the National Security Council under Biden. “Now we have an opportunity to learn from Ukraine’s innovations ourselves.”'

Ukraine’s drone sector has expanded at extraordinary speed. Since Russia’s full-scale invasion, Kyiv has deployed cheap First Person View attack drones, naval drones, and AI-driven systems, while producing more than two million UAVs last year alone. Analysts say Ukrainian drones can be manufactured for 20 to 30 per cent of Western costs, a factor that Western militaries now view as critical.

The European defense industry has already begun integrating with Ukraine’s drone makers. In September, Britain and Ukraine announced a joint production project involving a system called Octopus, designed to intercept drones in flight. Denmark has signed a similar deal to help Ukrainian companies manufacture weapons on Danish soil. German drone maker Quantum Systems recently acquired a 10 percent stake in Ukrainian firm Frontline, with an option to increase its holding to 25 percent. Other Ukrainian manufacturers, such as Skyeton, are in talks to set up production facilities abroad, including in southern England.

Industry executives stress that Ukraine’s greatest asset is not just technology but also combat experience. “Any company that does not [have a team in Ukraine] doesn’t understand the current battlefield conditions for drones and robotics,” said Sam Vye, chief executive of Syos Aerospace, a New Zealand-based drone maker.

The prospective U.S.-Ukraine deal comes just months after the Trump administration concluded a separate agreement granting the United States access to Ukraine’s mineral resources. That deal was easier to negotiate, since rights to such resources are largely state-controlled, unlike drone technologies developed by private firms. Still, both governments insist that the new talks underscore a shared recognition of Ukraine’s role as a defense innovator and America’s determination to secure access to its advances.

By Tamilla Hasanova