Why Ukraine’s Defense Industry Might Be the Best $30 Billion Investment Today

Ukraine requires $30 billion to accelerate its domestic arms industry, President Volodymyr Zelenskyy said on May 28. With Western stockpiles running low and delays mounting, Kyiv is racing to produce more weapons at home.

Ukraine is rapidly transforming its defense industry, focusing on several critical fronts:

The country has made benchmark progress in developing an ambitious missile program, producing new cruise and ballistic missiles designed for precision strikes targeting Russia’s weak spots. 

At the same time, Ukraine has emerged as a major player in drone production, manufacturing thousands of reconnaissance and suicide drones that have become essential on the battlefield. Parallel to that, Maritime drones have also become a core component to Ukraine’s strategy, enabling the Ukrainians, a country with a relatively nonexistent navy, to conduct operations against a very prevalent Russian naval force in the Black Sea with domestically built unmanned naval drones.

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Meanwhile, big strides in automated turrets and remote-controlled weapon stations are emboldening the firepower and survivability of Ukraine’s armored vehicles. Alongside this modern tech, the mass production of artillery shells, armored vehicles, and air defense systems is on a forward trend. All of these are leveraging the country’s Soviet-era industrial legacy infrastructure, adapted to the demands of modern warfare and the country's survival.

These conditions have already produced new weapon systems, including drones that are now actively deployed on the front lines, alongside others developed through the unprecedented R&D opportunities the war has created. Taken together, it’s clear that Ukraine is emerging as a key player in the global defense sector, gaining momentum through international partnerships and joint ventures.

Drone industry

Ukraine’s drone industry has scaled at a pace few could have imagined at the start of the war. Approximately 260 domestic companies produced around 2.2 million FPV drones in 2024 alone, making Ukraine the world’s largest FPV drone manufacturer. Local production could scale to 10 million units annually if needed, the Defense Ministry reports. Beyond sheer volume, Ukraine is leading on tactical innovation—building fiber-optic-controlled FPVs that can operate through Russia’s dense electronic warfare environment, long-range platforms like Backfire and Mace, and night-vision-equipped FPVs such as Bulava. For investors, this is one of the world’s fastest-moving drone ecosystems with proven battlefield results.

Rocket industry

Ukraine produced 100 Peklo missile-drones in just three months in late 2024, moving quickly to serial production. Alongside Peklo, the newly unveiled Bars drone-missile can hit targets up to 800 km deep inside Russia. Ukraine’s expanding arsenal of domestically built systems—including Neptune, Palianytsia, and Ruta—is now enabling sustained monthly deep-strike operations. Most of these missiles are built with more than 70% Ukrainian components. 

Ground robotics industry

Ukraine is preparing to deploy thousands of robotic ground vehicles and drone swarms to the frontlines in 2025. Over 200 THeMIS combat-capable unmanned ground vehicles (UGVs), built in partnership with Milrem Robotics, will be delivered this year, with production capacity now scaling to more than 500 units annually. Meanwhile, Ukraine’s domestically produced CRAB-LS robotic transporter has entered active service, moving supplies and evacuating wounded soldiers under fire. Ground robotics in Ukraine is evolving rapidly, with platforms supporting a growing range of roles, from logistics and casualty evacuation to mine-laying, reconnaissance, and front-line security.

Artillery industry

Ukraine has nearly doubled the production of its domestically built 155 mm Bohdana self‑propelled howitzer, reaching up to 36 units per month, up from over 20 earlier this year. Mounted on a wheeled chassis, the Bohdana is maneuverable, precise, and reliable—it first proved its worth during the battle for Snake Island and is now fielded widely from Bakhmut to Zaporizhzhia. Its unit cost is about €2.8 million, roughly half the price of similar Western systems, and production is spread across multiple facilities, including some in the EU, to ensure continuity under fire 

Beyond the Bohdana, artillery shell production is also scaling sharply: under support models like Denmark’s “Danish model,” which channels €1.3 billion into domestic weapons manufacturing in 2025, funding is covering artillery systems, drones, missiles, and anti‑tank systems. For international partners, Ukraine’s artillery sector offers a compelling blend of proven battlefield performance, cost efficiency, and rapid, resilient manufacturing capacity.

Sky Sentinel AI turret

The domestically developed Sky Sentinel is Ukraine’s next-generation, AI-driven air defense turret. Designed to counter Shahed drones and cruise missiles, it uses radar and artificial intelligence to autonomously detect, track, and engage targets without constant human direction. Built around a heavy machine gun capable of covering 360°, it can engage fast-moving targets—up to 800 km/h—within its effective range, which extends to approximately 1.5 km. 

Prototype Sky Sentinel units have already shot down multiple drones in active combat conditions, with one unit reportedly neutralizing six Iranian Shahed drones in operational deployment. With a per-unit cost of about $150,000—significantly lower than Western interceptor missiles—Ukraine aims to mass-produce dozens of these systems per month to protect both cities and frontline zones.

Funding the growing arsenal

NATO Secretary General Mark Rutte recently warned of Russia’s expanding military capabilities, underscoring the urgent need for Ukraine to strengthen its defense industry. In response, Ukraine is advancing new weapons—drones, robotics, and long-range missiles—while reviving traditional arms production like artillery shells and Bohdana howitzers. However, meeting these battlefield needs requires sustained investment.

Ukraine’s defense industry now has an estimated $30 billion in production capacity, outpacing the current defense budget. Manufacturers can produce far more, but progress depends on stable funding and consistent contracts.

International partners—including Germany, Denmark, the UK, France, the Netherlands, and Czechia—have launched joint projects, but broader investment is needed to unlock Ukraine’s potential fully.

Platforms like Brave1 are accelerating innovation, with over 500 defense tech projects moving from prototype to battlefield-ready systems. The result is a fast-evolving domestic market that blends mass production with advanced tech, from AI-driven air defense turrets to unmanned maritime drones.

The challenge ahead is securing the financial resources to scale production. Long-term contracts, stable financing, and international investment will be key to turning Ukraine’s wartime innovation into a sustainable, globally competitive defense industry.