The rapid evolution of drones in Ukraine is changing military costs and strategies, favoring private innovation in the face of government budget constraints.
Summary
Drones developed in Ukraine have transformed the economics of war since the Russian invasion of 2022. These inexpensive devices, often modified by civilians and soldiers, reduce human casualties and accelerate innovation. Entrepreneurs such as Elon Musk with SpaceX have provided Starlink satellites, giving Ukrainian forces an advantage. The 9-meter-long CA-1 autonomous drone has demonstrated its superiority in simulations against human pilots. NATO faces budgetary challenges, with depleted ammunition reserves and rising costs. Russia, despite its population of 140 million, struggles against 500 million Europeans and 310 million Americans. Guided munitions, such as 70-kilometer-range GMLRS rockets, are replacing unguided shells, increasing efficiency but requiring massive stockpiles. These changes underscore a more technological and economic war.
The impact of Ukrainian drones on military costs
Ukrainian drones have reduced spending on conventional warfare. An FPV drone costs around €500, compared to millions for a tank. By 2025, Ukraine is producing more than 4 million drones per year, including 2 million FPV drones. These devices, assembled in decentralized workshops, reach a monthly production of 200,000 units, up from 20,000 in 2024. Local modifications, such as the addition of thermal cameras or explosive charges, are shared via social media, accelerating adaptation.
This approach minimizes human casualties. Operators fly remotely, avoiding direct injury. For example, ground drones have captured Russian soldiers without ground combat. Russia, with estimated losses of 410,000 men in 2025, depends on depleted Soviet stocks. Ukraine has crippled 38% of Russian refineries through drone strikes, causing fuel shortages in 57 regions and a 34% drop in Russian oil revenues in November 2025.
The consequences are profound. This asymmetric war is forcing armies to rethink budgets. Human costs are falling, but investment in technology is rising. Western sanctions are exacerbating the Russian situation, with a growing dependence on China for components. If this trend continues, future conflicts will favor states with agile industries. Ukraine is already exporting its drones, generating 100 billion hryvnia in revenue in 2024, or around 2.3 billion euros. This strengthens its economy, but exposes factories to Russian strikes, such as those on production sites in 2025.
Extrapolation shows a risk of proliferation. Countries such as Iran and Turkey are copying these models, making low-cost weapons accessible. Conventional forces, such as those of NATO, must integrate countermeasures, such as $2,300 interceptors, to counter $46,000 drones. Without adaptation, budgets will skyrocket, with implications for global stability.
The role of entrepreneurs in autonomous weapons
Entrepreneurs have accelerated the development of autonomous weapons. Elon Musk has enabled the use of Starlink, a network of 6,000 satellites, for Ukrainian communications. This provides 100 Mbps bandwidth, resistant to Russian jamming. The cost: €100 per month per terminal.
The CA-1 Europa, an autonomous drone 11 meters long with a wingspan of 10 meters, developed by Helsing, uses Centaur AI for simulations. In 2025, it beat human pilots in simulated combat. Weighing 3 to 5 tons, it reaches high subsonic speeds, with a range of 1,000 kilometers. Scheduled for 2029, it costs less than an F-35 at €80 million.
Russia encourages its entrepreneurs, but with 140 million inhabitants compared to 810 million in Europe and America, innovation is limited. Ukrainian ground drones forced Russian surrenders in 2025.
The consequences include an erosion of sovereignty. States depend on private companies, such as SpaceX, which control critical infrastructure. Musk limited Starlink near Crimea, demonstrating this power. Economically, this creates jobs: the Ukrainian drone industry employs 10,000 people, generating 13.8 billion hryvnias in net profits in 2024, or €320 million.
Let’s extrapolate: autonomy reduces human error, but poses ethical risks. Weapons without human supervision could cause collateral damage. Nations must regulate, but war accelerates adoption. Ukraine is already testing AI modules for navigation, integrated into FPV drones, increasing accuracy to 70% over 2 kilometers.
NATO’s challenges in the face of war costs and reserves
NATO faces major problems due to the war. Military leaders are pushing for maximum aid, but politicians are managing the fiscal impacts. Total spending: United States $120 billion, Europe $185 billion since 2022. This is causing tax increases and inflation.
War reserves, now depleted, must cover 30 to 60 days of combat. Russia emptied its stocks in 2024, losing 4,000 tanks. Ukraine survived thanks to NATO, which provided €64 billion in American weapons.
Consequences: voters are suffering shortages. In Germany, energy costs have risen by 30%. Politically, this is divisive: Turkey, with 50% of NATO’s workforce, is unstable under Erdogan. Without reserves, battles are quickly lost, as in 1973 for Israel.
Let’s extrapolate: NATO must rebuild, with €40 billion promised in 2025. But Russian energy sanctions cost Europe €100 billion annually. This forces reindustrialization, such as the EU’s ASAP for 2 million shells per year by 2025.
Historical developments and lessons from Russia
NATO, formed in 1949, aimed to contain Russia. After 1945, West Germany joined to block invasions. Khrushchev, from 1953 to 1964, prioritized the economy, reducing Stalinist deaths (20% of the population).
Since 1999, Putin has revived the police state, spending €147 billion on defense in 2025. The invasion revealed failures: obsolete tactics, losses of 1.4 million men.
Consequences: Russia is stagnating, with growth of 0.6% in 2025. Sanctions are cutting oil revenues, forcing massive loans. This weakens the regime, risking internal instability.
Let’s extrapolate: past mistakes, such as Soviet Afghanistan (2-3% of GDP), are repeating themselves. Russia depends on China for 50% of its components, making it vulnerable to pressure.
Guided munitions and the post-Cold War economy
Guided munitions are changing paradigms. A 70-kilometer GMLRS rocket replaces dozens of shells. US orders: 10,193 in 2020, compared to 6,936 in 2018. PGK kits transform shells into guided munitions, with 5,600 ordered in 2017.
The end of the Cold War promised savings, but volunteer forces cost more. ISIL in 2016-2018 validated these weapons.
Consequences: stocks are running out fast.
In 2022, Ukraine quickly used up NATO ammunition. This is forcing increases in production, such as 148,287 155 mm shells in 2019.
Let’s extrapolate: future wars will require anti-jamming INS, accurate to within 1 meter. Without this, costs will skyrocket, favoring nations with flexible industries.
Technological developments require rapid adaptation. Drones and AI dominate, but economic vulnerabilities persist. Russia risks collapse, while Ukraine innovates to survive. NATO must balance aid and internal budgets to avoid divisions.
Sources:
- The Economist: Western drones underwhelming in Ukraine
- Hudson Institute: Impact of drones on battlefield
- Ukraine’s Arms Monitor: Drone warfare trends 2025
- Forbes: Ukraine deep drone strikes
- ASPI: Ever-faster weapon cycles
- OSW: Game of drones production
- Atlantic Council: Drone sanctions on Russia
- National Interest: Evolution in Ukraine drone defense
- Vision of Humanity: Drones and AI transforming conflict
- CSIS: Fewer soldiers more drones
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