Palladyne AI and Israel Aerospace Industries have formed a strategic partnership to manufacture, integrate, and market IAI’s loitering munition systems to the US Department of War (DOW).
Under the agreement, Palladyne AI will adapt the systems to US operational requirements and manufacture components and subsystems domestically, placing the US-based defense and industrial technology company as the domestic manufacturer and integrator of the systems.
IAI will provide engineering support and key subsystems. The Israeli defense giant has been active in the field of unmanned aerial systems for more than 40 years, with its systems deployed operationally across multiple militaries.
The partnership comes as the DOW increases investments in loitering munitions to expand capabilities to meet modern battlefield demands.
The agreement covers IAI’s HARPY, HAROP, and Mini HARPY systems. The HARPY and HAROP are designed for autonomous search and engagement of hostile targets, including radar sites, missile launchers, and command‑and‑control nodes. The HARPY can also be launched without prior intelligence on the target’s location, providing operators with flexibility.
The Harpy systems, designed with the characteristics of a UAV and a missile, are equipped with advanced sensors and precision strike capabilities.
IAI says the system is “dedicated to the suppression and destruction of air defenses (SEAD/DEAD)” and “serves as a strategic tool for armed forces planning strikes against anti-access/area denial (A2AD) defensive systems.”
The Mini HARPY combines EO/IR sensors with an anti‑radiation seeker to locate, target, and take out adversary emitters. The system is intended to provide tactical units with air‑defense‑suppression capabilities, including against Counter‑UAS arrays.
The systems have seen recent battlefield use by Azerbaijan and India.
'Well-known' system
Boaz Levy, IAI’s chairman of the board, said that the new partnership strengthens the company’s long‑term US presence.
“The US is a strategic market for IAI, and this partnership represents a significant step in expanding our long-term presence and industrial cooperation in the US defense sector,” he said.
“By combining IAI’s decades of operational expertise and combat-proven loitering munition technologies with Palladyne AI’s US-based manufacturing capabilities, we are positioning these systems to meet evolving operational requirements and support the current and future needs of the US,” he added.
Ben Wolff, president and CEO of Palladyne AI, said the collaboration enables rapid fielding of operational systems.
“The US defense industrial base needs battle-proven loitering munitions capabilities it can field now,” he statedd.
“What differentiates this partnership is that by combining IAI’s systems with Palladyne AI’s US engineering and manufacturing capabilities, we can make those systems’ capabilities available to the US Department of War much faster than through a clean-sheet development program,” Wolff said.
“We built that stack in 2025. This partnership is the first major proof of what it can do,” he added.
According to a report in Breaking Defense, Wolff said that the Israeli systems are well known to the DOW.
“People at the Pentagon are familiar with these weapon systems. I say ‘partnership with IAI,’ and people’s eyes light up,” he said, adding that “it’s not a Shahed. These are not the cheapest throw-away drones [but] a fairly exquisite piece of machinery.”
IAI Executive VP Guy Barlev said Palladyne AI’s engineering and autonomy capabilities were key factors in the selection. “This new strategic partnership will bring our combat-proven long-range loitering munitions to the US market,” he said.
Retired Admiral Eric T. Olson, a Palladyne AI board member, said the company was structured to scale proven systems for US needs.
“We built Palladyne AI to be the kind of partner the Department of War actually needs right now,” he said.