KIEV, Ukraine — The device used many of the same electronic components as the most lethal weapons of modern warfare. It was operated remotely. I could recognize images. It fired a laser.
Well, a laser pointer. The device, Petcube, was created by a Ukrainian entrepreneur, Yaroslav Azhnyuk, and his team. This is a smartphone-controlled gadget for observing and entertaining dogs and cats from a distance when they are alone at home. When Azhnyuk first tested it on a colleague’s lonely, barking dog, the animal jumped up and down chasing the laser, he said.
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Petcube is now sold in dozens of countries. But the company’s founders moved on to a new idea, one that reflects a widespread transformation of Ukraine’s civilian technology industry into a military contracting hub.
After initially joking about creating a military Petcube, with more powerful lasers to target Russian troops, Azhnyuk and his team moved on to developing first-person view, or FPV, drones. These small, buzzing quadcopters carrying explosives have become ubiquitous on the battlefield in Ukraine.
The team, now working at two new companies called Odd Systems and The Fourth Law, integrated an image recognition system powered by artificial intelligence into the drone. Instead of identifying, for example, a dog or a cat, it can be programmed to detect military vehicles, artillery pieces or enemy soldiers.
The image recognition system is integrated into an autopilot program used for attacks.
Pilots operating Odd Systems drones use a targeting method called Yolo, or “You Only Look Once.” After identifying a target, operators activate an automated system, and the drone autonomously travels the last approximately 400 meters, becoming immune to Russian interference.
Odd Systems also produces an interceptor drone designed to counter Iranian-designed Shahed drones.
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Russia has been launching these cheap, triangular explosive drones against Ukraine for years, and Iran has used them in recent weeks to attack U.S. bases, American embassies and other targets in the Middle East.
The company’s interceptor, Zerov, is a fast, rocket-shaped device with four propellers programmed to identify Shaheds, fly towards them and explode.
Iran’s attacks have sparked a surge in interest in Ukrainian anti-Shahed technologies. Odd Systems declined to reveal whether it is exporting its products to the Middle East or plans to do so.
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In Ukraine, the company’s FPV drones with image recognition system are regularly used on the front lines. The company is testing versions that fly autonomously along a programmed route and hit targets identified from a database.
“We used to make cameras that launched treats for pets, and now we make cameras that launch explosives at intruders,” Azhnyuk, 37, said in an interview at a restaurant in Kiev, Ukraine, where the company is based.
The Red Cross and other groups that monitor the laws of war oppose the use of artificial intelligence to conduct attacks without complete human control.
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But Azhnyuk said such advances were needed in Ukraine to face a relentless adversary and would be needed in other conflicts as drones dominate battlefields.
Odd Systems and an associated company operated by the same team, Fourth Law, are examples of the growth of weapons startups in Ukraine.
Investors are finding opportunities, in part thinking about a post-war period in which these companies will be able to export their products, in addition to supplying the Ukrainian army.
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Weapon ideas that seem exotic or fanciful are hitting the battlefield at a rapid pace.
Helium balloons that launch drones, guns that shoot nets instead of bullets, remotely controlled explosive speedboats, wheeled robots that rescue injured soldiers, and underwater drones are all finding their way into the Ukrainian military.
Underwater drones look like smooth black telephone poles with propellers. Late last year, one of these models struck and damaged a Russian submarine in the harbor, according to the Ukrainian army, highlighting the vulnerability of a prestigious Cold War-era naval vessel.
A central priority for both Ukraine and Russia are FPV drones. On both sides, these drones now cause the majority of casualties.
Russia has been focusing on producing some effective systems on a large scale. Ukraine has faced production difficulties, but has a huge variety of new projects.
More than 2,000 military technology startups are active in Ukraine, according to Brave1, a fund created by the Ministry of Digital Transformation for defense investments. Some emerged from the army itself, starting as makeshift workshops in the basements of drone units.
Last year, foreign direct investment in Ukrainian defense companies rose to about $100 million, up from $40 million the year before, according to Artem Moroz, head of investor relations at Brave1. About 80 companies have raised funds in the capital markets, he said.
The biggest deal last year occurred in September. Swarmer, a developer of AI-powered targeting software for drone swarms, has raised $15 million. Among the investors were several US venture capital funds, including D3, backed by Eric Schmidt, former CEO of Google.
This month, U-Force, a consortium of Ukrainian drone manufacturers including the producer of Magura drone speedboats, raised $50 million in seed capital. This investment valued the company at more than US$1 billion.
Public resources are also a source of financing in Ukraine’s defense industry.
Half a dozen European countries, led by Denmark, are investing in Ukrainian companies. These investments sometimes also benefit contractors in their own countries. Estonia finances Ukrainian companies if at least 30% of the components of their products are Estonian-made.
In another business model, foreign contractors partner with Ukrainian companies on a largely non-cash basis, exchanging technology for access to the battlefield and the ability for Ukrainian soldiers to test their products in combat.
Shield AI, a contracting company based in San Diego, cooperates with Iron Belly, a company based in Lviv in western Ukraine that makes fixed-wing explosive drones.
Funding rounds are not always publicly disclosed. “In the United States and Europe, whenever someone raises funds, they seek a lot of publicity,” said Brave1’s Moroz. “In Ukraine, companies prefer to remain in the shadows” because their factories are priority targets for Russian missiles.
Before the war, Ukraine’s technology industry had achieved disproportionate international success.
Among its highlights were Grammarly, a writing tool, and Ring, a video doorbell and home security company that Amazon bought in 2018 for around $1 billion.
Information technology was Ukraine’s third-largest export until the 2022 invasion, behind steel and agricultural products.
Before the war, Petcube founder Azhnyuk split his time between Kiev and San Francisco, perfecting his pet product. He comes from a long line of Ukrainian academics, who he says initially saw the project as trivial.
On the day Russia began its full-scale attack, Azhnyuk decided to step down as CEO and focus on helping Ukraine’s defense. In 2023, he created Odd Systems and Fourth Law to address what he saw as a central technological challenge of warfare.
About 90% of drones crash instead of hitting a target. Video signals are blocked, or aircraft move out of radio range and plummet from the sky. Azhnyuk’s auto-targeting system aims to solve this problem.
Partially taking humans out of the equation “isn’t as scary as it sounds,” he said. Drones operate with geofences, meaning they only attack within a designated zone. This is to prevent the drone from attacking a civilian or returning to the soldier who launched it.
Azhnyuk said he managed to attract initial rounds of capital, but could not reveal the sources for security reasons.
Last month, Axon Enterprises, an Arizona-based taser maker, announced an investment in Azhnyuk’s Fourth Law. The value was not disclosed.
Azhnyuk showed no regret in creating a computer program designed to automatically make life-and-death decisions.
“We could literally regulate ourselves to death” by restricting the use of artificial intelligence in weapons, he said, considering that Russia and China do not have the same concerns.
He said he feels obligated to continue development work because “I took an oath to defend my country when I was a Boy Scout.”
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