Drones of different varieties have beenused during Russia’s invasion of Ukraine. A $500 product is able to droplittle bombs into car windows. And that’s something where you justhaven’t really seen with other technology. The world’s biggest drone makerDJI is one of many companies that has found their products used on the battlefield. The unfortunate thing is thatit’s a very reliable product. So, it’s become a product of choice, even forthose who want to use a drone inappropriately. Doyou know that this drone isused in military circumstances? Yeah. Because it’s actuallyvery rugged and very precise.
How fast can it go? On paper, it’s 72km/hour. What is it about DJI dronesthat make people go crazy? It’s very easy to use. I don’t have toworryabout having to know the manual. The global drone market is expected to grow from$30.6 billion in 2022 to $55.8 billion by 2030. And more than 70% of that is dominatedby the Shenzhen-based company. DJI’s meteoric rise is an impressivefeat for a Chinese brand, one of the few that have succeededon theglobal stage through its ingenuity. DJI’s story began like many other successfultech start-ups – in a college dorm room,.
Where an ambitious young student namedFrank Wang developed early prototypes of what would become the foundation of amultibillion-dollar privately held empire. The model plane enthusiasthada simple goal at that time: to create a flying toy that would be sturdierthan the flimsy version in the market then. Today, DJI, which stands for Da Jiang Innovations,has been dubbed the ”Apple” of the drone industry. Its product line-up includes robots and cameraaccessories such as gimbals and stabilizers. Its first commercially successful productwas The Phantom drone, which Wang claimed in a media interview made DJI the first companyto bring “military-grade technology” to the public. Frank had an edict that if you get the productright, everything else will fall into place.
Even today where we have14,000 or more employees, 25% of our employees areresearch & development focused. So, we're now the only manufacturer thatreally manufactures everything from, say, a 250-gram drone that you would use to fly for,let’s say, family vacations and to get fun videos, all the way up to an agricultural drone thatwould spread seed or pesticide across farmland. We have a suite of various drones that aregood for search and rescue, public safety, fire, construction mapping, everything. But consumer drones are just a small subset of the wider drone market – eclipsed by dronesused for commercial and defense purposes.
At the start of Russia’s invasionofUkraine in 2022, a Ukrainian minister called out DJI for being complicit in thewar through its use by the Russian military. This compelled DJI to formally deny thatits products are designed for military use. We don’t adapt our products orweaponize them for combat use, and we certainly don’tsupport their use for combat. We’ve even gone the step ofactually stopping sales to both Russia and Ukraine during the current conflict. Most of the reports that I’ve seenin the media reference people buying products in third countries, where you canliterally buy at any electronics retailer.
It’s very hard for us to stop that. We don’t actually know whothe end users of our products are. And for the most part, we don’thave any way of tracking that. And that would be just as true as any otherconsumer electronics company, though. Everything from sort of Samsung,to iPhone, to whatever else. The recent controversy around DJI products being used for warfare isn’t the onlychallenge the company has had to face. In December of 2021, the drone maker was placedon an investment blacklist by the U.S. government, which banned American investors frombuying or selling shares in the company.
The U.S. Treasury Department specificallysingled out DJI for providing drones to the Xinjiang Public Security Bureau,which American authorities allege are being used for the surveillanceof Uyghur Muslims in the region. But the move is largely symbolic asit’s a private company, meaning its ownership structure and full listofinvestors are not publicly available. A lot of the concerns have always stemmed from the relationship between the Chinesegovernment and Chinese corporations. And that’s raised a lot of concernswithU.S. regulators, but also in Europe. David is the Head of Research at DroneAnalyst,.
Providing insights into thecommercial drone industry. He was also a founding member of DJI’senterprise business, leaving the company in 2020. With any technology, there’s gonna be greatapplications and life-saving applications. And there’s things that weneed to manage and avoid. The big question that all of us shouldhave is, what is each company doing as a role to police their ownproducts and police their own efforts. We've stated unequivocallythat we have had nothing to do with treatment of Uyghurs in Xinjiang. In fact, we have quite stringentlanguage in all our distributor.
Agreements that states that theyhave to abide by U.S. sanctions. The truth is that we've gone through numerousaudits of our firmware and of our products. But we've also cooperated with theUSDepartment of Interior with their audit, with Idaho National Lab doing anauditfor Department of HomelandSecurity and in no case that they foundthat data is going anywhere it shouldn't. However, the U.S. Department of Defense namedDJI “a Chinese Military Company” in 2022, leading the drone maker to stepup lobbying efforts in Washington against a national security ban on its products. If you want to share videos with us,you have to opt in to share that data.
The same for flight logs. We've even created a local data mode. That means when you're flying one of our products,you don't even need to connect to the internet. You couldn't even transferdata through a mishap or mistake. You're literally hermeticallysealed off from the internet. Paolo Stagno is a cyber securityexpert, who back in 2018, uncovered vulnerabilities affecting the Phantom 3,one of DJI’s leading drones at the time. Basically, I performed securityaudits on all its components. I was able to send spoof GPS signals to the dronein order to pretty much control all its movement.
In mid-air, as well as bypass the no-fly zonethat at the time, DJI set on specific locations. That’s pretty much systemicto all the consumer drones because they do not have any mitigation for that. However, DJI's popularity makes it particularlysusceptible to exploitation, Paolo said. There is like a black marketof modified drones’ firmware. Most of the pilots that want to unlock thedrones try to download such firmware in order to remove limitation about heightand distance from the drone operator. In November 2022, DJI’s Core Crypto Engine,which is fitted on most of its drones, received a pass from the U.S Department of Commercefor meeting critical data security requirements.
If they've broken any existing lawsin their country, that is really a matter for the police to take on. It's notsomething that we can actively engage in. But the security concerns surroundingthe use of DJI drones don’t stop there. In 2019, DJI released a drone detection platformcalled Aeroscope in response to potential safety and security challenges in high-risk areas suchas airports, prisons and government facilities. Aeroscope, basically, it’s aground station that you can use to track and find drones and drone operators. For example, there are reportsof the Russian army using that specific technology to track and finddrones or Ukraine’s drone operators.
If any of our distributors participatein anything that's seen as modifying for military use, it would be groundsfor losing their distributorship. I mean, we take policing that quite seriously. Even though it doesn’t command a monopoly– with brands such as Autel and Skydio striving to make inroads in the market– demand for DJI products remains brisk, says Charles, an employee at aphotography equipment rental company. Whenever we talk about stabilizersandgimbals, people will just turn to DJI and we’ll seldom hear people talk about like,Iwant to enquire about other particular brands. But you do carry other brands here, right?.
We do. And how often does that get rented out? Once a year. Were you aware that DJI has been inthe news the past couple of years due to privacy issues, security issues andeven militarization of their products? We weren’t really aware of that. But with all this, I think we stilldidn’t face any drop in rentals. What’s next for DJI in the next couple of years? Drones currently have to beflown within visual line of.
Sight with one person operatingthe sticks, right, like flying. We now have a product thatwould enable beyond visual line of sight in semi-autonomous operations. And that's something that regulationshave not caught up with yet. And the drone maker has its eyeson the automotive industry too. In 2016, it launched an automotive project that is now a full-fledged subsidiaryfocused on autonomous driving. From my experience at DJI,we’rejust scratching the surface. It’s certainly a company that despitethe headwinds, has a lot going for it.
DJI is a threat to world peace.
The Anxiousness in the US authorities as* is straightforward, they’ll't compete anymore because their economy is hacked by weapons sellers… They can't even judge of the charge that the Chines possess currently. Absolute Desperation for them. Like if You agree.
Who the heck in the rest of the field cares about US blacklisting? They can blacklist all they desire.