New Legislation Targets Chinese Drones Citing Security Risks

Congress is on the verge of making a critical decision that could reshuffle the U.S. drone market landscape amid growing national security fears.

At a Glance

Legislation seeks to ban Chinese drone companies from U.S. due to security threats.
DJI dominates the U.S. drone market, with major implications for several sectors.
Anzu Robotics maneuvers around the embargo with rebranded drones.
Congress investigates possible ties between Anzu and DJI amid security fears.

Congress Targets Chinese Drones

Congress is considering the Countering the CCP Drones Act as part of an annual military bill. This act intends to ban or restrict Chinese drone companies like DJI and Autel Robotics due to national security concerns. Lawmakers worry about unintended data sharing with the Chinese Communist Party, raising alarms about potential breaches in national security.

The bill’s implications are vast because DJI holds an estimated 70% to 90% of the U.S. market. Industries such as real estate, public safety, and small businesses rely heavily on these drones. The transition to other brands would bring delays, increased costs, and a potential economic downturn for these sectors.

Chinese drones, like those from DJI, pose serious risks to our national security and critical infrastructure.

We must prioritize a strong cyber defense to protect America from foreign surveillance threats.https://t.co/qEplgIjSXA

— Congressman Morgan Luttrell (@RepLuttrell) December 3, 2024

DJI’s Market Maneuvering

Despite the looming ban, DJI has devised a method to sidestep this legislation by collaborating with Anzu Robotics, a Texas-based startup. Anzu sells drones akin to DJI’s under a different branding, manufactured in Malaysia through a licensing deal involving BYD. Although Anzu’s CEO initially admitted to a DJI connection, he later retracted these statements.

Anzu’s ability to contract with BYD allows them to produce according to DJI’s exact specifications while DJI maintains control over the firmware. This relationship raises valid concerns about a potential security loophole.

🚨#ChinaWeek Update: @RepStefanik 's H.R. 2864, the Countering CCP Drones Act passes the House!

Chairman @RepMoolenaar in support of the bill ⬇️

"This bill would add Chinese drone company @DJIGlobal to the @FCC Covered List, meaning that any future models of DJI drones would… pic.twitter.com/qQIX9S0A7p

— Select Committee on the Chinese Communist Party (@committeeonccp) September 9, 2024

Congressional Investigations Continue

The House Select Committee on the Chinese Communist Party has initiated an investigation into Anzu’s operations and its ties with DJI. Concerns center around DJI drones possibly transmitting sensitive data to the CCP. Lawmakers express urgency to enforce security restrictions effectively to counteract the perceived foreign threat.

The DJI ban raises broader questions about maintaining innovation and competition in the U.S. drone industry. Experts suggest comprehensive regulations and enhanced security protocols could address these fears without severely impacting the economy or deteriorating U.S.-China relations due to retaliatory measures.