In the past three years, the war in Ukraine has marked a decisive turning point in global security. Low-cost, mass-produced unmanned aerial vehicles (UAVs) have become the decisive factor on the battlefield, fundamentally altering the economics of modern warfare. Expensive, low-volume traditional weapon systems are increasingly being neutralized by drones priced at just a few thousand dollars. This inversion has established a new guiding principle of defense: countering low-cost threats with low-cost means. This shift extends beyond state-on-state conflict. Affordable drone technology is expanding the military potential of small and medium-sized nations. At the same time, it multiplies the operational capacity of non-state actors, terrorist organizations, extremist groups, insurgent movements, and criminal networks that are turning what was once an expensive domain into an accessible tool of asymmetric warfare.

The Economic Inversion of Warfare

Traditional defense procurement has long relied on high unit costs and limited production runs. A single main battle tank or advanced air-defense missile can cost tens of millions of dollars. Yet, inexpensive drones costing as little as $500 have repeatedly destroyed or disabled assets worth millions. A commercially modified quadcopter or loitering munition can achieve effects once reserved for precision-guided munitions costing orders of magnitude more. The result is a dramatically altered cost-exchange ratio that favors the attacker. This forces even well-funded militaries to reconsider force structures and procurement chains. For smaller nations with constrained budgets, affordable and scalable drone systems offer a way to build credible denial capabilities without disproportionate spending.

Ukrainian Technology Transfer

A recent example of technology diffusion is the strategic investment announced on March 31, 2026, by Japan’s Terra Drone Corporation in Ukraine’s Amazing Drones LLC through its subsidiary Terra Inspectioneering. The partnership includes the launch of the Terra A1 interceptor drone: an electrically propelled system with a 32 km range, maximum speed of 300 km/h, 15-minute flight time, low noise and heat signature, and the ability to perform airspace surveillance, target detection, and neutralization in a single sortie.

Empowering Non-State Actors and Implications for the Asia-Pacific Region

The most destabilizing aspect is the accessibility of these systems to non-state actors. Terrorist and extremist organizations no longer require state sponsors or complex supply chains. Commercial components, open-source software, and simple assembly have lowered the barrier to entry, allowing insurgent groups, criminal syndicates, and ideological extremists to field effective aerial capabilities.In the Asia-Pacific, where vast maritime spaces, porous borders, and multiple gray-zone disputes already exist, the proliferation of cheap drones carries specific risks. Small terrorist cells or insurgent movements could use first-person view (FPV) drones or loitering munitions to disrupt shipping lanes, attack critical infrastructure, or conduct targeted operations with minimal logistical needs. The same technology that enables smaller states to deter larger neighbors also equips criminal networks and extremist groups to challenge law-enforcement or rival factions in remote areas. The combination of low cost, commercial availability, and rapid adaptability means that non-state actors in the region can now sustain prolonged asymmetric campaigns. Reports from other conflict zones show terrorist and insurgent groups already employing commercial UAVs for resupply and precision strikes, and similar patterns are emerging in Southeast Asia and the Pacific islands.

In Southeast Asia, the risks are particularly acute. The Philippines’ ongoing insurgencies in Mindanao and the porous maritime borders of the Sulu Sea already see small extremist cells experimenting with commercial drones for reconnaissance and occasional strikes. Similar patterns are visible in Myanmar’s borderlands, where insurgent groups have modified off-the-shelf UAVs for logistics and targeted operations. In the Malacca Strait and South China Sea gray zones, low-cost drone swarms could disrupt vital shipping lanes or harass naval patrols with minimal investment. These developments lower the threshold for violence: a terrorist or criminal network with a few thousand dollars can now field persistent aerial surveillance or precision munitions that once required state-level resources. The combination of vast ungoverned maritime spaces and readily available commercial technology creates ideal conditions for prolonged asymmetric campaigns by non-state actors across the region.

Conclusion

The convergence of economic inversion, widespread accessibility, and rapid technology transfer has created a more volatile global security environment. In the Asia-Pacific—a region defined by strategic chokepoints, unresolved territorial disputes, and active non-state threats, the democratization of lethal drone capabilities lowers the threshold for conflict and expands the operational reach of terrorist, extremist, insurgent, and criminal organizations. Policymakers can no longer rely solely on high-end systems. The principle of “countering cheap threats with cheap means” has become the new baseline for credible defense. Without scalable, affordable countermeasures and domestic production ecosystems, states risk ceding initiatives not only to peer competitors but also to far smaller and resource‑constrained actors operating in the region’s gray zones. The economics of war have changed, and the Asia-Pacific region is one where the consequences of the new economics will play out.

Andrey Koval is a defense planner working on issues of military effectiveness and long-duration conflict. The views expressed in this article are the author’s own.

The New Economics of War: Cheap Drones, Asymmetric Threats, and the Democratization of Destruction was originally published on Global Security Review.

Focusing on information operations is critical. Drones, for example, use artificial intelligence capabilities, as do defensive systems. However, conflict between near-peer adversaries and competitors is still unlikely as gray zone and hybrid conflict are the dominant avenues for competition. With the information environment transcending all domains of warfare, artificial intelligence capabilities become the go-to capability to ensure and maintain information advantage.

China’s AI-enhanced information operations are becoming increasingly sophisticated. For example, the Chinese advanced persistent threat actor Spamouflage Dragon uses generative AI to create online personas to influence public opinion. China and its proxy companies seek to develop or compete for AI supremacy within the information environment.

Of course, China will use anything within its arsenal to shape strategic, operational, and tactical levels of war to its advantage, expand its influence, and create an ecosystem that is dependent on its technologies. For example, Baidu, known as the “Google of China,” invested billions into AI capabilities, creating the proprietary ERNIE model, which has been trained on billions of parameters, increasing the output’s quality and complexity.

However, China is also leveraging open-source AI models to shape the information environment. With the recent release of open-source large language models such as DeepSeek and Qwen, Chinese-linked subsidiaries, High-Flyer and Alibaba Group created a way to expand their influence, revise history, and likely create a dependent ecosystem for target countries. Unlike the much more expensive ChatGPT, for which the more basic model is free, China’s investment in generative AI models is free for the public and even surpasses ChatGPT’s in some respects.

There is a debate about how China’s proxy state companies were able to create these advanced models without US-based critical components. China allegedly did not have access to the advanced critical Nvidia chips for which most AI models are dependent. China seems to have created generative models just as suitable or even better than that of ChatGPT, but allegedly at a fraction of the cost and free of charge to the public. The US limited Nvidia chip exports to China, a market predicted to top $1 trillion in revenue within a decade. Still, the accusation is that the Chinese subsidiary leased or bought the more advanced Nvidia chips from Singapore, circumventing restrictions, and used ChatGPT to train its model.

Regardless of how China secured these critical technologies, the cat is indeed out of the bag. China has shown that it has the capability to develop new and emerging AI technologies. From the capabilities already built, it now has a baseline to create even more capabilities to develop its own AI chip ecosystem. With such capabilities, China will become more active within the information environment with the help of AI capabilities, and its motives are far from benevolent.

Why is the Chinese model free? China has several motives, but it is likely in hopes that data and information across the globe are the price tag for using the model while lessening a dependency on Western technologies and becoming a global leader in AI by 2030. Whatever data is obtained by the United States is icing on the cake. The West is not the primary target audience. Both models have servers in Singapore and China, where information is likely subject to Chinese laws, and terms and conditions are meaningless.

The Chinese will use AI technologies to gain an advantage in the information environment and seek to expand influence by creating an ecosystem for which other countries are dependent on their models. The incentive is to give countries this technology to foster dependency. The idea is similar to China’s debt-trap diplomacy—the Belt and Road Initiative. While ChatGPT’s basic model is free, China seeks to develop better models at a cheaper price to serve as leverage over countries that cannot afford the higher-end US-based models.

The United States is taking the right approach to maintaining its information advantage through AI development and investment. The billions pouring into creating AI data centers will play an important role in ensuring the United States has the edge in AI.

These data centers remain critical for identifying and countering any malign information operations against the United States, its partners, and its allies. When Iran attempted to influence the 2024 presidential election using the generative model GPT, OpenAI detected and shut it down. Without this expansive investment in AI data centers that keep information within the letter of US law and oversight, these interventions would be out of reach, and information operations may be even more challenging to detect.

However, this approach is insufficient without incorporating artificial Intelligence into all aspects of military operations. The DoD uses artificial intelligence within some branches, but given the expansive nature of AI, this is not enough. AI is expected to touch nearly all aspects of military operations, especially information operations, and may not have time to wait for its major AI initiative, Project Maven, to fully develop.

Some military scholars have called something like this a revolution in military affairs, but perhaps, given the impact of war, it could be classified as such. The concept is somewhat antiquated and outdated without some context, but it remains the best way to describe what should take place within the DoD. The foundation is already in place through the conceptual framework of multidomain operations.

Artificial capabilities are widely available through graphical user interfaces in deployable, ready-to-use form, such as ChatGPT or even internal large language models. The joint force should use these capabilities to the broadest extent possible. If anything, artificial intelligence, including large language models, will make joint and combined forces more lethal and accurate as they counter Chinese efforts within the information environment.

The DoD must adopt incentives for service members to understand the capabilities of AI and incorporate them in all training environments. These incentives can include bonuses for taking AI-driven courses. The DoD can also increase awareness and accessibility of AI courses on its education platforms which now have a paucity of artificial intelligence courses.

The DoD must also improve the training environment. With proprietary or off-the-shelf software, the DoD can incorporate AI offensive and defensive platforms within all training and mission-critical tasks. Even simply assisting with identifying generative outputs, e.g., deepfakes, will counter Chinese influence within the information environment, especially during hybrid conflict. Furthermore, military doctrine should recognize the importance of AI, especially information operations, with an emphasis on psychological operations.

While AI investment is critical to countering Chinese influence within the information environment, the only way to truly embrace multidomain operations is to ensure service members have the AI technical competency necessary to maneuver within the information environment deterring Chinese aggression.

US Army Lieutenant Colonel Matthew J. Fecteau is a PhD researcher at King’s College London studying how artificial Intelligence will impact conflict. He can be reached at matthew.fecteau.alumni@armywarcollege.edu.

China’s AI-Driven Information Operations Are Here: The US Needs an AI RMA was originally published on Global Security Review.