An employee of Japan's toy maker Kyosho displays the world's smallest drone "Quatrox."
Washington CNN  — 

The Pentagon on Monday said it was seeking to recruit investors to invest in American small drones to provide an alternative to Chinese models, the first effort under a new Defense Department program aimed at linking “trusted” sources of private capital with “innovative companies critical to defense industrial base and national security.”

Ellen Lord, the Undersecretary of Defense for Acquisition and Sustainment, told reporters Monday that the Trust Capital Marketplace, as the program is officially known, will focus first on investment for small drones because it is a technology that everyone can understand and Chinese companies currently dominate their manufacture.

“People can understand what these small quad-copters are,” Lord said, describing small drones that are lifted and propelled by four small rotary blades, akin to a helicopter.

Lord pointed to Chinese moves to flood the market with low-cost Unmanned Aerial Systems, the military term for drones, as one reason American investors are needed to fund US-based innovation.

Commercial drones

Referring to Chinese drone-manufacturer DJI, Lord said that “essentially we don’t have much of a small UAS industrial base because DJI dumped so many low-price quad-copters on the market.”

While the military makes ample use of drones, most of those operated by US troops are of the larger and more technologically sophisticated variety, making them much more difficult to field in large numbers and expensive to produce.

These larger, more sophisticated drones operated by the US Air Force and Navy cost tens of millions of dollars, while commercially viable drones cost a few thousand.

US military commanders are constantly in search of additional intelligence, surveillance and reconnaissance platforms and assets such as drones.

And while the American military has increasingly explored giving small quad-copter type drones to troops in the field to bolster their ability to conduct quick surveillance and reconnaissance, Lord said that widely commercially available drones, such as those manufactured by the Chinese company DJI, cannot be used due to technology within them that send information to Beijing, a major US adversary.

Return on investment

“We then became dependent on them both from the defense point of view and the commercial point of view,” Lord said Monday. “And we know that a lot of the information is sent back to China from those. So it is not something that we can use.”

Lord said that defense officials would be traveling around the country to meet with potential investors as well as representatives from industry to help facilitate the process.

In May, when the initiative was first launched, Lord said, “We can also vet different providers of capital.”

“This is going to be a situation where we have individuals, family foundations, funds that are interested in our national defense, interested in making a return on their investments,” she said at the time.