Economic Insider

The Return of the Fighter Pilot: How One Defense Contractor Is Bringing Dogfighting Back to Save Lives

By Claire Nakamura

Claire Nakamura is a national security correspondent covering defense innovation, military procurement, and the intersection of technology and tactical operations.

There was a time when being a fighter pilot meant something visceral. It meant strapping into a cockpit, scanning the sky with your own eyes, maneuvering behind a target, and pulling the trigger. The legends of aerial combat from World War II through Vietnam were built on skill, instinct, and the kind of close-quarters flying that separated the exceptional from everyone else. Over the past three decades, that image has become almost entirely disconnected from reality.

Modern fighter pilots are, in many respects, systems managers. They operate platforms designed to engage targets from 50 to 100 miles away using radar-guided missiles. They rarely see their adversary. The skills of basic fighter maneuvering and air combat maneuvering are still taught, but seldom used in actual operations. The cockpit has become less about flying and more about managing information.

But something unexpected is happening in the defense world. The resurgence of cheap, low-altitude drones as a primary battlefield threat is creating a demand for exactly the kind of flying that the modern Air Force moved away from. And one company is positioning itself at the center of that shift.

A Tactical Technology Company

Valkyrie Aero does not fit neatly into any of the standard defense industry categories. It is not a pure technology company like Anduril or Shield AI, which develop autonomous systems and AI-driven platforms but do not operate them in combat. It is not a traditional defense prime like Lockheed Martin or Northrop Grumman, which build massive weapons systems over multi-year procurement cycles. Valkyrie describes itself as a tactical technology company, and that distinction matters.

The company is a U.S. Department of Defense prime contractor that operates the largest contractable fleet of mission-ready light attack Tucano aircraft in the world. It holds strategic contracts with the U.S. Air Force, U.S. Navy, and NATO. Its pilots train Tier 1 special operations forces in close air support and joint terminal attack control. And critically, it flies and fights with its own platforms. It does not hand a customer a manual and walk away.

That operational foundation is what led Valkyrie to develop the Gunslinger, a manned counter-UAS system that is now positioned to address what many defense officials consider the most urgent tactical gap in modern warfare.

The Gap Nobody Filled

The one-way attack drone has become the defining weapon of the 2020s. Ground-based counter-drone systems, including jammers, directed energy weapons, and short-range interceptors, have made progress. But the air-to-air counter-drone mission has remained largely unaddressed.

The reason is straightforward. The platforms that dominate Western air forces were designed for a different mission set entirely. An F-35 costs over $65,000 per flight hour. An F-22 runs close to $94,000. These are extraordinary machines built to penetrate advanced air defenses and engage peer adversaries. Asking them to chase down a drone the size of a small kayak flying at treetop level is not just inefficient. It is a misallocation of strategic assets that shortens airframe life and depletes weapons stockpiles that take years to replenish.

Old School Meets New Technology

The Valkyrie Gunslinger takes a fundamentally different approach. Built on the A-29 Super Tucano, a turboprop light attack platform manufactured by Embraer and already in service with 16 air forces worldwide, the Gunslinger can slow down to match the airspeed of one-way attack drones. It can get behind them, establish a stable firing position, and engage with guns and precision rockets in a manner that would be familiar to any World War II fighter pilot.

But the platform is far from a throwback. Valkyrie has integrated a proprietary AI-powered vision system that uses existing electro-optical and infrared sensors to detect, track, and lock onto drones at ranges beyond what the human eye can achieve. The system identifies targets, distinguishes them from birds and other airborne objects, and provides the weapons officer in the rear seat with steering cues, firing solutions, and optimized engagement sequencing for swarm scenarios.

The AI calculates fragment radius from each kill, determines time to intercept for multiple targets, and presents a prioritized path to engage an entire swarm rather than just a single drone. The weapon computer even inhibits the fire control circuit when the aircraft is not properly aligned, preventing wasted ammunition. It is a system designed by people who actually fly in combat and understand the cognitive load a crew faces when prosecuting multiple targets in a high-threat environment.

The Economics That Change Everything

Cost is where the Gunslinger argument becomes nearly impossible to counter. At approximately $2,500 per flight hour, the A-29 operates at a fraction of the cost of any fast jet alternative. A drone kill using laser-guided APKWS rockets costs around $5,000. Using the platform’s .50 caliber wing guns or 7.62mm minigun, that number drops to roughly $800. Compare that to the $450,000 or more it costs an F-16 to achieve the same result with a single AIM-9X missile, and the disparity is stark.

The Gunslinger can also stay airborne for three and a half hours on station at ranges up to 100 nautical miles. An F-16 gets approximately 30 minutes in the same engagement zone before requiring aerial refueling. That means continuous coverage, persistent presence, and the ability to thin out drone swarms over extended periods rather than making a single high-speed pass and returning to base.

Implications Beyond the Battlefield

The proliferation of drone warfare technology is not limited to state actors. Defense analysts have noted that non-state groups, including cartel organizations operating along the U.S.-Mexico border, are already acquiring drone capabilities and recruiting individuals with combat drone experience. The Department of Homeland Security has identified drone incursions as a growing concern for border security and critical infrastructure protection.

For nations that do not operate fifth-generation fighters and never will, the question of how to defend against drone swarms is existential. Many of these countries already operate or have access to light attack turboprop platforms. A counter-drone capability that integrates with existing airframes, requires no new infrastructure, and can be deployed rapidly represents a fundamentally different value proposition than waiting years for an autonomous system to complete its development cycle.

What Operational Really Means

The defense technology sector is filled with companies demonstrating impressive capabilities on PowerPoint slides and in controlled test environments. Valkyrie Aero draws a sharp line between demonstration and operation. The company holds the only Military Flight Release from both the U.S. Air Force and Navy for sensors and weapons release at night with night vision goggles. Its aircraft carry live ordnance. Its pilots execute real-world training missions with special operations forces. The Gunslinger is not a concept awaiting funding. It is a system built by operators who identified a gap in the field and built the solution themselves.

In an era where defense procurement timelines stretch across years and budget cycles, and where the threat evolves monthly, the ability to deploy a proven, cost-effective, operational counter-drone capability today carries a weight that no amount of venture capital funding or Silicon Valley branding can replicate. The fighter pilot may have been written off as a relic of an earlier era. But the battlefield has a way of deciding what it actually needs, and right now, it needs someone who can fly low, fly slow, and put rounds on target.

U.S. Regulators Warn Bank CEOs on AI Cybersecurity Risks

U.S. Treasury Secretary Scott Bessent and Federal Reserve Chair Jerome Powell called an emergency meeting with top bank CEOs to discuss an emerging cybersecurity concern. The focus of the discussion was Claude Mythos, an AI model developed by Anthropic, which is raising alarms for its potential impact on the financial sector. Key figures from JPMorgan Chase, Citigroup, Bank of America, and Goldman Sachs were briefed on the possible risks posed by this new AI technology.

Claude Mythos: A Changing Landscape for Cybersecurity

Claude Mythos is an advanced AI designed to autonomously scan and analyze millions of lines of code to uncover vulnerabilities that could be exploited by malicious actors. Unlike traditional generative AI, Mythos can identify “zero-day” flaws that are otherwise unknown to software developers. This capability could make sophisticated cyberattacks more accessible to a wider range of threat actors, presenting challenges for established cybersecurity defenses.

Although regulators have expressed concern over the rapid pace at which this AI could be used to identify vulnerabilities in critical banking infrastructure, it is not yet clear how widespread or immediate the threat may be. The Treasury Department’s emergency meeting highlighted the need for banks to remain vigilant in adapting to new technologies that could affect their security protocols.

Project Glasswing: A Collaborative Approach to Mitigating Risks

To address these potential threats, U.S. regulators have proposed Project Glasswing, a joint initiative between Anthropic and select technology companies. The aim of this initiative is to assist financial institutions in using AI to strengthen their internal cybersecurity measures. Through Project Glasswing, a group of banks will have early access to Claude Mythos for defensive purposes—not for commercial use but to help build a “digital immune system” for financial organizations.

This program is designed to help banks use AI proactively to identify and address vulnerabilities within their systems. By conducting “autonomous self-audits,” institutions can potentially patch long-standing flaws before they are exploited. However, the increasing speed and complexity of cyber threats mean that regulators are urging banks to act quickly to stay ahead of emerging risks.

Autonomous Escalation: Addressing Market Stability Risks

In addition to the direct cybersecurity threats posed by AI systems like Claude Mythos, regulators are concerned about the broader implications of autonomous AI in financial markets. Agentic AI, systems capable of performing complex tasks without human oversight, could introduce new risks to market stability. These AI-driven systems, including automated trading algorithms and loan processing tools, could be vulnerable to manipulation or malfunction, leading to disruptions in the financial markets.

Identity theft and fraud are also emerging concerns, as advanced AI models can replicate human behavior patterns, making it more difficult to secure financial transactions through traditional methods like multi-factor authentication (MFA). As AI technology continues to evolve, regulators are working with financial institutions to develop safeguards against potential AI-driven fraud and other security vulnerabilities.

New Regulations: Emphasizing Resilience Over Prescriptiveness

In response to these challenges, regulators are adjusting their approach to financial technology. Historically, efforts focused on strict enforcement, but in 2026, the emphasis is shifting toward operational resilience rather than rigid prescriptive rules. The Office of the Comptroller of the Currency (OCC) and the Federal Deposit Insurance Corporation (FDIC) are encouraging banks to adopt a more flexible, “technology-neutral” framework that holds financial institutions accountable for managing AI-related risks.

Comptroller Jonathan Gould has suggested that 2026 will be a critical year for enforcing cybersecurity standards. Specifically, regulations are expected to focus on requiring banks to adopt more secure authentication methods, such as phishing-resistant MFA based on FIDO2 standards. This approach aims to ensure that while AI is integrated into banking systems, the necessary controls are in place to mitigate any potential cybersecurity risks.

AI and Quantum Computing: Preparing for Future Challenges

Another significant issue raised during the emergency meeting was the potential intersection of AI and quantum computing. Together, these technologies pose a dual threat to financial systems. While AI models like Claude Mythos can already be used to expose vulnerabilities, quantum computing has the potential to break current encryption systems that protect sensitive data.

To address these future risks, the Federal Reserve has advised banks to begin transitioning to quantum-safe infrastructure. Although quantum computing is still in its early stages, its eventual impact could render current encryption methods obsolete, making it even more critical for banks to strengthen their cybersecurity frameworks to remain secure.