DJI ban bill faces vote

As Chinese drone manufacturer DJI awaits the fate of its life in the United States, as a bill to ban the drones will be put to a full vote in the House of Representatives today, we cover this developing story through the eyes of the American press.

The below story was first published by The Hill, and you can access it here.

Lawmakers in the House and Senate are pushing legislation to ban Chinese-made drones from entering the United States. But the leading Chinese companies manufacturing those drones are making moves to stay a step ahead of them.

One of China’s biggest drone makers, Da Jiang Innovations (DJI), is already partnering with a US-based company Anzu Robotics to license its technology for sale in the American market.

Another firm, the Hong Kong-based Cogito Tech Company Limited, registered through the Federal Communications Commission (FCC) in August 2023 to sell drones in the United States. Experts on drones say two of its drone products approved for sale in the US, the Specta Air and Specta Mini, are nearly identical to products produced by DJI.

The new businesses suggest China’s dominant drone companies are taking steps to make sure that their products reach US consumers even if Congress does pass a ban similar to the one that just hit TikTok.

The Chinese drones are being sold at prices below their US counterparts and have raised worries that any US industry will essentially be squashed. DJI already controls around 70 percent of the global commercial drone market and about 80 percent of the U.S. market.

Derek Scissors, a senior fellow at the American Enterprise Institute who specializes in China’s economy and US economic relations with Asia, said the issue with drones is data can be actively collected during flights.

“If you (fly) enough of them, you might get something useful. And if US government offices are buying them, which they have been, you definitely could get something useful,” he said.

“US government offices should not be using Chinese drones, because both the data collection in the field and with regard to the use (it) could be sensitive.”

Congress takes aim

Seven states already have banned the use of Chinese-produced drones by state agencies, including by law enforcement.  

DJI and another big Chinese drone company, Autel, have links to the Chinese Communist Party and China’s military, and the Pentagon has expressed concern with the companies. The Defense Department is prevented by legislation from purchasing Chinese drones. 

DJI and Autel have also been criticized for assisting with surveillance activities and human rights abuses against the Uyghur population in China. 

Rep. Elise Stefanik (R-N.Y.), a close ally of former President Trump who has been mentioned as a possible vice presidential candidate, has sponsored the Countering CCP Drones Act, legislation that would add DJI to the Federal Communications Commission (FCC) covered list, effectively banning it from operating in the country by prohibiting it from using U.S. communications infrastructure. The bill has passed the House Energy and Commerce Committee. 

Stefanik is also targeting DJI with the Drones for First Responders Act, which would slap tariffs on Chinese drones starting at 30 percent and increase them by 5 percent annually. The U.S. now has a 25 percent tariff on Chinese drones. The bill would also require drones imported to the U.S. not contain components from China by 2030.

This bill’s provisions would not explicitly limit sales of drones in the U.S. market by Cogito or Anzu. However, Stefanik’s legislation includes affiliates of DJI, meaning they would be subject to the ban if the FCC identifies them as an affiliate.

Sen. Marco Rubio (R-Fla.), vice chair of the Senate Intelligence Committee and another potential Trump vice presidential contender, has previously co-sponsored legislation targeting Chinese drone companies. When asked about the drones made by Cogita and Anzu, he made it clear in a statement that he wanted a broad targeting of Chinese drones and affiliates. 

“Any drone affiliated with the Chinese Communist Party should be on the Federal Communications Commission Covered List, regardless of which brand name it is sold under,” he said in a statement.

The FCC covered list designates technology from certain companies that are deemed a national security threat, effectively banning their products and services in the US market.

Several Chinese companies, including telecommunications giant Huawei, are on that list.

DJI, in a statement to The Hill, didn’t directly confirm a connection with Cogito or Anzu but said it frequently gets requests for collaboration.

“We will defer to these companies to provide specific details about our partnerships,” DJI said in the statement.

“However, this approach aligns with our continuous and long-term dedication to making our flying platforms as adaptable as possible.”

Anzu Robotics and a licensing deal

Randall Warnas, the founder of Anzu Robotics, said he had discussions with DJI about a venture in which an American business would license its technology a few months before his firm first registered in Delaware in April 2023.

Warnas formerly worked at DJI between 2015 and 2017.

Warnas said the discussions centred on structuring a licensing agreement to meet the changing “tide” of the moment.

“It was a conversation, just like many business conversations, where you decide to put on the brainstorming hat and try to figure out a solution,” Warnas said, adding that licensing DJI’s drone technology was hardly a novel idea.

“I can say that there are hundreds of people that have had that idea — if only someone could do it, if only someone could pull it off,” he said. “I just happen to have had the relationships necessary to actually make that happen.”

Lawmakers are concerned about the drones because of data collection, which drove President Biden in April to sign into law a bill that would ban TikTok unless it divests from its Chinese parent company ByteDance.

“Communist China is using their monopolistic control over the drone market and telecommunications infrastructure to target Americans’ data and closely surveil our critical infrastructure,” Stefanik said in a March statement.

“It is critical that we continue to advance both of my bills to counter these threats and strengthen America’s national security.” 

Consumers would be negatively impacted by a drone ban. So would law enforcement agencies and fire departments that need to use drones for their civic duties.

Jack Towne, a drone influencer based near Chicago, questioned if DJI has access to any valuable data, and said banning the company would impact thousands of customers looking for affordable commercial drones.

“There just aren’t good alternatives,” he said.

“They’ve already handicapped first responders, police officers and firefighters that can’t use DJI drones, and it doesn’t make sense to me. … It doesn’t help the people that use these things on a daily basis.”

At the core of drone technology are cameras and thermal imaging sensors, which transmit data through servers. DJI and other drone companies also use apps that by default capture data. And still others are concerned about Chinese-made drones with cameras flying near sensitive US military sites.

Anzu Robotics says all data captured by its drones are encrypted and that it has worked with a third party, a US-based cybersecurity consultancy firm called White Knight Labs, to verify safety. While the drones are manufactured outside of the country, Anzu says they operate on US servers and are otherwise entirely connected to American services.  

Stefanik bill seeks to help US industry

Stefanik’s first responders bill also seeks to help the US commercial and enterprise drone industry, which has long struggled to compete in the market against DJI and Autel. It would provide grant money to certain US customers for the purchase of secure drones. 

Warnas argued against a ban.

“For us as a country to get behind the idea of stunting competition for the purpose of making sure our guys win, it’s weird,” he said.   

Haye Kesteloo, who runs a website and blog about drones, agreed, saying national security threats should be addressed, but not through a blanket ban based on a country of origin.

“They’re using the threats of cybersecurity to go after Chinese-made drones. I think that is wrong if you use it in a way to eliminate competition.”

But Michael Robbins, president and CEO of the Association for Uncrewed Vehicle Systems International, said Chinese drones pose legitimate national security threats — pointing to both DJI and Autel’s affiliations with China’s military.

Robbins said banning Chinese companies is only part of the solution, and pushed for a greater effort to revitalize commercial American drone companies.

“We support reasonable timelines for moving away from Chinese drones,” he said.

“And pursuing options like that will really help create demand for non-Chinese drones, which would help spur investment into other drone companies that struggle to raise capital right now because of the Chinese drone companies.”

Warnas said his interest was to ensure the American public can use “the world’s best drone technology” without any concerns about where it comes from, and that DJI and Anzu were not trying to avoid a potential ban but “complying with country-of-origin ownership concerns.”

“That is not subversion of anything,” he said.

“It’s not that we saw some ban coming and responded to it. There was a market that was shrinking, or a market that was changing, and there were new rules to comply with.”

Warnas said his company officially came together just four weeks ago and that, while he is the only employee so far, he will be expanding in the future. Anzu has received thousands of inquiries already for its drones, he added.

Anzu Robotics is focused solely on enterprise drones. Its main product, the Raptor, is designed for mapping and other commercial uses, while the Raptor T is suited for thermal missions, inspections and search and rescue.

Under the deal with DJI, Anzu receives drone technology and a blueprint from its Chinese partner, but assembles them through manufacturers in Malaysia. 

Warnas compares the process to purchasing a recipe but cooking the food independently.

‘A little groundbreaking’

Warnas acknowledged that licensing DJI technology was “a little groundbreaking,” but that from the beginning, “it was mandatory for us to say we are an independent organization licensing technology and manufacturing in our own way and running this business independently.” 

Cogito, which produces the Specta line of drones, has denied any connection with DJI. In an email, a spokesperson said: “SPECTA is a proud independent innovator in the industry and has no relationship with other drone companies.” 

The Cogito drones first appeared around March, popping up on Amazon pages under the name Specta Air. 

Towne, a high school teacher outside of Chicago who runs a YouTube channel and website about drones called Half Chrome, noted the Cogito drones and DJI drones have the same flight time, camera, range and software — completely identical parts, minus the brand name. The devices even use similar radio frequencies, which experts say would be impossible unless the companies shared technology.

He said it was all but impossible for a company to copy a drone like the DJI Air 3, especially a part like the camera, which is incredibly unique and valuable.

“What the most likely scenario is DJI is producing these in Malaysia and licensing them to Cogito,” he said.

The Specta drones also share the same radio frequency as both DJI and Anzu Robotics drones, according to FCC records. No other company is on those frequencies besides California-based Skycatch, a geospatial data software company that has a formal partnership with DJI.

A former DJI employee who spoke on background to discuss a sensitive topic said Cogito being on the same frequency would be impossible without using technology from the Chinese company itself. Specifically, that technology is called OcuSync, a proprietary radio system produced by DJI.

Ian Lewis, a long-time drone and tech enthusiast who runs a YouTube channel called Mads Tech, said he and other investigators believe the Specta drones have unique chipsets that are patented by DJI and cannot be sourced anywhere else.

“We have never seen these chipsets in any other product,” Lewis said. “You can’t just replicate it. It’s almost impossible.”

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