A joint venture between an American defense startup and a Saudi firm has begun construction on a factory outside Riyadh that will manufacture long-range strike drones modeled on Iran’s Shahed system, the weapon that has repeatedly battered Gulf cities during the current war.

The facility is being developed by SR2Vector, a new partnership between Utah-based Vector Defense and Saudi-based SR2 Defense Systems. It will produce a one-way attack drone called SKYWASP, capable of striking targets up to 1,500 kilometers, or about 930 miles, away. That range is roughly the distance from Saudi Arabia’s northeast coast to Tehran.

The plant marks one of the most consequential private-sector defense projects to take shape in the kingdom since fighting between Iran and a US-Israeli coalition broke out in late February, and it represents a sharp escalation in Saudi Arabia’s effort to manufacture its own offensive weapons rather than buy them abroad.

“SKYWASP is a program that can level the playing field and boost Saudi Arabia’s deterrence capabilities,” Lucien Zeigler, SR2’s chief strategy officer and co-founder, told Semafor, which first reported the project.

Zeigler declined to disclose the size of the investment, projected production volumes or a timeline for when the first drones will roll off the line. He said only that the factory would produce “operationally relevant volumes consistent with the kingdom’s strategic deterrence requirements.”

SR2Vector intends to supply both the Saudi armed forces and allied foreign militaries, and the venture is being backed by MASNA Ventures, a defense-technology fund Zeigler is currently raising.

The project unfolds against a backdrop of sustained Iranian drone attacks across the Persian Gulf. Tehran has launched thousands of missiles and drones at Gulf states since the war began, with strikes that slipped past air defenses hitting hotels, data centers and energy infrastructure. Fewer than 30 people have been reported killed in the Gulf, while more than 3,000 have died in Iran from US and Israeli strikes.

The cost mismatch between Iran’s weapons and the systems used to shoot them down has emerged as a central strategic problem for Gulf governments. A Shahed drone is estimated to cost about $35,000 to produce, a fraction of the price of the interceptors used to bring it down. Industry estimates place Shahed unit costs between $20,000 and $50,000, while Patriot interceptors run into the millions of dollars per shot.

That asymmetry has triggered a regional scramble for cheaper drones and counter-drone systems. Gulf governments have explored partnerships with Ukrainian firms, which have spent years fighting the Russian-built version of the Shahed on the battlefield. A Saudi arms company recently signed a deal to purchase Ukrainian-made interceptor missiles, with additional weapons agreements under negotiation.

The SR2Vector factory also fits into Saudi Arabia’s broader Vision 2030 industrial agenda. The kingdom has one of the world’s largest defense budgets but imports almost all of its military hardware, and has set a target of producing half of its defense materiel domestically by 2030. Ahmad Al-Ohali, governor of Saudi Arabia’s General Authority for Military Industries, said earlier this year that the country had reached roughly 25 percent localization by the end of 2024.

SR2 Defense Systems launched in November 2025 as what its founders described as the first private-sector US-Saudi defense manufacturing joint venture. The company was co-founded by Idris Al-Zakari, chief executive of Riyadh-based Science Technology for Investment and Industrial Development, and Zeigler, managing partner of US-based REDSALT Defense. Its leadership team includes Ahmed Nasrallah, chief investment officer at Science Technology, and retired US Army Colonel Brad Gandy, the former chief of the US Military Training Mission to Saudi Arabia.

Defense cooperation between Washington and Riyadh deepened in November, when President Donald Trump designated Saudi Arabia a major non-NATO ally during a White House meeting with Crown Prince Mohammed bin Salman. The designation expanded the kingdom’s access to American military technology and streamlined defense industrial partnerships of the kind now taking shape outside Riyadh.

Vector Defense markets SKYWASP and similar platforms as “attritable” systems, meaning they are inexpensive enough to be used in large numbers and lost in combat without significant cost. The company describes its drones as cost-effective, expendable platforms designed to operate at scale, with in-kingdom production reducing the logistical burden of supplying them to regional theaters.

Saudi Arabia is not alone in the push. The United Arab Emirates announced a new defense-focused free zone in May aimed at attracting foreign arms manufacturers and localizing weapons production. Across the Gulf, governments are betting that homegrown drone manufacturing, even at modest scale, will give them tools to absorb and respond to Iran’s drone warfare in ways imported air defense systems alone cannot.

(YWN World Headquarters – NYC)