SkyfireAI’s 2025 Drone Industry Forecast: What Last Year’s Predictions Got Right – and What’s Next

Last year, Matt Sloane of SkyfireAI gave us his predictions for the drone industry… and he wasn’t wrong.  We’ve asked for the 2025 update!  Here – Matt’s take on BVLOS rule, Chinese drone tech, and who ends up as a major player in the industry.  DRONELIFE neither accepts nor makes payment for guest posts.

2025 Drone Industry Forecast: Regulation, AI, and Game-Changing Shakeups on the Horizon

by SkyfireAI co-founder and Chief Strategy Officer, Matt Sloane

With just a few days left in the year, it’s time to reflect on what happened this year in the drone industry, and make a few predictions about what I think is coming in 2025.

First, a look back, and an opportunity to see how last year’s predictions fared….

This was a big year for the drone industry — the FAA Reauthorization of 2024 was passed, which included a pathway to Part 108 regulations, there was a battle royale over whether Chinese-made drones would be blacklisted, lots of mergers, acquisitions, numbers added to the end of “DFR” (2.0, 3.0, etc); and a few truly shocking moments.

So what’s on tap for next year? A lot more of where all of that came from.

First, Part 108.

As the clock strikes midnight on New Years, the Biden Administration will have just 19.5 days left to release the Notice of Proposed Rulemaking for Part 108 – something that was mandated to have happened in September, but is still working its way through the Office of Information and Regulatory Affairs (OIRA) at the White House.

Whether or not this proposed rule-making will be published before Biden leaves office remains to be seen; but as I’ve recently communicated publicly, it is absolutely CRITICAL that it be released before the change of administration.

Not because the Trump Administration will stall it, at least not on purpose, but the effect of a change in administration will mean delays for all kinds of rule-making, not just this one; and a delay of any kind here will set the drone industry back.

Even if OIRA pushes the rule-making out before the 20th, the Trump Administration (along with the public) will have plenty of chances to comment before this rule becomes law.

Next, the “China issue.”

The pro-China arm of the drone industry took a collective sigh of relief twice this past year — once when Rep. Elise Stefanik – the champion of the Countering CCP Drones Act – was named as President-Elect Trump’s nominee for UN Ambassador, meaning she would no longer be in congress to promote anti-Chinese drone legislation.

The second sigh of relief came when the National Defense Authorization Act (NDAA) passed both houses without the full version of said Countering CCP Drones Act included. Instead, it has language that directs an “appropriate national security authority” to make a determination within one year about whether DJI and Autel pose a threat to our national security. If they determine neither does, the matter is over.

If they determine either does pose a threat, or fail to make a determination within a year, those companies would be automatically added to the FCC’s Covered List, meaning neither could get new FCC licenses for their drones — effectively “banning” new models.

We’ll see what 2025 brings on this matter, but some in Washington are already taking a victory lap, saying this one-year delay amounts to nothing more than a stay of execution.

My hot take — the incoming administration is MORE anti-China than the last one, so my money is on “nobody does anything, the year time clock runs out, and we end up with the ban anyway.” But only time will tell.

Major Players

Mergers and acquisitions will continue to be fierce in 2025 within the industry, following some mega-M&A in 2024: Flock Safety’s acquisition of Aerodome, Aerovironment’s acquisition of Blue Halo; and of course Echelon AI’s acquisition of Skyfire. (Ok this last one may be a bigger deal in my own mind than in the collective ethos of the drone industry, but stay tuned for great things!)

Another industry-rocking event came at the end of 2024, when the Army’s Short Range Reconnaissance Tranche 2 down-select broke in favor of Teal, upsetting the incumbent, Skydio.

What this will mean for Skydio is hard to say, but what it will mean for Teal and Red Cat Holdings is unequivocal — a “little engine that could” just became a bigger engine that might make a huge impact on the drone industry for years to come.

Other consolidation will continue, in my opinion, as hardware manufacturers seek software partners, drone-in-a-box partners, accessory partners and much more.

Industry-vertical titans will also be seeking chess pieces that help make up a more consolidated offering, and a movement away from Chinese dependence will mean more American and allied companies will be getting attention.

One particular company I have my eye on is Unusual Machines, which recently announced the addition of Donald Trump Jr. to their board. Helmed by former RedCat COO Allan Evans, this company wants to be everybody’s friend, and help build a robust, NDAA-compliant supply chain for the growing number of drone companies who need it.

Finally, Artificial Intelligence will become a much more important topic of conversation in the industry next year, with a huge focus being put on autonomy, data analysis and generally getting ready for a BVLOS-enabled future. While every company will likely offer some “AI” in their product in the coming years, most of it will be something closer to smart automation; but a few true artificially intelligent products will undoubtedly be coming to market.

All of these things – better hardware, software, BVLOS regulations, AI, autonomy and consolidation – will come together to help us all deliver on the promise of drones; and in that effort, I believe we’ll eventually look back at 2025 as an inflection point.

In the meantime, we’ll keep adding numbers to DFR (stay tuned for DFR 4.0 coming soon!); and trying to figure out what these mysterious drones are in New Jersey (aliens!).

Matt Sloane is the co-founder and Chief Strategy Officer at SkyfireAI. With over a decade of experience in public safety and drone technology, Matt has helped countless agencies integrate drones into their critical incident response. Prior to Skyfire, he worked as a medical news producer at CNN and served as an EMT. Matt is actively involved in shaping drone regulations and policy and is a licensed pilot.