[Reuters] A year ago, Ryan Tseng, the head of U.S. defense tech startup Shield AI, announced his company had turned a new page.
After a gory incident that partially severed a U.S. Navy official's fingers during a test of its V-BAT drone, Shield AI had addressed safety concerns with new landing gear and warning stickers near the propeller. "(The) aircraft is, tip to tail, just a radically better airplane," Tseng told Forbes last year.
Now it's happened again.
A Romanian Navy official's hand was caught in a V-BAT propeller on May 12 during a Shield AI training exercise on a boat off the Texas coast – severing two of her fingers and fracturing a third, a spokesperson for Romania's Ministry of National Defence told Reuters.
The incident, which has not previously been reported, comes as Shield AI struggles to overcome years of technical hitches and safety concerns with its V-BAT, according to interviews with 21 former employees, industry executives and investors, and a Reuters review of a whistleblower complaint, a lawsuit related to hostile work environments and company presentations.
Reuters found that the V-BAT has crashed more than 50 times over the past 18 months, that several staff who raised safety concerns were dismissed and that a Cessna plane with a Shield AI employee and his child aboard had to take evasive action to avoid a mid-air collision with a V-BAT.
Shield AI also allegedly obscured technical flaws with its V-BAT, which costs about $1 million, to help land military sales, according to a previously unreported whistleblower complaint filed in May to the Department of Labor's Office of Administrative Law Judges and reviewed by Reuters.
Shield AI acquired the V-BAT, a vertical takeoff and landing (VTOL) unmanned aircraft designed for military uses, when it bought Martin UAV in 2021.
The company didn't make Tseng, or Gary Steele, who replaced Tseng as CEO last year, available for an interview. In a statement to Reuters, Shield AI said it had a strong safety record and defended the performance of its drones, saying "operational mishaps are common" for a drone like V-BAT.
"V-BAT remains one of the most operationally proven VTOL aircraft in service today," the company said, adding that the drone had accumulated 18,000 flight hours since 2019.
Shield AI said the May 12 incident was caused by "a violation of established safety procedures, not from a product defect", without disclosing the specific violation.
Romania's defence ministry said it was investigating the incident and that it would be premature to draw conclusions regarding fault or whether the incident could have been prevented.
The Romanian official, whose identity hasn't been disclosed, had operations to reattach her fingers on May 12 and May 16 at the University Medical Center New Orleans. Her condition deteriorated and she was sent to the Walter Reed National Military Medical Center in Maryland, where she remained as of May 25, the ministry said in a statement, without providing further medical details.
Romania's Naval Forces, which signed a $30 million agreement with Shield AI last year for the V-BAT, said the contract remained in effect.
SHIELD AI VALUED AT $12.7 BILLION
Shield AI, which was valued at $12.7 billion in a March funding round co-led by JPMorgan (JPM.N), has emerged as one of Silicon Valley's largest defense tech bets, positioning itself as a key provider of drones and autonomous software to rearm the Pentagon as wars rage in Ukraine and the Middle East, and as tensions grow with China over Taiwan.
In February, U.S. Vice President JD Vance was touring Armenia when he was shown the latest V-BAT model, which had just been sold under Washington's first arms sales to the country.
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