Chinese drone maker DJI shut out of Washington with US market at risk

[WASHINGTON] Chinese-owned and operated DJI Technologies is up against an end-of-year deadline to keep its US business alive, and the drone maker is struggling to get anyone in Washington to listen.

The company, which controls over 70 per cent of the domestic commercial market in the US, has hired a small army of lobbyists and recently dispatched an Australia-based executive to Washington to address a looming ban on their technology. But DJI says emails and calls are going unanswered and they’re running out of time.

“We’ve been through the meat grinder on this issue, and we’re happy to put ourselves through the meat grinder again,” Adam Welsh, DJI’s head of global policy, said. “We’d love to get to the point where we could actually have a conversation.”

DJI, like Chinese-owned social media giant TikTok, makes a popular product but is facing existential threats in the lucrative US market amid rising concerns that the data it collects in the US could be shared with authorities in Beijing. Hardware in its supply chain also could have its security compromised before the product leaves China.

The DJI drones, which are less expensive than those made by US competitors, count filmmakers, farmers, law enforcement agencies, and fire fighters among their customers.

Congress last year inserted a provision in the annual Pentagon policy bill requiring drones made by the Shenzhen-headquartered company undergo national security audits to ascertain the risks around data collection, particularly whether the company adheres to Chinese laws mandating it share any data the government demands. The provision also affects competitor Autel Robotics, another Chinese manufacturer.

If the reviews validate those concerns – or if no audit is conducted – the drones could be added to the Federal Communications Commission’s Covered List, which bans any new models or technology from being sold or imported into the US.

DJI says it is ready to submit to the required audit, but officials don’t know who to talk to about it.

The law stipulates that the audit should be conducted by the “appropriate national security agency,” which could be the Departments of Defense or Homeland Security, the Office of the Director of National Intelligence, the National Security Agency or the Federal Bureau of Investigation.

Welsh was in Washington for nearly two weeks in July, trying to contact intelligence agencies and asking lawmakers in both parties for meetings. Congressional China hawks with whom DJI tried to talk said those meetings were never going to happen.

“It’s a despicable government and they’re part of it,” Florida Republican Senator Rick Scott said. “I would never do it. They want to spy on us.”

Representative Elise Stefanik similarly refused to talk to DJI, with spokesman Wendell Husebo saying the New York Republican doesn’t meet with “Communist Chinese front groups.”

The opposition to DJI appears to be largely bipartisan. Representative Frank Pallone Jr., the leading Democrat on the House Energy and Commerce Committee, said the company had been repeatedly flagged by the federal government as a national security concern.

“I simply won’t stand by and accept that risk, which is why I’ll continue to support DJI being added to the list of banned telecom technology that my Secure and Trusted Act created. This is exactly how I intended this law to work,” he said in an email to Bloomberg.

Welsh said he’s had to confront a “very established group think” on China.

“They may be accurate on some points, but they’re certainly not accurate about us, and we’re trying to break through and be treated on our own merits,” he told Bloomberg in an interview.

The parts that make up the drones mainly come from manufacturers working in and around Shenzhen, China’s Silicon Valley, which lies across the border from Hong Kong.

Influence game

ByteDance, TikTok’s Chinese parent, spent millions in 2024 lobbying Congress, paying influencers to file lawsuits, and mobilising its 170 million American users in a failed effort to kill legislation requiring it to sell the app’s US operations or face a ban. The law took effect in January, but President Donald Trump has signed three extensions of the deadline for ByteDance to sell, allowing the video-sharing platform to continue operating in the US while the administration seeks to arrange a sale.

DJI’s efforts pale in comparison.

So far this year, the manufacturer has spent about US$400,000 on lobbyists and law firms, according to Open Secrets. They include law firm Sidley Austin, which referred all inquiries about its work for the manufacturer to DJI. One lobbyist, Brian Darling at Liberty government Affairs, said DJI faced both an educational and ideological challenge on Capitol Hill.

“Some offices have little knowledge of the specifics of the company and others are ideologically opposed to any company that manufactures and is headquartered in China, even though they all use iPhones manufactured in China,” he told Bloomberg.

Despite the growing security concerns, police departments in Asheville, North Carolina and Ross Township in Pennsylvania continue to use the drones, saying they have been invaluable for police work and public safety.

During Hurricane Helene last year, the Asheville police force used drones, including those manufactured by DJI and Skydio, a California-based company, to identify and rescue victims, map damage to infrastructure and provide real-time aerial views for law enforcement and first responders, said Brandon Moore, Asheville police patrol commander.

In Ross Township, the drones have been used to cover ground more quickly to find missing people, including children and elderly, and used to scout potentially dangerous scenarios where suspects have barricaded themselves against law enforcement. They’ve also provided real-time aerial assessments during SWAT-type operations, said Brian Kohlhepp, the deputy chief of police.

Both officers said their departments follow safety guidelines for data collection and use and were extremely cognisant of people’s privacy.

“We don’t use them in any capacity where anything that we’re reviewing isn’t publicly available on Google Maps,” Kohlhepp told Bloomberg. “I would argue that the use of the drones wouldn’t reveal anything that compromises national security.”

Other police departments, including Orange County Florida, ceased using DJI and Autel drones after a state legislature ban came into effect in 2023.

DJI has a business partnership with Anzu Robotics, a company headquartered in Austin, Texas, that sells DJI drones. Critics claim the company is a pop up created by DJI in the event of the ban becoming law. The House Select Committee that focuses on China wrote DJI last year calling Anzu a “passthrough” company created to avoid the government restrictions. DJI referred questions about the nature of the partnership to Anzu.

Anzu declined to comment.

It isn’t clear which agency is responsible for the national security review DJI’s future depends on. The National Security Agency referred questions to the Pentagon. The Pentagon, along with other intelligence agencies, did not respond to requests for comment.

Late last month a US District Court judge lawsuit DJI had filed against the Pentagon over its designating the drone manufacturer as a Chinese Military Company remained unresolved. Some of the submissions the Pentagon made regarding the national security concerns were blacked out in documents. The judge asked for an order that would allow him to read the classified material and share it with DJI’s representatives who had security clearance to also review it. BLOOMBERG