A drone is visible in the grainy grayscale image of a thermal camera. This is the type of drone used by groups such as Hezbollah, Hamas, and Yemen’s Houthis. Suddenly, a blinding whiteness covered the image. After a few seconds, the drone’s wings broke and it fell, exploding as it hit the ground.
This video, shared by the Israeli Ministry of Defense and weapons producer Rafael, offers a hint at the future of anti-drone warfare. In it, they demonstrate one of their new weapons. It’s a high-energy laser designed to defeat aerial threats such as rockets and artillery shells, as well as drones. It’s called iron beam. Israel has already claimed to have shot down several enemy drones.
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Laser weapons have been a dream for weapons manufacturers and the military ever since lasers were invented in 1960. So far, it remains a dream. But now they seem to be on the brink of a breakthrough. Advances in technology have made lasers more robust. At the same time, the rise of drones has increased the need for weapons that can shoot them down cheaply and efficiently.
“Lasers are the next step in air defense systems,” said Ian Boyd, director of the Center for National Security Initiatives at the University of Colorado Boulder. The university is working on the development of high-energy lasers as part of a defense project.
“When we are attacked by thousands of cheap drones, we cannot afford to defend ourselves with expensive anti-aircraft weapons such as missiles. Lasers may be the solution.”
This promise has sparked a gold rush among defense companies. Although independent analysis of market size is lacking, there has been a flurry of recent deals and announcements.
Israel’s Iron Beam contract is worth $500 million to Rafael & Elbit Systems, another Israeli defense company. The U.S. Navy has contracted with Lockheed Martin to supply defensive high-energy lasers to its ships. British defense company MBDA was awarded a £316 million ($430 million) defense contract at the end of 2025 to deliver the Dragonfire laser weapon system by 2027. MBDA is also working with German defense giant Rheinmetall to develop a German system by 2029. France took a similar approach, again working with MBDA and a number of its own defense officials to develop a laser system.
star wars
One company benefiting from this gold rush is Australian Electro Optical Systems (EOS), led by German CEO Andreas Schwer. In 2025, they signed a 71 million euro ($84 million) contract with the Netherlands to develop laser weapons. In December, another contract worth $80 million was announced with South Korea.
Their laser technology is a descendant of the U.S. Strategic Defense Initiative program, colloquially known as “Star Wars.” In the 1980s, US President Ronald Reagan created a program to shoot down Soviet ballistic missiles using lasers fired from space.
That grand vision ended in failure. Billions of dollars were invested, but most programs ended in the 1990s. EOS was also one of the participants. They used insights from Star Wars to build lasers that tracked satellites. But now they are using drones for another purpose: to shoot down drones.
“Our high-energy lasers are derived from Star Wars technology,” says Schwer. “Initially, we developed lasers to track satellites. But when Houthi rebels used drones to attack Saudi Arabia in 2018, we realized this technology was needed elsewhere.”
The company currently employs 500 people. By the end of next year, that number should be 700. Schwer argues that number could rise even further if EOS makes a major acquisition.
EOS aims to collaborate with local defense companies as a growth strategy when it comes to laser weapons. In Europe, for example, we work with players such as Helsing, OHB, MSI and KNDS. That way, you can grow without investing a lot of capital. “We team up with local champions,” says Schwer.
dependence and sovereignty
The market for high-energy lasers is growing, especially in Europe. The importance of drone warfare in Ukraine, as well as recent incidents such as drone flights over critical infrastructure in Europe and Russian drone incursions on the EU’s eastern border, has led to a surge in demand for anything that can repel large-scale drone attacks.
“High-energy laser weapons have probably been around the corner for a long time, but in the last few years we have seen the technology mature and systems actually deployed,” says James Black, deputy director of Randland Europe’s Defense and Security Research Group.
However, the market remains fragmented, with many countries launching their own research projects. “Different countries are investing in sovereign research and development projects, trials, and small-scale field trials,” Black said. “We haven’t expanded to a large market yet. We haven’t seen any consolidation in the industry yet.”
One reason lasers are so attractive is that they do not rely on existing air defense weapons supply chains. “Countries want sovereign air defense solutions,” Black said. “They want to reduce their dependence on foreign suppliers. For example, they rely on the United States for various weapons such as Patriot missiles.”
The United States currently holds the lead when it comes to many advanced anti-aircraft weapons. However, the companies dominating the laser weapons market may come from other regions of the world. “The top priority for the U.S. military is to deter and defeat China,” Black said. “It affects what weapons U.S. companies develop. China is more advanced than Russia and Iran. Also, the Indo-Pacific is a very large region, mostly ocean, where the threat of mass attacks by small drones is much smaller than in Europe.”
swarm of drones
Lasers, on the other hand, are now becoming viable simply because the technology has matured. “Twenty years ago, we were using chemical lasers for these projects,” Boyd says. “They were the only ones with enough power.”
In a laser, there is always a medium through which the light passes and amplifies the light. Until recently, for military lasers, the medium of choice was a mixture of chemicals. Although these lasers produce very powerful beams, they also have drawbacks, including the volatile chemicals themselves.
However, solid-state lasers have become more powerful in the last few years. In such lasers, the medium is a solid material, such as an optical fiber. These lasers are more robust and easier to handle. “Solid-state lasers are used in all kinds of industrial processes,” Boyd says. “Civil industry has advanced them significantly, which has accelerated their use in military applications.”
However, technical issues still need to be resolved. One of them is collateral damage. Because the laser beam continues to travel straight even if it misses its target, it could miss the drone and collide with a passenger plane or satellite, for example.
“The laser beam can scatter off surfaces and potentially blind people,” Boyd said. “That’s why a good targeting system is so important.”
This became clear this week when airspace around El Paso was unexpectedly shut down by the US Federal Aviation Administration (FAA), throwing local airports into chaos. The closure appears to be related to unscheduled testing of anti-drone laser weapons by U.S. Customs and Border Protection.
“The El Paso incident underscores the need for judicious use of laser weapons,” Boyd said. “In a cluttered civilian environment, it is especially important to have effective processes in place to avoid collisions in the area where the laser is fired.”
Lasers are also affected by the weather. Rain or fog greatly reduces effectiveness. They also generate a lot of heat, making them easy to overheat and become easy targets on the battlefield. As such, lasers may initially be used to protect critical infrastructure away from the front lines or be installed on ships.
“For the foreseeable future, we won’t be shooting hand-held lasers at each other,” Black said. “Lasers are not a silver bullet. They don’t solve every problem. But lasers are making tangible progress and countries are actually putting them into practice. But we need to integrate lasers into broader anti-aircraft systems that work alongside other weapons.”
In Australia, EOS is working on it. One of their priorities is to make their lasers more powerful and capable of dealing with swarms of drones. “We want to get more kills per minute,” Schwer said. “That’s why we need more power. The next step is to get 50 kills a minute. Even with a swarm of drones, nothing can get through.”
