China's Top Drone Drone Manufacturer Enlists Texas Company To Avoid Federal Bans

Chinese president Xi Jinping (Getty Images)
June 12, 2024

China's Da-Jiang Innovations Science & Technology Co. (DJI) stands to lose its 58 percent share of the domestic commercial drone market should the House of Representatives pass Rep. Elise Stefanik’s (R., N.Y.) Countering CCP Drones Act.

Fortunately for China’s top drone manufacturer, the company already has a workaround in place.

Enter Anzu Robotics, a one-man Texas startup that hit the market in April with drones that bear remarkable similarities to DJI’s product offerings. Anzu’s drones share the same hardware design as DJI’s. They run the same software. They’re even compatible with the same third-party accessories. The only notable difference is that Anzu’s drones come in a green chassis, whereas DJI’s are gray.

According to Anzu’s founder, Randall Warnas, its drones offer a "DJI-esque experience almost one-to-one."

That’s because Anzu’s drones are nothing more than rebranded DJI drones with an American coat of paint.

DJI has long faced accusations from the U.S. intelligence community that its products pose a spy risk due to concerns they surreptitiously collect and transmit surveillance data back to the Chinese Communist Party. Stefanik said Monday that DJI is a "Chinese Military Company that is advancing technology that could one day be used against Americans," and said her bill to ban the company is expected to pass the House this week as part of the 2025 National Defense Authorization Act.

DJI approached Warnas in early 2023 with an offer to Americanize its drones in an effort to bypass congressional scrutiny and make them more palatable for sale in the American market.

In May, Warnas told the New York Times DJI’s goal was to "somehow cleanse the Chinese-ness from their technology to make it so that there was still an avenue" for sale in the United States.

Warnas, a former DJI employee, was a natural fit for the venture. He said during a June 4 interview on the LTD Podcast that his company entered a "first of its kind" licensing agreement with DJI to manufacture its drones in Malaysia for sale in the United States. DJI in return receives a portion of Anzu’s manufacturing expenditures. U.S. law enforcement agencies are expected to use Anzu’s drones, the Times reported.

Warnas said his company made modifications to DJI’s software to ensure no data is sent to Chinese servers and instead goes to servers in Virginia. He said he also contracted with a third-party penetration tester to ensure customer data stays in the United States.

But Warnas admitted that unknown variables still remain in the software his company has licensed from DJI.

"Have we got to the point where we know every line of source code? No," Warnas disclosed during his June 4 podcast interview. "DJI is a business and they’re not going to give away their keys and be like, ‘hundreds of millions of dollars of R&D, here you go Randall, replicate this.’ It doesn’t make sense for them to do that."

"But I trust in the product," he added.

Warnas told the Free Beacon the DJI source code he hasn't reviewed is related to "flight control and dynamics" and has nothing to do with data transfer protocols.

"If DJI provided source code then we could take that IP and 'steal' it. That is not a good business decision," he told the Free Beacon.

Warnas said the modifications his company has made to DJI’s drones should placate concerns from Stefanik and other China hawks in Congress such as Select Committee on the CCP ranking member Rep. Raja Krishnamoorthi (D., Ill.) who has called DJI a "threat to our national security."

But Stefanik isn’t buying it, saying in a statement to the Washington Free Beacon that Anzu Robotics is a DJI "shell company" that the Chinese company is using in a "desperate attempt to evade their inclusion onto the FCC’s Covered List."

"DJI and all its subsidiaries and affiliates have been put on notice," Stefanik said. "House Republicans will not allow a Communist Chinese Military Company unfettered access to spy on Americans."

Warnas vehemently objected to Stefanik’s assertions that his company is a DJI shell corporation.

"This is an entirely separate uncontrolled entity that just has a licensing agreement," Warnas said during his June 4 podcast interview. "Cool, hold all the DJI shell companies accountable. I’m not one."

"I’m a U.S. entity, manufacturing in Malaysia, U.S. software all pointing to [Amazon Web Services] servers, not sending anything back to DJI," he said. "No control from DJI. They don’t tell me what to do, I don’t give them any data. Congresswoman Stefanik should be like, ‘Well, you’re kind of doing all the things, so good luck.’"

Experts say DJI’s novel licensing arrangement with Anzu could work to bypass regulatory scrutiny in the short term and, if successful, could lay the groundwork for other Chinese companies looking to evade U.S. sanctions.

But some say the strategy risks provoking further action from Congress.

"It’s a Band-Aid on a bullet wound," Foundation for Defense of Democracies China program director Craig Singleton told the New York Times.

In the meantime, Warnas has a clear pitch to DJI’s customers that could soon find themselves in a bind if Congress bans the company from the United States.

"You can’t use Chinese drones, you can’t use DJI?" Warnas said. "I am—Anzu Robotics is—the best alternative for you today. Period."