Ukraine Proved Its Drones in Battle. The U.S. Wants Them.

Summary

WSJ Tech News Briefing: Ukraine Proved Its Drones in Battle. The U.S. Wants Them Release Date: March 13, 2025

Welcome to the Wall Street Journal’s Tech News Briefing with host Shara Tipkin. In this episode, released on March 13, 2025, Tipkin delves into two major stories shaping the tech landscape: Walmart’s strategic push to compete with Amazon through same-day deliveries, and the burgeoning collaboration between the United States and Ukraine in drone technology development.

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1. Walmart vs. Amazon: The Race for Same-Day Delivery Dominance

Walmart’s Strategic Shift: Walmart has been intensifying its focus on same-day delivery services as a cornerstone of its e-commerce strategy. Historically perceived as lagging behind online giants like Amazon due to its extensive physical store network, Walmart is now leveraging this very advantage to enhance its delivery capabilities.

Key Insights from Sarah Nassauer: WSJ reporter Sarah Nassauer provides an in-depth analysis of Walmart’s delivery surge. She notes, “They delivered about 5 billion products same day last year, 2024. And they say that's growing fast” (02:37). Nassauer explains that Walmart is utilizing a network of freelance gig drivers, referred to as “Spark,” alongside partnerships with third-party companies like Uber Eats, to facilitate these rapid deliveries (02:16).

Evolution of Walmart’s Delivery Model: Initially, Walmart introduced online grocery pickup, allowing customers to order groceries online and collect them from parking lots. This model has been progressively enhanced to include non-grocery items and speedy delivery, covering over 90% of the U.S. Nassauer emphasizes, “Walmart's the country's largest grocer and they long ago sort of realized, well, that might be a thing that we can use to compete with Amazon” (03:03).

Competition with Amazon: While Amazon maintains a significant lead in overall online presence, Walmart is carving out a niche in same-day delivery for frequently purchased items like groceries and household essentials. Nassauer points out, “Amazon is fully aware and doing lots of things to quickly try to cut Walmart off in terms of this sort of advanced ability” (04:17). Despite Amazon’s ongoing efforts to ramp up its grocery delivery services, including expansions of Amazon Fresh and other fulfillment centers, the competition remains fierce.

Future Outlook: Walmart aims to solidify its position as the largest company by revenue in the U.S., anticipating surpassing Amazon within the year if current growth trajectories continue (04:45). The battle for retail dominance is, therefore, far from over, with both giants striving to innovate and capture greater market share through enhanced delivery services.

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2. Ukraine’s Drone Technology: A Strategic Asset Desired by the U.S.

Pentagon’s Drone Ambitions: The U.S. Department of Defense has long sought to acquire a substantial number of small, cost-effective drones for widespread military use. However, American drone manufacturers have struggled to meet these requirements efficiently. WSJ reporter Heather Somerville sheds light on this issue, stating, “The Pentagon has talked for a long time about the importance of acquiring a very large number of small drones that are relatively cheap...” (05:49).

Challenges for U.S. Drone Manufacturers: Somerville identifies several obstacles hindering U.S. drone production: limited domestic demand, insufficient robust manufacturing capabilities, and the high cost of production. Additionally, U.S. drones have yet to be battle-tested, revealing shortcomings when deployed in conflict zones such as Ukraine (06:27).

Emergence of U.S.-Ukrainian Partnerships: In response to these challenges, American defense startups are increasingly collaborating with Ukrainian drone manufacturers, who have demonstrated remarkable ingenuity and resilience amidst ongoing conflict. “There’s a real appreciation and respect for the ingenuity of these Ukrainian startups that have created what are now quite enormous drone operations with very limited resources” (07:25). These partnerships aim to combine Ukrainian expertise with American software capabilities to develop advanced drones suitable for Pentagon needs.

Manufacturing Disparities: Ukraine’s ability to produce drones at scale significantly outpaces the U.S., with Ukrainian companies manufacturing over 2 million drones last year compared to the Pentagon’s optimistic estimate of 100,000 drones annually from U.S. manufacturers (08:35). Cost and supply chain constraints, particularly the reliance on parts from China, further exacerbate the U.S.’s production challenges.

Political and Regulatory Hurdles: Despite strong technological incentives, political tensions—such as disputes between former President Trump and Ukraine’s president—could impede partnership efforts. Additionally, Ukraine’s export controls restrict drone sales outside the country, compelling companies to seek manufacturing bases in Europe and lobbying for policy changes to facilitate U.S. sales (10:28).

Future Prospects: The collaboration between U.S. and Ukrainian drone companies is poised to enhance the Pentagon’s drone capabilities, provided that political and regulatory obstacles can be navigated effectively. As Somerville concludes, the success of these partnerships hinges on maintaining trust and overcoming export restrictions to fully leverage Ukraine’s proven drone technology (10:33).

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Conclusion In this episode, Tech News Briefing highlights Walmart’s innovative use of its physical store network to challenge Amazon’s dominance in same-day delivery and examines the strategic collaboration between the U.S. and Ukraine to advance drone technology for military applications. These stories underscore the dynamic interplay between traditional business models and cutting-edge technological partnerships shaping the future of commerce and defense.

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Produced by Julie Chang, supervising producer Katherine Milsop, and Deputy Editor Chris Zinsley.

Transcript

[Comcast Business]

With leading networking and connectivity, advanced cybersecurity and expert partnership, Comcast business helps turn today's enterprises into engines of modern business. Powering the engine of modern business. Powering possibilities. Restrictions apply.

[Shara Tipkin]

Welcome to Tech News briefing. It's Thursday, March 13th. I'm Shara Tipkin for the Wall Street Journal. Walmart is battling Amazon with speedy deliveries. It's leveraging its HU store network to get groceries and other items to people the same day they're ordered. Can that help Walmart retain its title as the country's biggest company by revenue? Then we learn about Ukraine's advantages in making drones. And our reporter Heather Somerville explains why the tech is so coveted by the U.S. but first we're checking in on a battle brewing in retail. Ten years ago, Walmart's huge store footprint made it look outdated compared to online retailers. Now it's relying on those locations to compete with Amazon on super fast deliveries. Here to talk about Walmart's delivery surge is WSJ reporter Sarah Nassauer. Sarah, what's going on with Walmart? Why is it really focusing on delivery right now?

[Sarah Nassauer]

Really it's been focused on delivery now for let's say a good five years, but it's really been a long road to get there. And really we're talking about speedy delivery, same day delivery. And frankly, Amazon really built the consumer expectation that that would even be possible. Right. And so, you know, 10 years ago that's when I started covering Walmart and they had 4,700 stores in the US and that was seen as kind of a negative. But little by little, through lots and lots of tests, they've figured out a way to also have same day delivery. That covers more than 90% of the US and that's really the first thing that they've done in E commerce that can truly rival Amazon.

[Shara Tipkin]

How is Walmart delivering items so quickly? How can they do this same day?

[Sarah Nassauer]

They are primarily right now using this system of kind of freelance gig drivers called Spark that they created. Those folks aren't Walmart employees, they're gig drivers, just like a doordash driver would be, you know, a freelance driver. That really is what they're using to cover most of the same day deliveries. They also still partner with some of those third party companies like Uber Eats.

[Shara Tipkin]

How much delivery is it actually doing?

[Sarah Nassauer]

They delivered about 5 billion products same day last year, 2024. And they say that's growing fast. And that's of things that you could get in a super setter, groceries, but also clothing or like a throw pillow and Also they're building up a prescription business out of their pharmacies.

[Shara Tipkin]

So are groceries the most popular sort of things that people are having delivered or what are they really seeing demand for?

[Sarah Nassauer]

Groceries are the cornerstone. They started really building this business by offering something called online grocery pickup, which is the idea that you could buy groceries online and then pull into the parking lot and they'd put it in your car. And they've sort of layered things on top of that. The ability to also include non grocery items and then speedy delivery, they've created a network for that. But Walmart's the country's largest grocer and they long ago sort of realized, well, that might be a thing that we can use to compete with Amazon. To be clear, Amazon is much bigger online. Overall, they have a huge head start. But Walmart has excelled in this same day delivery of the things that we tend to buy pretty frequently, the groceries and the paper towels. And Amazon is in the process of ramping up that part of their business. They've struggled with grocery, they bought Whole Foods, they've tried Amazon Fresh, which they're kind of redesigning. They had various same day delivery things that were focused on grocery over the years, some that they've cycled out of, but certainly they are ramping up a lot of things right now, like just adding more grocery items to more of what they call like their same day fulfillment centers. And that's in motion now.

[Shara Tipkin]

What does the same day delivery push mean for the fight over retail dominance?

[Sarah Nassauer]

This battle isn't won by Walmart by any means. Amazon is fully aware and doing lots of things to quickly try to cut Walmart off in terms of this sort of advanced ability. Walmart's the largest company for revenue in the country. Amazon is close to that. And like if they're on their same growth trajectory, they are going to surpass Walmart this year for a full fiscal year in terms of being the largest company in the country.

[Shara Tipkin]

That was our reporter Sarah Nassauer. Coming up, Ukraine has an edge on drone development and the US wants to team up. Can the two find a way to work together on drones? That's after the break.

[Comcast Business]

With leading networking and connectivity, advanced cybersecurity and expert partnership. Comcast business helps turn today's enterprises into engines of modern business powering the engine of modern business powering possibilities. Restrictions apply.

[Shara Tipkin]

US defense startups have spent billions to develop small drones for the Pentagon, but it hasn't gone smoothly. And now those companies are partnering with a somewhat unusual source, Ukrainian drone manufacturers. Here to talk about what's happening is WSJ reporter Heather Somerville. Heather, what does the Pentagon want from new drones?

[Heather Somerville]

The Pentagon has talked for a long time about the importance of acquiring a very large number of small drones that are relatively cheap, cheaper than the big drones they're accustomed to buying, and that can be used en masse. The problem has been the Pentagon hasn't really bought these drones that they say they want. There's a number of reasons for that. Some of that is the Pentagon's fault, but some of that is the fault of of American drone makers. They just haven't done a very good job building cheap drones that fly well.

[Shara Tipkin]

Why has it been so hard for American companies to make these sort of drones?

[Heather Somerville]

Part of the problem is that there aren't many people who buy American drones. Anyone who's a hobbyist in the US likes to just go out and fly. A drone to take pictures is buying a Chinese drone because they're cheap and you can buy them at Best Buy and Walmart and wherever you'd like. And the Pentagon hasn't bought many of the drones from US companies that are building what they say are military grade drones. So there isn't much income for these companies. There's no real robust manufacturing capability to build a lot of drones cheaply or quickly in the U.S. and lastly, we're not at war. So these drones from these US Companies haven't been tested in war. They haven't been battle proven. And that was discovered in a rather unfortunate way when a lot of these US Companies did send their drones to Ukraine at the start of the expanded Russian invasion and realized that they didn't work at all.

[Shara Tipkin]

How did this partnership with Ukrainian companies come about really?

[Heather Somerville]

Since the start of the war, there's been a lot of interaction between US and Ukrainian drone companies. Over time there's been a real appreciation and respect for the ingenuity of these Ukrainian startups that have created what are now quite enormous drone operations with very limited resources. So what we have now is a smattering of official partnerships, businesses that have been created through a combination of US entrepreneurs and Ukrainian drone manufacturers. And what they're trying to do is leverage all of this Ukrainian know how that has been developed over more than three years of war with the software skills that American engineers really excel at combining those things together. The hope is we'll start to have some really seriously good drones that the U.S. defense Department can begin to buy.

[Shara Tipkin]

Where does the manufacturing aspect come into this? You noted the Defense department estimates the US can build 100,000 drones a year. Last year, Ukraine built more than 2 million. What's behind the big difference?

[Heather Somerville]

Yeah. And the 100,000 drones a year for the US drone manufacturing base is optimistic. That's probably. If everything is perfect, the US Simply does not have the ability to build quickly and en masse. It's just more expensive. Typically, it's hard to find parts that are cheap and readily available that don't come from China. And the Pentagon's not going to buy drones made with parts from China.

[Shara Tipkin]

How does the recent dispute between President Trump and Ukraine's president impact these partnership efforts?

[Heather Somerville]

Well, as of now, they don't. As of now, the Defense Department's Defense Innovation Unit really has been in the lead on sourcing Ukrainian drone expertise in bringing some of these U.S. ukrainian partnerships into the fold of the Defense Department. They are very clear that they want the best technology for the DoD, and the best technology is in Ukraine. And of course, these companies are. They're not immune to the politics. Nobody is. But really, they're focused on the technology. And these Ukrainian companies, they are focused on finding new ways and new places to sell their drones to get additional capital, additional revenue to grow. I will say that one potential problem is that as the trust of the US from the Ukrainian side erodes with actions like the Trump administration stopping military aid and pausing intelligence sharing and the like, there could be some greater challenges in getting Ukrainian government approval for these Ukrainian drone companies to begin selling their technology and sharing the technology with US Counterparts. We'll have to wait and see how that plays out.

[Shara Tipkin]

Aside from politics, what's standing in the way of Ukraine selling drones to the.

[Heather Somerville]

U.S. the big thing is export controls. Ukraine does not allow its domestic drone makers to sell drones outside of the country. They want to keep all the drones for their fight against Russia. There have been some workarounds. Companies are setting up manufacturing facilities in other parts of Europe. The companies are seeking exceptions, special permissions to sell a small number of drones to the US and there are some avenues being carved to let Ukrainian drone makers start to expand. There are also huge lobbying efforts by these Ukrainian drone companies to try to get Kyiv to change its mind on this.

[Shara Tipkin]

That was WSJ reporter Heather Somerville. And that's it for Tech News Briefing. Today's show is produced by Julie Chang with supervising producer Katherine Milsop and Deputy Editor Chris Zinsley. I'm Shara Tipkin for the Wall Street Journal. We'll be back this afternoon with TNB Tech Minute. Thanks for listening.

[Comcast Business]

With leading networking and connectivity, advanced cybersecurity and expert partnership. Comcast business helps turn today's enterprises into engines of modern business. Powering the engine of modern business powering possibilities. Restrictions apply.