September 9, 2026, (Inside AI) — Elbit Systems, Israel's largest defence contractor, has formed a new division called Fuse to develop AI-based autonomous military technologies, including drones and other unmanned systems.
The unit will operate from the company's headquarters in Rosh HaAyin, Israel, and marks a strategic push into software-defined warfare. Elbit announced the launch on Wednesday, signaling its intent to compete more aggressively in the global market for autonomous defence platforms.
Fuse will combine machine learning, computer vision, and sensor fusion to enable real-time decision-making on the battlefield. The goal is to reduce human latency in threat detection and response, a capability that military planners increasingly view as decisive.
Elbit has not disclosed the unit's size, budget, or initial project timelines. However, the move aligns with a broader industry shift toward AI-enabled command and control systems that can operate in contested environments where communications are degraded or denied.
The company already supplies drones, electronic warfare systems, and armored vehicle technologies to dozens of countries. Fuse is expected to integrate AI across these product lines rather than operate as a standalone hardware manufacturer.
Israel's defence sector has prioritized autonomy for years, driven by operational requirements along its borders and in urban combat zones. Elbit's rivals, including Israel Aerospace Industries and Rafael Advanced Defense Systems, have also invested heavily in AI-guided munitions and loitering systems.
Global defence budgets are shifting toward software-centric platforms. The U.S. Department of Defense has requested over $1 billion for autonomous systems in recent budget cycles, while NATO members are accelerating adoption of AI-enabled ISR, or intelligence, surveillance, and reconnaissance, tools.
Fuse's launch comes as regulators and human rights groups raise concerns about lethal autonomous weapons. Elbit has previously stated that human operators remain in the loop for critical engagement decisions, but the company has not detailed Fuse's specific autonomy boundaries.
Industry analysts note that AI defence units often struggle to transition from laboratory prototypes to fielded systems. Data quality, adversarial robustness, and certification against military safety standards remain persistent hurdles.
Elbit reported record revenues in 2025, driven by demand for artillery, drones, and electronic warfare systems following multiple regional conflicts. The company's order backlog exceeded $20 billion at the end of last year, providing a financial cushion for long-term AI research.
The new unit will likely recruit talent from Israel's commercial tech sector, which has produced leading AI startups in computer vision and autonomous navigation. Competition for these engineers is intense, with defence firms often offering security clearances and mission-driven work as incentives.
Fuse's creation also reflects a structural trend: traditional defence primes are absorbing AI capabilities that were once the domain of specialized startups. Acquisitions and internal venture units have become common as militaries demand integrated, software-first solutions.
Elbit has not named a leader for Fuse, nor has it specified whether the unit will pursue international partnerships. Given export control restrictions on advanced military AI, the company will likely prioritize domestic development and selective allied collaborations.
The announcement was brief, with no technical specifications or demonstration dates provided. That silence is typical for defence firms protecting proprietary capabilities, but it leaves open questions about how quickly Fuse can deliver operational systems.
For now, the launch signals intent. Elbit is betting that autonomous AI will define the next decade of defence procurement, and Fuse is its vehicle to capture that market.