Investing.com -- Shares of Aevex (NASDAQ: AVXL) fell 5% on Wednesday following reports that the U.S. Navy has suspended new orders for the company's autonomous drone speedboats over ongoing performance issues.
According to a report from Bloomberg citing sources familiar with the matter, the Navy halted procurement of the Global Autonomous Reconnaissance Crafts (GARCs), manufactured by Aevex's BlackSea Technologies unit. The decision comes after the Navy spent more than $130 million on the platform and commissioned an independent assessment of the program earlier this fall.
Aevex acquired BlackSea in September in a deal valued at up to $650 million. To date, the company says it has delivered over 300 of the unmanned surface vessels to the military.
Sources noted that the halt was driven by hardware limitations as well as the emergence of more cost-effective alternatives, such as lower-cost one-way attack drones.
The setback highlights the broader friction facing the Pentagon as it attempts to rapidly scale autonomous capabilities. Despite the procurement pause, the Pentagon has requested $54 billion in the upcoming fiscal budget to expand unmanned systems and reshape future doctrine around autonomous warfare.
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