A one-man startup thinks it can address U.S. government concerns about Chinese-made drones dominating commercial sales in the U.S. market.
Anzu Robotics, whose chief executive and founding partners are both Americans and whose company is based in Texas, is expected to use drones for law enforcement, utilities, architects and others, and is assembled in Malaysia and run on servers in Virginia.
There’s just one problem: Anzu has close ties to China and to DJI, which is based in Shenzhen and is the target of U.S. legislation and regulation to limit sales of Chinese drones in the United States.
About half of Anzu’s components come from China. Much of its software also originates in China. Anzu licenses its drone designs from DJI, which charges Anzu a fee for each drone DJI orders from its Malaysian manufacturer.
The crossover raises questions about whether Anzu is truly independent from DJI, China’s leading drone maker, or just a rebranded version of the Chinese company.
According to a 2022 analyst report, although drones account for 58% of commercial drone sales in the United States, DJI’s business has been under a shadow recently It is regulated by federal and state regulations designed to prevent China from potentially gaining access to information collected by U.S. drones.
The company now faces a major threat from a bipartisan bill in the House of Representatives that would significantly restrict its future access to the U.S. communications infrastructure that its products rely on.
Given its link to the Dow Jones Industrial Average, Anzu is something of a litmus test for Chinese companies facing an increasingly tough regulatory environment in the United States.
If moving manufacturing out of China and distributing products through a company that uses U.S. ZIP codes helps avoid being blacklisted by federal agencies or banned by Congress, then the formula Ansu has laid out could apply not only to DJI but also to other Chinese companies whose operations have come under scrutiny in the United States.
If those efforts fail, it would be another setback for Chinese businesses trying to navigate Washington’s growing suspicion and hostility toward China.
In exchange for granting Anzu a commercial license, DJI will take a cut of every dollar Anzu pays its Malaysian drone maker, Randall Warnas, Anzu’s chief executive and sole employee, said in an interview.
But he admitted that Anzu was essentially DJI’s idea.
He recalled that early last year, a representative claiming to represent DJI’s top brass posed this question to a group of U.S. drone industry executives: “What are you willing to try to make our technology — DJI technology — suitable for long-term use in the United States?”
The DJI concept — which, according to Mr. Werners, was also developed by several other DJI employees — was endorsed by Anzu’s founders: himself and three partners, all of whom are said to be American citizens.
The goal, he said, is to “clear the Chinese identity from the technology in a way that there is still a pathway” Sold in the United States.
Mr. Werners has been in touch with the office of Rep. Elise Stefanik, a New York Republican who is spearheading a new bill to effectively ban DJI drones from operating in the future in the U.S. Mr. Werners has held discussions with Ms. Stefanik’s office about Anzu’s efforts and how to comply with U.S. regulations. On Thursday, Mr. Werners sat down with a staffer for more than an hour for a question-and-answer session in which Ms. Stefanik seemed unimpressed.
“This desperate attempt to evade tariffs and sanctions is futile. DJI and all of its shell companies will be held accountable,” Stefanik said in a statement Friday.
Regina Lin, a spokeswoman for DJI, said in a statement that the licensing partnership between DJI and Anzu “is designed to increase the accessibility of high-performance, cost-effective drones in the market.” She said DJI has no financial relationship with Anzu and called Anzu “a completely independent company.”
Some analysts say that while Ansu’s strategy may succeed in the short term, its business model may soon be threatened by U.S. Congress and regulators considering tighter regulation of Chinese companies and their affiliates in the United States.
“This is like a Band-Aid on a gunshot wound,” said Craig Singleton, director of the China program at the nonpartisan Foundation for Defense of Democracies.
Still, some lawyers and drone industry veterans said they admire Anzu’s innovative strategy and see no imminent regulatory risk to its business model.
“Anzu Robotics is doing what many in our industry are looking for,” said Chris Fink, a drone dealer in Fayetteville, Arkansas. He has received inquiries about Anzu drones from users who are wary of buying Chinese products in the current regulatory environment but can’t afford U.S.-made drones.
Anzu was officially launched in April, four months after receiving the equipment. approve Mr. Werners said Anzu has received thousands of inquiries about its drones. He estimated those inquiries have led to at least 400 orders, all of which have been forwarded to third-party brokers in the U.S. like Mr. Fink.
The company is managed from the headquarters of Werners, a veteran drone salesman who worked at DJI early in his career and briefly served as CEO of Autel, another Chinese drone maker, in 2021. He resigned after just nine weeks in the job. Accusing him of lacking autonomy A short stay.
Mr. Werners is a U.S. citizen who lives outside Salt Lake City, Utah. But Anzu receives his mail at a company office building in Austin, Texas, and lists that address as its official headquarters.
“Austin will be where Anzu Robotics’ long-term future is, but there’s no reason to delve into that space right now,” Mr. Werners said.
The Anzu’s components are made in China and Malaysia and assembled at a factory in Malaysia, according to documents reviewed by Mr. Werners and The New York Times.
The product assembled there is a forest green commercial drone called the Raptor, which drone experts say Very similar to some of DJI’s Mavic 3 models — shipped to a logistics center in the U.S. According to Mr. Werners, the drones are operated by flight control software and user applications that originated from DJI but have been modified by Anzu’s data security partner, Aloft, a Syracuse, N.Y., company with servers in Virginia, to ensure that user data stays in the U.S. and is not collected by third parties without the user’s permission.
Ansu’s founders believed this complex setup was necessary because of Washington’s hostility toward China.
According to a bill passed by Congress in late April Sign it now Social media network TikTok could be banned in the United States under an order from President Biden unless it is sold to a domestic owner as soon as possible.
Congress is considering several bills aimed at restricting Chinese technology and products, including the Countering Chinese Drones Act. The bill, sponsored by Ms. Stefanik, seeks to essentially end DJI’s operations in the United States. Congress and Mr. Biden Accepting new tariffs This is a continuation of the efforts launched by the Trump administration to strengthen American manufacturing.
The difficulties domestic drone makers face in competing with DJI, coupled with a host of national security concerns, have prompted the Chinese government to take steps to crack down on DJI, a trend that has also affected other Chinese technology companies, forcing them to scramble for countermeasures.
“Chinese companies are thinking creatively and using every tool at their disposal to find these loopholes and exploit every legal and regulatory gap,” Singleton said, adding that they hope “it will take years for Washington to find and close these loopholes.”
David Montgomery Austin contributed reporting. Tashini Sukumaran Reporting from Kuala Lumpur, Malaysia also contributed.
