The Iran conflict exposes the new cost curve of war
“Shock and awe” was the term of art when the United States invaded Iraq in 2003. That conflict saw the United States bring to bear overwhelming military force backed by superior technology in the form of precision-guided weapons, stealth aircraft, and satellite technology, as well as a finely tuned military force built on sound doctrine, world-class training, and a professional cadre of officers and noncommissioned officers. In many ways, the initial strikes on Iran resemble this dynamic—a world-class military with superior weapons and training engaging a weaker foe, aiming to achieve a lightning-fast military victory in service of political aims.
A closer look, however, reveals a shift in the battlefield dynamic over the past twenty years that often gives weaker militaries more tools to offset stronger adversaries. Cheap drones, open-source satellite imagery, and cyber tools give weaker states such as Iran new ways to hold superior militaries at risk, while forcing them to expend munitions and resources at far greater cost. And despite deep capital markets, a strong innovation base, and a growing defense tech sector in the United States, costs remain high and development timelines remain long due to an ornery requirements process, misaligned acquisition incentives, and bureaucratic inertia. The Pentagon’s challenge is to rapidly field innovative, lower-cost technologies alongside its exquisite capabilities, ensuring each is used where it delivers the greatest advantage.
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Consider the overwhelming firepower with which the United States initiated combat operations in 2003. Joint Direct Attack Munitions, aircraft carrier strike groups, and stealth bombers remained out of reach for Iraqi defenders. US bases in the region were also largely untouchable; while Iraqi Scud missiles inflicted serious damage in the first Gulf War, US missile defense systems proved highly effective during Operation Iraqi Freedom, leading to a decisive end of initial combat operations after just a few weeks of fighting, the following insurgency notwithstanding. Much has changed since then, especially with the proliferation of low-cost drone technology, at which Iran has become adept. By producing and exporting the Shahed-136 drone to Russia for use in Ukraine, Iran has refined both the technology and doctrine behind these systems.
The result is a weapon that forces the United States to intercept $30,000 drones with $2-million defensive systems—while still inflicting casualties in the opening salvos of a conflict. Iran’s combination of ballistic missiles and low-cost drones threatens to swiftly deplete defensive systems, leaving US, Arab, and Israeli targets vulnerable to attack. Additionally, Iranian-aligned groups in the region, such as the Houthis in Yemen, militias in Iraq, or even the much-weakened Hezbollah in Lebanon, can employ much of the same low-cost weapons to stretch and harass American and Israeli troops, broadening the battlespace across the region and striking civilian traffic and infrastructure to impose global costs to a growing conflict.
While the United States will continue to enjoy unquestionable military overmatch, both the United States and Israel enjoy another advantage over the terrorist regime in Tehran and its regional proxies: a deep pool of innovation, capital markets, and industry ready to produce in support of national security and defense. While there will always be a place for exquisite weapons systems and precision munitions, cheaper and more attritable weapons systems must be part of the fight to both adequately and economically defend against some of the systems being employed by Iranian forces, as well as weapons the United States might encounter in a future Pacific conflict. The Low-cost Unmanned Combat Attack System (LUCAS) drone is one example of the United States leaning into more cost-effective weapons, a rare case of reverse-engineering the Iranian Shahed. Other novel and emerging technologies changing the battlefield today include autonomous ground systems, artificial intelligence-driven counter-drone weapons, and energetics (such as propellants and explosives) for artillery strikes.
For example, autonomous ground vehicles armed with counter-drone weapons or sensors could be cheaply and effectively deployed across the Middle East to defend US bases as well as civilian oil infrastructure, allowing soldiers and civilians to take cover while autonomous systems remain exposed and engage incoming drones. This would obviate the need for expensive missiles to take down low-cost drones, allowing the United States to keep its high-cost systems in reserve for bigger targets that may yet be on the way.
In addition to hardware, the United States has a strong advantage over Iran in big data, computing power, and software. US systems are far more networked than they were twenty years ago. Intelligence collection and analysis is now supported by artificial intelligence. Open-source imagery solutions provide the United States with more options to locate enemy capabilities and stockpiles.
Supported by deep capital markets and institutional investors, the United States dominates the defense tech landscape—and will continue to do so. That means it’s up to the Department of Defense and the services to send a strong demand signal. Unless leaders are willing to employ proven innovative systems at scale, the United States will continue to rely on older, slower, and far more expensive weapons systems both in this fight and in the next.
From Nagorno-Karabakh to Ukraine to Iran, drones and loitering munitions have repeatedly demonstrated how inexpensive systems can reshape the battlefield. Now the United States must adapt in order to remain the world’s premier fighting force. The technology is already here. The question is whether policymakers have the vision and the flexibility to deploy it.
Nic Adams is a nonresident senior fellow with the Scowcroft Middle East Security Initiative at the Atlantic Council’s Middle East Programs. He also advises frontier technology firms on strategic communications, business development, and government relations. He previously served as a professional staff member on the US Senate Select Committee on Intelligence and as a commissioned US Army officer.
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Image: A visitor of an exhibition takes a photo of parts of an Iranian made Shahed-131/136, which was launched on Kyiv, Ukraine on June 27, 2025. Photo via REUTERS/Alina Smutko.