Morgan Stanley states that with the deep integration of AI technology, drones are undergoing a pivotal transformation from mere flying tools to intelligent agents.
On December 19, according to Hard AI, Morgan Stanley's latest "Robotics Yearbook Volume IV" report extensively focuses on the drone and low-altitude economy sectors, asserting that AI algorithms will become the core driver in unlocking the autonomous potential of drones. The emerging low-altitude economy will fundamentally reshape how humans utilize space, ushering in a new era of three-dimensional spatial economics.
The bank's global embodied AI team highlights in the report that AI's deep empowerment enables drones to achieve a qualitative leap from "tools" to "intelligent agents." A direct consequence of this trend is the increasing prominence of drones becoming "smaller, cheaper, and expendable." Morgan Stanley predicts that, driven by continuous AI advancements, policy support, and expanding applications, the global drone population will surge from 130 million in 2030 to 2 billion by 2050.
With the expansion of drone applications, the bank particularly notes that the low-altitude economy will evolve from "single-point applications" to "ecosystem synergy," establishing an aerial transportation network covering short-haul and intercity rapid transport. Previously underutilized three-dimensional space will become a new economic growth frontier.
**AI-Driven Cost Efficiency: The Leap from Tools to Agents** AI's deep empowerment has facilitated drones' transformation from "tools" to "intelligent agents." The bank emphasizes that the drone industry's explosive growth stems not from a single technological breakthrough but from the dual impact of technological iteration and AI empowerment.
Early drones relied on manual remote control. The 1941 "Queen Bee" target drone and the 1967 QH-50 anti-submarine drone required high technical expertise, limiting their applications. The emergence of camera drones in the early 2010s expanded their reach from professional to consumer markets, yet they remained "tools."
The true turning point arrived in the 2020s. AI-powered FPV drones marked the industry's entry into an intelligent era, achieving "conditional autonomy"—semi-autonomous flight, beyond-visual-range operations, and the ability to carry multiple payloads for complex tasks, steadily progressing toward full autonomy.
Morgan Stanley highlights AI's unlocking effect on drones in critical technical aspects:
- **Navigation**: AI algorithms overcome traditional GPS reliance, combining visual recognition and inertial navigation for precise positioning, enabling drones to operate in GPS-limited environments. - **Target Tracking**: Machine learning allows drones to dynamically lock onto moving targets, adapting to complex operational needs.
This directly alters cost structures: For 6-10 inch FPV drones, core components include the camera module ("eyes"), flight control system ("brain"), and brushless DC motor ("power"). Standardized low-cost components, coupled with open-source software (e.g., ArduPilot), have slashed the cost of high-performance drones, transforming them from expensive military equipment to affordable consumer electronics.
Morgan Stanley notes that AI has reduced technical barriers from $30 million professional equipment requiring five operators to $500 user-controlled products.
**Global Drone Market Poised for Explosive Growth** Drones' "dual attributes" drive growth across consumer, commercial, and defense sectors, with commercial applications emerging as the low-altitude economy's backbone:
- **Agriculture**: Large-scale adoption is underway. Drones serve 500 million hectares of farmland globally, with one-third of China's farmland using drone operations, reducing chemical usage by 30%. DJI's agricultural drone fleet has reached 400,000 units, enhancing efficiency in spraying, crop monitoring, and livestock management. - **Logistics**: Explosive potential is evident. Zipline has completed over 1.5 million deliveries since 2016, while China's drone deliveries hit 2.7 million parcels in 2024. Amazon, Walmart, JD.com, and SF Express are building aerial networks for sub-5lb packages (86% of Amazon's parcels). - **Public Services**: Significant value is demonstrated. Over 1,700 U.S. police departments use drones for search and rescue (90.8%), crime scene photography (84.7%), and disaster response (83.7%).
Energy inspections, mineral exploration, and construction mapping also benefit from drones, improving efficiency and safety by replacing hazardous human tasks with AI-powered data analysis.
In consumer applications, FPV drone racing, aerial photography, and outdoor adventure recording are gaining traction. Enhanced AI algorithms boost obstacle avoidance and battery life, making drones more accessible and driving market expansion.
Morgan Stanley forecasts explosive growth under AI advancements, policy support, and application expansion, projecting 130 million drones by 2030, 900 million by 2040, and 2 billion by 2050.
**Low-Altitude Economy and eVTOL: The 2D-to-3D Leap** The bank asserts that globally, the low-altitude economy will evolve from "single-point applications" to "ecosystem synergy." Drones, eVTOLs (electric vertical takeoff and landing aircraft), and hypersonic vehicles will complement each other, forming an aerial network for intracity, intercity, and international transport.
Morgan Stanley views the ultimate solution to ground congestion as leveraging the "empty skies." Currently, only ~14,000 aircraft occupy global airspace, while ground traffic reaches gridlock.
The primary bottleneck lies not in aircraft but outdated air traffic control (ATC) systems. The FAA warns 76% of ATC systems may be unsustainable. Only AI-driven automated airspace management can accommodate millions of new flights.
The report estimates one eVTOL's annual revenue potential at ~$1.46 million, compared to ~$109,500 for a traditional ride-hailing vehicle—equivalent to 10-15 Uber cars.
Morgan Stanley projects ~36,000 large VTOL aircraft globally by 2030, 2.5 million by 2040, and 17 million by 2050.
Technologically, battery energy density is pivotal. Current lithium-polymer batteries offer 140-200 Wh/kg, while hydrogen fuel cells theoretically reach 2,500-2,700 Wh/kg. A 20% biannual energy density increase ("Moore's Law for batteries") will drastically extend drone range, unlocking new applications.
The bank concludes that policy relaxation will optimize low-altitude resource utilization, transforming underused 3D space into an economic catalyst, reshaping urban planning, logistics, and mobility.
Macroscopically, drones and aerial mobility represent an AI-driven revolution in spatial utilization. Just as cars redefined land value, drones and the low-altitude economy will unlock the skies, creating a "ground + air" dual-space paradigm to fuel global economic growth.
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