Palladyne AI Targets Defense Modernization with New Robot Software

SALT LAKE CITY, UT – January 12, 2026 – Palladyne AI (NASDAQ: PDYN) has commercially launched Palladyne IQ 2.0, a next-generation industrial autonomy software, positioning the technology as a direct response to intensifying pressure from the White House to overhaul the U.S. defense industrial base. The software aims to accelerate automation on factory floors and in maintenance depots, arriving just days after a sweeping executive order targeting defense contractor performance.

The Salt Lake City-based company, which specializes in embodied artificial intelligence, is betting that its new software can provide a much-needed boost to an industrial base that has been criticized for lagging production and supply chain brittleness. IQ 2.0 is designed to make industrial robots more intelligent, adaptable, and easier to program, particularly for industries where reliability and security are paramount.

A Software Solution for a Presidential Mandate

The timing of the announcement is strategically significant. On January 7, 2026, President Donald J. Trump issued an executive order titled "Prioritizing the Warfighter in Defense Contracting." The order directs the Department of War to hold defense contractors accountable for production delays and insufficient investment in capacity, explicitly linking future contracts and executive compensation to performance metrics like on-time delivery rather than short-term shareholder returns.

Palladyne AI is framing IQ 2.0 as a purpose-built tool to help companies meet these new, stringent demands. The software provides an autonomy layer that enables robots to perform complex, repetitive, or hazardous tasks with greater consistency and speed. By doing so, the company argues it can help manufacturers increase production throughput, improve quality, and reduce the cost and schedule risks that have plagued major defense programs.

“Recent executive orders reinforce what defense and industrial operators are already confronting: modernization and improved operational performance are not optional,” said Ben Wolff, Chief Executive Officer of Palladyne AI, in a statement accompanying the release. “IQ 2.0 is engineered to help defense and industrial operators modernize quickly raising throughput, improving quality, and tightening cost and schedule execution.”

The technology’s potential to rapidly enhance existing facilities is a key part of its appeal. As a hardware-agnostic software platform, IQ 2.0 can be integrated into facilities without requiring a complete and costly replacement of existing robotic systems or infrastructure, offering a faster path to modernization.

Democratizing the Factory Floor

A core innovation touted by Palladyne AI is IQ 2.0's low-code/no-code framework. This approach is designed to empower factory line workers and technicians—not just specialized robotics engineers—to program and repurpose autonomous systems for new tasks using a more intuitive interface. This 'democratization' of robotics programming is a significant trend in the broader manufacturing sector, where it has been shown to dramatically cut down on development and deployment times.

Industry studies have shown that low-code platforms can reduce application development time by 60-80% and boost operational efficiency by 40-60%. By bringing this capability to the complex world of industrial robotics, Palladyne AI aims to solve several critical pain points. It reduces the reliance on a scarce pool of highly specialized engineers, lowers the overall cost of automation, and allows factories to become more agile in re-tasking their equipment to meet shifting production demands.

“IQ 2.0 was built to operate where modernization happens—on the factory floor, in depots, and across industrial workflows,” Wolff continued. “By enabling workers to rapidly reprogram and redeploy autonomous systems, IQ 2.0 turns automation into a flexible, scalable production advantage rather than a fixed-cost constraint.”

This flexibility is crucial for the defense sector, where production needs can surge unexpectedly. The ability to quickly adapt an automated assembly line from one component to another could be a key factor in improving the resilience and responsiveness of the national supply chain.

A Strategic Play in a Challenging Market

Palladyne AI’s strategic pivot comes at a pivotal moment for both the company and the wider industrial automation market. The company, which rebranded from Sarcos Technology and Robotics Corporation in 2024, is not yet profitable and operates in a high-risk, volatile technology sector. Public filings from late 2025 show modest revenues against significant operating investments. However, the company also maintains a strong balance sheet with a healthy cash position and minimal debt, giving it the runway to pursue ambitious projects like IQ 2.0.

The global industrial robot market has faced a downturn in recent years, with revenue declining amid sluggish manufacturing demand. However, analysts project a rebound beginning in 2025 and strengthening in 2026. Furthermore, the market is becoming more fragmented. The long-standing dominance of the industry's "Big 4"—FANUC, Yaskawa, ABB, and KUKA—is slowly eroding as smaller, more innovative players gain ground. This shifting landscape creates an opening for a specialized software provider like Palladyne AI to capture market share by offering unique capabilities.

By focusing on a U.S.-based, secure, and hardware-agnostic platform, Palladyne is differentiating itself, particularly for defense and government customers who have stringent data sovereignty and security requirements. This focus on mission-critical applications may insulate it from some of the broader market headwinds affecting general-purpose manufacturing.

Addressing a Brittle Industrial Base

The challenges that Palladyne IQ 2.0 purports to solve extend far beyond any single executive order. For years, Pentagon officials and industry analysts have warned of the U.S. defense industrial base's "brittleness." Decades of offshoring, just-in-time supply chains, and a shrinking skilled workforce have left the nation struggling to rapidly scale production of critical munitions and equipment, a weakness starkly exposed by the need to support Ukraine and replenish domestic stockpiles.

Initiatives aimed at modernizing the industrial base are a top priority for the Department of Defense, which is seeking to expand production lines, accelerate the path from prototype to deployment, and encourage new market entrants. Palladyne's technology speaks directly to these goals. An adaptable automation software that can increase throughput and reduce reliance on a limited labor pool could become a vital tool in rebuilding industrial capacity.

By enabling existing infrastructure to become smarter and more flexible, solutions like IQ 2.0 represent a new approach to modernization—one based not just on building new factories, but on upgrading the intelligence within them. The successful adoption of such technologies could be a critical component in ensuring the nation’s industrial base is prepared for future conflicts.