Gulf states are expected to ramp up defense spending in the wake of the Iran war as they look to shore up security and deterrence against future attacks. Saudi Arabia, which has one of the world’s biggest defense budgets but imports almost all of its military equipment, has set a goal of localizing 50% of that spending by 2030.

Iran has fired thousands of missiles and drones at Gulf countries since the outbreak of the war in late February. While most were intercepted, those that slipped through hit targets including hotels, data centers, and energy facilities. The death toll in the Gulf has been limited, with less than 30 people reported killed, but in Iran more than 3,000 people have died in US and Israeli strikes.

The Shahed drone has become one of Iran’s most potent weapons. The drones are estimated to cost about $35,000 to produce, far less than the interceptors and missiles that Gulf states have used to shoot them down. That asymmetry is pushing governments in the region to seek alternatives, such as partnerships with Ukrainian companies — Russia builds a version of Shahed which has been used extensively in its war with Ukraine.

The MASNA Ventures fund that will back the drone facility aims to capitalize on increased defense cooperation between the US and Saudi Arabia, which was named a major non-NATO ally in November, when Saudi Crown Prince Mohammed bin Salman met President Donald Trump at the White House.