Drone Swarms Are the New Fireworks Lighting Up China's Skies

(Bloomberg) -- Since China banned fireworks across more than 400 cities to reduce pollution, a new entertainment has emerged to fill the skies: drone swarms.

Shows featuring more than a thousand drones forming 3-D animated figures and other images are being booked for celebrations across the country. Among those cashing in on the technology is EHang Inc., which has been contracted for several performances and in the process set a record for the number of airborne craft in a single display.

Swarms burst onto the global stage at the Winter Olympics in February, when Intel Corp. used more than 1,200 drones to fly as one in the shape of athletes. Since PyeongChang, there has been debate on their use, including the controversial potential for military applications. Ehang's focus for now is on making money from civilians, with a May 1 live performance launched from the ancient city wall of Xi'an watched by more than 100,000 people and part of a deal that netted the company a 10.5 million yuan ($1.6 million) payday.

“We have other business sectors but the first one we have monetized is the drone swarm performances,” said Ehang co-founder Derrick Xiong, adding that EHang is also developing passenger and delivery drones. “It's a more environmentally friendly way of doing fireworks.”

The startup's automated swarms, which communicate and coordinate with each other, have been featured in nearly a dozen cities in the country that invented fireworks, with clients from Honda Motor Co.'s Acura division to Chinese tech giants JD.com Inc and Baidu Inc.

The Xi'an performance took the world record from Intel for the biggest drone display by using more than 1,300 while Intel plans a show featuring more than 1,500 for its 50th Anniversary in July.

While the Intel performance at PyeongChang was pre-recorded, EHang has performed for live audiences. Some drones failed to stay in formation during parts of Ehang's record show and Xiong said the issue may have been due to man-made interference, but declined to provide details.

Founded by Duke graduate Xiong and his partner Huazhi Hu in 2014, Guangzhou, China-based EHang raised $42 million in a Series B round the following year with investors including GP Capital, GGV Capital and ZhenFund.

EHang's drones aren't the only ones getting attention. When state broadcaster CCTV held its annual Spring Festival Gala, the world's most-watched TV show, it featured Zhuhai-based Oceanalpha's performance of 80 boat bots.

Verity Studios, a company founded by robotics expert Raffaello D'Andrea that focuses on live drone shows, has performed swarm displays in 20 countries, including at Cirque du Soleil and on tour with Metallica.

One of the challenges in China is restrictions on the nation's airspace. Xiong has sought to address that by offering some control to authorities by designing command and control centers that can track traffic. Profits from shows are supporting the company as it works toward a goal of bringing to market the first passenger drone , a concept that is being tested at an abandoned amusement park in its hometown.

Phil Finnegan, director of corporate analysis at Teal Group, said regulators concerned with making sure each drone is operated by one operator could limit the use of swarms.

“There are military applications for swarms, but in terms of commercial, it's nascent,” he said. “The concern is that regulatory authorities may allow this in limited circumstances and widespread use is still far off.”

To contact the reporter on this story: Blake Schmidt in Hong Kong at bschmidt16@bloomberg.net

To contact the editors responsible for this story: Pierre Paulden at ppaulden@bloomberg.net, Robert Fenner, Reed Stevenson

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