After Rhodes commandeered a suit of armor from Stark and delivered it to the United States Air Force, Justin Hammer refitted the suit to create the War Machine armor. Hammer then presented the War Machine as a "Variable Threat Response Battlesuit," along with a fleet of drones created for him by Vanko, at the Stark Expo.
The skirmish began moments after Stark arrived at the Expo in his Mark VI suit, at which point Vanko remotely commandeered Hammer's entire fleet of drones as well as the War Machine suit, using them to target Stark as he fled the Expo. Vanko programmed Rhodes' suit and the drones to pursue Stark, even as Rhodes relayed his involuntary movements to Stark to allow Stark to execute evasive maneuvers, and Stark instructed his suit's operating system to hack into Rhodes' suit.
While the aerial pursuit continued, S.H.I.E.L.D. agent Natasha Romanoff assaulted Hammer backstage, forcing him to reveal that the drones were being controlled by Vanko from Hammer's own facility in New York City. While Romanoff headed for Vanko's location with Happy Hogan driving, Pepper Potts notified the New York City Police Department and assumed control of the ground response.
Vanko then deployed the grenades from dozens of drones, bombing the Expo fairgrounds, before using the large-caliber guns on another platoon of drones in an attempt to shoot down Stark. Vanko continued firing grenades into the fairgrounds until one of his drones located and locked onto a child wearing an Iron Man mask. Moments before the drone was set to fire on the child, Stark landed and blasted the drone, then launched again and fled the Expo's airspace in order to draw Vanko's drones away from the crowd.
Stark led the battalion of drones into an underground parking garage, causing one to crash even as War Machine opened fire on him, destroying dozens of passenger vehicles. Stark then led the drones pursuing him back to the Expo fairgrounds, where he tricked the entire platoon into crashing into an enormous globe sculpture, but he was tackled moments later in midair by the War Machine armor, causing both men to hurtle into the Oracle Corporation's bio dome, where the War Machine armor pinned Stark and opened fire.
Romanoff and Hogan soon reached Hammer's facility where Romanoff incapacitated eleven security agents while Hogan fought and eventually defeated one guard. They reached Vanko's holding cell to find Vanko gone, and Romanoff accessed Vanko's computer to reboot the War Machine armor, returning control of the suit back to Rhodes. Stark and Rhodes argued over strategy for a moment before a platoon of drones arrived, surrounding them and opening fire as Stark retaliated with repulsor blasts and Rhodes cut down drones with machine gun fire. Stark destroyed several drones with miniaturized missiles until he and Rhodes were nearly overrun by drones, at which point Stark discharged an arc of weaponized laser fire that destroyed every drone in the area.
New York Police arrived soon after to arrest Hammer, and Potts coordinated rescue efforts with the Department. From Hammer's facility, Romanoff warned Stark of an incoming threat; moments later, Vanko landed in the Oracle biodome in his Whiplash armor. Rhodes attempted to disable Vanko with a Hammer Industries warhead known as "the Ex-Wife," but the missile turned out to be a dud. Stark fired a volley of missiles, but Vanko's armor survived the blasts; Rhodes opened fire, and Vanko used his suits electrified whips to sever the War Machine's turret gun.
Stark attempted to lift off, but Vanko caught him with one of his whips and hurled him back to the ground. Rhodes continued firing, and Stark launched himself at Vanko, who deflected the attack; Vanko then used his whips to drag Rhodes close enough to pummel him, but Stark attacked, battering Vanko's suit. Vanko retaliated by simultaneously catching the Iron Man suit and the War Machine suit around the throats with his whips with himself between them. Stark and Rhodes then fired their palm-repulsors at one another, their energy streams colliding and detonating, blowing out the entire Oracle biodome.
The blast destroyed Vanko's suit, but Stark and Rhodes discovered that Vanko had set his own suit, as well as the entire fleet of drones, with self-destruct sequences. Stark and Rhodes lifted off, and Stark rushed to find Potts near a fallen drone; he landed, picked up Potts, and relaunched seconds before all of the drones detonated, flying her to the safety of a nearby rooftop.
Due to Stark's recklessness leading up to this encounter, Romanoff recommended that he not be recruited into S.H.I.E.L.D.'s Avengers Initiative, though Director Nick Fury offered Stark an emeritus position as a consultant. Stark and Rhodes were later honored with medals presented to them in Washington, D.C. by Senator Stern.