The second Iron Man movie, and the first sequel in the MCU, follows up on the life of the billionaire playboy philanthropist turned super hero in the aftermath of the events from the first film.
Ivan Vanko watches his father, the co-inventor of Tony Stark’s arc reactor, die in poverty as Tony announces to the world that he is Iron Man. Ivan begins investigating his father’s blueprints and makes an arc reactor of his own.
Six months later Iron Man opens the Stark Expo and brags about bringing peace to the world since donning the suit. He’s brought before congress and asked to turn the tech over to them, but he refuses and in the process humiliates Justin Hammer, their lead tech contractor, which ends in the Hammer contract being revoked. Concerned by failing health caused by toxins introduced from the arc reactor keeping him alive Tony names Pepper the new CEO of Stark Industries, and taking on Natalie as a new assistant.
At the Monaco Grand Prix Tony indulges in some destructive behavior and decides to race, but the race is interrupted by Ivan testing out his new arc reactor powered tech, introducing himself to the world as Whiplash, targeting Tony. Pepper and Happy race in to deliver a portable Iron Man suit, allowing Tony to take him down, but only barely, as Hammer watches from the sidelines.
A quick interview with Ivan reveals his plan to bring Tony down just by showing that it can be done, and that others can have the technology as well, a possibility that the government, especially Senator Stern, immediately picks up on. Tony and Pepper take off for Tony’s upcoming birthday party, even if he’s not happy about it, but Ivan does not spend long in jail, quickly getting busted out by Hammer. Hammer offers him resources and help getting his revenge against Stark in exchange for building him an army of Iron Man style suits.
Rhody stops by, concerned about the government situation, and begins to suspect that Tony is ill. At the party a depressed Tony gets incredibly drunk in the Iron Man suit, trying to have a blast at his last party after some encouragement from Natalie, leading Rhodes to put one of Tony’s earlier suits to try to contain his antics before someone gets hurt. The two get into a suited brawl, busting up most of the house in the process. In the end Tony lets Rhody fly off in the suit, and he takes it to the military.
The next morning Iron Man is chilling out at a donut shop and is approached by Nick Fury. He finds out that SHIELD is aware of his condition, and that Natalie is actually Natasha Romanov, the Black Widow. They tell him that there is a potential cure for his palladium sickness, and that the secret to unlocking it is hidden in his father’s old stuff. They put him under house arrest until he can get things under control, but he of course slips out to see Pepper, and in the process finds his father’s old model of the original Stark Expo. He takes it back to his place and realizes that it’s actually a map of a theoretical new element that could be used as a replacement for the palladium and is able to build a small particle accelerator to create some, upgrading his chest piece in the process.
Meanwhile, Vanko and Hammer have been busy. Vanko has taken over Hammer’s suit project completely and turned the armored suits into attack drones, remotely controllable. Hammer, meanwhile, finally has his hands on the suit that Rhody took from Tony, and gives it a weapons overhaul, turning it into the War Machine armor. Both are scheduled to go on display at the Expo, and Vanko calls Tony to let him know that his legacy is about to burn, sending him speeding into action. Once he arrives Vanko turns on Hammer, initiating a backdoor to take remote control of all of the drones, and the War Machine, with Rhody inside. They begin attacking Tony and the crowd with Rhodes calling out warnings as Iron Man tries to lead them away from the bystanders. Happy and Black Widow race to the Hammer factory to try to stop Ivan, and they are able to reboot the War Machine, giving Rhody control over it, but Ivan escapes.
The drones close in on Iron Man and War Machine at the center of the expo, but they are able to take the rest of them out. The victory is short lived, however, as Vanko himself shows up in his own upgraded Whiplash suit. He is very nearly able to take out both of the heroes, but they recreate a powerful blast from their fight at Tony’s and knock him out. Whiplash, beaten, lets out a final laugh and the two realize that all of the defeated drones were also equipped with explosive devices. Iron Man rushes off to save Pepper from imminent death and reaches her in the nick of time.
After the smoke clears Tony meets with Fury again and is informed that they have decided not to include him in the Avengers Initiative due to his volatile personality.
TLDR: Iron Man deals poorly with terminal illness and faces off against Whiplash, a near equal genius bent on revenge against the Stark family. War Machine and Black Widow enter the fray and help Iron Man take down Whiplash, while some help from his father’s memory leads Tony to a cure.