Welcome to the latest edition of Defense Tech and Acquisition. On the 25th anniversary of 9/11, we mourn those we lost and will never forget why we must remain vigilant in defending our national security. We must continue to strive for the national unity that we saw following these horrific attacks. In their memory, may we carry forward the courage, compassion, and hope that rose from the ashes and still bind us together.
The biggest stories across the Department and the defense industry this week:
There are many insightful discussions by key defense and tech leaders from NDIA’s ETI conference that make this one of our most exciting editions.
Increasing debates and initiatives to drive unmanned system adoption.
Industry, supported by the Department, expand production facilities.
Army rolls out NGC2, iterates with PrSM, and advances IPFC-Inc 2
Navy highlights pivot to PAEs, torpedoes, and a new nuclear microreactor
Pentagon Revamping Direction of CMMC While DIU Moves Forward on BRIDGES
Air Force Boosting its AI Integration Efforts and Adopts New Propulsion Strategy
Space Force Needs More Launch Capability as Need for pLEO Grows
Space-Based Interceptors Will Be Needed at Scale for GD4A
Finland Completes Border Wall and Case Made for Closer Australia Collab
With Reconciliation Uncertain, Pentagon Eyeing Plan to Retool FY27 Priorities with Congress
BLUF: If Congress does not pass the full $350B reconciliation funding requested by the Pentagon, the department is prepared to work with lawmakers to figure out how to shuffle key priorities into the base budget.
The plan, discussed by DoW Comptroller Jules Hurst at NDIA’s ETI conference means the department would need to work with appropriators to cut investment in other places or defer them until 2028.
What’s more important to have money for in FY27 or can it wait until FY28.
A lot of these technology areas are evolving fast, so money is needed right now to invest in change, while others need a little more R&D.
DoW requested $1.5T through a $1.15T base budget and $350B reconciliation bill.
Big-ticket priorities of Golden Dome, munitions, and DAWG are in reconciliation.
While Congress passed a CR until Dec 11, past years have shown there may be a second CR after the mid-terms and new Congress, so the Pentagon is bracing for final budget decisions in the new calendar year.
The munitions deals fundamentally change when we buy things from contractors because for the first time we’re making them put in CapEx and if they don’t meet the production targets, it’s going to hurt their profitability, so they’re incentivized to meet them.
US allies and partners are also involved to buy these munitions.
Gen Michael Guetlein, warned Golden Dome could come to a grinding halt in October if lawmakers do not figure out a way to continue funding.
“If we really want to fund those things, then we have an opportunity to go back to the appropriators before they finalize the bill, at least I think we will have a conversation. However it’s too premature to know exactly what those decisions will be and what the trade-offs will require.” Jules Hurst, DoW Comptroller
Navy Must Start Killing Manned Programs
BLUF: DIU Principal Deputy Director and Chief Commercial Officer Matthew Shortal told the National Commission on the Future of the Navy that the Navy may be making some investments in unmanned vessels, it needs to get a lot more ruthless to bring the fleet into the future.
Dollars are not following rhetoric in building out the unmanned fleet.
Reports are it’s 96% manned, 4% unmanned. Shortal’s view is that it’s not even close and we need to move quicker. In budget discussions, moving between manned and unmanned doesn’t happen. It’s not moving to 10% for unmanned.
The budget for this year offers a couple more billion for unmanned, yet it’s not enough. We need to start killing manned programs.
The Commission will deliver findings in early 2027 with concrete choices for force design, industrial base reform, and the policies that enable a Navy and Marine Corps team capable of sustained operations and rapid surge when required.
Shortal noted the Ukraine conflict and Epic Fury have shifted the paradigm and emphasized unmanned vessels as the way into the future. He noted Saronic’s Corsair USVs rescued Apache pilots and conducted one-way attacks on Iran’s largest naval facility.
“At DIU, we don’t spend years gazing at the problem. In the face of generational technological change on the battlefield, resource allocation towards new entrants and new capabilities like unmanned autonomous vehicles in all domains is a critical directive in the face of a new war.” Matthew Shortal, DIU Principal Deputy Director and Chief Commercial Officer
Our Take: I’m excited to continue the discussion with HON Jules Hurst and Matt Shortal on a panel on reshaping national security investments at the Creative Disruptors by the Lakes event next weekend.
DAWG Director Warns Funding Lapse Could Kill Momentum
BLUF: LTG Steven Marks doesn’t know if the Defense Autonomous Working Group (DAWG) will get the $54B requested and warned the program could stumble if it doesn’t get something.
“We’re at a point where there is a potential for us to get, some money out of the FY27 budget. It truly concerns me, because I have looked over and seen what they’re doing in Ukraine and what’s going on with Operation Epic Fury.”
If reconciliation fails to pass in Congress, as seems increasingly likely, then DAWG could be left with $1B requested through the base budget.
That is four times the $226M DAWG received for FY 26 which is a dramatic growth by the standards of most Pentagon programs, but it’s <2% of the original plan.
LTG Marks noted the world has woken up. That while adversaries can’t keep up with our exquisite capabilities, they can take a $100K drone and attack a $2B vessel. We’re on the losing end of that cost imposition curve.
Gen Caine Urges Industry To Lean More Into Shared Risk When Delivering Tech For US Military
BLUF: Gen Dan Caine, CJCS, called on government buyers and commercial sellers to deliberately meet in the middle on cost, speed, and experimentation as they deliver and adopt new assets in the modern global security environment.
There is a shared sense of urgency between the White House, government, military, and industry particularly at this time when the U.S. is confronting diverse adversaries in multiple regions around the world.
Gen Caine spotlighted DIU and OSC to more closely align with industry partners.
Caine also said advanced tech like AI, drones and hypersonics are increasingly changing the battlespace in real-world combat domains.
The U.S. military must continue to build an arsenal encompassing a high–low mix of weapons that can deliver both exquisite effects and mass, at scale.
“The character of war is absolutely changing, and technology is essential to that. When you look at the price of lethality right now, it’s on an exponential decrease. Technology is proliferating everywhere. Learn the right lessons from fights in Europe and elsewhere. The battlefields of the future are becoming much more digital.”
“We all have to go fast. For the newcomers, startups, and entrepreneurs out there, what I’m seeking to solve for is shared risk. Where can we find a place to compromise between buyers and sellers at scale, so that our primes, neoprimes, and startups all have an open door?”
“Our tech stacks are going to be under attack in high-end conflict. We need to prepare for a resilient C2 structure that allows us to arm the joint force with the capabilities that they need at the time that they need them, not after conflict starts.”
Gen Dan Caine, CJCS,
Related: Data Is a Joint Force Priority, Top General Says
“The capabilities that we see emerging in frontier AI models, the work that the Joint Force is doing in space, the work that we're doing in the undersea domain, all of those technologies must nest within the way we're going to go fight wars.”
Boosting Production Scale the Next Step for Pentagon, Industry
BLUF: The DoW is focused on bolstering the defense industrial base as the modern battlefield evolves, and the next step is boosting production scale to keep up with the pace of warfare.
While there has been a lot of great investment from the venture and private capital communities into the defense industrial base, the DoW and industry still need to ramp up production scale to get capability into the hands of warfighters.
That's through streamlining contracting, enabling expansion of a factory, and acquisition transformation initiatives, such as streamlining the certification qualification process.
The Pentagon also needs to provide industry with a long-term demand signal that can help foster innovation and scale production. Duffey said the budget is still the best demand signal the government can put out.
“Without the hard hats, there aren't helmets. Without the workers, there aren't warriors. We need what the defense industrial base produces in order to make our warfighters successful. As long as we are focused on building that industrial base, and we can supply the Joint Force that we need and replenish it in the case of war, it will itself serve as a deterrent.” Michael Duffey, USW(A&S)
How the Pentagon is Undermining Trump Executive Orders
BLUF: DEPSECDEF Feinberg’s Supplier Cost and Pricing Transparency memo tells the acquisition workforce to reset expectations regarding supplier cost and pricing information and sends a clear, but wrong message to the defense industry.
Pentagon memos directed action on vital acquisition issues, tackling decades-old problems such as requirements, innovation and industrial base capacity.
To industry it says: “We don’t trust you. We are not partners; we are adversaries.”
This is not just bad policy; it directly undermines the positive initiatives that Secretary Pete Hegseth and Feinberg have been pushing since last year.
Instead of attracting, this repels new innovators to the defense industrial base.
The memo says the Pentagon will install its own software in company data systems to pull cost information directly. Every contractor, especially commercial innovators, will shudder at the thought of government intrusion into their core data systems.
Instead of increasing collaboration between the department and its private sector partners, it will create barriers to active cooperation.
Government need is already well served by existing laws, regs, and practices, which provide robust and abundant info about both projected and real costs.
I suggest the Deputy Secretary issue a second memo to clarify and amplify the guidance and build on the strong foundations that exist today or are being developed.
His priority should be current negotiations to convert framework agreements into long-term contracts that increase delivered quantities of needed munitions and platforms.
He should affirm the goal of relationships that promote the innovation, expanded industrial capacity and speed to delivery of results needed to counter today’s challenges and tomorrow’s threats.
Iran Is Producing Ballistic Missiles Again
BLUF: Iran has resumed its production of ballistic missiles using stockpiled components and working in underground facilities.
Despite heavy attacks on its missile sites and industrial facilities during the initial phase of the war, Iran has been busy assembling liquid-propellant missiles, which have to be fueled just before launch, as well as solid-propellant missiles, which can be stored ready to fire.
Intelligence points to activity at several underground sites, including the Khojir missile facility in southeastern Iran.
Iran is also attempting to build new underground assembly points to avoid getting struck again.
Iran is mainly assembling the new missiles from existing components in more limited quantities than before the war.
The U.S. had destroyed up to 90% of Iran’s drone, ballistic missile, and naval industrial base and significantly degraded Iran’s ability to launch missiles and drones.
Covenant Unveils Deep Precision Strike Missile it Plans to Build Thousands
BLUF: Emerging from two years of stealth development, Covenant revealed its hallmark missile, opening a new facility in Texas it hopes will produce the low-cost, deep precision strike system by the thousands beginning next year.
Anthem is a mass-producible, easy-to-store missile system made of mostly commercial parts that is capable of destroying hardened targets en masse from long distances using a heavy, 200-plus kilogram payload.
With $250M in funding from several venture capitalist firms, the company built factories in Germany, Israel and now Dallas, where it aims to make 1,000 Anthem missiles in its first year. The goal for the Dallas facility is to ramp up to 5,000 missiles per year
“The reason we’ve stayed in stealth for so long is that we didn’t really want the distraction. We have a platform today that is going through custom qualification with the Army, in order to enable it to be assessed, and then ultimately fielded and in the hands of end users next year.” - Abby Denburg, Covenant President and CGO
“Deep precision strike is the biggest gap in the arsenal of the West, and we spent the last two years building Anthem to fill it.” Michael Kaufman, co-founder and CEO of Covenant.
“We’re looking at a wide array of capabilities in different range envelopes, warhead effects, different velocities, and at different price points. So I don’t want to just limit myself to a $500,000 Covenant cruise missile solution. Obviously, it’s in the mix, and we’re very intrigued, and have been impressed with what Covenant has been able to do.” LTG Frank Lozano, PAE Fires
Our Take: We’re excited to see another well financed and backed company join the defense industry to offer mass-produced low-cost munitions, which the Department desperately needs. Kudos to the Covenant team for their rollout event in Texas with USD(A&S), Army PAE Fires, and Navy PAE Munitions among the attendees.
Related: Covenant Emerges From Stealth With $250M for Deep Precision Strike and Army Now Testing Anthem Long-Range Strike Weapon Built for Mass Production
DOD to Move all Classified AI Workloads off Anthropic by October
BLUF: The DoW is close to completely migrating all of the military’s classified systems away from Anthropic models and over to alternate frontier AI vendors.
The DoW is moving to a multi-model ecosystem (excluding Anthropic) that deploys diverse generative AI capabilities to support real-world operations across its intelligence and warfighting networks.
The Pentagon uses commercial frontier models in both classified systems and on unclassified operational tools like the nascent GenAI.mil platform.
Technology suppliers, deployment methods, and security levels differ, depending on the workspace.
The department designated Anthropic as a national security supply chain risk. Now the two are hashing it out in court.
“I’d say about 90% has transitioned. All of the Maven Smart Systems or Palantir work has been transitioned months ago, and we’re on track to get it done by the end of the month.” Emil Michael, USW(R&E)
US Firms To Assess Hybrid Engines For Air-Launched Space Vehicles
BLUF: Starfighters Space, a space company operating the world’s only commercial fleet of flight-ready Mach 2+ supersonic aircraft, and Vaya Defense and Space, the privately held developer of the patented Vortex-Hybrid rocket engine, have agreed to explore supersonic flight testing and future air-launched suborbital missions.
Both firms operate on Florida’s Space Coast, only miles apart. Their proximity is expected to support faster engineering, prototyping, engine testing, and development of hardware intended for flight.
They will examine whether Vaya’s hybrid propulsion technology is suitable for STARLAUNCH, Starfighters’ air-launch system. The assessment will initially focus on suborbital missions.
X-59 Supersonic Aircraft Hits Mach 1.2 at 49,000 Feet in 25th Test Flight
BLUF: NASA’s X-59 experimental supersonic aircraft has successfully completed 25 test flights. It reached Mach 1.2 at 49,000 feet and validated key predictions regarding stability, flying qualities, and structural loads.
Rather than the speed itself, the flight’s true success lay in how quietly it passed over the desert floor.
Designed to trade the deafening crack of supersonic travel for a gentle, barely noticeable “thump,” the needle-nosed aircraft is meeting every single performance mark set by its engineering team.
Before construction began, NASA engineers developed a virtual digital twin to simulate the X-59’s flight dynamics. Today, real-time sensor data from actual test flights is validating those early computer models with accuracy.
“Through our ongoing flight tests with the X-59, we’ve gained invaluable insights into both the aircraft’s performance and the unique challenges of the aircraft design. Each test point has validated our models and predictions, and it has strengthened our confidence in the aircraft’s performance. Every flight brings us closer to transitioning to the next phase where we will demonstrate the X-59’s quiet supersonic flight capabilities.” - Cathy Bahm, NASA, Project Manager
Hermeus Unveils Air-Launched Ramjet-X Test Vehicle
BLUF: Hermeus revealed a ramjet-powered test vehicle that can be launched from under the wing of its supersonic Quarterhorse aircraft.
The unveiling of the Ramjet-X concept reveals a low-cost, expendable vehicle capable of high-speed flight to complement the reusable, Pratt & Whitney F100-229-powered Quarterhorse.
Quarterhorse provides the reusable launch energy, while Ramjet-X provides a simple platform for testing at sustained high-mach speeds.
The turbine-powered Quarterhorse and the ramjet-powered Ramjet-X repackages turbine-based, combined-cycle into separately powered aircraft, while still building the company’s experience with both forms of propulsion.
“Ramjet-X gives us a way to put new systems into sustained high-mach environments without building an expensive one-off test program every time.” Zach Shore, Hermeus CEO
DARPA Prepares To Tackle Next CCA Autonomy Challenge
BLUF: A newly modified fleet of Lockheed Martin F-16C Block 42 fighters over at least the next two years will be dedicated to exposing AI agents to the reality of flight-testing beyond-visual-range combat between multiple aircraft for the first time.
This cadre is jointly funded by DARPA and the Air Force.
AI-enabled air combat is close to operational reality, regardless of whether the algorithms are ready.
The first increment of the Air Force’s CCA program entered production only a few weeks after the first three VENOM-configured F-16s entered safety-of-flight testing in early June at Eglin AFB, FL.
The first General Atomics Aeronautical Systems Inc. FQ-42 and Anduril FQ-44 jets could arrive at Test and Training Unit-1 (TT-1) at Creech AFB, NV, in two years.
The X-62 became the first aircraft to fly with AI agents under DARPA’s Air Combat Evolution (ACE) program.
Following a heated competition between multiple companies, an AI agent created by Heron Systems—now owned by Shield AI—defeated a human F-16 pilot in a simulator on the ground five times in a row to win DARPA’s AlphaDogfight trials.
In the next phase of the ACE program, DARPA migrated more than a dozen AI agents to flight testing on the X-62.
The exact timing for autonomous flight tests has not been released, but the AIR program is funded through the end of fiscal 2028
“These are combat-capable jets that have fully live sensors on them to allow us to truly vet out these types of scenarios and not just simulate everything that we have on there.” Terry Wilson, DARPA’s AIR and VENOM Deputy Manager
New Hypersonic Aircraft Could Launch From High-Altitude Airship
BLUF: JP Aerospace released new computer-generated images of its proposed Hazel vehicle, giving a new look at an unusual idea for reaching orbit without using a traditional rocket, but rather a high-altitude airship called SuperTandem.
They are concept animations, not real flight footage.
This reveal offers a look at a spaceflight idea the firm has worked on for decades. The volunteer-run group wants to use lighter-than-air vehicles as part of a long-term plan to move people and cargo toward orbit.
The Airship to Orbit program suggests a slow journey from Earth to space. First, a stratospheric airship would take passengers and cargo to a high-altitude base called Dark Sky Station.
After that, a much larger orbital airship would speed up to reach orbital velocity using electric engines. This process would take several days, which is very different from the quick, high-energy trip of a rocket.
Multi-Kilojoule Lasers Built For Nuclear Fusion Could Power Next-Gen Air Defense
BLUF: RTX Ventures has invested in laser fusion company Xcimer Energy to develop pulsed-laser technology for potential use in US military directed-energy systems.
The new partnership aims to adapt powerful pulsed lasers designed for fusion energy into potential military defense systems.
The collaboration brings together two applications that share a fundamental engineering challenge: building powerful lasers that can fire repeatedly, reliably and affordably.
Xcimer is developing excimer laser technology for its fusion power system. The company says the same approach could provide the performance and scalability needed for directed-energy weapons, potentially offering longer-range capability than existing systems.
Related: Could Laser Fusion Tech Be Used to Shoot Down Missiles and Drones?
U.S. Is In Adaptation Race For Autonomous Warfare
BLUF: As autonomous systems continue to define modern warfare, the U.S. is locked in a race for drone dominance, but the real competition is the speed of adaptation.
The advantage will increasingly belong to the force that senses change, learns from it, updates its capabilities and puts them into the hands of warfighters faster than its adversary and that is the competition the U.S. is in right now.
Autonomous warfare is changing how forces identify and eliminate threats, deliver effects, and move supplies, forcing military, government and industry to confront whether they can move at the speed of that competition.
The typical innovation and procurement cycle — define a requirement, develop a program, field a capability and sustain it for decades — is increasingly mismatched with a threat that can change in weeks or days. We must learn, integrate, produce, build and adapt faster.
The U.S. also needs an industrial base capable of producing adaptation itself. With the help of government, it must build a robust American production ecosystem that can move from operational problems to battlefield testing and back again at unprecedented speed.
“The side that adapts fastest will have the advantage in the next war, not necessarily the side with the most exquisite platforms, not necessarily the side that invents the technology first and not necessarily the side that spends the most money.”
“Machines contribute speed, persistence, processing and scale. Humans contribute judgment, creativity, context and ethics. The combination is the advantage,”
LTG Steven Marks, SOCOM Vice Commander
Maven Is Becoming The Pentagon’s Everything App
BLUF: The Pentagon is finding ever more uses for the AI-powered C2 system called Maven Smart System, including logistics, force readiness, supply chain and budgeting data.
Maven is used by all U.S. combatant commands for intelligence and operations data analysis.
While MSS started as a tool to bridge intelligence and operations efforts, the department is working to include readiness and disposition of forces, supply chain and budgetary considerations, modeling and simulation to improve decision-making processes - horizontal integration of directorates data.
The organizations that have been most successful are integrating AI in new ways and changing how they operate, versus simply automating existing processes.
Vendors are recommended to use Tradewinds, DOD’s digital marketplace, as it satisfies the competitive requirement with a five-minute video, way better than writing a bunch of RFIs and RFPs.
“MSS has already replaced six, eight, ten different IT systems that U.S. military personnel previously used to analyze data. The goal was to build a golden thread of data from sensors, to aggregation and visualization, to decision-making and acting based on those decisions.” Cameron Stanley, CDAO
Pentagon’s Pursuit of Quantum Sensing Tech Has Momentum, but Hurdles Remain
BLUF: A Hoover Institution report, “The Quantum Revolution: A Guide for Allied Policymakers,” placed sensing on the shortest path to commercialization of the major quantum tech areas, which also include computing and communications.
The Department of War is moving to take advantage, but it is not just a question of whether the tech is reliable and can be produced at scale.
Applications such as resilient navigation, detection in contested environments and intelligence gathering highlight how quantum sensing can deliver qualitatively different and more immediate effects for security and defense.
DIU has spearheaded a number of efforts focused on quantum sensing, most recently an initiative to use quantum sensing to revolutionize ISR.
The initiative, called Farseer, is a multi-phase project designed to transition mature commercial quantum sensing technologies directly to the Joint Force, and is expected to invest up to $200M within the next year.
Any time new technology is being brought into the U.S. military, it is not just a question of whether the tech is reliable and can be produced at scale. It’s also a question of whether it can be integrated with other systems.
Other Defense Tech News:
Alpha Speedrun Fellowship by A16z
The Alpha Fellowship backs builders at the earliest possible moment, before the idea and sometimes before the diploma. Alpha is for highly technical students, dropouts, and recent grads who don’t want to wait to start building.
Fellows ready to go all in on their own idea receive capital and support from day zero. Those who want to learn inside the fire get fast-tracked into engineering roles at breakout startups. The fellowship takes place in San Francisco.
Defense Industrial Base Will Achieve Five Stars by End of Administration
BLUF: Strengthening the defense industrial base has been a focus for the current administration, laid out as a priority in the 2026 National Defense Strategy.
Emil Michael said on a scale of one to five stars, the defense industrial base inherited by the current administration was a one, is currently at three, and can attain five by the end of President Trump’s term.
Many efforts currently in motion will take time. Deals have been made for low-cost drones, but scaling them in the hundreds of thousands takes time.
Working technology still needs to be produced, analyzed and scaled, and the right financing structure needs to be applied to the right demand signal.
The defense industrial base will also benefit from the proposed $1.5T defense budget for 2027. The one-time infusion will also rebuild the arsenal for a modern era that requires swarms of autonomous, attritable drones, counter-UAS capabilities and compute for AI.
“What I'm really optimistic about is that the country and industry are game for it. Everyone gets it. This is the moment with the largest amount of venture capital investment in defense tech ever, not only in gross dollars or nominal dollars, but in real dollars, and the number of entrepreneurs entering the space has been really extraordinary. We have more work to do, but it's going. The trajectory is great.” Emil Michael, USW(R&E)
L3Harris lands $4.7B deal to ramp up missile-defense production
BLUF: L3Harris will expand the production of missile interceptor components under a $4.7 billion contract it received from Lockheed Martin.
L3Harris said its two facilities under construction in Camden, AR, will support the production of propulsion systems for PAC-3 Missile Segment Enhancement interceptor, which is designed to engage with ballistic missiles, cruise missiles and aircraft threats.
It will also modernize its solid rocket motor manufacturing processes.
Related: L3Harris Receives Landmark PAC‑3 MSE Propulsion Contract
Mach Industries Raises $600M to Scale Defense Manufacturing
BLUF: Mach Industries, a defense manufacturer developing advanced autonomous systems for the U.S. military and its allies, today announced a $600M continuation of its Series C financing, bringing the company's valuation to $3.7B.
Mach Industries is funded by Ribbit Capital, Infinite Capital, Bedrock Capital, Sequoia, and others as the company invests in its growth.
This marks a step-up in valuation for Mach Industries and provides additional capital to accelerate the company's next phase.
The financing will support continued development of platforms across long-range strike, counter-UAS, and other mission areas, while expanding the manufacturing infrastructure required to produce them at scale.
Across weapons platforms, propulsion, energetics, and advanced manufacturing, Mach Industries is building the capabilities required to move its portfolio of defense systems into scaled production.
US opens 56,000-square-foot factory to build hydrogen-powered drones at scale
BLUF: Hydrogen-powered drone manufacturing is expanding across the U.S. as Heven AeroTech opens a 56,000-square-foot production facility in Winchester, VA, establishing its first East Coast site and launching a national manufacturing network.
The opening builds on the company’s existing manufacturing operations in the Columbia River Gorge.
The Virginia facility will support production of its Z1 hydrogen-powered drone while establishing the processes and supply chains needed to expand American-made unmanned aerial systems for defense partners.
The company said it stood up its first East Coast facility within 90 days, with the opening intended to demonstrate how quickly domestic drone manufacturing capacity can be established.
Florida Has Become the New Hotbed for Defense Startup Money
BLUF: Andreessen Horowitz is the latest venture-capital firm to open a new office in the state to invest in startup defense companies.
The Menlo Park, CA-based firm said it is planning to open its new base next year in West Palm Beach, where a team will oversee the American Dynamism fund.
That vehicle has raised $1.18B for startups building technologies for national security and the industrial economy.
Florida is emerging as a major hub for companies financing the burgeoning new defense business, which is increasingly turning to startups as AI and drone warfare reshape the battlefield.
Space and defense-oriented startups have begun to pop up in South Florida, too.
“We’ve seen capital move to Florida in the last five years in droves. It really is this incredible ecosystem that’s been built up over the last several years, and it’s become an important nexus for space, military and funding.” Katherine Boyle, a16z GP
XTEND AI Robotics Rings NYSE Opening Bell as a Public Company
BLUF: XTEND's proprietary XOS operating system powers more than 12,500 deployed systems across 30+ countries and five active combat zones, with sovereign manufacturing sites in the U.S., U.K., Israel, Singapore, and Latvia.
XTEND’s software-enabled robotic systems are designed to extend the reach and effectiveness of operators while reducing human exposure in high-risk environments.
The company’s platform combines advanced robotic hardware with intuitive control, mission management, and autonomous capabilities designed to support rapid deployment across diverse operational scenarios.
Defense Contracting Is Broken. We Want to Fix It.
BLUF: Red Cell announced an OT agreement with CDAO to pilot shared savings. The agreement has a ceiling of up to $100M in the first year. Under this model, vendors cover all upfront costs and are paid a percentage of the savings they generate for the Department. If they don’t deliver, they don’t get paid.
They serve as the prime with a platform team to handle go-to-market, contracting, and project management.
Their portfolio companies provide the technology, expertise, and forward-deployed engineers to do the actual work.
If they deliver capabilities that reduce costs, it will receive a percentage of the savings and provide ongoing capabilities at a significantly lower cost.
Precedent exists for shared savings in private and public use cases. For example, this approach returned $2.5 billion to Medicare in a single year.
Related Article: Pentagon Partners with Venture Studio to Pilot Shared Savings Contract Model via $100M OTA
Our Take: We applaud any models that shift away from cost-plus approaches that don’t reward outcomes. There is undoubtedly some complexity here but kudos to CDAO for trying something novel. Red Cell has a talented team and I’m sure they will find opportunities to bring significant savings to key mission areas and DoW will learn in the process how they can refine their approach for enabling this in other areas.
What SBA’s New Size Standards Could Mean for Small Businesses
BLUF: On August 20, 2026, the Small Business Administration (SBA) proposed a major revision of the standards used to determine which firms qualify as small businesses for federal programs.
The proposal would simplify the methodology by replacing ~1,000 categories with 338 broader ones while increasing employment and revenue thresholds.
The proposed revisions will classify ~114,000 existing midsize firms as “small businesses,” including 37,000 firms already participating in federal contracting.
Growing firms could retain small-business status longer, and some companies currently classified as large could become eligible for small-business programs.
This could lead to a negative impact on the competitive positions of “true smalls” (firms with under 50 employees).
Our Take: Read the whole article if you have equity here as Jerry goes into great depth on the specific changes. Overall, this makes sense since it simplifies the work on the KOs and minimizes the disparity across NAICS codes. There still does seem to be quite a bit of randomness in terms of what companies are judged as small in terms of employee size or revenue generation. Maybe the most valid critique is that this seems more favored towards businesses staying SBs longer which maybe is contrary to intent since a strong percentage should be trying to graduate not stay below the threshold for purposes of preference (even though we understand the instinct). In terms of increases in SBs from this change, it seems the SBA estimates that it will only be about 1.8%.
Rebuilding Defense Industrial Base Requires Skilled Labor
BLUF: Rebuilding the defense industrial base also means having the right people lining up to do the skilled work at those facilities, such as welding and machining.
There are some 400,000 unfilled skilled-trade jobs in the defense industrial base today, and that number could grow to 2.5 million over the next decade.
Getting Americans into those jobs means convincing young people that skilled-trades work is good work, and meaningful.
This is why the War Department launched the Build Freedom Initiative, which promotes and funds blue-collar careers.
“Our approach is that if you don’t get kids excited in elementary [and] middle school about the trades, by the time that they graduate high school, they’re not actually interested. Our next generation of submarine builders is in middle school today ... so we’ve got to get them excited in the moment.” Michael Cadenazzi
DIU Moves to Prototype New Contract Model That Will Fast-Track Security Clearances for Startups
BLUF: DIU will soon sponsor approved startups and non-traditional companies with temporary security clearances so they can participate in classified conversations.
They will prototype a process to grant venture-backed and other small businesses with fast-tracked Facility Security Clearances (FCL) under DIU’s Bridge Program.
Through Bridge, DIU is initially going after three main friction points: classified infrastructure deficits, slow security and cyber accreditation processes, and test and evaluation-related complexities.
“If you’re a vendor that has technologies in that area, you’ll be able to apply to share your capabilities in varying formats and artifacts (maybe a product roadmap). In exchange, we’ll grant you a facility clearance. We’ll take you through the FCL process, and if DCSA determines the applicant is clearable, then DIU will hold the clearance for that vendor for a period of years.” Sarah Pearson
Pentagon Pores Over Heaps of Industry Feedback on CMMC Reform
BLUF: With over 1,000 responses (and 10,000 pages) to OSW’s RFI on CMMC, Pentagon officials are assessing the next steps.
The overall position is that the CMMC framework wasn’t dynamic enough and the Pentagon is looking to move away from “point-in-time assessments” of contractors’ cybersecurity posture.
Industry stakeholders and defense leaders have also identified government CUI designation and marking practices as a challenge for the defense supply chain.
“What we want to do is a couple of things. Compliance equals compliance. Compliance doesn’t equal security. We all know that cybersecurity is a dynamic process. It needs to be contiguous and continuous, and it needs to be at … the pace of the threat in and of itself. That’s kind of number one.”
“Manufacturers’ operational technology is critical right now, and nowhere in CMMC was there even mention around how to build cyber resilience for a manufacturing line. The handling of federal data doesn’t necessarily build cyber resilience for small to medium manufacturing companies. So, this is where we’re headed.” Kirsten A. Davies, OSW CIO
Our Take: This makes almost too much sense, we’re very glad to see this pivot. The pushback on CCMC was never about cybersecurity being unimportant, it was always that it was an overly expensive and time-consuming process for little payoff. This pivot from DoW gets closer to the real value-add for the defense supply chain.
Noble Supply & Logistics Files Chapter 11 as Defense Contract Problems Mount
BLUF: Noble Supply & Logistics and 10 affiliates have filed for Chapter 11 bankruptcy as the government-focused distributor grapples with a cash crunch, excess inventory and mounting problems involving major Defense Logistics Agency contracts.
On Aug. 27, three days before the bankruptcy filing, DLA notified Noble that it was terminating approximately $400M of orders under a separate Special Operational Equipment contract.
That came as Noble was already struggling with the fallout from another Defense Logistics Agency program that had left the distributor carrying substantial inventory and purchase commitments.
The company won the Defense Logistics Agency’s Federal Supply Group 53 contract in 2021 to provide supply chain management for fasteners, hardware and related products used across multiple weapons systems.
The contract had an estimated potential value of more than $1B and included a three-year base period, a one-year transition period and two three-year options.
Noble invested heavily in inventory to meet the contract’s delivery requirements, where many products had long lead times, requiring Noble to wait up 18 months from order for some items between purchasing inventory and receiving payment.
Our Take: While Noble likely overleveraged themselves in some of their acquisitions leading up to this contract and were impacted by an SBA size rule, it’s clear that they expected better treatment from DLA (their primary customer) and were not rewarded for taking on risk. We haven’t heard DLA’s full accounting, but this is not going to be helpful for them moving forward if they need cooperation and improved investment from industry.
Support Grows for Dark Horse SecArmy Contender Marc Andersen
BLUF: Marc Andersen, who was handpicked by Driscoll to become the assistant secretary of the Army for Financial Management and Comptroller last year, is now on a short list of candidates under consideration by the White House for the Army’s top civilian role.
Andersen’s background in finance — both in the private sector and in his current Pentagon role — could help guide the Army through a challenging near future that likely will include a continuing resolution and difficult budget decisions.
“He listens. He cares. He gets things done. He combines the heart of a servant leader with the experience of an execution-oriented business leader turning vision into resources, infrastructure, and measurable results while keeping Soldiers and families at the center.” - MSgt (ret) Pasha Palanker, Army special operations
“He’s fantastic to work with, really understands the problems and solutions needed and has a great relationship with the Hill.” - Gen (ret) Timothy Ray, BENS President and CEO
Beyond Prototypes: Army Readies Operational NGC2 Tech for I Corps
BLUF: After more than a year of experimentation, the Army is on track to provide the first operational version of its ambitious NGC2 hardware and software to the I Corps, starting with choosing which software applications to move forward.
I Corps will be the first to receive what Army officials described as the locked-in architecture: a combination of new, commercial gear as well as ruggeized, bespoke military systems.
NGC2, billed by senior leaders as a ground up rebuild of communications networks to enable everything from passing and receiving data to intelligence information, is planned to eventually be fielded to the entire service.
“The reality is, some of the principal apps of NGC2 we’ve already incorporated into our operations as we provided some C2 oversight for both 4th ID and 25th.” LTG Matthew McFarlane, I Corps commander
“My focus as we move into I Corps is to be able to get them to achieve fight tonight capability with these new tools as quickly as possible. The fight tonight challenge is we need to be able to get this capability to the point where we can do that handoff, we can make that transition from the legacy C2 system that the modern software based capability we’re providing as part of NGC2 is able to pick that up and go.” Joseph Welch, PAE C2/CC2
Army Awards $196M for Sensors in First Production Contracts Under EW-Focused Call for Solutions
BLUF: The Army awarded two EW-related contracts with a combined value of $196M, marking the first production deals under a new rapid call for solutions program focused on tech meant to help soldiers fight in the electromagnetic spectrum.
The Army awarded Heaviside Industries, a startup focused on autonomous precision munitions, $99M for its MOTH spectrum analyzer
They also awarded Research Innovations $96.9M for its AI-driven Dragonfly sensors, which will be integrated with another company’s drone.
The contracts stem from the Army’s Rapid Electromagnetic Warfare and Signals Intelligence (REWSI) call for solutions. It is meant to give the Army a vehicle for commercial EW tools, streamlined acquisition and faster access to different technologies, according to Joseph Welch, PAE C2/CC2
xTech|Search 10
The Army is seeking innovative tech solutions from eligible small businesses across the U.S. through the xTech|Search competition.
This platform offers participants the opportunity to pitch novel technology solution whether a new application for an existing technology or an entirely new technology concept to the Army, engage with the DoW, earn prize money, join an accelerator program and submit a Phase I Army SBIR or STTR proposal.
The xTech|Search 10 competition will consist of four rounds:
Concept white papers | Up to 50 semifinalists receive $5K each
Virtual semifinals pitch event | Up to 25 finalists receive $20K each
Finals demonstration event | Up to 3 winners: $200K, $100K, and $50K
Opportunity to submit a Phase I Army SBIR or STTR proposal.
The competition will award up to $1M in cash prizes throughout the competition to selected participants. Submissions are due October 19, 2026.
PrSM Program Exemplifies Rapid Delivery Through Proactive Risk
BLUF: As the Army accelerates its transformation for an increasingly contested operational environment, the acquisition enterprise is redefining how programs are developed, decisions are made and risks are owned.
The Precision Strike Missile (PrSM) program exemplifies this shift—showing how speed and relevance are achieved not by avoiding risk, but by accepting and managing it.
This emerging mindset is reshaping acquisition pathways feedback loops, and workforce expectations across PME Offensive Fires and the broader Army.
PME Offensive Fires structured the program to ensure risks are not ignored but deliberately mapped and managed throughout the acquisition life cycle.
This incremental development model allows the Army to field meaningful capability while maturing technology through successive improvements.
To meet emerging threats, the Army increasingly treats acquisition pathways as strategic tools rather than rigid regulatory lanes.
The PrSM program also demonstrates how pathways within the Adaptive Acquisition Framework can be leveraged to align capability needs with efficient development approaches.
PrSM Increment 2 program is using the Middle Tier of Acquisition – Rapid Fielding (MTA‑RF) pathway to deliver an early capability to engage moving maritime targets with residual PrSM Increment 1 capability.
This decision—made at the intersection of risk, urgency and technical readiness—shows how acquisition pathways can serve as agile instruments for delivering timely capability.
“By prioritizing operational speed, iterative development and informed decision-making, the program has achieved a healthy balance between operational urgency and technical and programmatic risk through an incremental development approach.” LTC Daniel Newell, PrSM Product Manager
Our Take: This is exactly why the Middle Tier of Acquisition pathway was developed to enable acquisition professionals to balance speed and risk, rapidly demonstrate and produce meaningful capabilities with testers and users, then iterate.
Army Selects Lockheed, Boeing-Anduril Team For Next Phase in IFPC Inc 2 Competition
BLUF: The Army has selected Lockheed Martin and a Boeing-Anduril team to move onto the second phase of the Indirect Fire Protection Capability (IFPC) Increment 2 interceptor prototype program. The companies have been selected to advance to the demonstration phase of the development effort.
Other Army News:
Army Not Walking Away From UAVs Despite Reverting Drone Unit Back to Infantry
Repair Forward, Replace Fast: An Army Sustainment Model That Keeps More Drones in the Fight
Our Take: The PAEs are the linchpins of the new Warfighting Acquisition System. See the Navy’s (and the rest of the DoW’s) PAEs on Digital Pentagon.
Navy Looks to Future with PAE Model, Embrace of Autonomy
BLUF: Last year the Navy began rolling out the new Portfolio Acquisition Executive (PAE) strategy with PAE RAS in December, followed by five additional PAEs in March. These are noteworthy for the future of the Navy and the maritime industrial base.
The aim of the PAE model is to establish a single senior leader responsible for each portfolio and to move the service’s acquisition strategy from one that is compliance-based to one that is outcome-focused.
The ultimate outcome, as laid out in the Navy’s shipbuilding plan for FY27, is a golden fleet that will add numbers to the Navy’s fighting force, both manned and unmanned vessels, while also igniting a renaissance in American shipbuilding.
A strong industrial base is not just an economic goal, it is a national security imperative.
“Our acquisition workforce is critical to our warfighting capability, and not being deployed does not excuse us from having a warfighting ethos. Each PAE will operate with a digital-first mindset. We will align on data and eliminate non-value-added layers of program reviews and bureaucracy to identify risks earlier and enable faster and more informed decision-making.” VADM Seiko Okano, ASN/RDA PMD
“We are shifting from a bureaucratic, peacetime administration to an agile, responsive warfighting procurement engine. We are streamlining decision-making because our competitors are not waiting for us to finish paperwork or check those milestone documents off.” Sam Taylor, Acting Deputy PAE
“The reform asks the government to do more, not less. Move faster, engage a wider set of vendors, run more demonstrations, evaluate more technology. Consolidating authority makes decisions cleaner, but it does not by itself create more hours in the day for the people making them. Structure and capacity are two different problems, and I think the second one is going to determine whether the first one delivers.” Daniel Kreegar, Voltari Electric VP
“Our adversaries can procure or develop inexpensive drones that pose a significant threat to traditional sea power lines. The ability to have great persistence over longer times, or engage in a higher threat environment without requiring human presence on-site, represents a huge force multiplier potential for the Navy.” Jason Marshall, Metal Shark Boats EVP of Programs
DoW Announces Navy’s First Advanced Nuclear Microreactor Deployment at Naval Weapons Station Crane
BLUF: The DoW announced the planned installation of the State of Indiana's first advanced nuclear Micro Modular Reactor (MMR) at Naval Weapons Station (NWS) Crane no later than September 2028.
This action implements Executive Orders which advances a clear mandate to restore American nuclear leadership globally, remove barriers to innovation, and rebuild the domestic nuclear workforce.
The Army, Navy, OSW, and Indiana through this project will secure continuous power for one of the Nation's most important defense technology and weapons installations, create highly skilled American jobs, strengthen the American nuclear supply chain, and rebuild the industrial capacity required for national defense.
“The DoW is rapidly fielding next-generation energy solutions for our warfighters. We are unleashing the American nuclear industrial base to ensure our military installations possess the resilient infrastructure required to maintain uninterrupted operations.” - Emil Michael, USW(R&E)
“Our standard is to field and deploy capability within 24 months or less. The Department has a clear mandate to move advanced nuclear power from promise to deployment. We turned that mandate into a focused sprint within our Contested Logistics Critical Technology Area to deliver this capability on time and on target, strengthen the American nuclear industrial base, and secure a decisive advantage for our warfighters.” - Mike Dodd, ASW for Critical Technologies
Related: Why the Pentagon picked an Indiana Navy base to host a nuclear microreactor
Everything We Know About The U.S. Navy’s Submersible Drone Iran Just Captured
BLUF: The Navy lost a Dive-LD UUV and it is now in Iranian hands.
An underwater drone operated by U.S. forces malfunctioned. It was surveying regional waters in support of ongoing operations. The defective drone was an older model that neither collected sensitive data nor carried any classified sonar or radar equipment. U.S. operations in area waters continue.
Anduril statement: “Dive-LD is an attritable autonomous system, meaning it is designed from the outset to operate in dangerous environments where loss of the vehicle is an expected possibility. Its purpose is to keep warfighters out of the most dangerous parts of the undersea mission. This vehicle had already delivered significant value operating thousands of hours in months-long operations in CENTCOM.”
The UUVs can also remain at sea for around 10 days at a time, depending on their exact configuration, and do so with a high degree of autonomy.
Navy SEAL divers, robot boats and specialized underwater craft into the perilous strait for a four-month mine-clearance mission. A trio of Independence class Littoral Combat Ships specifically configured for mine-sweeping duties had been deployed before the start of the conflict.
Related: Anduril Dive-LD Drone Was Dead in the Water Before Iran Nabbed It
Autonomy, Strategy, and the Limits of an Unmanned Fleet
BLUF: Without careful consideration of the limits of robotics, the Navy risks building brittle uncrewed platforms and falling short of its uncrewed objectives.
CNO’s Hedge Strategy seeks to scale combat mass and absorb operational risk.
Yet this approach relies on a singular, fundamentally fragile assumption: that unmanned systems will mature with the speed and reliability of digital technologies such as microprocessors.
The technological immaturity of robotics and the fundamental challenges of system integration remain significant barriers.
A viable path would prioritize a manned-autonomy bridge force of austere, risk-tolerant ships that fuse existing but untested technologies with operational credibility.
The hybrid fleet concept rests on a deeply technology-centric assumption that conflates pure digital processing with physical robotics.
Drones have transformed the battlefield but in an evolutionary rather than revolutionary fashion.
What is proven is the operational utility of autonomy in small, short-duration, mission-focused systems, especially for ISR; loitering munitions; and electromagnetic decoys.
Today’s marine engineering and combat systems are not designed to function autonomously over long durations.
The ideal platform to operationalize manned-autonomy teaming at scale would resemble a minimally manned variant of the MUSV employed as a versatile and containerized weapons truck that relies on embarked sailors to maintain its resilience across long-range operations.
A fleet of 25 such vessels could collectively exceed the practical antisurface missile capacity of a surface action group composed of three to five Arleigh Burke–class destroyers, while remaining geographically dispersed and tactically elusive.
Our Take: The Navy is not going all in on unmanned systems and is still behind in fielding a set of operationally useful platforms. A hybrid fleet is the right goal, but optionally manned designs often impose SWAP and performance penalties that erase the advantages of purpose-built unmanned vessels. Some missions, even short-range, short-duration ones are better performed by dedicated UxVs, while others require mixed manned-unmanned formations. The Navy should accelerate fielding of UxSs for the missions they can already do well rather than defaulting to compromised, human-ready hulls. Strategy should evolve to match platform type to mission, not force every ship to split the difference between two different design problems.
America’s Biggest Military Shipbuilder Taps Robotics to Build Navy Warships Faster
BLUF: HII is targeting a 15% increase in shipyard throughput through workforce, infrastructure and physical AI investments.
The strategy combines workforce expansion, infrastructure upgrades and a broader use of technology, including physical AI, in shipbuilding operations.
HII said its shipyards increased throughput by 14% in 2025, while around 40 ships are currently under construction or modernization at its Ingalls and Newport News facilities.
HII’s plan focuses on three areas: hiring and retaining skilled workers, modernizing shipyard infrastructure, and expanding the industrial base supporting naval construction.
One of the more notable elements is the company’s planned use of physical AI in shipbuilding. Unlike software-based AI systems that primarily process information, physical AI is designed to interact with and operate within the physical world.
In a shipyard, that could include applications involving robotics, automated production, inspection and other manufacturing processes.
HII is pairing these investments with broader capital spending intended to increase production capacity.
Our Take: Robotics, automated production, inspection, and physical AI are essential if U.S. shipbuilders are going to deliver warships at the speed and scale the Navy now requires. Legacy yards long lagged on automation because of labor dynamics, underinvestment, and a regulatory environment built for one-off, high-mix work rather than serial production.
Growing strategic pressure and industrial competition are finally forcing firms like HII to modernize, pairing robots with a larger skilled workforce and a distributed supplier network rather than treating automation as a substitute for people. If physical AI can reliably handle welding, prep, and inspection without sacrificing Navy-grade quality, the 15% throughput target becomes a stepping stone instead of a ceiling.
Navy Selects L3Harris VAMPIRE for Littoral Counter-Drone Defense
BLUF: L3Harris Technologies has been awarded a contract to deliver its VAMPIRE (Vehicle-Agnostic Modular Palletized ISR Rocket Equipment) counter-unmanned system to the U.S. Navy for littoral defense against drone threats.
The VAMPIRE system is a self-contained weapons solution that delivers advanced reconnaissance and precision strike against drones and remotely piloted platforms across domains.
L3Harris is also delivering VAMPIRE systems to the Army. Separately, the company unveiled its Wraith Shield software earlier this year, which provides a radio-as-a-sensor capability to defeat small drones and can be incorporated with VAMPIRE and Drone Guardian systems to deliver layered defense against UxS threats.
Navy Accelerates Tomahawk Production
BLUF: The Navy is rapidly accelerating Tomahawk cruise missile production to meet urgent inventory demands, leveraging a legacy 2019 SLAM-ER contract to fast-track new warhead casings by 2027.
Tomahawk production is slated to receive a major boost with a new production modification tacked onto an existing 2019 contract for SLAM-ER cruise missiles.
The move to fold Tomahawk warhead production into SLAM-ER production is another case of accelerated manufacturing supporting inventory replenishment across major U.S. military weapon systems. The newly delivered warheads will be installed on both newly built and recertified Block IV/V Tomahawk missiles.
Navy Plans Air-launched Torpedo for China-Focused Anti-sub Warfare
BLUF: The Navy is looking to make anti-submarine warfare less dependent on a small number of specialized aircraft by developing a compact torpedo delivery system that could be carried by carrier-based aircraft and unmanned platforms.
The effort centers on the Silent Anvil Air-Launched Torpedo (SAA-LT).
Rather than simply replacing an existing torpedo, the program is aimed at expanding the number and types of aircraft that can participate in long-range submarine hunting.
The Navy wants SAA-LT to remain in the roughly 250-pound class, with a maximum weight of 268 pounds, a length of up to 70” and a diameter of 7.5'“.
Those dimensions are intended to make the weapon compatible with a much wider range of aircraft and unmanned platforms than larger air-launched systems.
Navy’s Next-Generation Fighter Decision to Be Unveiled Soon
BLUF: The DoW has decided which company will make the Navy’s next-generation stealth fighter and could announce the winner in the coming weeks or sooner.
Boeing and Northrop Grumman are competing for the contract.
Some Pentagon officials had sought to delay it by up to three years, citing concerns about engineering and supply chain capacity.
Congress pushed back, earmarking $750M for F/A-XX in the massive tax-cut and spending bill signed into law in 2025 and an additional $1.4B in FY26.
Other Navy News:
Lower-Tier Suppliers a Hidden Risk to Navy’s Shipbuilding Ambitions
US Warship Heads for Major Overhaul as Navy Upgrades Its Destroyer Fleet
US Marines Field Tempest Counter-UAS Vehicle For Mobile Protection Against Drone Threats
BLUF: The Marine Corps is fielding ten V2X Tempest counter-UAS vehicles under a $19M contract to provide maneuver units with a mobile missile-based defense against Class 2 and Class 3 drones.
The procurement adds a distributed kinetic layer that can operate alongside existing Marine air-defense and electronic-warfare systems while limiting exposure through rapid repositioning.
Tempest combines a Can-Am 4x4 platform with two AGM-114L Longbow Hellfire missiles and a RADA RPS-42 radar, allowing crews to receive external targeting data, engage priority unmanned threats and relocate after launch.
The contract also covers software management, spares, training and support services through August 2027, supporting integration of the system into the Marine Corps' wider counter-UAS network.
First Look at General Atomics’ Wildfire, Its Successor to the MQ-9 Reaper
BLUF: General Atomics has given us the first look at its new Wildfire drone design for an armed medium-altitude, long-endurance (MALE) uncrewed aircraft in response to new Air Force requirements for a lower-cost successor to the MQ-9A Reaper.
The rendering depicts the drone armed with four Joint Strike Missile (JSM) cruise missiles which can be employed as an anti-ship or land-attack weapon.
The Air Force shared last week that it is targeting a roughly $10M unit cost for the MMA drones, not including sensors and certain other systems.
The Air Force wants delivery of at least 20 drones by 2029 and eventually plans to buy up to 180.
Air Force MMA Requirements
“Perform the same general intelligence, surveillance, and reconnaissance (ISR) and strike missions as the MQ-9A. To that end, stated program requirements to date include a speed of at least 200 knots true airspeed, a munition and sensor payload capacity of at least 2,800 pounds, an unrefueled combat radius of at least 2,300 nautical miles with payload, the ability to self-deploy one-way at least 8,000 nautical miles, and the ability to operate from runways no longer than 6,000 feet. The MMAs also need to be highly modular and use open architecture mission systems to make it easier to integrate new capabilities and functionality down the line.”
Our Take: We still see significant overlap in some of the potential requirements for CCA Inc 2 especially when it comes to the weapons payload. This aircraft makes more sense (in terms of cost and complexity) as a local ISR capability. It appears overly challenging to reach the desired price point given all the requirement demands.
Air Force Seeks ‘Rapidly Deployable’ Drone Swarms for Base Security
BLUF: The Air Force is looking to turn its cargo planes into launch platforms for drone swarms to then autonomously defend any Air Force bases — and any aircraft parked there — from attack.
The Air Force is looking for a 3-for-1 deal.
One mission is to provide transport aircraft with onboard intelligence, surveillance and reconnaissance capabilities by enabling them to become high-altitude drone motherships.
Another mission is “self-protection for Mobility Air Forces operating in contested airspace.”
A final mission is advanced disaster response, large-scale search-and-rescue, and commercial aviation monitoring.
The Air Force wants the same AI drone software to handle all missions.
This means software should be adapted to seamlessly transition from aerial deployment into a coordinated flight pattern and autonomously execute a perimeter defense monitoring route.
Our Take: This is ambitious given the different characteristics that drones can have but it’s a noble vision and one that we look forward to seeing progress on - a drone mothership is long overdue.
Reversing the Propulsion Stagnation: Sneden Outlines the Path to Speed and Scale
BLUF: Acknowledging the challenges of the past three decades, John Sneden (PAE for Propulsion) emphasized that the Air Force is actively turning the page and building momentum for the future of its propulsion program.
At the core of Sneden’s vision is a shift from fragmented, program-specific stovepipes to a horizontally integrated propulsion portfolio. He is organizing the workforce and portfolio around three areas:
The Fielded Fleet — Focused on strengthening supplier capacity, resolving single-source vulnerabilities, executing long-term multi-year sustainment contracts, and stabilizing operational readiness across active aircraft fleets.
The Fast Fleet — Accelerating the delivery of upgraded capabilities at the speed of relevance through digital twins, advanced and additive manufacturing, and rapid prototyping efforts.
The Future Fleet — Serving as an innovation incubator for next-generation capabilities, while establishing Government Reference Architectures (GRA) to prevent vendor lock and preserve competition.
Sneden highlighted several initiatives already delivering promising results:
Digital twins are rapidly moving from concept to reality. The completed digital twin for the F100 engine recently validated a major repair in a virtual environment, saving approximately 1,000 engineering hours.
Advanced manufacturing and additive techniques have achieved dramatic improvements, including a 50 percent reduction in unit costs and a 30 percent increase in manufacturing throughput on small turbine engine programs.
Flexible contracting vehicles like the Propulsion Consortium and the Advanced Propulsion Acquisition Contract — are creating faster pathways for technology maturation and broader industry participation.
A planned 10-year joint enterprise sustainment contract that links four Services across the Department of War aims to provide the stable, predictable demand that industry needs to invest with confidence.
“After a period that produced only one new non-derivative military aircraft engine since the 1990s, we are embracing a bold transformation designed to restore America’s propulsion edge. We are accelerating our technology pipelines and fundamentally strengthening our business partnerships. We’re one enterprise executing one unified strategy to deliver absolute propulsion advantage in the United States Air Force and our industry partners.” John Sneden, PAE Propulsion
Our Take: This sounds very promising. We look forward to reporting on more of the success from John’s shop. Propulsion advances are directly correlated to gaining the range and efficiency needed to operate successfully over long distances such as are required for the PACOM AOR.
Hypersonic Aircraft Startup Adding Anduril’s Autonomy Software for 2027 Flight
BLUF: Anduril Industries and Heremus have agreed to integrate Anduril’s autonomy software onto Hermeus’ hypersonic demonstrator aircraft “Quarterhorse”—uniting two technologies that have drawn keen interest and investment from the Air Force.
They plan to fly the Quarterhorse Mk 2 aircraft using Lattice autonomy in 2027.
Hermeus is building a reusable aircraft that can reach hypersonic speeds.
The speeds at which that aircraft will operate will require beyond human-like decision-making speeds.
“We’re going to do a lot of software and hardware in the loop testing, and a lot of independent validation of what we are doing on the route generation side, and appropriately, I think the monitoring of execution of those routes when we’re at those high speeds on the build-up phase all the way to flight.” Brett Darcey, VP for Mission Autonomy at Anduril
Our Take: This is a great partnership that we are excited about.
Air Force Wants AI To Find, Follow, And Fight Hostile Emitters
BLUF: Air Force is turning to artificial intelligence to help its aircraft detect and track electromagnetic emitters at machine speed.
The Air Force awarded Perceptronics Solutions and Pacific Defense a SBIR Phase III contract to advance AI and machine learning for airborne EW systems.
Under the award, the companies will mature AI-powered emitter-tracking algorithms, integrate electronic attack techniques, and test how the technology performs in contested and congested electromagnetic environments.
Air Force Puts AI Inside Battlefield Decision Loop
BLUF: A new Air Force experiment has tested how AI could help shorten the time needed for personnel to assess and respond to battlefield developments.
The latest two-week Decision Advantage Sprint for Human-Machine Teaming (DASH) brought together air force and space force personnel with industry developers to evaluate AI-enabled command-and-control (C2) tools.
The experiment also explored ways to accelerate the development and integration of new C2 capabilities.
Our Take: DASH has identified promising ways for the Air Force to improve operations. AFRL had described DASH as a model that allows proof of concept, early operator feedback, and then delivery of “chunks of warfighting capability” in a rapid, repeatable cycle. What we are less clear on right now is how DASH is leading to real contract awards, specifically production ones that allow scaling of successful demos.
Air Force Wants to Retire the A-10. The BRRRRT Act Would Keep 126 Flying
BLUF: Congress is trying to preserve at least 126 A-10 Thunderbolt II aircraft through fiscal 2033 with the bipartisan BRRRRT Act would require the Air Force to rebuild support programs that the service has already started dismantling.
The bill would prevent additional retirements until the defense secretary certifies that an aircraft or combination of systems has entered service, become fully operational, and can perform the A-10’s missions.
It would protect certain retired A-10s from being stripped for parts, preserve aircraft that could return to service or transfer to an ally, restart an A-10 demonstration team and protect the pilot training and weapons school pipelines.
Our Take: Our friend Gus Garcia wrote an article not long ago on “A Disciplined Case for the A-10 The Air Force Won’t Make” where he compellingly wrote about the virtues of keeping the aircraft and schoolhouse intact until a new aircraft was made available. This bill seems to be a response to that plea. We would love to see the Air Force bring back the Light Attack Aircraft program that could execute many of the same CSAR, c-UAS and CAS missions that the A-10 has excelled at over the years with a new platform that was easier to manufacture, maintain and scale.
Other Air Force News:
US Space Command Should Always Be Led by a Guardian
Lt. Gen. David A. Deptula, USAF (Ret.) and Charles Galbreath
BLUF: A new SPACECOM commander will need to be nominated soon to replace General Whiting. Whoever they choose, it has to be a Guardian—and so should every successor thereafter.
The reason is operational, not parochial: Guardians are the military professionals best prepared to integrate spacepower into global, multi-domain operations, and the Space Force exists to generate the nation’s combat-ready space forces.
Space is no longer an uncontested domain, merely enabling others; it is a warfighting domain and capable of delivering decisive effects.
A Guardian commanding U.S. Space Command brings both the depth to fight for space superiority and the breadth to lead Soldiers, Sailors, Airmen, Marines, and allied forces as a joint team.
The move to Huntsville should deepen U.S. Space Command’s and the Space Force’s partnership with the Army, but should not blur responsibility for leading the nation’s space warfighting enterprise.
Our Take: We 100% agree.
Space Force Expects to Spend $17B More on Launch as Demand Soars
BLUF: The Space Force expects its launch program to grow by 91 missions and nearly $17B by FY32 as demand for national security space capabilities soars.
The growing need is driven in part by the Space-Based AMTI, Space Data Network, SDA MT/MW and Golden Dome proliferated space architectures.
Whether these satellites launch on time hinges, in part, on the availability of certified, ready rockets.
To date, only SpaceX and ULA are eligible to launch satellites for Lane 1 & 2 though ULA’s Vulcan rocket is currently grounded due to an anomaly.
Blue Origin’s New Glenn is eligible for Lane 1 flights and is on the certification path for Lane 2, but it, too, is grounded after a rocket exploded on the pad in May.
That leaves SpaceX’s Falcon 9 and Falcon Heavy as the only rockets available to support NSSL missions at the moment.
This has driven delays including for the NG-OPIR satellite, originally slated for March, has now been pushed to no sooner than October.
Our Take: This is a real problem that Space X is the only launch provider currently available especially since it could take multiple years for new launch providers to be able to launch Lane 2 national security missions.
Space Force Taps GDMS for $99M MUOS Ground Segment Upgrade
BLUF: General Dynamics has been awarded a $99.3M task order to modify the Mobile User Objective System, or MUOS, ground segment to support two service-life-extension satellites.
The service life extension effort aims to keep the MUOS waveform available worldwide into FY35 and the supporting ground system into FY40.
The five MUOS satellites now in geosynchronous orbit were launched between 2012 and 2016.
Space Force Taps Texas Site for New Deep Space Radar, Targets Operations In 2030
BLUF: The Space Force has selected a site in north Texas as the preferred location for the final site of its new Deep Space Advanced Radar Capability.
Pending final approvals, construction on the new radar and accompanying facilities will start at Lake Kickapoo, Texas, in 2027.
The U.S., UK, and Australia are working together on the DARC program to boost their ability to monitor geosynchronous orbit, which extends out to 22,000 miles above Earth.
Consisting of three radar sites, DARC will give the allies a 24/7, all-weather view of the entire GEO belt—greater coverage than is now possible with any other ground-based system.
Under a trilateral agreement, the Space Force is leading development, but the agreement allows the U.K. and Australia to operate and host sites and participate in joint operations and exercises.
Golden Dome Orbital Interceptors Face Daunting Economics
BLUF: A planned constellation of U.S. space-based missile interceptors could cost tens to hundreds of billions of dollars while remaining vulnerable to relatively inexpensive countermeasures, according to a new study.
The study concludes that space-based interceptors would impose substantial economic and industrial costs while creating a defense that Russia, China and other adversaries could adapt around.
The Space Force is developing a proliferated constellation in low Earth orbit that it says could engage missiles during boost, midcourse and glide phases of flight.
The service awarded 20 prototype agreements to 12 companies in late 2025 and early 2026 with a potential combined value of up to $3.2B.
For a scenario involving only a handful of North Korean ICBMs, the researchers estimate that under reasonable conditions, including a 30-second interceptor-release window, would require more than 5,000 interceptors.
A central argument is that the economics are partly controlled by the adversary.
The shorter a missile’s boost phase, the less time an interceptor has to reach it and the more satellites must be spread around Earth to ensure one is close enough when a launch occurs.
That means changes to adversary missiles or operating tactics that compress the engagement window could force the U.S. to add thousands of interceptors.
Our Take: This is not new information for the GD4A team. They recognize the need for thousands of interceptors hence the focus on keeping them lower cost. This also is why they recognize the need to pair defense with good intelligence. It’s hard for any country to launch missiles without some type of indications or warnings and that will have to play in the calculus on the total numbers in the constellation.
Space Force Backs Startup Seeking to Change How Satellites Move in Orbit
BLUF: Space Force is putting $50M behind Space Kinetic who is developing an unusual way to dispatch small spacecraft from a larger vehicle in orbit.
The company is developing Whirlwind, an electromechanical system designed to release small spacecraft from a host vehicle at high velocity.
The idea is to give those spacecraft an initial change in trajectory without requiring each one to carry the propulsion and propellant needed to make that maneuver on its own.
The company describes Whirlwind as a space maneuverability and deployment system built around a “one-to-many” architecture, in which a single host could dispatch multiple smaller vehicles for different missions.
Our Take: This could be a game changer if the economics are right.
U.S. and Allied Burden Sharing: A Progress Report
BLUF: Many allied governments across Europe and the Asia-Pacific have significantly increased defense spending and introduced initiatives aimed at strengthening domestic industrial capacity.
CSIS examined trends across NATO and the Asia-Pacific and found significant growth in military expenditures, procurement, and industrial initiatives.
In European NATO countries and Canada, defense spending has grown by over 50 percent since 2022.
Poland, the Baltics, and Scandinavia have increased their defense spending by 71 percent, 134 percent, and 126 percent, respectively, since 2022.
Asia-Pacific partners are likewise raising defense expenditures—albeit at a generally slower pace than NATO countries.
Japan has increased defense spending by 60 percent in the past decade, for example, although it started at a very low level in absolute terms.
Our Take: Read Jerry and Celia’s full paper. It’s intriguing how much focus national security spending has gotten across the globe.
Mateship Under Pressure
BLUF: Current wars in Europe and the Middle East matter, but the central pacing challenge for the United States and its Pacific partners remains China. Washington cannot meet this challenge alone however.
Working together, the U.S. and its allies and partners can more effectively deter revisionist powers across the globe and generate the combined capability necessary for success—from the tactical to the strategic level.
Meeting that challenge will not only require new platforms and sharper strategies, but also allies that know each other, trust each other, and can fight together.
For the U.S, no Pacific partner fits that description more than Australia: a country with whom we have long shared a history of similar values and democratic DNA.
In the Pacific, strength begins with lethality and positional advantage— and, from a logistics perspective, manufacturing capacity and supply chain resilience.
For the U.S. a crisis in the region is an away game fought across thousands of miles of ocean against a peer competitor (possessing equal or better technology) with the ability to contest movement, communications, logistics, and access at every point along the way.
Geography makes Australia indispensable. As key terrain in the Pacific, Australia’s northern bases, ports, training areas, and industrial capacity make it central to any serious strategy of denial, especially if U.S forces cannot rely solely on trans-Pacific resupply.
Strategic alignment is most enhanced when two nations develop, procure, build, field, stockpile, and sustain capabilities together.
The objective is not dependence, but complementary strength: two sovereign militaries capable of acting independently when required and together when it matters most.
Our Take: This is a great piece and cogent reminder of why we need strong relationships between allied militaries even when there is political tension. The training and collaboration that’s done today will reap rewards on the battlefield.
Havoc Heads to Taiwan
BLUF: Havoc inked a deal with Taiwanese shipbuilding giant CSBC to integrate Havoc’s collaborative autonomy software with CSBC’s USVs in Taiwan.
Sweden to Buy Lockheed Martin’s Himars Artillery Rocket System in $729M deal
BLUF: The deal will be for around 10 Himars (High Mobility Artillery Rocket Systems) systems, plus ammunition. Deliveries are expected to start in 2027.
Lockheed Martin Secures $950M Australian Air Battle Management Contract
BLUF: Lockheed Martin Australia has been awarded a contract to sustain and expand Australia’s joint air battle management system as part of a broader Australian effort to improve its air and missile defense capabilities.
Lockheed Martin says the enhancements under Australia’s Project AIR6500 Tranche 2B will establish a “scalable path” for future improvements and integration of future technological advances.
The enhancements to the AIR6500’s core architecture include advanced C2 aids, expanded comms, and cyber‑security.
Anduril Doubles Down on Poland with Autonomous Aircraft Pitch for F-35, Apache
BLUF: Anduril Industries has teamed up with Poland’s state-run defense giant PGZ for local assembly and production of the surface-launched Barracuda-500M cruise missile.
The company is pitching its Fury autonomous combat aircraft and the Thunder autonomous attack rotorcraft for the nation to be the first European user.
Anduril envisions the autonomous aircraft accompanying the country’s envisioned fleets of F-35 fighter jets and AH-64E Apache attack helicopters.
Shield AI Signs X-BAT Letter of Intent with Poland’s PGZ and WZL-2
BLUF: At a signing event at MSPO, Shield AI, Polska Grupa Zbrojeniowa (PGZ) and Wojskowe Zakłady Lotnicze (WZL-2) signed a letter of intent to partner on the design, production and delivery of X-BAT, and on sustaining it in Poland.
UK 2026 Space Strategy
BLUF: The U.K.’s strength in space has always been amplified by partnership and through deep collaboration with allies old and new. We will deepen those partnerships, forge new ones, and work together to deter threats, shape the rules that govern space, and ensure this domain remains open, safe, and sustainable.
Our space sector is already one of the most innovative, productive, and commercially driven in the world.
Our scientists and engineers are building instruments that peer to the edge of the universe and pioneering the technologies that will service satellites in orbit.
Through this strategy, backed by a serious, fully funded delivery plan, we are acting decisively to unleash that potential, deliver greater capability to:
Protect and defend the United Kingdom
Scale up the commercial space businesses
Germany Fears France’s Palantir Rival Risks Creating a New Dependency
BLUF: France and Germany want to avoid relying on American military AI technology, but Berlin is wary that a European alternative could simply replace one foreign dependency with another.
Paris is promoting Arcadia, a French-built system that also uses AI to pull together battlefield data, enabling commanders to make quick decisions. It is already being tested by the French military and is pitched as an alternative to Maven.
Germany sees promise in the French approach, but internal German government notes show Berlin is wary of replacing dependence on an American company with reliance on French technology.
The assessment notes that the data and technology powering Arcadia come exclusively from French defense companies — including Mistral AI, Safran.AI, Thales and Airbus.
Our Take: Sounds like if France wants EU adoption, it may need to include non-French companies in the mix. It probably should have anticipated this outcome.
Finland Completes Border Fence to Protect NATO’s Eastern Flank
BLUF: Finland finished building 124 miles of fence along its border with Russia, strengthening surveillance along the longest stretch of NATO boundary against its main adversary.
The barrier was erected to protect against irregular migrant flows.
In addition to a fence 15 feet high built in sections across dozens of locations, it is equipped with technical surveillance systems and flanked by patrol roads.
China’s Submarine Crews Are Using Warship Sounds to Improve Target Tracking
BLUF: China’s People’s Liberation Army Navy (PLAN) has built a database containing acoustic information on warships that can help submarine crews identify and reacquire surface targets in difficult underwater conditions.
Poland, Canada Seal Defense Cooperation Pact, to Finalize Drone Deal
BLUF: Poland and Canada have signed a defense cooperation agreement aimed at enhancing bilateral ties, with a focus on joint exercises, military training and stronger relations between their local defense industries.
Polish soldiers will head to Canada to participate in Arctic drills.
Aside from the training agreement, both countries will also finalize a drone deal that includes a host of platforms produced by WB Group, including FlyeEye mini-drones, Warmate loitering munitions and Gladius strike and recon aircraft.
Commission on the Future of the Navy Hearing at NPS
Watch on YouTube now.
Pentagon’s $1.5B Reprogramming Would Shift Money to AI Center, MV-75 Tiltrotor
BLUF: The Pentagon has requested permission from Congress to reroute about $1.5B in FY25 & 26 funds for a “high priority” AI initiative, for new Army helicopter program and for funds related to programs affected by Iran operations.
The most expensive line item is a request to shift $600M in FY26 funds to “immediately” build and equip a top secret, high-performance AI compute center.
The MV-75 Cheyenne tiltrotor would be the second biggest recipient of funding if the reprogramming request is approved by Congress to avoid a stop-work order.
Includes $18M for six additional long-endurance drones, along with multi-mission payloads, attrition air vehicles, support equipment and spare parts.
Adds $36M to accelerate the Common Tactical Command and Control system and support testing of counter unmanned aerial system (C-UAS) technology.
Shifts $40M into the Pentagon’s acquisition and sustainment enterprise for “Cyber Integration and Logistics Systems Modernization.”
Our Take: Without having any of the details, it does seem that the AI Compute Center could have been funded using other approaches since there are efforts to permit data centers on military bases and this is commercial-oriented technology. The other requests make perfect sense even if using counter-terrorism funds as a source at this particular time is less than ideal.
See our NDAA and budget posts for the latest insights and analysis.
Future of the Navy Hearing at NPS | Matt Shortal
National Commission on the Future of the Navy
Inside America’s Fight for Drone Dominance | Travis Metz
School of War Podcast
Modernizing Shipbuilding: Tech, Innovation, Future of MIB | ADM (ret) Rick Hunt
NDIA Emerging Tech Horizons
Building Minimum Useful Products | Adam Warmoth
Crossing the Valley
Inside the US Navy Drone Sub Iran Just Captured
Sandboxx
Air • Space • and Cyber Conference
AFA • Sep 14-16 • National Harbor, MD
Fixing Shipping and Shipbuilding: Plotting the Course Ahead
Hudson • Sep 16
Creative Disruptors by the Lakes - Feat. Pete and Matt - SOLD OUT!
CDF • Sept 18-19 • Minnesota
Unmanned Maritime Systems Tech
SAE Media • Sep 14-16 • Arlington, VA
Undersea Warfare Conference
NDIA • Sep 21-23 • Groton, CT
UAV Technology
SAE Media • Sep 22 • London UK
Resilience Conference
Oct 5-6 • London
Land Forces
Oct 6-8 • Perth • Western Australia
DEFCON
Stanford • Oct 7 • Silicon Valley, CA
Apex Europe
Oct 7-8 • London
AUSA Army Annual Meeting and Expo
Oct 12-14 • Washington DC
