Absent its own acquisition or technology budget, U.S. Central Command has a need for $150 million in fiscal year 2026 to purchase new and emerging systems and technologies to test and evaluate outside of similar activities the military services do.
This operational testing, in what is a “live ‘battle lab’” environment in the Middle East, would inform the military services’ programs, provide feedback for operators, and lower risks associated with these systems, outgoing CENTCOM Commander Gen. Michael Kurilla says as part of his command’s unfunded priorities list (UPL) delivered to Congress in late June.
“Despite being on the operational front lines, Combatant Commands (CCMDs) have a limited role in shaping the capabilities required to defeat a dynamic threat,” Kurilla wrote in a June 24 letter to House Armed Services Committee Chairman Mike Rogers (R-Ala.). “Without acquisition authority or a technology development budget, CCMDs rely primarily on the Military Services with some support from external agencies and other small innovation eco-system entities to respond to emergent needs.”
The Senate in late June confirmed Navy Vice Adm. Brad Cooper to be the new commander of CENTCOM. Cooper is currently deputy commander of CENTCOM.
In his letter to Rogers, Kurilla highlighted that U.S. adversaries in his region “have exhibited an alarming penchant for rapidly adapting commercial and emerging technologies to target US and allied interests,” adding that similar adaptations elsewhere demonstrate CENTCOM will have to continue to face these challenges.
Of his six priorities, funding for the accelerated technology testing is Kurilla’s last on the list.
CENTCOM’s overall UPL provided to Congress is valued at $732 million and includes $215.7 million for upgrades to the F-16 fighter’s Integrated Viper Electronic Warfare Suite, Kurilla’s top priority, $179.1 million for denial and deception capabilities, $118.6 million for “Building Enduring Cyber Advantage” that consists of Maven, cloud computing, zero trust architecture, and data analytics, $46 million for tactical unmanned aerial vehicles and operations in counter surveillance reconnaissance, and $22.5 million for commercial satellite communication transponder leases for command and control using geostationary satellites.
Classification remains a barrier to U.S. space information sharing with allies, according to the Government Accountability Office (GAO).
“DoD has grappled for years with many of the challenges that currently affect combined space operations with allies and partners—including the over classification of space-related information and the ability to share information,” according to a new GAO report, Space Operations: DoD Is Pursuing Efforts to Collaborate with Allies and Partners but Needs to Address Key Challenges, GAO-25-108043. “The department has efforts underway to address some of these challenges, but they are complex and will take time and monitoring to address fully.”
Classification is even a problem for U.S. space information sharing with other countries in the FIVE EYES alliance–Canada, the United Kingdom, Australia, and New Zealand. “Australian officials identified classification barriers as one of the challenges in working with the United States on space operations and activities,” GAO said. “The officials noted that while Australia’s designation as a FIVE EYES partner helps with information sharing, the United States’ use of ‘Not Releasable to Foreign Nationals’ classification markings limits coordination. Officials acknowledged that the United States is working to address classification barriers, but this issue has limited Australian personnel’s ability to participate in exercises and their exchange officers’ ability to fully support combined operations.”
Space systems used by U.S. FIVE EYES’ allies include Canada’s Sapphire by MDA Space Ltd. for space domain awareness and the U.K.’s Skynet communications satellites, the first of which launched in 1969 and the latest of which are Airbus built. Under a September 2023 update to the AUKUS agreement, the U.K., Australia, and the U.S. will have sites for Northrop Grumman‘s [NOC] Deep Space Advanced Radar Capability (DARC) (Defense Daily, May 21, 2024). Australia is to field DARC next year, the U.K. in 2028, and the U.S. in 2029.
“DoD uses exercises to build space-related relationships with allies and partners but is currently limited in its ability to fully integrate them into those exercises,” GAO said. “However, classification challenges may limit DoD’s ability to include allies and partners in a particular exercise or share information fully during the course of an exercise. For example, Space Force officials told us that they are often unable to share classified planning concepts for exercises with foreign officials, which can make it challenging to meaningfully incorporate allies and partners into an exercise.”
“In one example, Space Force officials told us about a recent iteration of Space Flag—a Space Force exercise that was designed to provide space units with advanced training in a congested, contested, and competitive environment,” the GAO report said. “However, because the operational plan used to develop the exercise was not releasable to foreign officials, allies were not
included in the exercise despite being included in prior years, according to the officials. In another example, USSPACECOM [U.S. Space Command] and USINDOPACOM [U.S. Indo-Pacific Command] officials told us that an ally could not fully integrate into an exercise because part of the exercise scenario contained information not releasable to foreign nationals.”
Booz Allen Hamilton [BAH] on Thursday said its venture capital unit has made a strategic investment in Corsha Inc.
, which provides secure machine-to-machine communication to protect operational technology.
The value of the investment was not disclosed. Corsha, which has 28 employees, is Booz Allen Ventures’ 16th investment using its $100 million capital fund.
Corsha’s Machine Identity Provider platform tracks non-human identities such as Application Programming Interfaces, Internet Protocol addresses, digital certificates, and other machine attributes, applying behavioral analytics to detect anomalies and potential threats.
The Air Force Sustainment Center last July awarded Northern Virginia-based Corsha a Phase III Small Business Innovation Research award to help streamline how to get Authority to Operate and Interim Authority to Test certifications for new technologies on the services’ Industrial Depot Maintenance shop floor. Corsha says its technology works across hybrid cloud infrastructure, data centers, manufacturing shops, and other critical infrastructure to enable secure, automated communication.
Booz Allen said it will help expand Corsha’s research and development lab, scale its artificial intelligence and machine learning capabilities, and support its operations in critical manufacturing environments.
“The physical world is increasingly hyperconnected and software defined, leaving military installations, civilian critical infrastructure, and other hubs of economic and national security at risk of cyber disruption,” David Forbes, director of cyber-physical defense at Booz Allen, said in a statement. “Addressing identity verification challenges is a critical step toward creating more resilient systems. We invested in Corsha because we believe their technology can solve the identity problem and because we expect security the physical world to be a significant growth vector in the cyber market.”
The National Reconnaissance Office’s (NRO) MILNET Block I has around 200 satellites, including SpaceX Starshields, for communications and future space-based ground moving target indication.
Now, the U.S. Space Force is requesting more than $3.5 billion in the service’s fiscal 2026 unfunded priorities list (UPL) to leverage the NRO’s work and to begin linking hundreds of low Earth orbit (LEO) satellites, including those in the Space Development Agency’s (SDA) Proliferated Warfighter Space Architecture (PWSA).
The Space Force fiscal 2026 UPL also includes nearly $687 million for MILNET Block II launches under the National Security Space Launch (NSSL) program. SpaceX, ULA, and Blue Origin are the contractors for critical national security missions under NSSL, Lane 2. ULA is a Boeing [BA]-Lockheed Martin [LMT] partnership.
The Department of the Air Force has said that it is conducting an Analysis of Alternatives (AoA) on future satellite communications, and that the department intends MILNET to be a “plug and play” architecture that is not SpaceX-reliant (Defense Daily, June 26).
As the Space Force explores future communications options, it is halting funding for SDA’s Tranche 3, Transport Layer effort for advanced LEO communications satellites–a halt which raises questions on the future of SDA’s two-year tranches.
MILNET and the pause in SDA’s Tranche 3, Transport Layer also raise questions on whether SpaceX will become the main or the sole provider of military space communications.
The Department of the Air Force has said that the future satellite communications AoA will help the department determine MILNET requirements and architecture, “but there is and will continue to be investment in commercial SATCOM as appropriate to meet warfighter needs.”
“We will continue to evaluate a variety of pLEO capabilities, including PWSA Transport Layer, to determine the optimal path forward for enabling diverse data link requirements,” the department said. “As part of the AoA, we are also investigating communication between different optical crosslinks in order to support a scalable multi-vendor satellite communication architecture that avoids vendor lock.”
Air Force Secretary Troy Meink has said that the SDA Tranche 2, Transport Layer for PWSA is on track and that “as we go forward, MILNET, the term, should not be taken as just a system.”
“How we field that going forward is something that’s still under consideration, and we will look at the acquisition of that,” according to Meink.
The SDA Tranche 2, Transport Layer contractors include Lockheed Martin, Northrop Grumman [NOC], York Space Systems, and Rocket Lab USA [RKLB].
In May, Meink took office as the 27th secretary of the Air Force.
Before Meink’s nomination in January as Air Force secretary, he served, since October 2020, as the NRO’s principal deputy director. There, he spurred acceleration of NRO’s use of fixed price contracts. Some national security analysts have said that Meink has had a close working relationship with SpaceX founder Elon Musk and have expressed conflict of interest concerns because of that relationship.
Meink has said that he favors multiple competitions over defense modernization programs’ lifetimes.
The top items on the Navy’s FY 2026 unfunded priorities list (UPL) are focused on munitions buys and funding the sixth-generation fighter program.
As the top priority at $841 million, the Navy seeks funding to “invest in priority munitions to maximize production lines and replenish inventories expended in recent conflicts,” according to the document obtained by Defense Daily
.
The Boeing MQ-25A T-1 test asset conducts the first refueling between an unmanned aircraft and a manned F/A-18E/F Super Hornet on June 4, 2021. (Photo: Boeing)
The vast majority of this part of the funding request is $694 million to maximize production of Advanced Medium Range Air-to-Air Missiles (AMRAAM) with 448 missiles at $1.6 million per round.
The Navy argued this extra investment in AMRAAM “mitigates risk of capability gap while Navy develops future medium range air warfare capabilities.”
The document notes AMRAAM allows F/A-18E/F Super Hornet and F-35 Joint Strike Fighter aircraft to have the ability to engage enemy aircraft at medium to long distances and neutralize threats before they can get close enough to pose a risk to U.S. or allied forces. This level of procurement would also ensure “the Navy retains sufficient stockpiles to support sustained operations in the event of a conflict.”
Other munitions under this first priority include $62 million to expand Standard Missile-6 (SM-6) procurement from 139 to 150 units, a weapon thoroughly used during recent engagements in the Middle East and Red Sea; $25 million to increase procurement of Maritime Strike Tomahawk (MST) from 73 to 86 to maximize production line capacity of a weapon shared with the Army while the weapon is still in its low-rate initial production phase; and $50 million to increase production of Long-Range Anti-Ship Missile (LRASM) from 109 to 120 units to maximize the vendor’s production line.
Sixth-Generation Aircraft
The second item on the Navy’s FY ‘26 wish list is $1.397 billion dedicated to the “Air Wing of the Future,” which the document said will allow the service to award the sixth-generation fighter contract to industry.
This comes after a senior defense official told reporters the Navy only sought $74 million in the FY ‘26 budget request to complete aircraft design of the F/A-XX, its placeholder name for the sixth-generation fighter program, as a way to maintain minimal development funding while allowing industry to prioritize the Air Forces’ F-47 fighter program (Defense Daily, June 27).
At the time, officials said DoD had made the strategic decision to focus on the F-47 in a $3.4 billion request while holding off on F/A-XX “due to our belief that the industrial base can only handle going fast on one program at this time, and the presidential priority to go all in on F-47 and get that program right while maintaining the option for F/A-XX in the future.”
The official said F/A-XX is otherwise in the hands of President Trump, Secretary of Defense Pete Hegseth and Secretary of the Navy John Phelan.
The Navy’s wish list argued the Navy sixth-generation fighter is a critical component of the future carrier Strike Group and Air Wing of the Future, due to replace the fourth generation F/A-18E/F and EA-18G Growler and use onboard mission system autonomy while integrating with manned and unmanned teaming.
The Navy argued it has “significantly invested in research and development” for F/A-XX since the FY 2021 budget request because of its critical role to effectively counter the modernizing Chinese military.
“The current 6th Generation program has stable, validated requirements, backed by extensive data analysis and approved Initial Capabilities Documents that demonstrate a program that can establish a temporal air superiority and conduct necessary strikes in a highly contested environment.”
Previously, the Navy’s fiscal year 2025 budget request had to cut its F/A-XX request due to “hard choices” imposed by budget caps from the Fiscal Responsibility Act. Navy officials told reporters in 2024 this included cuts of $1.5 billion to $500 million, but they said the service was still committed to the future aircraft (Defense Daily, March 11, 2024).
The latest UPL list argued that the F-35C is highly capable into the near future, but the Sixth Generation fighter will be better equipped to penetrate Anti-Access Area Denial environments to maintain air superiority.
An F-35 firing an AMRAAM. (Photo: Raytheon)
Several other top priorities on the wish list focus on munitions.
Munitions Industrial Base
The third item is $1.4 billion for weapon-specific investments in the Navy’s organic and commercial munitions industrial base to increase capacity, supply chain resilience and accelerate integration.
The document argued because the Navy “continued to expend priority munitions at a high rate” and the industrial base is not able to keep up with that pace with growing demand for increased production, so they require a “significant investment to build infrastructure and maintain requirement inventories.”
Notably this set of funding would be split into $200 million to address bottlenecks in lower-tier munitions components by establishing and qualifying second source vendors and expanding existing ones; $100 million to procure long-lead materials for the SM-6, Advanced Anti-Radiation Ground Missile (AARGM) and Naval Strike Missile (NSM); $143 million to add a scalable second source for Tomahawk cruise missile motors to control long-term costs via competition and adding supply chain resiliency; $129 million to accelerate development of LRASM Offensive Anti-Surface Warfare capability and invest in sub-tier suppliers to boost production from 120 to 240 units per year; $220 million accelerate integration of the Patriot Advanced Capability-3 (PAC-3) Missile Segment Enhancement (MSE) into the Navy’s Aegis Weapons System; $560 million for production improvements, capacity increases and obsolescence for AMRAAM; and $50 million for capacity investments in the Tomahawk Land Attack Missile (TLAM) supply chain to maximize production and recertification.
Rounding out the top five priorities is $235 million to procure another 540 rounds on top of 1,950 in the FY ‘26 request and continued research and development in the HAWKEYE non-traditional sea denial expedition loitering munition in order to accelerate delivery and reach full operational capability by 2027 and $100 million to accelerate development and build capacity as well as over 50 more test article rounds of the Multi-mission Affordable Capacity Effector (MACE). MACE is set to be a low-cost hypersonic air-to-surface missile designed to be deployed from Navy fixed-wing aircraft with a higher payload capacity per aircraft than other developmental hypersonic weapons.
The Navy noted MACE is specifically meant to be able to be produced and fielded in large quantities as a “reliable option for delivering significant damage in a high-intensity conflict scenario.”
Other unfunded priorities on the list include $871 million to procure six airframes to recapitalize C-130T Hercules aircraft to the KC-130J fleet by 2030, the Navy Reserve top equipment priority; $105 million to procure another 18,000 sonobuoy units, and $480 million to procure three more Ship-to-Shore Connectors (SSC) to maintain the production line and reduce the risk of production break in 2027 that would otherwise increase costs and interrupt the supply chain.
The Navy noted the SSC procurement was not otherwise funded in the FY 2026 budget request “because priority was given to near-term readiness and resources were invested in conducting Service Life Extensions (SLE) on existing Landing raft Utility (LCUs).
The list also includes $525 million in a classified item with no details as well as $1.65 billion military construction projects.
The Pentagon’s Defense Advanced Research Projects Agency (DARPA) has selected Bell [TXT] to build a X-plane demonstrator capable of flying at speeds of up to 450 knots, with the office confirming to Defense Daily
it aims to have a platform completed in 2027 to support flight testing in 2028.
Bell, which beat out Boeing’s [BA] Aurora Flight Sciences, noted that its work on Phase 2 of the Speed and Runway Independent Technologies (SPRINT) program will include completing design, construction, ground testing and certification of its vertical takeoff and landing (VTOL) demonstrator.
Artist’s rendering of Bell’s X-plane concept for DARPA’s SPRINT program. Photo: Bell.
“Bell is honored to have been selected for the next phase of DARPA’s SPRINT program and is excited to demonstrate a brand-new aircraft with the first-ever stop/fold technology,” Jason Hurst, Bell’s executive vice president of engineering, said in a statement. “This is an achievement we’ve been working toward for over 10 years, as we’ve leveraged our nearly 90-year history of X-plane development to bring new technology to our warfighters.”
Just over a year ago, DARPA announced it had selected Bell and Aurora Flight Sciences for Phase 1B of the SPRINT program to work on completing preliminary design reviews (Defense Daily, May 28 2024).
Both firms had previously been tapped for the initial phase of the program focused on conceptual design work, which at the time also included Northrop Grumman [NOC] and Piasecki Aircraft (Defense Daily, Nov. 27 2023).
“The SPRINT X-plane is intended to be a proof-of-concept technology demonstrator and its flight test program seeks to validate enabling technologies and integrated concepts that can be scaled to different size military aircraft. The goal of the program is to provide these aircraft with the ability to cruise at speeds from 400 to 450 knots at relevant altitudes and hover in austere environments from unprepared surfaces,” DARPA has said previously.
DARPA has request $55.2 million in FY ‘26 for the SPRINT program, with a budget document detailing the interest in developing high-speed VTOL aircraft to support missions such as “infiltration/exfiltration, contested personnel recovery, troop transport, logistics support, and armed escort” and aiming to have a demonstrator that “reduces technical, schedule, and cost risk for a follow-on operational system.”
“In preparation for X-plane development, Bell has completed significant risk reduction activities including demonstrating folding rotor, integrated propulsion and flight control technologies at Holloman Air Force Base as well as wind tunnel testing at the National Institute for Aviation Research (NIAR) at Wichita State University,” Bell said in a statement on Wednesday.
Following the work in Phase 2 to finalize a critical design and then move into building and ground testing Bell’s X-Plane, DARPA noted that Phase 3 will include flight testing.
The top unfunded priorities of U.S. Indo-Pacific Command (INDOPACOM) in the Defense Department’s fiscal year 2026 budget request are all-domain unmanned systems, coming in at more than $4.4 billion.
The specific systems are classified, according to a June 20 letter from INDOPACOM Commander Adm. Sam Paparo to the House Armed Services Committee (HASC). The all-domain unmanned systems are part of an $11.9 billion list of items Paparo highlights in the congressionally-mandated unfunded priorities list (UPL) provided to the committee.
INDOPACOM is the primary focus area for the DoD’s Replicator initiative, which aims to provide thousands of all-domain attritable autonomous systems for an initial operating capability this summer.
The next largest category in the UPL is counter-C5ISRT, amounting to $2.9 billion, with directed energy and counter-directed energy accounting for just over $1 billion. The directed energy programs are classified.
This spring, the Army conducted tests of the Epirus-built Integrated Fires Protection Capability High-Powered Microwave, a type of directed energy system designed to defeats threats from swarms of small drones (Defense Daily, May 2). The use of the system in a live-fire exercise was also the first employment of IFPC-HPM in the Indo-Pacific region.
Classified mid-term asymmetric capabilities make up nearly $1 billion of the unfunded C-C5ISRT needs.
The letter to HASC leaders says the FY ’26 budget request advances the command’s “comparative military advantages in warfighting capabilities and facilitates posture improvements contributing to reviving our warrior ethos and rebuilding our military. However, unless accelerated, security remains at risk.”
Penetrating platforms, specifically find, fix, track, and target (F2T2), make the list at $989.1 million. The line-item number given for the F2T2 account is 0603734N, which corresponds to the Navy’s CHALK CORAL research and development program for innovative technologies that are classified.
A list of 10 munitions accounts for the $976.6 million in unfunded critical munitions needs of INDOPACOM, led by $327 million for the Air Force’s Joint Air-to-Surface Standoff Missile built by Lockheed Martin [LMT]. The command said $138 million is needed for the Navy’s Advanced Lightweight Torpedo Mk 54 Mod 2 being developed by RTX [RTX], and $114.7 million for Hammerhead Mines that General Dynamics [GD] is developing.
Some of the other key munitions on Paparo’s UPL include $125 million for the Navy’s Enhanced Joint Direct Attack Missile being developed by Boeing [BA], $60 million for the Long-Range Anti-Ship Missile built by Lockheed Martin, and $55 million for the RTX-developed Maritime Strike Tomahawk.
Paparo also lists $1.2 billion under the Improve Theater Posture category, which is mostly for construction and support items, and $39.4 million for “peculiar support equipment” for the Extra Large-Unmanned Undersea Vehicle that Boeing will soon begin supplying the Navy as the Orca.
Various campaigns and exercises account for $672.9 million of the UPL, followed by $406.7 million for the Assured Command and Control account, which includes nearly $226 million for various cyber security and network defenses, $35 million for the Joint Fires Network, and $42 million for the Joint Sustainment Decision Tool.
The Army has submitted to Congress a $4.3 billion unfunded priorities list (UPL) for fiscal year 2026, seeking additional funds to bolster production of munitions, air defense capabilities and small drones.
“…I ask that you support our UPL if additive funding is available but not displace anything already requested in the FY ‘26 [president’s budget request] – this should only be enacted if additive funding is available,” Gen. Randy George, the Army chief of staff, wrote in a letter detailing the request obtained by Defense Daily.
PrSM is the next-generation, long-range precision-strike missile delivering critical capabilities to attack, neutralize, suppress, and destroy targets, supporting successful mission execution via combined Joint All-Domain Operations. (Official U.S. Army photo, Darrell Ames)
While the Army’s full UPL request has not yet been made available, George in his letter notes the $4.3 billion includes “items that support air and missile defense modernization and readiness, long-range precision fires, enhanced production of small unmanned aerial systems and soldier, family and quality of life projects.”
The request for additional funding areas follows the Army’s $197.4 billion budget request for FY ‘26, which includes $5.4 in reconciliation spending, with the service having detailed plans to divest of $4.9 billion in older and “ineffective” equipment as part of its new wide-ranging transformation plan (Defense Daily, June 27).
The UPL request to Congress includes $581 million for small drones and counter-UAS capabilities, with George noting that both areas are “changing faster than our budget process can react.”
Drones and C-UAS are two capability portfolios, along with electronic warfare, where the Army is seeking $2.4 billion in agile funding authority for fiscal year 2026 to be able to move money around flexibly rather than being locked into more rigid budget line items (Defense Daily, June 26).
The Army recently detailed plans for a new program to deliver thousands of small drones over the next year, with an interest in systems that each cost less than $2,000 (Defense Daily, July 8).
For munitions, the UPL request includes $324 million to “maximize” production of the Army’s new Precision Strike Missile (PrSM) and $300 million to modernize organic industrial base work related to repair and recertification for Patriot Advanced Capability-3 (PAC-3) interceptors, both of which are built by Lockheed Martin [LMT].
The Army on July 2 approved a Milestone C decision for PrSM Inc. 1, officially transitioning the program from the development to production and deployment phase (Defense Daily, July 7).
George notes the Army’s request also includes $173 million to upgrade and repair Patriot air defense systems to “improve readiness across the fleet” and $46 million for advanced manufacturing capability “so that we can reduce our reliance on unsteady supply chains and improve our security posture.”
A separate UPL document submitted to Congress by Under Secretary of Defense for Research and Engineering Emil Michael also includes $21.6 million for Army efforts related to Small Business Innovation Research and Small Business Technology Transfer efforts, including $5 million for a project to develop robotic expeditionary repair systems for artillery and $16.6 million for four artificial intelligence-related initiatives.
In addition to low-cost, other desired attributes include mission-specific assets, which in addition to kinetic and ISR, include expeditionary, and other potential uses.
The kinetic problem set would leverage existing government payloads that would be integrated into UUVs. The kinetic effector would be launched from a government platform—surface or subsurface vessel that would likely be uncrewed—or pier, and have the speed and endurance to hone in and hit a moving or static target, DIU said.
The kinetic UUV dimensions are 12.75 inches in diameter, 120 inches long, and a maximum weight of 800 pounds or less with the payload.
In addition to torpedo tube launch, the submarine-launched UUV solution also wants an asset that is recoverable without using divers. The solution should allow multiple communication channels with the host platform, a preferred ability to navigate over long ranges without GPS, transponders, or bottom lock, and a pathway to the Unmanned Maritime Autonomy Architecture.
DIU also wants autonomous launch and recovery, and the ability to operate for at least two days or 120 nautical miles, or both, with payload.
The UUV dimensions include up to 21 inches diameter, 256 inches long, and maximum weight of 4,000 pounds at launch. Payload dimensions include 12.75 inches diameter, 54-inches long, and power usage that is 18 amps at 18 to 40 volts direct current.
The government will consider smaller UUVs and payloads for use with 6 and 10-inch submarine tubes.
Responses to the Low Cost Undersea Effectors solicitation are due by July 24.
Spending by the Defense Department in 2024 on the top 100 startups with dual-use and defense technology more than doubled versus 2023 but remains less than 1 percent of the DoD budget, according to a new report by the Silicon Valley Defense Group (SVDG).
Excluding launch provider and satellite manufacturer SpaceX, the department spent nearly $2 billion on the remaining 99 venture and private equity-backed startups in 2024, versus $856.3 million in 2023, SVDG says in its third annual National Security 100 report. Dating back to 2019, when just $101.6 million was spent on the top 99 companies—excluding SpaceX—DoD has steadily increased its contracting dollars with the startup ecosystem, the report says.
While the U.S. is leading in developing “breakthrough technologies,” the problem is uptake, SDVG says.
“To maintain our strategic edge, we must do more than innovate, we must accelerate adoption at speed and scale,” the report says.
Spending data is provided with, and without, SpaceX, which SDVG says “obscures the challenges facing” startups in the defense industrial base given the billions of dollars in private investment and government contracts the space technology has garnered.
Including SpaceX, DoD spent $4.1 billion in 2024 on the 100 ranked companies versus $1.8 billion in 2023, and $514.8 million in 2019.
Meanwhile, private investment to date in these companies far outpaces defense contracts, with $70.1 billion in funding raised, says SDVG, which continues to sound the alarm that venture and other private capital needs to see a return to keep investing in the national security innovation ecosystem. Federal contracts to date to startups add up to $28.6 billion, it says.
“This gap must continue to close in order to incentivize continued development and investment,” the report says. “Continued progress depends on DoD’s willingness to take on more innovation risk and ‘pick winners.’ Picking winners means scaling firm fixed price contracting and large programs of record for non-traditional companies.”
Pointing to DoD’s 14 critical technology areas, SVDG says the companies that dominate its top 100 are in artificial intelligence, software, cyber, and space. Areas such as microelectronics, quantum, hypersonics, and directed energy are still underrepresented, it says.
The top 10 companies in the ranking are Anduril Industries, SpaceX—the first two switching places versus the 2024 list—Applied Intuition, databricks, Saronic, Shield AI, Dataminr, Groq, X-energy, and Epirus. Dropping out of last year’s top 10 are LamdaLabs, Scale AI, Relativity Space, Axiom Space, and Skydio.
Key metrics for the top 100 ranking include recent capital raised, total capital raised, and recent headcount growth. Valuation does not factor into a startup’s momentum, SVDG says. The companies must also be backed by venture capital or private equity, not be publicly traded, and vetted for foreign ownership concerns.
