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Defense Business Brief: The enduring case for small USVs | Battleship costs balloon | Rainey joins Bain Capital

Lauren C. Williams — Fri, 07 Aug 2026 02:33:00 -0400

Seasats CEO Mike Flanigan isn’t really interested in building ship-sized drone boats.

“We don't plan to build bigger systems,” Flanigan told Defense One.

Instead, Seasats is all in on small unmanned surface vessels with three variants: Lightfish, which is about 12 feet long; the 20-foot Quickfish; and Heavyfish, the company’s largest offering at 35 feet long. The latter will make its water debut later this year.

“All of our substantial business is on Lightfish, so that's really where 95 percent of our focus is. That's what's supporting Marine Corps, Navy, Special Forces…what we're doing internationally,” he said.

Quickfish, which is in production, serves as a “reactionary tool” that can be used to reposition an asset or intercept a target. And Heavyfish is “essentially a Lightfish, but stretched out, where you don't need an expeditionary force to carry it off a beach with no equipment,” Flanigan said. “You can fit significant amounts of payloads, both subsea and aerial.”

The San Diego-based company has long been working with the Navy and other militaries; one of its Lightfish vessels used for surveillance recently spotted a Chinese warship near the Philippines. Last year, a Lightfish traversed the Pacific from San Diego to mainland Japan autonomously.

There’s admittedly a lot of excitement, churn and chatter around larger USVs, but for Flanigan, smaller can be strategically important and avoid some of the pitfalls of building bigger.

“All of these platforms have this long endurance characteristic to them,” he said. “Small USVs have a strategic advantage against large platforms. [Vessels] under 40 feet are much harder to spot. They're much faster to build. You can use them with much less regret. So you actually end up with strategic value over something larger, like over 100 feet.”

And now that Navy doctrine and planning is starting to include maritime drones in more detail, there’s a rush to adopt.

“There's some understanding now that's like, oh, you can put vessels that are 12 feet long anywhere in the world,” Flanigan said.

And that’s good for business.

“Right now we're seeing huge adoption…definitely, we're in the thick of scaling and hiring” as “people are trying to move faster than each other.”

Welcome

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Sticker shock: President Donald Trump’s battleship costs keep growing. The Congressional Budget Office estimated the nuclear-powered ship program would cost about $275 billion, with the first battleship costing about $23.4 billion—up significantly from the administration’s original $15.1 billion estimate. That cost would drop to about $18 billion per ship as the fleet of 15 are built through 2056, according to the CBO report released this week. Sen. Jeff Merkley, D-Ore., and the ranking member of the Senate Budget Committee, ordered the CBO analysis.

For comparison: “A new DDG-51 destroyer costs more than $3 billion. Thus, if the average BBGN cost about $18 billion, the Navy could buy five destroyers for the price of one battleship.”
But those five destroyers would have higher maintenance and operational costs due to the need for more sailors and running on fossil fuel, the report states.
And any cost savings with respect to nuclear-powered versus fuel are undeterminable at the moment: “Switching to nuclear power would reduce the battleship’s operating costs over time by eliminating the need to purchase fuel. CBO does not have enough information to estimate those potential savings, which would depend on the final design of the ship and the specifications of the conventional propulsion plant it otherwise would have used.”
Related: In last week’s earnings call, HII CEO Chris Kastner said the company started initial “design work for the battleship” with the Navy “on a limited basis.”
The CBO report comes as the Pentagon pushes for a $1.5 trillion budget, ramped up weapons production, ambitious new programs like Golden Dome, and existing programs with cost overruns—even amid underlying concerns around transparency.
In the back of my mind: The White House push towards manufacturing is exposing a dearth of workers who can build the nation’s weapons systems—especially at an accelerated pace.

Making moves + other news

James Rainey, former commanding general of Army Futures Command, is now at Bain Capital.
Hadrian secured a $1.37 billion Series D funding round, pushing its valuation to just under $8 billion. The AI-factory builder plans to expand, adding new factories and production lines for things like munitions and autonomous systems.
Lockheed Martin is looking for domestic critical minerals suppliers. The defense giant signed a memorandum of understanding with NioCorp for the rare-earth metal scandium. Lockheed is also in talks with two companies, Teck Resources and 5N Plus, to supply germanium, Reuters reported.
Ondas landed a $50 million contract for the Army’s Lethal Unmanned Systems (LUS) program. The company’s prime defense contractor, Mistral, received the award as part of a $982 million contract for the program. Ondas also hired David Barnea, former director of Mossad, to be the company’s global president and chairman.
The Navy used a Saildrone USV to aid in a drug bust last year. The Voyager drone has been operating with Fourth Fleet for the past three years to support intelligence gathering and surveillance operations and was recently linked with an $81 million cocaine bust from a ship interdiction in October 2025.
Blue Water Autonomy will join a $40 million IDIQ contract to map the ocean floor with uncrewed surface vessels. The multiyear contract with the Naval Oceanographic Office involves multiple vendors that will compete for task orders.
The energy company Fuse inked a research deal with the Nevada National Security Site. “Fuse has built commercial capabilities at the frontier of pulsed power technologies, creating a unique opportunity to advance the field through collaborative research,” Daniel Lowe, NNSS’s chief scientist, said in a news release. “By combining Fuse’s demonstrated hardware with NNSS's technical expertise, we'll be able to evaluate emerging technologies, explore new approaches to dense plasma focus systems and generate insights that benefit both national security missions and the broader fusion community.”
Tiberius Aerospace is working with the Army to further develop the company’s “next-generation precision-guided, ramjet-powered 155mm artillery munition,” called Sceptre. The company signed a CRADA, or cooperative research and development agreement, with Army Combat Capabilities Development Command Armaments Center.

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Rough waters help firm demo ‘expeditionary manufacturing’ aboard warship

Jennifer Hlad — Fri, 07 Aug 2026 02:03:37 -0400

HONOLULU—Heavy seas didn’t stop Firestorm Labs from printing “thousands” of unique parts aboard the USS Essex amphibious assault ship on the way to the Rim of the Pacific naval exercise here, the expeditionary manufacturing company announced this week.

“We were told it was the roughest water off the California coast in the last five years,” Firestorm CEO Dan Magy told Defense One. The company has an exclusive arrangement with HP, which uses a type of 3D printing called multi-jet fusion, “and what we’ve found is that the systems and the machines are quite resilient.”

“We think we’re building a contested logistics solution that is going to be scalable across all branches of the Department of War,” Magy said. “If we’ve seen anything from Ukraine and now from Iran… we need to rethink warfare from the ground up. We are increasingly dealing with contested environments where—you know, look at what just a blockade in one part of the world has caused to the ability to get products out, oil prices. Heaven forbid something like that happened in the South China Sea, where 70 percent of the things we all buy in the world are produced.”

Magy believes their xCell additive manufacturing unit—composed of two 20-foot containers that can go anywhere—"really represents a leap forward in how we're thinking about solving, maintaining legacy systems, but also building attritable systems like drones closer to the need.”

During a tour of the xCell unit used aboard the Essex, Duane Blank, field operations manager for Firestorm, showed off some of the parts printed at sea, including stops made to protect Apache helicopter rotors from scraping against the ship’s non-skid coating.

The nylon composite the company uses for printing works for “everything within the entire spectrum of warfare,” Blank said, from prosthetics to drones to humanitarian assistance and disaster relief items.

Among the items printed while pitching through Sea State 5 were a dozen Squall first-person-view drones, Blank said, which were later used as adversary aircraft during a counter-drone exercise as part of RIMPAC.

The “beauty of 3D printing,” he said, is the “ability to iterate” and get troops what they need “at the point of need.”

Magy said it’s a top concern.

“The No. 1 thing we're hearing from folks across the service is, ‘It's great if you make it in a factory in Alabama or California or Texas. What happens if the thing breaks on the battlefield? I have to put it in a box now for four months.’”

Sustainment wasn’t what the company initially set out to address, he said, “but it has become increasingly important for all of our customers, because there are a number of legacy systems that like, the supply chain just isn’t there anymore. Let alone the supply chain for something in Okinawa or in Bahrain.”

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Officials hedge SpaceX aircraft-tracking satellite bet with three smaller company contracts

Thomas Novelly — Thu, 06 Aug 2026 12:00:18 -0400

Three more companies will get Space Force money to build satellites that can track aircraft, a move meant to reduce the service’s reliance on SpaceX for the capability.

Rocket Lab and STR were awarded firm-fixed-price other-transaction-authority agreements to develop a space-based solution for the military’s airborne moving target indicator mission, or AMTI. A third company was also selected, but officials didn’t name the firm in a press release this week due to “operational security.” More than two months ago, the service awarded SpaceX a $4.16 billion contract to build the emerging technology.

Col. Ryan Frazier, acting Space Force Portfolio Acquisition Executive for space-based sensing and targeting, said the service didn’t want to put all its eggs in one basket.

"The core focus of this second task order is diversifying our capabilities and ensuring we don't rely on a single technical solution,” Frazier said in the news release. “With these new partnerships, we are exploring unique innovations and technologies and fundamentally different ways to accomplish the airborne moving target indication mission. Maturing these varied technical solutions now gives us distinct performance advantages for the future and guarantees we are fielding the absolute best technology available."

Attention to space-based AMTI has grown after an expensive E-3 Sentry AWACS was heavily damaged during the first weeks of the Iran war. Air Force Secretary Troy Meink said the following month that the incident illustrated the “importance of a survivable platform” and the service later announced it had chosen nine companies to make up the vendor pool for AMTI contracts, but declined to name them. As well, Pentagon leaders who had argued that they didn’t need both air- and space-based AMTI have resumed backing a next-generation airborne warning platform.

The three new space-based AMTI contracts total $615 million, a mere fraction of the $4 billion given to SpaceX. The bulk of the money, $397 million, went to Rocket Lab, per the company’s press release. The California-based company said it would build and launch its “Flatellites” — a flat satellite to be used in large constellations.

“A resilient space architecture demands a robust, competitive industrial base, and tapping into the broader commercial market is how we get there,” Frazier said.

It’s not clear what STR or the other unnamed company were building for the space-based system. SpaceX officials, during the company’s most recent earnings call, acknowledged the competition.

“You can look at those as tranches and beginnings of additional capability that we will bring online, some of which we will have to compete,” said Gwynne Shotwell, the company’s president and CEO. “But fundamentally, we have the contracts in place to fulfill many phenomenologies, both the ones we’ve recently announced as well as additional ones that we’ll be working on going forward.”

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Did AI blow a $450M Army contract decision? Company lawsuit says yes

Christian Robles — Thu, 06 Aug 2026 11:34:00 -0400

Trax International Corporation is asking the U.S. Court of Federal Claims to direct the Army to reevaluate bids for mission support services at White Sands Missile Range — in part because the department allegedly misused AI to determine the contract award.

Trax's complaint, filed in late July, alleges that the Army used AI that hallucinated multiple times, creating the false impression that the company's bid was weaker than rival Southwest Range Services’ successful bid of roughly $450 million. The Government Accountability Office denied Trax’s bid protest in May.

The lawsuit claims that records the Army provided to GAO did not explain whether assigned strengths for the Southwest Range Services bid came from a human at the Source Selection Evaluation Board or an AI tool.

The suit also claims that the Army conceded that one of the weaknesses it identified with Trax’s bid is unsupported by documentation. In fact, the suit said, the purported weakness is a “classic AI hallucination, with made-up references to TRAX’s proposal, that no one on the [Source Selection Evaluation Board] checked.”

“Given the $29.4 million price premium associated with [Southwest Range Services’] proposal, there is a reasonable possibility that the removal of this Weakness could have changed the award decision,” the lawsuit states.

The Army declined to comment on the ongoing litigation.

Trax is not the first contractor to publicly allege that an agency has wrongfully used AI to evaluate contract bids.

Salient CRGT alleged that a Defense Department subagency improperly used AI, rather than human employees, to evaluate bids. The Government Accountability Office dismissed the allegation in a decision dated Jan. 5, 2026.

Contractors will likely continue to scrutinize federal agencies’ use of AI in evaluating bids, according to David Timm, a partner at Burr & Forman.

In a recent Washington Technology op-ed, Timm raised concerns that few civilian agencies are reporting the use of AI in bid evaluations as “high-impact.” That means agencies have either not implemented minimum risk practices or have not publicly disclosed them if they have, he told Nextgov/FCW in an email.

The Defense Department has said that it used AI to help evaluate bids in several recent solicitations. But if agencies don’t widely disclose this, it could become harder for contractors such as Salient CRGT and Trax to successfully argue the government misused AI.

“More bid protests are likely to come as the ungoverned and undisclosed use of GenAI tools results in errors throughout the procurement, but if agencies do not comply with the [Office of Management and Budget] rules it will complicate how contractors prove their allegations,” Timm wrote in the op-ed.

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US has too few interceptors to deter war with China, experts say

Patrick Tucker — Wed, 05 Aug 2026 21:33:31 -0400

The United States would run out of the interceptors it needs to take down Chinese missiles “within days” of a conflict, according to a new report from the Heritage Foundation. It's the latest in a series of warnings from experts and commanders highlighting a critical gap.

The White House, Congress, and defense contractors have taken steps to address it. But the ongoing war with Iran has exposed those efforts as insufficient, experts say.

It’s not a new problem. A 2023 report from the Center for Strategic and International Studies concluded that the U.S. would “within the first week of a Taiwan conflict” run out of key munitions, such as Patriot Advanced Capability-3 Missile Segment Enhancements, Terminal High Altitude Area Defense interceptors, and SM-6 and SM-3 Standard missiles. In May, CSIS reported that the United States will be in “a window of vulnerability for several years, until inventories return to their previous levels, and another several years before they get to the levels that war planners desire.”

The Trump administration is trying to wring more production out of industry. In January, the White House cut a deal with Lockheed Martin intended to triple annual production of PAC-3 missiles to 2,000. On Monday, the Pentagon announced a related seven-year, $3 billion deal with Lockheed and Northrop Grumman to boost the production of PAC-3 solid rocket motors. The deal is also intended to help “quadruple” annual production of THAAD interceptors.

A Northrop spokesperson said a billion-dollar investment in its Allegany Ballistics Laboratory has enabled the company to double annual production of motors since 2021, and that the company aims to triple production by 2027.

And yet these deals—and the goals the Pentagon set in January—are too small to quickly restore an arsenal depleted by Trump's war on Iran. “Those metrics that were set prior to [Operation Epic Fury]. That was before we just lit off billions of dollars in a decade worth of production per work in some cases,” said Tom Karako, who leads CSIS' Missile Defense Project.

The Heritage report makes its own estimate of weapons expended in the war: “During the first four days of Operation Epic Fury, U.S. and allied forces used approximately 1,738 theater surface-to-air munitions to defend against 565 Iranian ballistic missiles and 57 cruise missiles.”

The report says the Pentagon currently has “less than 10 percent" of the PAC-3 MSE, THAAD, SM-6, and SM-3 interceptors "required to deter or, if necessary, prevail, in a protracted, high-intensity conflict with China.”

The Heritage report is dire, but it may not go far enough, as it does not factor in how China may use low-cost drone warfare to further frustrate U.S. operations in the region.

In an April hearing, U.S. Indo-Pacific Command leader Adm. Sam Paparo also communicated his concerns about missile shortfalls and a lack of solutions for countering cheap drones. “Current production timelines are misaligned with operational expenditures and the threats we face,” Paparo said.

Ukraine's shortage of Patriot interceptor missiles is reducing its ability to fight off Russian ballistic missiles. On July 28, Ukrainian President Volodymyr Zelenskyy met with Lockheed Martin representatives to discuss the possibility of license-building a Ukrainian version of the PAC-3. But such an agreement would not produce usable missiles until 2030.

The White House has gone back and forth on the issue. But Ukraine has gotten further with President Donald Trump than it did with his predecessor, Zelenskyy said in May: “I started this conversation with President Biden and I will continue with President Trump. Ukraine has not received a license to manufacture PAC-3. I believe that in the future, perhaps we will obtain one or there will be our own system.”

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Can an Alaskan spaceport ease Pentagon’s launch bottleneck?

Thomas Novelly — Wed, 05 Aug 2026 17:30:13 -0400

Rocket Lab’s announcement that it would launch suborbital rockets from Alaska could ultimately give the Pentagon a much-needed new option for national-security launches, the company and space experts told Defense One.

Last week, the Space Force’s acquisitions arm announced a $266 million, multi-launch contract with the California-based rocket company. That will cover 12 to 18 launches, which will start this year and “primarily take place from a new Rocket Lab location at the Pacific Spaceport Complex-Alaska (PSCA) in Kodiak," the company said.

These missile-defense missions will be handled by the company’s HASTE rocket, a suborbital variant of its Electron.

Both rockets “use the same launch infrastructure so yes, operating out of Alaska naturally opens the door to a broader range of possibilities including orbital launch,” a Rocket Lab spokesperson said. “It’s important to remember too that the core systems, infrastructure, and expertise we build and refine in Alaska aren’t tied to just one location.”

Top Space Force officials and lawmakers are concerned that the Cape Canaveral and Vandenberg bases will be unable to handle the projected increase in military-satellite launches. The Space Force expects to launch more than 100 rockets a year within five years and potentially thousands a year by 2036.

An Arctic national-security launch site would reduce the bottleneck and help the military reach polar orbits, said Clayton Swope, the deputy director of CSIS’ Aerospace Security Project.

“Putting something in Alaska, you kind of get both of those things,” Swope said. “You get this diversification away from the two main launch sites we have, and you are creating a launch site that is more optimized around a different type of use, which is related to the orbit, the inclination.”

The state-owned spaceport where Rocket Lab will host its new launch location boasts “a low population density, manageable air and maritime routes” that would distinguish it from some other launch facilities. But it has hosted just nine orbital missions since it was founded in 1998.

Charles Galbreth, a retired Space Force colonel who directs space studies at the Mitchell Institute, said the Rocket Lab expansion “could potentially be very helpful” for small and medium national-security launches—eventually.

“It's a capacity or a capability waiting for a demand signal,” Galbreth said. “So there's got to be the combination.”

Alaska can be an important addition, yet its isolation will present challenges, said Brian Weeden, who directs civil and commercial policy for the Aerospace Corporation’s Center for Space Policy and Strategy.

“I certainly think there is room for an expansion of different kinds of launch activity in Alaska. I don't think it's going to probably take the place of also standing in other areas,” Weeden said. “You're still going to need power. You're going to need to get rocket fuel up there. You're going to get the payloads transported up there, and that may be a little bit harder to do in a more remote location like Kodiak, as opposed to a place like Cape Canaveral or Vandenberg, where a lot of infrastructure already exists.”

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How many worked for DOGE? New data emerges, but many agencies stonewall

Sean Michael Newhouse — Wed, 05 Aug 2026 16:52:42 -0400

At least 206 people worked for the Department of Government Efficiency, but much remains unknown about the Trump administration's government-overhaul effort because federal agencies refused to fully cooperate with a Congressionally-ordered inquest.

In a new report published on Wednesday, the Government Accountability Office said it was largely unable to determine whether DOGE employees completed required ethics training and paperwork. GAO looked specifically at employees who worked for DOGE in the Executive Office of the President or were detailed from EOP between Jan. 20, 2025, and Jan. 31, 2026.

GAO identified 206 such people and that at least 128 of them had left by Jan. 31, 2026.

At least 27 were special government employees who were limited to serving 130 days during any one-year period. One prominent SGE was Elon Musk, the former de facto head of DOGE, whose companies received billions of dollars in federal contracts during his government service.

Investigators were not able to determine the appointment type, such as Schedule C political appointee or noncareer Senior Executive Service, for more than 150 of the personnel because many agencies did not provide the requested information.

“This total includes the 127 [U.S. DOGE Service] employees who held titles as digital services experts or consultants within USDS,” according to the report. “Although USDS has stated that USDS positions last no more than 4 years, we were unable to determine whether these USDS employees or other personnel had held such time-limited appointments.”

In total, 10 agencies and the EOP did not respond to requests from GAO for records that these DOGE employees participated in ethics training and completed financial disclosure reports.

“As a result, we are not able to determine the total number of DOGE personnel who held positions within EOP who received trainings or who completed financial disclosures at those 10 agencies or at EOP,” investigators wrote.

Nine agencies, covering 64 DOGE employees, did submit information about whether the staffers did such training and reports. But GAO argued that much of the documentation was incomplete. For example, the Agriculture Department provided an “ethics-related presentation” for Trump appointees but didn’t offer evidence for when, or if, the DOGE staffers received the training.

The White House did not respond to a request for comment.

While “the U.S. DOGE Service Temporary Organization” terminated on July 4, pursuant to the executive order establishing it, GAO pointed out that the directive permanently renamed an existing White House office as the U.S. DOGE Service.

“Since the EO does not call for the termination of the broader USDS entity, it is possible that USDS and personnel at federal agencies could continue to do work that advances some of these initiatives after the temporary organization’s termination,” investigators wrote.

DOGE spearheaded many of the civil service reductions that took place last year, resulting in a decrease of more than 350,000 to the federal employee headcount.

GAO in April reported that the Treasury Department and DOGE did not follow all security protocols with respect to granting access to government payment systems.

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As AI models break free, White House works with firms on secret safety measures

Patrick Tucker — Wed, 05 Aug 2026 13:25:04 -0400

No one is saying, officially, what was decided when top frontier AI labs—Google, OpenAI, Anthropic, and Meta—met with White House officials on Tuesday to discuss voluntary guidelines for testing new models.

But Democratic lawmakers described the Trump administration's approach to regulation as “ad-hoc and unpredictable,” and said it’s likely to boost global adoption of rival Chinese models at the worst possible time.

Two officials with one of the labs said that Google, Anthropic, and OpenAI submitted a joint draft of the regulation around nine days ago and then began to work with each other and with the White House to find points of agreement. According to the officials, the labs all agreed they should be able to continue A/B testing as part of the process for developing models, and the White House concurred.

Companies that agree to the framework will submit their models to U.S. inspectors to be evaluated for safety for 30 days before those companies can receive federal funding—including from the Defense Department, whose 2027 budget request seeks more than $54 billion for AI companies, according to the officials.

A June White House executive order adds that models from participating companies would get extra intellectual property protection from Chinese competitors or others who might seek to steal secrets.

The White House is not commenting on how it will conduct the inspections. One of the officials said the the Office of Science and Technology Policy is still trying to set testing standards and how bodies like the National Institute of Standards and Technology and the Cybersecurity and Infrastructure Security Agency will conduct or design tests.

The murkiness around the policy’s details has angered some top lawmakers. In a Tuesday letter, Senate Democrats ask the White House to “provide an unclassified response, with a classified annex if necessary, clarifying the Administration’s current policy and approach to limiting access to advanced AI models.”

The lawmakers also evinced concern about the models' new abilities to defy easy inspection, scrutiny, and limitation.

“During an internal evaluation [in July] OpenAI models escaped their testing environment and used high-level technical capabilities to compromise a third party’s network without any instructions to take those actions,” the letter reads. “The Federal Government cannot be passive as these capabilities emerge.”

AI’s Jurassic Park moment

Last week, Chinese company Moonshot AI released a new open-weight model, Kimi 3, that performs as well as some top U.S. models and is being offered to consumers around the world at a far lower price.

Lawmakers and others are increasingly worried the United States could fall behind China in a race to develop faster, more efficient, more profitable models and to shape the way global populations use, buy, sell, and even build AI. Open weight models have become a key point of contention.

Anthropic wants more scrutiny of open-weight models and more efforts to curb sales of high-performance chips to China to thwart distillation attacks. But others in the industry are taking a more supportive view of open weights.

A former senior White House official and a former senior defense official with direct knowledge of the discussion said Anthropic pushed for more language in the framework to address open-weight security, but came away disappointed.

Anthropic did not comment for this story.

In recent months, several of the newest AI models have broken out of their virtual testing containers.

Anthropic disclosed the first such incident in April, when an early version of their Mythos model was able to “autonomously write some remarkably sophisticated exploits,” including one that allowed it to escape an isolated testing environment that programmers use to test code for effectiveness and safety before it’s released.

Anthropic pulled the model from general release, but made it available under "Project Glasswing" so the government and a handful of large companies could find and fix vulnerabilities in their software.

The White House responded with an export-control ban on June 12, barring access to the model not just to foreign countries but even foreigners in the United States. That meant that Anthropic’s own researchers, many of whom were born outside of the United States, could not work on the model. The White House reversed the ban on June 30.

In July, tensions around a national AI safety strategy, or lack thereof, grew hotter. Both Anthropic and OpenAI revealed new incidents in which models breached their containment. It came as no surprise to many veteran cybersecurity experts. AI researcher and author Gary Marcus, in 2022, predicted such a possibility on his blog, describing it as an “AI’s Jurassic Park Moment.”

Last week, AWS Chief Security Officer Stephen Schmidt told reporters: “Containers are not security boundaries. I actually have a T-shirt that says that, which I started wearing about three years ago.”

AWS hosts multiple models for users through its Bedrock platform. Schmidt said the AI Mythos era requires a far more vigilant approach to cybersecurity, especially for researchers.

“One of the reasons that we built the virtualization infrastructure for AWS using our own Nitro Hypervisors so many years ago was we realized that containers were not an appropriate security boundary then. The same is true for AI. You cannot use an AI container as a security boundary.”

In March, a group of British researchers calculated the sandbox breakout period for various large language models, which proved very accurate months later.

A follow-on paper published this week by the same group describes how to build better containment environments for the models emerging today.

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Pentagon counterdrone task force has a new AI-powered marketplace

Lauren C. Williams — Tue, 04 Aug 2026 22:18:13 -0400

The Pentagon’s counterdrone task force awarded Kaizen Laboratories $15 million to build a “two-way” marketplace designed, in part, to make selling tech to foreign militaries easier.

The site was built from a “blank slate” and developed to facilitate the Pentagon’s Foreign Military Sale Fast Lane Initiative, Nikhil Reddy, Kaizen’s co-founder and CEO, told reporters ahead of the announcement.

“We just launched it, and we'll continue to bring on more partner nations, a ton more vendors to the system,” Reddy said.

The AI-backed marketplace has been online for about two weeks, but details of the contract weren’t publicly released until late Monday. The Pentagon awarded Kaizen the contract on May 8 through a rapid acquisition tool called an other transaction agreement.

The new marketplace aims to provide a single point of purchase for the U.S. military and allies and partners, while helping them find the right technology that’s also interoperable. State and local agencies are also being onboarded, Mike Obadal, the Army undersecretary, said at a Center for Strategic and International Studies event Thursday.

“Networked air defense, whether it's counter-UAS or ballistic missile, is critical because everyone has to be able to see the same picture,” which can mean sharing or having “commonality” in information and equipment where possible, Obadal said.

The Defense Department, other federal agencies, and certain “foreign governments are able to go on the counter-UAS marketplace, where we have a number of different industrial options. We've got all kinds of AI workflows in there. You can say: ‘Here's the problem I'm trying to solve, and it'll set up a package for you.’”

The platform is particularly helpful with foreign military sales, for which the portal and its Amazon Web Services backbone allows the Pentagon to “start the paperwork for a foreign military partner that immediately becomes a letter of intent or a letter of request,” Obadal said. “The initial ask from a foreign government is, ‘we would like to investigate these capabilities.’ Traditionally, that goes into our FMS, our foreign military sales process, which takes months at best to get to the other end.”

Australia, Poland, Republic of Korea, Romania, and the United Kingdom are currently approved to use the marketplace, which could help the U.S. align its counterdrone tech with their militaries.

“Allowing them access to the pricing, the availability, the capabilities, all on a digital database … And then the backside of that, generating the FMS process and starting that FMS process is incredibly powerful,” Obadal said. “And so now we can come together with an informed discussion on how do we network counter-UAS between our countries, our deployed forces, our partners…That's what we're trying to promote with the use of modern tools like the marketplace.”

Reddy said he wants to make the marketplace the best “on the internet,” with lots of features, such as integrating test data, that he hopes to add in a matter of weeks.

“There's a ton of agentic tooling that we want to build into the platform, discovery, comparison of products…Testing integration so that you purchase an asset and you can immediately see testing and integration data to ensure that compliance is there,” Reddy said. “We've met with logistics leaders across the military that want repairability information and right-to-repair catalogs built into the marketplace. So all of that is coming.”

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Chinese telecoms kept footholds in US despite crackdowns, probe finds

David DiMolfetta — Tue, 04 Aug 2026 16:00:00 -0400

Years after federal regulators invoked national security to push three Chinese state-owned telecommunications providers out of the American market, the companies never fully left, a new House probe has found.

China Telecom, China Mobile, and China Unicom retained equipment, data-center space and connections to other networks in the United States after the Federal Communications Commission denied or revoked their authority to provide certain telecommunications services, according to a nearly 50-page bipartisan House China Committee investigation planned for release Tuesday and first seen by Nextgov/FCW.

From 2019 to 2022, the FCC denied China Mobile USA’s application to provide international service; it revoked related authorizations held by China Telecom Americas and China Unicom Americas. But those actions did not require the companies to remove equipment, leave data centers, or sever private network links, so the carriers continued offering enterprise networking, internet transit and other services, the panel found.

The committee argues that those remaining footholds could give Beijing’s cyberspies visibility into sensitive traffic, help keep malicious infrastructure online and create opportunities to reroute data or reach U.S. targets. American officials regard China as the country’s leading cyber adversary, with a record of targeting critical infrastructure and stealing military, commercial and personal data.

The three carriers did not respond to detailed requests for comment.

Nextgov/FCW also sought comment from the FBI, the Cybersecurity and Infrastructure Security Agency, and several U.S. spy agencies. The Defense Intelligence Agency, which produces intelligence findings for the Pentagon, declined to comment.

A spokesperson for China’s embassy in Washington said Beijing “firmly opposes the U.S. overstretching the concept of national security and going after Chinese companies,” adding that China would defend its “legitimate and lawful rights and interests.”

The remaining network ties took on added significance in the committee’s review of Salt Typhoon, the sweeping Chinese espionage campaign uncovered in 2024 where hackers breached major telecom carriers in the United States and abroad. The intrusion reached systems used to comply with court-authorized wiretap requests and allowed the cyberspies to target the communications of senior U.S. officials, including President Donald Trump and Vice President JD Vance.

Reviewing routing data from Sept. 22 to 25, 2024, just as the Salt Typhoon campaign became public, the committee identified 58 groups of internet addresses that CISA had linked to Salt Typhoon servers. China Mobile International’s network appeared in routes to those servers at least 192 times, helping keep the attacker infrastructure reachable as U.S. defenders sought to shut it down, the report said.

The committee does not allege that China Mobile USA employees knew about or participated in the campaign, and it says the routing evidence does not definitively link the company to Salt Typhoon. But the panel argues that the overlap shows how China Mobile’s remaining network ties could help sustain malicious infrastructure.

That finding came from a broader analysis that identified nearly 109,000 incidents from January 2018 through May 2025 in which Chinese or Hong Kong-linked networks allegedly claimed U.S. internet addresses without authorization, potentially diverting American traffic through their systems. The committee classified them as high-confidence hijacks of the Border Gateway Protocol, a bedrock system that directs traffic across networks, but acknowledged that some may have resulted from mistakes or poor network management.

More than 4,200 of the incidents involved China Mobile-controlled networks. In September 2024, eight originated from the same network that appeared in routes to Salt Typhoon servers and diverted traffic belonging to unnamed U.S. network operators, the committee said.

Addressing the threat

Telecommunications networks have long been prized intelligence targets because they can expose private conversations and reveal what political and diplomatic leaders are thinking. Such concerns are compounded by China’s 2017 National Intelligence Law, which requires companies and citizens to assist state intelligence work. Beijing denies that the law compels companies to participate in illegal espionage.

“China’s state telecommunications carriers for too long have enjoyed non-reciprocal access to U.S. domestic networks, but the seriousness of Salt Typhoon gives the FCC and other agencies more than enough justification to restrict or expel them,” said James Mulvenon, a leading authority on Chinese national security issues and vice president of intelligence at risk advisory firm Pamir Consulting.

The committee recommends giving federal agencies greater authority over equipment and private network arrangements that remain after a license revocation, along with targeted removal funding, stronger routing protections and logging requirements for foreign-controlled operators.

Marc Rogers, a veteran telecommunications expert who helped develop the mobile internet in the 2000s and has spent roughly two decades consulting governments and companies on telecom cybersecurity, agreed with many of the panel’s recommendations. Those include treating core telecom systems as high-risk targets requiring closer oversight, strengthening checks on how traffic moves across networks and tightening rules on the foreign-made equipment U.S. carriers can use.

But Rogers disputed the panel’s call to expand “rip and replace” telecom equipment, calling such programs economically unrealistic and could disrupt carrier operations.

“On paper it sounds great, until you get someone with operational experience,” Rogers said. “Then they realize you’re basically talking about bulldozing an entire city and building a new one.”

Rogers also said the panel’s recommendations resemble measures in British telecom security law but warned that they would work only if countries act together.

“If only one country takes a strong position, China will just maneuver around them,” he said, adding that the proposals are largely aimed at tactics China has already used. Policymakers should learn from those incidents, Rogers said, while also preparing for how Beijing’s methods may evolve.

The findings underscore the difficulty of removing operators deemed national security risks from a telecommunications ecosystem built on private infrastructure and decades of commercial ties. Regulators can ban specific services without necessarily reaching the equipment, leases and private agreements that preserve connectivity.

The committee based its report on subpoenaed company records, eight interviews conducted under oath, federal records, routing data and network infrastructure scans. It said Cloudflare and unnamed outside cybersecurity experts independently reviewed and verified portions of its routing analysis.

Parent company control and U.S. footprint

Across all three companies, the committee found U.S. subsidiaries that remained dependent on parent or affiliate entities in China or Hong Kong for important technical and operational functions while retaining equipment and network connections inside the United States.

At China Telecom Americas, requests involving connections between U.S. and overseas networks were handled by personnel in Shanghai, Hong Kong or Beijing, according to testimony cited in the report. Service orders could also flow through a parent-controlled system to Shanghai Telecom without a separate contract. The U.S. subsidiary did not keep independent traffic-flow records, leaving employees unable to determine whether a parent or affiliate had changed routes involving equipment in the United States.

China Telecom Americas identified 10 active points of presence — sites where a carrier keeps equipment and connects with other networks — across seven metropolitan areas. A senior engineering official also told the committee that about a quarter of the company’s U.S. transmission hardware was still made by Huawei, whose equipment the FCC has deemed a national security risk.

China Mobile USA, meanwhile, was described by one witness as “basically a sales team,” while another said it had no network engineers. Orders for data center space and network connections were approved at its Hong Kong headquarters, and witnesses could not identify a network operations team based elsewhere.

Despite this, China Mobile USA’s records contained 39 point-of-presence entries across 27 data-center and interconnection facilities. The committee said those sites connected it to carrier backbones, internet exchanges and private networks used by major U.S. technology companies. Investigators identified at least 143 active China Mobile network assets in U.S. facilities.

China Unicom Americas disclosed that seven of its eight directors and two of its three senior managers were Chinese Communist Party members. Its U.S. employees used parent-controlled email and computer systems, and evidence indicated that they operated under cybersecurity, administrative and privacy policies issued by China Unicom Global.

A compliance official told the report’s authors the subsidiary could guarantee its own adherence to U.S. law, but not its parent’s.

A China Unicom Americas compliance official also acknowledged that the subsidiary did not know the identities of some third parties in China that ultimately received services ordered through China Unicom Global. The company had equipment and active connections in roughly 10 U.S. data centers.

Other carrier relations

The report also describes relationships between the three Chinese carriers and companies linked by U.S. authorities to Chinese hacking operations.

China Mobile, in one case, acted as a middleman for CloudRadium, a Hong Kong hosting provider whose infrastructure has repeatedly surfaced in malicious cyber activity, the committee said. Subpoenaed records showed that China Mobile purchased U.S. data center space and network connections on CloudRadium’s behalf, including through a four-year contract valued at $480,000.

The report also links CloudRadium to a Wyoming company of the same name and GlobalData Investments, a California corporation that markets hosting and data center services under the CeraNetworks name. Nextgov/FCW found that the companies’ websites used similar logos, layouts and animations. An email sent to an address listed for Steven Beals, identified online as GlobalData Investments’ chief operating officer, was returned as undeliverable.

The committee also details China Unicom’s relationships with Integrity Technology Group and i-SOON, two Chinese cybersecurity contractors U.S. authorities have linked to state-backed hacking.

A 2024 U.S. advisory identified Integrity Tech infrastructure as the control layer for a botnet of compromised routers and other internet-connected devices operated by Flax Typhoon, a Chinese state-sponsored hacking group. China Unicom Beijing network addresses were used to manage the botnet and connect it to other attack infrastructure and, according to the committee’s report, China Unicom and Integrity Tech formalized a cooperation agreement in November 2023 while the botnet was operating.

China Unicom separately appeared as a corporate partner of i-SOON. The company drew international scrutiny after a large collection of purported internal documents appeared on GitHub in 2024, exposing details about its hacking tools, targets and work for Chinese police and intelligence agencies.

The Justice Department later charged eight i-SOON employees and two Chinese police officers in a years-long hacking campaign, alleging that the company worked with at least 43 intelligence or police bureaus. The charges have not been proven in court.

Integrity Tech’s website was unavailable when Nextgov/FCW attempted to contact the company, and a functioning corporate website for i-SOON could not be located.

“China has been conducting an escalating campaign of cyberattacks on U.S. networks as a form [of] operational preparation of the battlefield,” said Jack Burnham, a senior research analyst in the China Program at the Foundation for Defense of Democracies whose work focuses on China’s military, emerging technologies and science and technology policy.

“Key to these efforts is Beijing’s capacity to access core domestic networks, either via installed equipment, routing relationships, or other interconnections,” Burnham said. “While the FCC has sought to tamp down on Chinese state-owned telecoms firms that pose a national security threat, there is clearly more work to be done, both in terms of regulation and rip-and-replace, to properly handle these threats.”

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OPM breach victims could get identity protection for life

David DiMolfetta — Mon, 03 Aug 2026 09:00:00 -0400

Federal employees and contractors whose sensitive personal data was stolen in the massive Office of Personnel Management breaches disclosed a decade ago would receive identity protection for the rest of their lives under new bicameral legislation.

Senate Intelligence Committee Vice Chair Mark Warner, D-Va., and Del. Eleanor Holmes Norton, D-D.C., plan to introduce the RECOVER PII Act on Monday, aiming to prevent the federal government’s identity-protection program for victims from expiring Sept. 30, according to bill text first seen by Nextgov/FCW. Sens. Tim Kaine, D-Va.; Angela Alsobrooks, D-Md.; and Chris Van Hollen, D-Md., are also Senate cosponsors.

Just over 10 years after the OPM breaches compromised personal information belonging to roughly 22 million people, the identity-protection services provided to affected federal workers, contractors and their families have begun expiring. People who enrolled in OPM’s MyIDCare program are receiving notices that their complimentary coverage will end 10 years after their individual enrollment date. Some notices began arriving late last year and will continue through September, when OPM plans to conclude the services at the end of the federal fiscal year.

“More than ten years after the OPM data breach exposed the personal information of millions of federal employees, the threat remains,” Warner said in the statement. “The data stolen included workers’ most sensitive and personal information — from Social Security numbers to security clearance records — and once that information is in the hands of a bad actor, you don’t get it back.”

The two breaches compromised information belonging to some 22.1 million current, former and prospective federal employees, contractors and others. One intrusion exposed personnel records for roughly 4.2 million people, while a second compromised 21.5 million background-investigation records. About 3.6 million people were affected in both incidents, according to the Government Accountability Office.

Foreign intelligence services can hold onto these OPM records for years, combine them with information from other cyber intrusions and use the fuller picture to identify or target government personnel and their families.

Those risks can also grow over time. Data stolen from a lower-level employee in 2015 could become far more valuable if that person later moves into a more sensitive national security role. GAO warned last year that adversaries can combine publicly available data to identify military personnel and their families or disrupt Defense Department operations.

Congress responded to the breach in a 2017 appropriations law by requiring OPM to provide victims with at least 10 years of complimentary identity protection and no less than $5 million in identity-theft insurance. The new bill would replace that limit with coverage lasting for the remainder of each affected person’s life while retaining the insurance requirement.

“We have a responsibility to stand by the federal workers who were put at risk through no fault of their own,” Warner said. “This legislation will ensure those affected continue to receive the identity protection they need, while helping better safeguard personal information from future exploitation.”

The bill would also allow agencies to reimburse federal employees and contractors for privacy tools and services, such as those that remove or limit their personal information online. Agencies would decide whether to offer the reimbursements, which would not be limited to OPM breach victims and would come from their salary-and-expense budgets.

Norton has introduced legislation in the past seeking lifetime protection for OPM victims, beginning after the breaches were disclosed. Similar bills introduced over the years have not become law.

“Lifetime identity protection is the only solution that will give the workers whose data was compromised the peace of mind they deserve,” Norton said in a statement. “Because there is no limit on how long personal information can be exploited, Congress must protect these federal employees and contractors in perpetuity. Thank you to Senator Warner for working with me to secure this vital protection for those affected.”

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Attackers are targeting open-source AI just as Big Tech is embracing it

Patrick Tucker — Sun, 02 Aug 2026 08:00:00 -0400

The future of AI will be driven in significant part by startups and small players using open-source software to make their own, cheaper, more efficient versions of Claude or ChatGPT, tech leaders finally admitted this week. For companies like AWS, the challenge now is protecting those public tools from increasingly sophisticated attacks from China, Russia, North Korea, or other players.

“Open-weight models—AI models that anyone can download, inspect, modify, and run on their own infrastructure—are an important part of that foundation because they make advanced AI more accessible, adaptable, and widely available,” reads a July 24 statement by Nvidia CEO Jensen Huang, and co-signed by Amazon, Meta, Google, Microsoft, and a host of other companies.

How open won

The statement shows a dramatic reversal by companies that made fortunes off of proprietary software and have invested billions in OpenAI, Anthropic, and other frontier AI labs whose primary business is closed AI models. Dramatic, yes. But years in the making.

Satya Nadella illustrates how quickly sentiment among leading tech firms has changed. In 2024, the Microsoft CEO described proprietary models as critical to safety. Closed-source AI, he said, “allow[s] us to do deep end-to-end red-teaming, alignment, and safety evaluations before exposing them to the world.” Microsoft had invested $13 billion in OpenAI by that point.

AWS, another signatory of Huang’s statement, this week completed a $50 billion investment in OpenAI; the Amazon spinoff has also put money into rival lab Anthropic. Both of those investments were bets that the intellectual property of a small number of labs was going to be better and easier to safeguard than code made, often, by volunteers.

What has changed since 2024? Several things: A growing body of research showed that relatively cheap open-weight models were steadily catching up to the performance of closed ones. The American public is increasingly pessimistic about AI. The Pentagon wants AI that it can control and can operate without large, targetable data centers.

But for tech giants like Microsoft and AWS, the biggest change since 2024 is their evolution from provider of AI to provider of tools, space, and security for open-source and open-weight AI developers.

During AWS’ earnings call on Thursday, CEO Andy Jassy boasted of more than 10 models in Amazon’s Bedrock platform, which allows users to build their own generative models.

Nadella did the same on behalf of Microsoft this week. “We offer the broadest model catalog in the cloud, with over 11,000 models, including the latest from OpenAI, Anthropic, Mistral, xAI,” and Microsoft itself.

Venture capitalist Chris Dixon in his 2025 book Read, Write, Own describes this phenomenon as “commoditizing the complement.” Big Tech’s recent open-source enthusiasm is not unlike Oracle’s support for the development of the open-source Linux operating system in 2006. Oracle’s strategy, as Dixon describes it, was to get volunteers to make and maintain an operating system that was cheaper than Microsoft Windows. And they did.

Today, Microsoft and AWS see themselves more and more not as the future’s most powerful builders of AI but sellers of tools, services, computing resources, etc., to a wide ecosystem of AI builders—including their own.

Among those services are AI tools like Microsoft Copilot and Amazon Inspector, which help find malware and vulnerabilities in builder code, including code from open-source libraries.

Poisoning the future

AWS said adversaries are increasingly turning to AI not just to find vulnerabilities in open-source code, but to poison those code libraries in ways even other AI security programs don’t detect; for instance, malware that only executes when a user issues a prompt that has a typo or that only works when other code is entered into the library later.

This dangerous code is often cloaked in helpful suggestions.

“How does that malicious package or software get into that open source?” asked Rick Anthony, Sr., who manages Amazon Inspector. “Attackers are gaining trust… They're going out and they're acting like real developers. You know, they're creating packages, and these packages are doing real useful benefits.”

These techniques are easier to execute with AI coding agents, Anthony said. “They can sit there and have very reasonable-looking contribution histories. They can have very useful release cycles, and before you know it, these attackers look like good citizens within the open-source community.”

Attackers are also exploiting the fact that more and more security reviews now happen via AI agents, which have weaknesses and blind spots. “What we're going to see is attackers not only try to fool the humans, but try to fool the AI by giving it enough evidence to convince it that what you're running is ‘OK.’”

China and Russia are in a great position to carry out such attacks because they don’t face penalties for running experiments on real-world targets, AWS Chief Security Officer Stephen Schmidt said. he was He said he is “really concerned” about them.

AWS is employing red teams running with their own AI agents to find vulnerabilities in code before adversaries can exploit them, but also to attack emerging open-weight models, hoping to discover potential adversaries' tactics before adversaries do.

But finding a hole or vulnerability is only the first part of the challenge, Schmidt said. Developing an actually useful patch takes longer. So AWS is also looking to speed up sending its fixes to the problems it encounters, and then test them again against threats they haven’t yet thought of.

“We test the [patches] for not only performance but also the way that they respond to certain kinds of adverse behavior, because we know that the adversaries are going to go after them as soon as we release them to the public,” Schmidt said.

That, too, will become increasingly difficult for more and more organizations precisely because defenders are now using AI to find more vulnerabilities. Following Anthropic’s release of its powerful Mythos model to a handful of companies, the number of vulnerabilities researchers found and disclosed quickly doubled, as did the number of patches. Each new bug found is a victory, but it also increases the work to develop a good patch.

“We are running this as a security industry as a sprint—oh my gosh! You know this big thing called Mythos came out, and we’ve got to do all this vulnerability identification. This is going to be the long haul. We're going to be doing this forever” Schmidt said.

The ramifications of that for future software development, and AI model building in particular, are significant. New AI builders will have to invest in protective AI at the same rate they invest in building new tools, he said.

That’s one reason why not everyone is excited about the future of open-source models.

Anthropic is notably absent from Huang’s statement. The company’s CEO issued his own statement this week, stating that he isn’t for banning open-weight models outright, but he supports mandatory safety testing for all models, as well as other measures to curb China’s ability to copy powerful models like Mythos.

Anthropic researcher Julie Merz was more direct about the threat in a Sunday post on X: “This time next year there will be the internet hitting every rural hospital/city council/etc at once with crypto locker attacks,” she said. “I think there’s a shocking lack of imagination in a lot of the CEOs/influencers pushing open models.”

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Shock wave

Peter W. Singer and August Cole — Sat, 01 Aug 2026 08:00:00 -0400

Imagine an alternate near-future in which the U.S. military had more vigorously pursued the development of hypersonic weapons. When a major U.S. Air Force exercise deploys such weapons to Guam, Tinian, and Saipan, it surprises Chinese military leaders who believed that U.S. hypersonic missile development had been stymied by underfunded research, technological gaps, and a lack of prioritization.

This month’s Fictional Intelligence is a “what if” thought experiment that takes the form of a memo on this stunning turn of events, written by a colonel in the PLA Intelligence Bureau of the Joint Staff of the Central Military Commission. In this imagined universe where the U.S. leads China in hypersonic warfare, not lags behind, the People’s Liberation Army is forced to revisit its strategic assumptions and plans.

This fictional document uses PLA writing conventions, for example, to detail specific aircraft and offer general systems capability observations.

FICTIONAL PLA MEMO TEXT:

DATE: 203X July 2

REF: 33/CMC/24-8

DIST: PLA Joint Operational Systems Design Expert Group • Central Military Commission Political Work Department • Central Military Commission Joint Staff Department • Central Military Commission Equipment Development Department • Eastern Theater Command Political Work Department • People’s Liberation Army Air Force Political Work Department

SUBJECT: Selected Observations on the Strategic and Mechanization Implications of the Performance of U.S. Air Force Hypersonic Weapons Systems

Comrade,

Reflecting the urgency communicated by the Communist Party of China’s Politburo Standing Committee and the Communist Party of China’s Central Military Commission, I respectfully offer this analysis in response to the CMC’s inquiry into the strategic blackmail posed by the U.S. Air Force PACIFIC ARCHER exercise inside the Second Island Chain and the mechanization aspects of the enemy’s combat power.

Summary: As a reflection of adversary defense industrial strength and military research, the PACIFIC ARCHER exercise signifies a qualitative shift for the enemy and necessitates a subjective rectification of our previous assumptions about American hypersonic weapons integration and its operational implications to the PLA.

Guided by dialectic principles, this analysis divides into three parts:

1) PACIFIC ARCHER Systemic Overview

2) Rectifications of Understanding: Cognitive Lag and U.S. Hypersonic Capabilities

3) Operational Logic for Confrontational Thresholds and Active Defense

PART 1: PACIFIC ARCHER Systemic Overview

On 17 June 0430 local time, the U.S. Air Force commenced exercise PACIFIC ARCHER to simulate the rapid deployment of hypersonic-missile equipped fighter and bomber aircraft. During the next 36 hours, the Americans deployed multiple squadrons of systemic nodes (five squadrons of fighter aircraft and four bomber squadrons) to Guam, along with additional support aircraft. Notably, both types of combat aircraft were armed with hypersonic missiles. Within 12 hours of arriving on Guam, 67 percent of the aircraft dispersed to other locations inside the Second Island Chain, including Saipan and Tinian.

The operationalization of this system-centric rapid response capability, integrating an aviation network entirely equipped with hypersonic air-to-ground effectors, is significant in multiple ways. It turned legacy aircraft and AI-guided Collaborative Combat Aircraft into an intelligentized force. The exercise of this system-centric rapid response capability marked the first time the adversary deployed aircraft that were all equipped with hypersonic air-to-ground missiles. Additional support and logistics C-17 and C-130 aircraft transported additional simulated missiles to Guam and other dispersed U.S. Air Force Agile Combat Employment (ACE) bases to demonstrate contested resupply. These systemic strike nodes achieved a qualitative leap ahead in lethality to achieve the potential systemic neutralization of our high-value targets.

Previous U.S. military exercises such as REFORPAC, BAMBOO EAGLE, and TALISMAN SABRE integrated hypersonic weapons capabilities, with a focus on U.S. Army and Marine Corps ground-launch capabilities, such as Precision Strike Missile (PrSM) and Long Range Hypersonic Weapon (LRHW or Dark Eagle) missiles. PACIFIC ARCHER is the first exercise centered on an intelligentized air-launched weapons framework of multiple aircraft types and their employment from dispersed locations that can match or exceed ground-launched hypersonic weapon ranges. The enemy demonstrated its capability to strike deep into our strategic depth.

The enemy aircraft involved in the exercise included F-15EX, F-22, F-35, F-47, B-21, B-1, and B-52, as well as at least two types of known Collaborative Combat Aircraft. Notably, the B-52 can carry more than 20 HACM weapons and the B-1 can carry 36 HACM weapons. Imagery and signals reporting indicate the aircraft carried the hypersonic missiles internally and externally. Known missile types tested during PACIFIC ARCHER were AGM-183A ARRW, Hypersonic Attack Cruise Missile (HACM), and Mako weapons; presently unknown hypersonic air-to-air missile systems were also deployed.

By 29 June, all U.S. Air Force aircraft involved in PACIFIC ARCHER departed Guam, Saipan, and Tinian after completing multiple simulated long-range strike missions.

PART 2: Rectifications of Understanding U.S. Hypersonic Capabilities

The PLA possesses the most advanced and comprehensive hypersonic air-, sea-, and ground-launched missiles of any military. They are the logical product of the Party’s dedication to defending China’s core interests and years of investment to generate asymmetric advantages for the PLA in the New Era.

We must now admit a cognitive gap in our technical modeling and principal assessments that believed the enemy would continue to lag behind China’s hypersonics march to world-class status in the future. This necessitates seizing this opportunity for self-reflection on how the U.S. achieved this capability and for developing renewed understanding of the integrated elements involved. This reexamination is a moment to study the U.S. example and use that new understanding to surpass them in this technical area.

For one, PLA intelligence analysis considered the American harnessing of civil-military fusion with a sole focus on AI and software to have shut the door on military research and technology programs developing medium- and long-term capabilities in non-profit civilian economy centers, including hypersonics. Also, analysts believed U.S. military and political leaders to have timid voices regarding a sense of urgency in reforming the culture of procuring and deploying hypersonics as a matter of time sensitivity.

The U.S. Air Force’s fielding of these air-launched decapitation tools during PACIFIC ARCHER reveals much greater success in overcoming the technological and developmental challenges of air-launched hypersonic missiles than was previously assessed by PLAAF.

Most significantly, the enemy’s deployment of so many aircraft equipped with hypersonic missiles to the Guam bastion attests to the successful scaled production of such weapons. It is now evident that the U.S. has built a bridge between hypersonic research and testing and its revitalized defense industrial base’s production facilities. Past analysis of renewed enemy military-industrial-financial complex capabilities during the last decade indicated a policy focus on intelligentized command and control, autonomous drones, conventional munitions, and profit-seeking innovation –– rather than research-intensive aerodynamic pressure sensors, dual-flow scramjet propulsion, and composite aerostructures needed for scaled production of hypersonic air-launched missiles. In seeing what was visible on the water’s surface, such hypersonic technologies appeared to have been cut off from the flow of vital budget support and dedicated Air Force research and testing organization personnel focused on scaled manufacturing challenges. We assessed there to be little likelihood of production breakthroughs in these areas. PACIFIC ARCHER revealed a gap in our understanding.

As an example of the adversary’s progress, the successful miniaturization of medium-range hypersonic air-to-ground missiles allows them to be carried on internal weapons racks in aircraft such as F-35 and F-22 fighters. Produced at multiple manufacturing facilities, the supply chain for these miniaturized missiles is nonetheless vertically integrated and must reflect harmonious cooperation among the U.S. Air Force and defense industry. Subsequent research reveals successful high-volume manufacturing of miniaturized scramjet propulsion units. Not only does this design reduce the radar signature on these aircraft equipped with internally carried missiles, but it also makes it difficult to determine if an aircraft is equipped with hypersonic weapons during testing or deployment. Other technological advances linked to the capabilities demonstrated in PACIFIC ARCHER exceeded expectations. These include hypersonic flight control software systems, materials thermal management, and precision navigation and timing.

Shared military-civil fusion goals between U.S. universities and the U.S. Air Force are now known to have led to the development of additional hypersonic test infrastructure, such as multiple Mach 10 wind tunnels. Expanded flight test campaigns conducted to improve air-launched capabilities were integrated into other ground-launched missile development programs, resulting in cost efficiencies and obscuring the nature of these air-launched experiments.

Determining a precise picture was now evidently made more difficult by comprehensive adversary counterintelligence activities focused on securing defense-industrial research and development. We must also acknowledge their potential use of deception and cognitive warfare operations, capabilities that they demonstrated in past generations, but we assumed had been devalued. It is highly possible the gap in our understanding of U.S. Air Force hypersonic capabilities is attributable to a deception operation on the part of the American military to create a cognitive trap.

Your announcement of the replacement of the leadership cadre of the PLA Intelligence Bureau and a CMC Discipline Inspection Commission focused on all who failed in their duty will surely bring more information on how this cognitive gap proved possible.

What is known at this time is that by shining a bright light on emergent adversary civil-military fusion market forces revitalizing their defense industry, we created a shadow elsewhere. MSS and PLA analysis and cyber activities focused on emerging defense companies, especially those centered in “Silicon Valley” and their venture capital industry, both of which had been compromised by our human and SIGINT assets for over a generation. However, this created a failure to appreciate that many important defense breakthroughs like hypersonics advances, which often require long lead time and don’t always produce profits, could still be fueled by government research and development centers like DARPA and the Air Force Research Lab.

While more time is needed to understand how this was achieved, it is now clear that a shared vision of urgent innovation and scientific fighting spirit was present within the U.S. Air Force, as evidenced by reexaminations of obscure public writing and speeches by officials. While a budget is like oxygen for the body, without a facile mind there is no way that a program will thrive. By harvesting its human capital and innovation from all ranks and organizations, the U.S. Air Force has created a talent forest that is a resource for future development work in this technical area, as well as others. This may be the backbone of the breakthrough in air-launched hypersonic weapons displayed at PACIFIC ARCHER, and we must strongly search out other cognitive gaps in multiple other technology areas where we had assumed superiority for the PLA.

PART 3: Operational Logic for Confrontational Thresholds

The hegemonic behavior of enemy military forces inside the Second Island Chain is not surprising, but the U.S. Air Force hypersonic capabilities displayed at PACIFIC ARCHER reflect a necessary opportunity to consider the reexamination of operational logic for confrontational thresholds. It was believed that the enemy would be subdued without fighting, yet this aggressive demonstration shows they have now embraced our own approach to asymmetric engagement. If Chairman Mao advised, "You fight your way, and I’ll fight my way," the systematized employment of hypersonic weapons is more “our way.” A primary area of inquiry relates to operational planning during the critical window of the next 18 months.

While all-domain sensing of systemic threat nodes allows the identification of U.S. Air Force fighters and bombers dispersed to fixed nodes of high value inside the Second Island Chain from Guam to Tinian, Saipan, and other locations, PLAAF forces will be blind to whether these aircraft carry a spear or a stick. With its dispersed bomber and fighter aircraft armed with air-launched hypersonic weapons, the enemy has demonstrated a qualitative leap in lethality at a distance, while expanding the strike radius to apply persistent asymmetric pressure to the PLA’s own high-value systemic nodes.

When U.S. Air Force aircraft operate from a distributed operational system within the Second Island Chain, enemy air-launched hypersonic missiles can attack fixed PLA targets from multiple vectors and beyond air-intercept ranges. It is assessed now that enemy air-launched hypersonic missiles can simultaneously reach targets inside the First Island Chain, such as PLAN Carrier Strike Groups in port, PLA frontier bastions on Fiery Cross Reef, and the nerves of our space-ground nodes at Sanya Ground Station and Jiamusi Ground Station. This target coverage within our strategic barriers at scale was not believed to be possible until PACIFIC ARCHER presented the operationalization of these capabilities.

The demonstration of such enemy hypersonic capabilities introduces additional dilemmas for large-scale PLA expeditionary operations, which rely on surprise, mass, and speed. The enemy can deploy such aircraft and missiles in a superior position before a battle, such that they are able to predetermine the outcome in their favor.

Dispersed U.S. Air Force fighters and bombers inside the Second Island Chain will be able to pursue mobile targets at ever greater distances, as was demonstrated during PACIFIC ARCHER. In one instance observed by a PLAN surveillance vessel, a B-1 bomber operating from Tinian International Airport launched a HACM that destroyed a maneuvering maritime target decoy south of Wake Island. At a range of approximately 1,600 kilometers and guided by sensor-fusion data, this capability exceeds the speed and range of conventional air-launched antiship missiles previously used by the enemy. Our modeling and simulations of enemy airpower capabilities must therefore shift if relatively fewer enemy aircraft can target far more fixed and mobile PLA targets than had been expected. Additional testing during the exercise of an unknown hypersonic air-launched missile fired from B-21 bombers revealed the U.S. Air Force has fielded an internally carried Mach-10 weapon. This new enemy capability further destabilizes the balance between defense and offense.

The PLA’s planned asymmetric advantage targeting the enemy’s logistics in depth during a war of consumption is now also an assumption that must be reexamined.

The new enemy capabilities pose complications and dilemmas for PLA and CMC air, sea and expeditionary operations in INDOPACOM –– particularly the time-to-target compression from Mach 6/Mach 7+ hypersonic weapons deployed around the enemy force at scale. U.S. Air Force distributed nodes inside the Second Island Chain are beyond PLARF non-ballistic engagement zones, which compounds the PLA’s dilemmas as each dispersed enemy Air Task Force now has a much greater effective targeting range. With these new hypersonic weapons, the enemy systemic strike node operating concept emerges from its desperate position of timidity and defensiveness to one that is proactive and highly disruptive. By targeting PLAN vessels and air-defense systems, the enemy can disrupt the PLA’s counter-intervention capabilities necessary for far seas protection.

In light of this, specific operational areas necessary for strategic leadership require careful consideration based on the enemy capabilities demonstrated at PACIFIC ARCHER.

First, any operation to fulfill our national destiny to reunify with Taiwan must recognize the seeding of enemy archers and arrows throughout our near seas that can sever supply lines by targeting supply vessels in the Taiwan Strait with hypersonic air-launched missiles. The enemy can also apply a stranglehold on lines of communication and supply to our bases in the East and South China Seas.

Transregional operations to establish common strategic interests in the Indian Ocean, East Africa, South America, the Middle East, and the Arctic, must also be reassessed. U.S. Air Force aircraft equipped with hypersonic missiles provide a similar gain in range and speed, threatening PLA forces, our interests, and our logistics support facilities worldwide. Specifically, a harmonious and historic reunification with Taiwan could be prevented by enemy hypersonic weapons deployed to global strategic nodes proximate to our Belt and Road lines of communication. Even a few enemy aircraft could sever the maritime flow of oil, critical minerals, and other materiel flowing from the beating heart of our logistics networks in those far regions.

Conclusion:

The PACIFIC ARCHER exercise signifies a qualitative shift for the enemy’s systemic strike nodes in the Second Island Chain and reflects a renewed strength in their civil-military fusion focused on intelligentized warfare. The U.S. Air Force fielded unprecedented numbers of air-launched hypersonic weapons while demonstrating an improved joint operational strike system. In doing so, they revealed an unexpected sense of urgency in their fusion of research and development, production, and doctrine to achieve new levels of lethality at a distance against the PLA’s high-value systemic nodes. The adversary’s previously identified system dependencies, identified through systems confrontation analysis, are no longer valid. The Communist Party and CMC must reexamine all strategic planning during the next 18 months as we seize this opportunity for self-reflection on how the adversary achieved this capability and for developing a renewed understanding of our own PLA capabilities.

PREPARED BY: Commanding Officer Senior Colonel Li Feng, PLAAF

REVIEWED BY: Political Commissar Senior Colonel Bao Hu, PLAAF

Image: Modified from an original DVIDS U.S. Air Force photo.

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HII’s sea drone business is growing, but revenue is ‘modest,’ CEO says

Lauren C. Williams — Fri, 31 Jul 2026 16:58:25 -0400

The nation’s largest military shipbuilder sees maritime drones producing “modest” revenue now, but expects that to grow as the Navy builds its unmanned fleet, HII’s chief executive said during Thursday’s earnings call.

“We know it’s going to become more of the Navy fleet because [unmanned systems] can do excess missions and expand the fleet size such that they can do things that large capital ships can’t do and take the place of large capital ships in some of the missions,” said Chris Kastner, HII’s CEO and president. “From a revenue standpoint right now, it’s pretty modest.”

Kastner went on to say that HII’s unmanned business, which is part of the Mission Technologies division, is growing quickly. Earlier this month, the Navy extended its Lionfish unmanned undersea contract that was originally awarded in 2023 for nearly $350 million. The contract is for five years with options, and the first units were delivered in 2025.

“I don’t really want to comment on how large it’s going to be, but I’ll tell you one thing—it’s the fastest-growing business unit we have,” Kastner said, adding that the company is competing for the Navy’s medium unmanned surface vehicle program.

“The international and domestic pipeline is strong, we’re going to pursue those…It’s a good business unit. It’s a growing business unit. The profitability should be solid because it’s firm fixed-price contracts. We think we’re very competitive, and we’re going to continue to invest in it and watch it grow. Now, is it going to be a billion-dollar battleship? No. We think it’s going to grow. We think there’s significant opportunity, and we think it’s going to be a greater part of the fleet.”

Sea drones have become increasingly visible on the battlefield as navies use them for surveillance, rescues, and kinetic strikes. And more companies have entered the sector as the Navy boosts its unmanned systems budget and homes in on how it wants to integrate them into its fleet—while pushing companies to grow the capacity to build them quickly.

HII has emphasized its tech business more in recent years, often stressing the segment’s poised growth. Mission Technologies had $760 million in second-quarter revenue this year, an approximate $31 million and nearly 4 percent drop compared to last year.

That’s “primarily due to lower volumes in all domain operations in global security, partially offset by higher volumes in warfare systems and unmanned systems,” Tom Stiehle, HII’s chief financial officer and executive vice president, said during Thursday’s call.

The Mission Technologies business is expected to grow about 5 percent in the next five years and generate up to $3.2 billion in revenue for fiscal year 2026, according to the company’s earnings update.

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Anthropic confirms its AI breached 3 organizations during testing

Alexandra Kelley — Fri, 31 Jul 2026 09:40:00 -0400

Anthropic’s flagship artificial intelligence model Claude gained unauthorized access to the networks of three different organizations, the company announced following internal cybersecurity audits of its routine model evaluations.

In a press release posted Thursday, Anthropic said that, following the containment breach of OpenAI’s ChatGPT-5.6 and subsequent attack on Hugging Face’s systems, Anthropic conducted an audit of its own model evaluations. The findings revealed that, out of 141,006 examined evaluations of Claude models dating back to April, there were three incidents where a model accessed the internet from within or while interacting with the third-party evaluators.

Each attack occurred during a “capture-the-flag” scenario where the models are asked to find hidden information housed within a different node.

In the blog post, Anthropic blamed a “misunderstanding” between them and their third-party evaluators that granted the models internet access. The models were told in prompts that they would not have real internet access and therefore operated under the premise that all accessible systems were part of the test environment.

“Operating under the false belief that all accessible entities were intended to be in-scope for the exercise, Claude compromised the impacted organizations’ infrastructure using basic techniques, such as exploiting weak passwords and unauthenticated endpoints,” the post reads. “It did not find or exploit any complex vulnerabilities, and in each case, Claude continued working to complete only the specific capture-the-flag task its evaluation had assigned.”

The models involved in the incidents were Opus 4.7, Mythos 5, and an unnamed internal research test model that isn’t planned for release. Anthropic stated that, despite accessing the internet as part of its cybersecurity testing, the models did not deliberately attempt to leave their training environments; accessing the internet only occurred as they looked to complete their tasks.

In one incident, Opus 4.7 executed the task on the real-world networks of a company once it realized it could via internet access.

A second incident was more extensive. Mythos 5 sought to find information by referencing software development instructions inside a fictional environment. It used these instructions to install a Python package from a public registry that didn’t actually exist in the hopes that the fictional company would automatically download it, thus granting the model access to its networks. In order to do this, it created login credentials a human user would need.

That Python package was inadvertently uploaded to the internet, where 15 systems downloaded it and compromised their systems.

The third incident saw the prototype model scan real targets after being unable to find the fictional target included in the test.

Anthropic noted that, when the models were able to discern that the attacks affected real systems, they halted their testing processes—something that, in part, the company said, gives it “cautious optimism.”

“Several defense-in-depth measures, on both our side and our partner’s, could have prevented these incidents or at least reduced their likelihood of occurring,” the post read. “Both we and our partner also could have reviewed evaluation transcripts or network logs more thoroughly. It’s also possible that a prompt which told Claude it did have internet access would have changed how Claude behaved when it came into contact with real systems.”

In the aftermath of the breaches, Anthropic is working with its evaluation partner, Irregular, and METR, an independent AI evaluation organization, to continue conducting reviews. It is also working alongside affected companies whose systems were compromised.

Anthropic concluded by saying it encourages other AI developers to conduct similar audits and that evaluation exercises in general need stronger oversight and safeguards.

“Ultimately, many factors contributed to these incidents, but, consistent with a blameless postmortem culture, we’re approaching the fixes as if the responsibility were ours alone,” the post reads.

Industry peers characterized Anthropic’s revelations on the heels of OpenAI’s incident as a burgeoning pattern cyberdefenders should heed.

Tom Kellermann, the vice president of AI Security and Threat Research at TrendAI, said that these incidents underscore the continued need for safeguards even in secure sandbox environments.

“Anthropic and OpenAI just proved that when you strip guardrails for testing, you’re not creating a sandbox, you’re inviting systemic risk,” Kellermann said in a statement to Nextgov/FCW. “Every organization deploying agentic AI needs to ask itself if their evaluation environment is actually contained. Containment and monitoring are no longer optional.”

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Defense Business Brief: Handshake deals > plane orders?; Inside the aerospace supply chain, plus thoughts on that critical minerals EO

Lauren C. Williams — Wed, 29 Jul 2026 19:50:05 -0400

Maybe it was just me, but there seemed to be more handshake deals between companies than airplane buys—military and commercial—at last week’s Farnborough International Airshow.

As a Farnborough first-timer, I had very few expectations. I guessed there likely wouldn’t be as many aircraft flying because of surging fuel prices and the Iran war. And the NATO Summit already had several major announcements.

But given the fanfare, should there have been more big buys trumpeted? Or are industry deals—showcasing how willing companies are to collaborate—the new normal?

“There are always partnerships being announced, but I think it was more of a lack of the large order announcements that we typically see that made them more visible,” said Grant Holve, a commercial aerospace analyst for Forecast International, a sibling brand of Defense One that provides market analysis and intelligence. “It was a 50-50 split between commercial and defense this year…usually it's like 80-20 or 70-30 tilted toward commercial.”

The lack of big purchase announcements coupled with the strong European defense spending backdrop seemed curious to me. But a theme emerged: dual-use commercial aircraft venturing into the defense arena.

“Commercial crossovers into defense aerospace seemed to be an identifiable theme. That was a takeaway I noticed specifically with the ‘contested logistics’ space for air taxi companies,” said Jon Hemler, director of Forecast International's military aerospace and weapons division.

Those eVTOL makers definitely made a splash, from Archer Aviation’s snazzy black and gold chalet (and partnership with Anduril) to Sikorsky teaming with Beta Technologies’ MV250 on autonomous cargo aircraft.

“It's increasingly an area where civil firms can partner with defense companies as an entry point to the market,” Hemler said.

Welcome

A boom for the aerospace supply chain. The more electrified and digitally-infused aircraft get, the more parts they need. That’s good business for distributors like FDH Aero, which team up with multiple suppliers to bulk buy, store and sell parts to customers.

“There's a lot more digital components, connectors, wires than there were two decades ago,” thanks to the electrification of aircraft and increasingly complex digital environments, CEO Ian Walsh told Defense One at the Farnborough airshow. “And because defense and commercial are growing very sharply, there's a huge pull on the supply chain to keep up with that.”
That demand can put a lot of strain on suppliers as commercial companies cross over to sell more to militaries.
“Imagine an [original equipment manufacturer] that's building helicopters for commercial [customers], and now this military customer wants 250 helicopters…they basically have to double their production, so it's putting a lot of strain on the supply chain to keep up,” he said. “We are seeing and benefiting from the fact that we're really good at what we do. We source long-lead time parts. We know our customers’ build rates in production, so we're really able to plan.”
Plus, drones need parts too: “If you'd been here a decade ago, if somebody mentioned the word ‘drone’ or ‘unmanned,’ they would look at you kind of funny. And I think every single booth [here] has some connection or product that's now tied to unmanned drones, eVTOLs. So that's a whole new frontier.”
But at the end of the day, while the “brains” of the newer, possibly autonomous, aircraft may differ, “an airframe is an airframe, whether it's going into space or it's landing vertically or landing on a runway. They all have connectors, rivets, bolts, connectors, fasteners—a bunch of little components all over it. I mean, there's just hundreds of thousands of those pieces all over that aircraft.”

Quick turnaround. Last week’s executive order on critical minerals will push defense contractors to get clear visibility into their supply chains by next year—a timeframe that caused much consternation. But could it be the push that prime contractors need? Can the industrial base risk waiting longer?

“It’s a critical element of sovereignty for us to be able to make sure that we can create deterrence through our industrial base,” said Chris Morton, who leads aerospace and defense business for IFS, which provides AI-fueled enterprise software and asset management for industrial businesses.
But “directing prime contractors, essentially, to rationalize their entire supply chain all the way to the bottom…it’s a Herculean undertaking.”
Morton said that type of visibility isn’t common among prime defense contractors, but getting that insight could lead the industry to uncomfortable, but necessary discoveries.
“I think there’s gonna be a whole lot of surprises. In the Army, we used to say that one of the first parts of operational planning is knowing yourself. And this effort is really that first step. We may discover some things that we are not happy about. But it’s a critical part of this effort because how can you know what materials you need to source and components you need to manufacture if you don’t really know what goes into your supply chain? We’ll see how the defense primes respond to this, because this is not an easy undertaking, not one bit.”
Related reading: In a July 22 report, the Government Accountability Office evaluated ways to reduce imported critical mineral reliance and recommended four policy changes to help that: creating domestic manufacturing capacity; building more infrastructure for battery and semiconductor recycling; making it secure; and investing in research and testing.
And another thing: The Trump administration plans to ban robots and inverters made in China and certain other nations, to bolster U.S. efforts in the sector.

Making moves + other news

A revolving door in reverse? The Pentagon wants to bring in more people from the private sector into defense acquisition and procurement roles through a new hiring program. But that could cause “significant conflict of interest” that’s layered with “corruption concerns” and “national security implications,” said Sen. Elizabeth Warren, D-Mass., in a letter to Deputy Defense Secretary Stephen Feinberg, CNBC reported.
- Related: Feinberg has been scrutinized for at least appearing to benefit financially from his post alongside other members of the Trump administration. Earlier this week, Sen. Warren sent a separate letter to Feinberg re-upping concerns from April about his financial ties to the firm he co-founded, Cerberus Capital Management, and oversight of the Golden Dome for America project.

Defense technology company Tagup wins a Marine Corps contract to help streamline equipment maintenance and repairs for 1st Maintenance Battalion in California. No dollar amount was listed, but Tagup’s Manifest AI platform uses a trove of data to see where all the parts for a given piece of gear come from, anticipate demand in an uncertain environment, and help troops plan for deployments.
- “Every maintenance decision requires balancing readiness, cost, and time,” Paul Plemmons, president of Tagup, said in a news release.
- “Manifest gives maintainers the decision advantage to weigh those tradeoffs and commit to the course of action that best keeps mission-essential equipment ready and available.”
Leonardo DRS to buy tech company Raft for $450 million.
Leidos wins $717 million Air Force contract for ISR support for Air Combat Command. The contract extends work the company has done since 2019.
The think tank Center for Strategic and Budgetary Assessments added Phil Davidson and Anita Antenucci as the board chair and vice chair, respectively.
- Davidson is the former commander of Indo-Pacific Command and has been on CSBA’s board for four years.
- Antenucci has served on the board for nearly eight years and founded the investment banking firm 3Wire Partners.

One more thing: A Seasats drone boat caught footage of a Chinese warship near the Philippines, Reuters reported.

Jennifer Hlad contributed to this report.

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Iran war ‘accelerated’ key tanker connectivity upgrades, top Air Force officials say

Thomas Novelly — Wed, 29 Jul 2026 19:41:38 -0400

DAYTON, Ohio—The ongoing war in Iran has pushed Air Force officials to prioritize battlespace awareness upgrades on the service’s tanker fleet, four months after two KC-135s were involved in a deadly crash during Operation Epic Fury.

Top acquisitions officials told reporters Tuesday during the Life Cycle Industry Days conference here that upgrading the KC-135, the newest of which was built more than 60 years ago, was a major priority for the service. In March, two of the tankers were involved in a mishap that did not involve “hostile fire or friendly fire,” according to U.S. Central Command. Six airmen died in the crash.

“We absolutely accelerated [Mobility Air Forces] connectivity because of Operation Epic Fury,” said Col. Paul Tinker, the deputy mobility program acquisition executive. “The MAF is more capable right now than it was, you know, in terms of connectivity, during the start of Epic Fury. We diverted personnel and funding resources to make that happen. It's AMC’s No. 1 priority, and it continues to be their No. 1 priority. We really focused on that for the last couple of months.”

Shortly following the crash, current and former Air Mobility leaders sounded alarms over the lack of battlespace awareness and connectivity onboard the KC-135. In March, Air Mobility Command said “almost half” of the service’s nearly 400 tankers were connected to Link 16, the military’s secure communications network, through a years-long effort known as real-time information in the cockpit, or RTIC. The service has made progress in just a few months.

While exact figures weren’t provided, “the majority of the KC-135 fleet is currently equipped with RTIC,” an Air Mobility Command spokesperson told Defense One in an emailed statement Wednesday.

After the deadly crash, former air mobility commanders told Defense One that KC-135s have standard radios that can provide some encrypted communications and a Traffic Alert and Collision Avoidance System, or TCAS, a transponder meant to prevent mid-air collisions. In chaotic combat zones, crews may decide to go without those systems and rely on visual separation instead.

The Air Force said increasing the amount of information KC-135 crews can have in the cockpit is a crucial safety upgrade, according to a January Congressional Research Service report.

“According to the Air Force, the tankers' ability to access tactical data links could increase mission success in contested environments by improving survivability, agility, and situational awareness for command-and-control elements and aircrews,” the report said. “The connectivity could provide aircrews with such information as potential threats, fuel availability, and safer landing sites. In addition, tanker aircraft could serve as a backup information conduit for other aircraft in a degraded communications environment.”

Col. Melvin Baylon, the Legacy Tankers Division’s senior materiel leader, told reporters the acquisitions arm has been working with Air Mobility Command on several upgrades, including increased access to Link 16.

“If you would’ve asked me just a few short years ago that we would’ve been integrating as much capability as we are onto the KC-135 platform, I would’ve said there would’ve been no chance,” Baylon said. “The end state is to make sure that we increase battlespace awareness.”

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Amazon uncovers broad North Korean hacking campaign against open-source software

David DiMolfetta — Wed, 29 Jul 2026 14:58:00 -0400

A North Korea-linked hacker group has been tied to four open-source software compromises dating back to March 2025, Amazon researchers said Wednesday, significantly expanding the publicly known scope of Pyongyang’s efforts to use trusted code to reach large numbers of potential victims and gain access to companies’ systems.

The assessment for the first time links the same financially-motivated hacking group to compromises of four major JavaScript packages—typo-crypto, debug, chalk and axios—that developers use as building blocks for other software. The axios package alone receives more than 100 million downloads each week, and its compromise had previously been attributed to the North Korean group.

Amazon said Wednesday that it had uncovered evidence connecting the actor to the three earlier incidents, based on technical findings that included instances of reused code and similarities in how the attacks were carried out.

Amazon Threat Intelligence attributed the campaigns to the group with “medium confidence,” according a blog post authored by Amazon Integrated Security CISO CJ Moses scheduled for release Wednesday evening. The cyber intruders are tracked by researchers under several names, including Sapphire Sleet, Stardust Chollima, BlueNoroff, CageyChameleon and Alluring Pisces.

In each incident, the hackers tricked a trusted software maintainer and used the access to publish an update containing malicious code, according to Amazon. Organizations configured to automatically download the latest version of those packages may have pulled the compromised updates directly into their systems. The approach allows hackers to compromise a small number of widely used packages while potentially gaining access to thousands of downstream systems, making it more efficient than targeting organizations individually.

Open-source software—code that can be freely inspected, modified and reused—underpins operating systems, web servers, encryption tools and many of the applications businesses rely on daily all over the world. The projects often depend on volunteer maintainers to review proposed changes, fix security flaws and publish updates.

That model relies heavily on trust. Attackers can spend weeks or months posing as legitimate contributors, fixing bugs and building relationships before attempting to gain control of an established project or publishing a malicious update.

That dynamic drew widespread attention in 2024, when an account operating under the name “Jia Tan” spent years gaining the trust of other developers before attempting to insert a backdoor into XZ Utils, a widely used data-compression tool included in numerous Linux distributions. The backdoor was discovered before it could be broadly deployed.

“Quite frankly, the open-source community is looking for good citizens because these packages are often not maintained by people who are getting paid to do that as a full-time job,” Rick Anthony, senior manager for Amazon’s Inspector vulnerability management service, told reporters in Arlington, Va. on Wednesday. “They are very welcoming for anyone who is willing to contribute.”

North Korea has long treated cyber operations as both an intelligence tool and a source of revenue. Its hackers steal cryptocurrency, conduct espionage and extort victims, while operatives posing as remote IT workers obtain jobs at foreign companies and quietly funnel their salaries back to the regime. Amazon is among those companies, executives said Wednesday. U.S. officials say the proceeds help Pyongyang evade sanctions and finance its nuclear weapons and ballistic missile programs.

“For a sanctions-constrained regime, generating revenue through these operations means that the greater the efficiency, the more money they get, and the more that they can use that money to do things that got them the sanctions to begin with,” Moses told reporters. “One successful supply chain compromise can yield access to hundreds, if not more, targeted intrusions.”

The findings also illustrate how open-source attacks are becoming harder to detect.

Amazon said attackers are increasingly dividing a malicious operation among several packages that appear harmless when reviewed individually. One package may contain encrypted data, another the code needed to unlock it and a third the instructions to download and execute the final payload. The malicious behavior becomes visible only when the components are used together.

AI is also making malicious software harder to spot, the blog warned. Hackers can use it to create polished-looking code, convincing documentation and fake developer profiles, eliminating many of the obvious mistakes that once raised red flags.

Attackers can also exploit errors made by AI coding assistants. If an AI tool recommends a software package that does not exist, hackers can register the name and load it with malware, hoping a developer or automated system will download it without realizing the recommendation was wrong.

Concerns about open-source software security have increasingly drawn attention in Washington. In December, the chairman of the Senate Intelligence Committee asked the White House national cyber director to take steps to address vulnerabilities in open-source projects that help power systems used throughout U.S. military and civilian agencies.

Last August, Nextgov/FCW first reported that an employee of the Russian technology company Yandex was the sole maintainer of a widely used open-source tool embedded in at least 30 pre-built software packages available to the Defense Department.

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Up to six designs could move ahead in Air Force’s next robot-wingman effort

Thomas Novelly — Wed, 29 Jul 2026 13:51:42 -0400

DAYTON, Ohio—Up to six designs could be brought to the prototyping phase of the second round of the Air Force’s drone-wingman effort next year, a service official told reporters on Tuesday.

Increment 2 of the Air Force’s Collaborative Combat Aircraft competition is well underway, Col. Timothy Helfrich, the fighter portfolio acquisition executive, told reporters at the Life Cycle Industry Days conference here. By roughly mid-2027, Helfridge expects, there could be “up to” half a dozen designs.

“We have another approximately 10 months left of our concept-refinement contract, where we would expect to have the refined attributes as we did before, as well as several closed conceptual designs,” he said. “We're shooting for roughly six, but we'll see what we end up with.”

In December, the Air Force announced that nine companies had received contracts to refine concepts for Increment 2 CCAs, and that 11 more remain eligible to compete in later phases of the effort.

“Increment 2 will be structured similarly to Increment 1, where more than one awardee may be selected for prototyping,” an Air Force official told Defense One late last year. “This approach allows for competitive development and ensures that the Air Force can evaluate various solutions before selecting the final designs to move into production.”

In 2024, service officials funded initial Increment 1 work by Boeing, Lockheed Martin, and Northrop Grumman, Anduril, and General Atomics, but ultimately only the latter two were chosen to build prototypes and then to begin production.

Northrop Grumman’s largely self-financed CCA earned its prototype an Air Force designation and made it eligible for the first increment, but it did not win a production contract.

Helfrich said other unexpected entrants might eventually compete for Increment 2.

“We will continue to maximize competition through all the phases of CCA Increment 2. So we may have entrants that come in in a later phase that were not part of concept refinement,” he said. “We have to maximize the learning as soon as we can.”

This week, just outside of Dayton, Anduril unveiled the first Fury CCA produced at its facility near Rickenbacker Airport in central Ohio. The Air Force has already been experimenting with a prototype Fury and with General Atomics’ Dark Merlin CCA.

Service officials said in a Tuesday press release that the Air Force used the CCAs as part of a recent multi-day Agile Combat Employment exercise at Creech Air Force Base in Nevada.

"This exercise was about getting the systems into the hands of the warfighter," Lt. Col. Matthew Jensen, the Experimental Operations Unit commander, said in a press release. "We are focused on operating CCA outside of a traditional test environment so we can continue to learn, inform and rapidly iterate."

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How the UK is helping Ukraine hit Russian targets

Patrick Tucker — Wed, 29 Jul 2026 00:47:09 -0400

A new tech-sharing agreement allowing Ukrainians to make a British-designed radar jammer called Stone Cloak may soon help Ukraine accelerate drone strikes on Russian targets.

Ukraine has been using British-built versions of the digital jammer—about the size of a computer tablet—on long-range strike drones already this year. But the agreement allows the country to mass-produce it themselves so it can be more rapidly scaled across their drone forces.

The British government announced the existence of Stone Cloak for the first time on Saturday as Ukrainian President Volodymyr Zelenskyy met with the new prime minister at a naval base in Portsmouth. The occasion is the annual Sea Breeze joint exercise. Ukrainian, U.S. and British sailors paid “special attention” to countering Russian air defenses during this year’s Sea Breeze according to Ukraine’s national news agency.

“At this point, we don't know the full details of Stone Cloak, but suffice it to say, the system will likely increase mission effectiveness against some of the Russian air defenses,” Jeffrey Fischer, a retired U.S. Air Force officer, told Defense One via email.

Ukraine uses a variety of electronic warfare systems as part of its drone operations. But the ones provided by partners like the U.K. are often backed by larger research budgets. Operators and developers can also test them in a more controlled environment than the Ukrainian battlefield. But they can emulate the unique electronic warfare aspects of such places–so long as Ukrainian operators are allowed to participate, such as the Hedgehog 2025 exercise in Estonia in which the participating Ukrainian team exposed large gaps in NATO drone warfare concepts. That’s why new technology emerging from joint Ukrainian-allied exercises is a big deal. But the actual sharing of intellectual property related to that technology is more rare.

British Prime Minister Andy Burnham on Monday described Stone Cloak as “the best of homegrown British innovation, and proven on the frontline” of Russia’s war on Ukraine. That frontline has moved back toward Moscow, thanks in small part to British-donated Storm Shadow missiles, which Ukraine has been using to hit targets in occupied territory going back to 2023. However, the United Kingdom never transferred the actual design technology to Ukraine, just the missiles themselves.

The new announcement shows how quickly technology sharing between the two countries has evolved in just three years, as well as the speed of Ukrainian weapons development and manufacturing compared to some NATO counterparts.

The United Kingdom spent six years developing and deploying Storm Shadow. Manufacturing relied on specialized European supply chains. French and Italian partners were involved, which made a tech transfer bureaucratically difficult. And the missiles were expensive gifts, averaging $2 million apiece.

These and other factors compelled the U.K. and Ukraine to enter into a joint agreement to develop a new long-range strike drone with streamlined and simplified requirements—a 2024 effort called Breakstop that British officials say will deliver missiles for frontline use later this year. That timeline—less than 24 months from concept to full deployment—is far faster than Storm Shadow and much less expensive. Meanwhile, Ukraine also announced its own long-range strike missile, the Flamingo, or FP-5, which is also capable of striking Russia but costs much less than the Storm Shadow.

Fischer said that the contrast in innovation speeds helps explain how such intellectual-sharing partnerships help the United Kingdom as much as they do Ukraine. “One critical but often overlooked lesson from the Ukraine war is the extremely rapid adaptation cycle Ukraine is able to implement. In some cases, battlefield lessons are implemented in less than 10 days to new systems. In my seven combat deployments, NOTHING has ever come close to that.”

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Senate confirms Clayton as Trump’s next intelligence director

David DiMolfetta — Tue, 28 Jul 2026 21:17:00 -0400

The Senate on Tuesday night confirmed Jay Clayton to serve as President Donald Trump’s second permanent national intelligence director, replacing an acting chief whose leadership alarmed Democrats and disrupted efforts to renew a major foreign surveillance program.

Clayton was confirmed in a 51-47 vote. He will oversee the Office of the Director of National Intelligence, which coordinates the work of the nation’s 18 intelligence agencies and serves as the president’s principal intelligence adviser.

His confirmation ends Bill Pulte’s roughly six-week tenure as acting director, during which the Trump loyalist presided over repeated personnel cuts and faced accusations that he was politicizing the intelligence community. Pulte said Tuesday that ODNI had completed a fifth round of cuts without disclosing details of who was affected.

Clayton, the U.S. attorney for the Southern District of New York, served as a Securities and Exchange Commission chairman during Trump’s first term. His nomination was initially viewed by some Democrats as a stabilizing alternative to Pulte. Democrats had pushed the White House to nominate a permanent intelligence director and agreed with Senate Republicans to move Clayton’s confirmation process quickly, hoping to curtail Pulte’s time in the role.

But Clayton shed much of that prospective support during his confirmation hearing this month, when he repeatedly declined to say directly that former President Joe Biden won the 2020 election. The Senate Intelligence Committee advanced Clayton’s nomination last week in a 9-8 party-line vote, with every Democrat and Democratic-aligned independent on the panel opposing him.

Clayton also faced scrutiny over subpoenas his office issued to New York Times journalists in an effort to identify the sources behind reporting on security shortcomings of Trump’s new, Qatari-donated Air Force One.

During his July 15 hearing, Clayton defended the Justice Department’s handling of the investigation and said he was comfortable that prosecutors had followed the proper process. The department withdrew the subpoenas days later, however, after a federal judge sharply questioned government attorneys about how they had obtained reporters’ phone records and whether they had complied with legal safeguards intended to protect journalists.

Clayton also signaled that he wants the intelligence community to devote more attention to the connections between economic competition and national security, an emphasis informed by his time overseeing U.S. financial markets.

“National security and economic security are synonymous,” Clayton told lawmakers. Understanding the economic consequences of major events and their broader effects, he added, should be a larger part of what the intelligence community provides policymakers.

His arrival could also revive negotiations over Section 702 of the Foreign Intelligence Surveillance Act, which allows the government to collect the electronic communications of non-U.S. citizens located abroad without a warrant.

The authority statutorily lapsed in June after Democrats joined other lawmakers in blocking a largely unchanged renewal package, citing Pulte’s installation as acting intelligence director. Democrats had argued that they would reconsider an extension once the Senate confirmed a permanent official to lead the intelligence community.

Intelligence collection under Section 702 has continued despite the expiration, with providers still complying with government requests to furnish communications for spy agencies, House Intelligence Committee Ranking Member Rep. Jim Himes, D-Conn., told Nextgov/FCW last week, but he added that, at any moment, “they can decide to challenge the validity of the request” and he is “very concerned” by that possibility.

Asked whether a Clayton confirmation would help get votes necessary to legislatively reauthorize Section 702, Himes said, “I think that certainly helps.”

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The Army didn’t want this striking rotorcraft, but could it be what NATO needs?

Lauren C. Williams — Tue, 28 Jul 2026 19:44:30 -0400

FARNBOROUGH, England—Two years ago, the Army changed its mind about buying a new attack helicopter. Now, one of the finalists in that canceled effort is pitching its tech to NATO.

“We called that Raider-X for the Future Attack Reconnaissance Aircraft program for the U.S. Army. I ran that aircraft chained to the ground, getting ready to go do a flight test in that aircraft. Our competitor, Bell Helicopter, built the Invictus helicopter. And the Army canceled the program. So we never got to fly that aircraft,” said Bill Fell, test pilot for Sikorsky, a subsidiary of Lockheed Martin.

The S-97 Raider helicopter was center stage in front of Lockheed Martin’s megachalet at the international airshow here last week. The display comes as Europe grows its industrial base and NATO increases its defense spending, presenting U.S. companies with the challenge of making their bids more attractive to allies.

Sikorsky is weighing a bid on NATO’s Next Generation Rotorcraft Capability program alongside European-based Airbus and Leonardo with U.S.-based Bell, which were chosen to develop prototype designs for the aircraft. Leonardo and Bell have expressed willingness to collaborate on the program.

Boeing is also considering a bid for NGRC, assessing “the competition as customer requirements and specifications are refined,” a company spokesperson told Defense One.

“We're looking for the right customer now,” Sikorsky’s Fell said. “We're looking at the requirements and evaluating that now. We're also considering a prospective program in South Korea.”

Sikorsky has said it would produce the NGRC aircraft in Europe, similar to other aerospace companies looking to expand business on the continent.

The company flew a bigger version of the aircraft, created with Boeing, called the Defiant in 2019. That helicopter lost its bid for the Army’s Future Long-Range Assault Aircraft program.

The stacked, or coaxial, rotors makes the Raider, which can reach up to 240 knots, visually striking. Russia’s Kamov debuted a coaxial helicopter at Farnborough in the 1990s, versions of which still fly today.

The dual-rotors promote fast, low-altitude flight and prevent retreating blade stall.

“There's a natural speed limit to helicopters,” Fell said. “The airflows end up being such that the outboard few feet of the retreating disc has to produce the same amount of lift as the advancing disc entire blade does—with much higher velocities over it as well. And so, in normal helicopters, you get in high-speed flight, and eventually you get to the point where you've gone so fast that that retreating half of the disc just can't keep up anymore. It can't produce the right amount of lift, and we call that retreating blade stall.”

Fell said Sikorsky’s X-2 technology addresses that by having an “advancing half on each side” where the high-velocity airflow that comes over the disc can be counterbalanced or somewhat discounted on the retreating side.

So, going fast isn’t a problem, but the system isn’t as efficient as a tiltrotor.

“This technology is never going to be as efficient as a tiltrotor, and I think the Army wanted the additional speed that they could get out of that, and it also goes fast a little more efficiently,” Fell said.

Raider is for the military customer that wants to go fast and decelerate just as quickly, he argued.

“Any time you're coming in somewhere where they're shooting at you, or you are afraid they're going to shoot at you, you can decelerate more quickly in this aircraft and minimize the amount of time that somebody's shooting at you. I think that's a good thing,” Fell said.

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Air Force will resume B-52 radar testing with second bomber after deadly crash

Thomas Novelly — Mon, 27 Jul 2026 20:29:13 -0400

DAYTON, Ohio—Air Force officials plan to resume B-52 radar development with another Stratofortress after a crash killed an eight-person crew during a June test flight.

On June 15, a B-52 Stratofortress crashed in California during a test flight as part of the Air Force’s radar modernization program, which is aimed at keeping the service’s 75 Cold War-era bombers in the skies until at least the 2050s. The service had already planned to modify another aircraft with the updated Raytheon-built Active Electronically Scanned Array radar later this year, program officials told reporters on Monday during the Life Cycle Industry Days conference here. It’s not clear when officials will resume flight testing.

“The original acquisition plan and execution strategy was always to have two test aircraft,” Col. Spencer Turner, the B-52 system program manager said, adding that the “modification effort on that second aircraft is ongoing” and that he expects the service to complete the installation of the full radar suite onto the aircraft “this year.”

The deadly crash may add to persistent program delays. The Air Force planned to have two test aircraft for the radar modernization program, but only one had been completed. The June 15 crash paused test flights, and as the service waits for the next upgraded bomber, it’s not clear if another B-52 will be added to development efforts. Despite the incident, program officials claim they are still “on track” with the realigned budget and schedule, but they may need to be adjusted.

“Obviously, the crash was not in our original schedule,” Turner said. “So we need to look at our schedule and adjust as necessary.”

Boeing delivered the first test B-52 aircraft to Edwards Air Force Base in late 2025, according to a company press release.

“The new radar will significantly increase B-52 mission effectiveness by improving situational awareness, speeding target prosecution and enhancing aircrew survivability in contested environments,” Troy Dawson, Boeing Bombers vice president, said in the December news release. “This phase of the program is dedicated to getting it right at the start so that we can execute the full radar modernization program.”

Spokespeople for the Air Force and Boeing did not immediately respond when asked if there are still plans to have two dedicated test aircraft following the crash.

The radar modernization plan has faced heavy criticism.

Last year, the radar modernization program’s cost overruns triggered a Nunn-McCurdy Act breach. The Government Accountability Office warned that the production design for the radar modernization was “planned with very little development flight testing completed” and “beginning production with limited testing of a fully integrated system often results in costly and time-intensive rework if the program discovers issues later,” according to the watchdog’s annual weapons systems assessment released last month.

The B-52 has led major bombing campaigns during the Iran war. With the modernized bombers, which will be designated the B-52J, the service plans to have the Air Force long-range fleet consist of the Stratofortresses and the next-generation B-21 Raiders.

Col. Timothy Spaulding, the portfolio acquisition executive for bombers, said it’s possible that the service could pull B-52s out of the boneyard at Davis-Monthan Air Force Base for future fights.

“We can and have looked at bringing B-52 out of Arizona,” he said. “That's not necessarily an easy thing to do, and there's some limitation to how far you might go on that number.”

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