In a series of actions, the Department of Defense/War (DOD/ DOW) entered the new year with AI on its mind. Throughout these releases, a wartime approach to AI is demanded – one where rapid experimentation, barrier blocking, and latest innovation are emphasized.

At the crux of it all is the new Defense AI strategy, dated January 9th. While many strategies tend to outline high-level vision and objectives, the new AI Acceleration Strategy promotes near-term tangible and measurable efforts for Defense AI success.

According to the released document, the new strategy aims to, “unleash experimentation, eliminate legacy bureaucratic blockers, and integrate the bleeding edge of frontier AI capabilities across every mission area to usher in an unprecedented era of American military AI dominance.”

Elements of the New AI Strategy

As part of its wartime approach to deliver AI capabilities, the strategy lists three principles/tenets: warfighting, intelligence and enterprise operations. The strategy outlines seven pace-setting projects (PSPs) among the three tenets:

Warfighting

1. Swarm Forge
2. Agent Network
3. Ender’s Foundy

Intelligence

1. Open Arsenal
2. Project Grant

Enterprise

1. GenAI.mil
2. Enterprise Agents

The PSPs are meant to set in motion additional AI applications across the department, “Therefore, I direct each Military Department, combatant command, and defense agency and field activity to identify within 30 days at least three projects they will prioritize to fast-follow these PSPs,” according to the strategy.

Aside from the PSPs, the strategy outlines areas of AI investment the DOD plans to pursue, which include AI compute infrastructure, expanded data access (with a required delivery of updated data catalogs to the CDAO within 30 days), and special hiring and pay to bolster talent. The strategy alludes to funding under the One Big Beautiful Bill and the Joint Acceleration Reserve to catalyze the strategy’s objectives.  

Other elements of the strategy’s wartime approach to AI include promoting competition over centralized planning, as well as Modular Open System Architectures (MOSA) with accessible data to improve third party integration.  

Advana Memorandum

In conjunction with the AI strategy, the DOD released the memorandum, Transforming Advana to Accelerate Artificial Intelligence and Enhance Auditability. Advana is the DOD’s enterprise data and analytics platform.

The memo calls for the reorganization of Advana into three teams: the War Data Platform (WDP) team to expand the core data integration layer for warfighting and intelligence missions; the Financial Management team to support clean audits and enterprise financial statements; and the WDP Application Services team to rationalize all other Advana applications. Each team will focus on creating environments conducive to the integration of agentic AI and other applications.

Leadership View on AI

In a speech at SpaceX facilities in Texas following the AI strategy’s release, the Secretary of War, Pete Hegseth, outlined the department’s AI vision. The Secretary placed emphasis on shifting away from legacy technological development approaches to one focused on speed and innovation. Hegseth also noted the recent technological leadership changes at the department to achieve such a focus.

Remarking on the barriers prohibiting innovation, the Secretary announced the creation of a barrier removal SWAT team within the Under Secretary of War for Research and Engineering (R&E) with the authority to waive non-statutory requirements that slow down AI adoption.

Moreover, Secretary Hegseth reiterated the importance of data accessibility, announcing that the, “CDAO will exercise its full authority to enforce the DOW data decrees and make all appropriate data available across federated IT systems for AI exploitation, including mission systems across every service and component. Denials of data access requests will be reported to the CTO within seven days, and they better have a good justification.”

In terms of budget and funding, Hegseth stated, “I'm directing the services to establish that triple I, innovation, insertion, increment, within the budgets of all program portfolios. This will ensure that they have funds set aside to quickly integrate innovations during weapon system development.

Implications for Contractors

The underlying tone thatcontractors should glean from these recent DOD AI-related occurrences is establishing cadence with AI vendors.

• Acquisition Outlook. Speed is the primary component of DOD’s AI vision, non-traditional acquisition approaches such as OTAs and CSOs will be utilized to accomplish DOD AI goals. The strategy also emphasizes small team competition over large prime-led programs.
• Opportunities. The PSPs within the AI strategy, each with aggressive demonstration timelines, will require contractor partnership. The reorganization of the Advana platform will lead to new formal requirements.
• AI Compute Infrastructure. Both the strategy and Hegseth’s speech emphasize leveraging private sector capital to expand access to AI compute, in particular establishing new data centers on DOD grounds.
• Diminishing Prime Contractor Role. The strategy’s call for open system architecture and changes in system design requirements will reduce prime contractor monopolies.
• Performance-based Continuation. The strategy and Advana memorandum are tied to usage and impact metrics, with constant determinations for AI impact.
• Barrier Elimination. Expanded authority to accelerate AI delivery, including rapid ATO exchanges, will remove barriers beyond lawful use.  
• Agentic AI Expansion. The Defense sector is placing heavy priority on agentic AI, increasingly turning to contractors for rapid agentic AI frameworks and integration.