Reuters reported this week that the U.S. Army had used up much of its global stockpile of long-range precision missiles during the five-month conflict with Iran, raising concerns about military readiness for future crises.

President Donald Trump on Thursday played down concerns over weapons shortages, saying the U.S. had an almost unlimited supply of some munitions while acknowledging stocks of others were tighter. He added that U.S. defense companies were expanding production capacity.

Rheinmetall signed a memorandum of understanding with Lockheed last month to jointly produce Army Tactical Missile Systems, or ATACMS, at Rheinmetall’s Unterluess plant in northern Germany. Production facilities are due to be set up next year.

“Naturally, there will also be sufficient capacity to replenish the U.S. military arsenals depleted by the conflict involving Iran,” CEO Armin Papperger told Reuters in an interview conducted on Thursday but published on Friday.

“That won’t happen in two years. It will take much longer.”

Defense companies across the world are racing to meet a surge in demand as governments step up military spending amid conflicts in Ukraine and the Middle East, and U.S. pressure for Europe to take more responsibility for its own security.

Helping build Europe’s defenses

Rheinmetall has been among the biggest beneficiaries of Europe’s drive to raise defense spending.

Europe’s largest ammunition maker has pursued partnerships and acquisitions to rapidly expand production capacity to meet growing demand.

The ATACMS joint venture still requires approval, but Papperger said the process was well advanced and had the backing of the U.S. government.

The partners intend to target the global market for ATACMS missiles, he added. “There will be a market for missiles for the next 15 years.”

Rheinmetall expects the joint venture to generate its first revenue in 2028, the CEO said.

Talks needed with new Leonardo CEO

Papperger said Rheinmetall remained interested in acquiring Iveco’s military truck business from Italy’s Leonardo, but future talks would depend on new CEO Lorenzo Mariani.

“I had a handshake agreement with his predecessor,” said Papperger. “Mariani can decide on new terms, and we will see if they remain attractive to Rheinmetall.”

The deal is not at risk, Papperger added, saying he hopes to meet Mariani after the summer break.

Boxer contract expected by year-end

Rheinmetall, which on Thursday cut its sales outlook after Germany canceled its F126 frigate program, also expects a multibillion-euro contract to supply Boxer armored vehicles to the German military to be signed by year-end, Papperger said.

“There is absolutely nothing standing in the way,” he said.

Rheinmetall’s share of the contract would be worth €12.4 billion ($14.3 billion), while the total value, including partner KNDS, is expected to reach about €25 billion.

Boeing’s BSU-111/B Payload Delivery Unit is a wing-and-turbojet engine kit that converts a 500-pound Joint Direct Attack Munition (JDAM) into a long-range JDAM (JDAM LR) dubbed the GBU-75. The result is a gravity bomb with the reach of a cruise missile.

Boeing said it has spent nearly $100 million of its own money on the program.

“Scaling production of the GBU-75 will provide the fleet with an affordable, sustainable solution designed to eliminate long-range land and sea-based threats to U.S. and international forces,” said Bob Ciesla, vice president of Boeing Precision Engagement Systems.

The BSU-111/B wing-and-engine kit is the latest modification to the JDAM family, which has previously seen the gravity bomb receive a tail kit that steered it roughly 15 nautical miles and a wing kit that further stretched that distance to 40.

The Kratos-designed TDI-J85 engine pushes that past 300.

The JDAM LR’s capabilities go beyond land strikes. The QuickStrike Long Range mining variant pairs it with a bomb carrying a ship-tracking sensor. Boeing has shown concepts loading large numbers onto Air Force bombers, though no Air Force buy has been announced.

The Air Force Life Cycle Management Center at Hill Air Force Base, Utah, buys JDAM for both the Air Force and U.S. Navy. The first GBU-75s are bound for the Navy.

The Navy demonstrated the weapon back in April, when Super Hornets released two JDAM LRs over the Point Mugu Sea Range off California.

The April 1 round separated cleanly, fired up its engine and flew 34 minutes before landing within meters of its target. The April 3 round added altitude changes and maneuvering. Each covered roughly 200 nautical miles.

When announcing those tests in April, Capt. Sarah Abbott, the Navy’s Precision Strike Weapons program manager, emphasized the need to give the fleet’s JDAMs greater standoff range.

“As Naval Air Forces in theater continue to rely heavily on JDAM systems, the program recognizes a critical need to provide the fleet with greater standoff range,” she said. “This new capability allows pilots to engage targets from significantly safer distances, maintaining a tactical advantage in contested environments.”

Reusing existing infrastructure is a key aspect of the program’s appeal.

Navy budget documents describe JDAM LR as a modification to the baseline program, built on the existing production line and guidance hardware. Any jet that can drop a conventional JDAM can carry the new variant without modification, according to Boeing’s release.

The award, which had not appeared in the Pentagon’s daily contract announcements as of Aug. 5, is an undefinitized action, meaning Boeing began work before the two sides agreed on a price. The Government Accountability Office has long called these contracts risky because contractors are reimbursed for allowable costs, regardless.

Boeing’s release did not say how many GBU-75s the contract buys, how much they cost or when deliveries begin.

Rheinmetall now expects sales in the range of €13.7 billion to €14.2 billion ($15.8 billion to $16.4 billion), down from €14.0 billion to €14.5 billion previously, based on a €300 million hit to its naval division.

It also cut its order book guidance to more than €100 billion, from roughly €135 billion previously, and lowered its capital expenditure target to 8%-9% of sales from 16%.

The company left its free cash flow conversion ratio and margin targets unchanged and said it remained on track for record growth.

JPMorgan analysts said they had expected the canceled frigate program to have made more of an impact beyond 2026 and said the downgrades could signal slower growth in 2027-28.

Rheinmetall had reported a nearly 70% jump in second-quarter sales to about €3.3 billion, with all business segments contributing to the rise, in an unscheduled release last month.

Its shares fell as much as 4% in early trading before paring losses to trade 1.2% down by 0745 GMT.

DENTED AMBITIONS

Rheinmetall has seen its fortunes soar with Europe’s renewed interest in building up its defenses after Russia invaded Ukraine in February 2022, with Europe’s largest ammunition maker targeting annual sales of up to €50 billion by 2030.

The company completed the acquisition in March of the warship division of German shipbuilder Luerssen as part of its ambitions to become a bigger player in the naval sector.

It has also been considering acquiring German Naval Yards Kiel and promised to reach a final decision within weeks after a rival bidder withdrew from the process last month.

The German government’s decision in June to scrap a delayed frigate program for which Rheinmetall had looked likely to secure the contract tempered the company’s upward momentum.

“In the naval business, too, we are looking to the future and are working hard to fulfil our current maritime orders as a reliable partner with a high level of expertise, and to secure new ones on the international stage as well,” said Chief Executive Armin Papperger on Thursday.

The Trump administration in December announced its intention to build a new class of large surface combatants, designated as the Trump-class guided missile battleship.

If built, the 35,000-ton nuclear battleship, according to the report, will be the most heavily armed surface vessel the U.S. Navy has ever built, possessing anti-air, land-attack and anti-ship missiles, hypersonic missiles, nuclear cruise missiles, large lasers and a rail gun.

“If built to those specifications, the ship would be the largest surface combatant in the world and larger than any surface combatant built for the Navy since World War II,” according to the report. “It would be more than three and a half times the size of the Navy’s Arleigh Burke-class guided missile destroyer and more than twice the size of the Zumwalt-class guided missile destroyer.”

The Navy projects that between 2028 and 2056 it will build 15 Trump-class guided missile battleships, with the subsequent 14 costing $18 billion each. By contrast, the USS Gerald R. Ford, the U.S. Navy’s premier nuclear-powered aircraft carrier, cost approximately $13.3 billion.

By 2058, the total tonnage of “large surface combatants to be constructed would need to increase by 60 percent,” which the report notes “could be a challenge for the shipbuilding industry.”

The shift away from small surface combatants would mean that by 2035, shipyards would need to produce 12% greater tonnage under the 2027 plan than under the 2025 version, according to CBO’s estimation.

To keep pace with the service’s aims, the Navy would need to build a battleship about every other year from 2028 to 2056, the report notes, while continuing to produce two DDG-51 destroyers per year.

Last March, the Government Accountability Office released a report detailing nearly two decades of lackluster progress in U.S. shipbuilding. According to the GAO, not enough ships have been built, newly constructed ships are failing to function as expected and ships are being delivered up to three years later than ordered.

In a statement to the Senate Armed Services Committee, Shelby S. Oakley, a director at GAO, said that unrealistic expectations of costs and timing have diverted resources and introduced delays in shipbuilding, with the result that Navy programs and shipbuilders have been “effectively made to operate in a perpetual state of triage.”

The report also notes that while the price tag will be immense up front, over time, by switching to nuclear power, it would reduce the battleship’s operating costs by eliminating the need to purchase fuel. The GAO did not provide an estimate of possible savings.

Since the December announcement, the cost of Trump-class battleships has been a moving target, with the updated $23.4 billion roughly six billion more than the initial Navy projection.

Firestorm Labs manufactured more than 1,000 parts and 12 of its proprietary 3D-printable first-person view Squall drones aboard the Wasp-class amphibious assault ship USS Essex as it transited toward RIMPAC 2026 in Hawaii, according to a release.

“Every part xCell printed on deck is one that doesn’t need to be flown or shipped across contested waters — cutting the fuel, aircraft hours, and personnel it takes to keep a ship operational,” a social media release said. “Repairs that once meant days or weeks waiting on a resupply run can now happen in hours, on station.”

Firestorm Labs created the xCell as a factory-in-a-box that can be deployed aboard U.S. Navy vessels to churn out unmanned aerial systems and spare parts for expeditionary warfare.

As waves as high as 12 feet crashed against the ship, service members assembled drones that were later flown as adversary aircraft during a counter-drone exercise at RIMPAC 2026 in Hawaii.

The service members also helped print mechanical test components that assessed the efficacy of the 3D printer used for drone production and fabricated military repair parts that crew members of the USS Essex needed.

The Defense Department, and Navy in particular, is laser-focused on building out modular payload capabilities that can deliver mission-ready assets for the service.

Chief of Naval Operations Adm. Daryl Caudle announced the “containerized capability campaign plan” in March at the McAleese Defense Programs conference.

Caudle outlined a vision in which transportable containers housing defense capabilities such as drones and weapons can be deployed to any region in the world.

In May, the Pentagon announced framework agreements with defense companies Anduril, CoAspire, Leidos and Zone 5 to acquire more than 10,000 containerized missiles over three years beginning in 2027.

The move signaled the launch of the “Low‑Cost Containerized Munitions (LCCM) program."

The extension is in line with the Trump administration’s efforts to curb illicit narcotics flowing into the United States via alleged drug-carrying vessels in the Caribbean Sea and eastern Pacific Ocean.

Since 2023, Saildrone’s USVs have worked in coordination with the U.S. Navy, supporting the Joint Interagency Task Force South (JIATF-S) and U.S. Naval Forces Southern Command/U.S. Navy Fourth Fleet, per the release.

“The continuity of Saildrone’s presence along the southern border for nearly three years demonstrates the strategic value we bring as the world’s most experienced operators of unmanned surface vehicles,” said Saildrone President VADM (ret.) John Mustin. “Our unmatched ability to remain on station and on mission in critical regions for months at a time is why our fleet serves as a powerful deterrent to bad actors. We look forward to continuing to partner with the Navy in its mission to secure the country’s maritime approaches and southern border.”

The 33-foot-long Voyager is designed for persistent surface and subsurface surveillance and can also conduct nearshore mapping missions and seafloor characterization, the release states.

Able to remain “on mission and on station” for months at a time, the USVs are “both a deterrent and an alarm” along the U.S.’s expansive southern maritime border, according to the company.

Since September 2025, the U.S. military has conducted strikes against alleged drug-carrying vessels in the Caribbean Sea and eastern Pacific Ocean in support of what the Pentagon has called continued counternarcotics efforts.

As of June 22, the Trump administration and U.S. military have disclosed 66 strikes, killing at least 196 people.

Since the start of the year, at least six defense-automotive tie-ups have been announced, as President Emmanuel Macron’s government seeks to combine the scale, automation and cost discipline of France’s car sector with one of the fastest-growing segments of military technology.

Ukraine and Russia’s use of drones has reshaped warfare, and that has prompted France and its European allies to prioritise drone production, as pressure from Washington on Europe to boost its military capabilities has added urgency.

The projects indicate France is building an industrial base capable of producing tens of thousands of drones a year — a scale difficult for defense startups to achieve alone, albeit one still dwarfed by Ukrainian and Russian efforts.

FRANCE AIMS FOR SCALABLE DRONE PRODUCTION

“Why now? Because the need is now, drones are now,” Christophe Périllat, chief executive of auto parts supplier Valeo, told reporters at the end of July. “And why in France? Because we’re being asked to guarantee our sovereignty.”

French defense officials do not anticipate a near-term need to deploy a large number of drones in the skies above France, but say it must be prepared for conflict.

The goal is to give France the ability to produce drones quickly and ramp up output should a crisis arise, they say. A July report by the French Senate’s defense committee described France’s stock of just a few thousand drones as “insufficient to achieve a critical mass.”

Valeo has said it will manufacture electric drone motors in France for defense technology firm Harmattan AI. Meanwhile, Forvia unveiled a partnership last week with a European defense company specialising in AI-powered counter-drone systems and is weighing plans to build capacity in France to manufacture 1,000 interceptor drones each month.

Renault, already working with Turgis & Gaillard to develop a long-range drone, partnered with Thales in June to industrialise production of the Toutatis kamikaze drone, targeting up to 1,000 units per month from 2027.

French drone maker Delair teamed up with German automotive supplier Schaeffler the same month to establish a French production line capable of producing around 100 drones per day by November.

SIMPLIFYING DRONE PRODUCTION FOR SCALE

If the plans announced by Renault, Schaeffler and Forvia are realized, combined output could reach 60,000 units per year. In a conflict, many more would be needed.

Drones have been used in warfare for decades, but the war in Ukraine has seen an explosion in scale.

Drones now dictate the flow of the battlefield, notching up the vast majority of kills. The front line has turned into a “kill zone,” with soldiers hiding underground from the constant aerial threat.

After Russia’s full-scale invasion in 2022, Ukraine quickly accelerated its use of drones for reconnaissance, battlefield combat and long-range strikes. President Volodymyr Zelenskiy said in July that it will produce 10 million in 2026.

Ukraine now has hundreds of drone makers, big and small. Some even produce more than Ukraine’s military can buy, and the government has cautiously moved towards allowing them to export some excess production.

Patrick Pailloux, head of France’s defense procurement agency, said he was working in particular with auto subcontractors to design drones that France will be able to produce in large quantities.

“It’s not the same: producing a drone in a defense start-up and making something that can be reproduced in very large volumes using production-line robots,” he said.

Renault CEO François Provost said in June the Toutatis kamikaze drone was being redesigned with fewer components and from injection-moulded plastic, enabling cheaper, higher-volume production than the current 3D-printed model.

ENOUGH DRONES TO TRAIN ON, BUT NOT MILLIONS

Defense officials say the challenge is scaling up production capacity while not building stockpiles that could soon become obsolete.

Patrice Caine, CEO of French defense technology group Thales, said this summer that drones were “objects that evolve quickly” under the impetus of technological advances.

Pailloux said France needed “enough so that we can train, and (the production capacity) to be able to withstand a shock”.

Prime Minister Sebastien Lecornu pledged a €150 million ($175 million) investment to develop a dedicated drone sector last December.

But Antoine Level, head of France’s drone industry association, said Germany was ahead of France in funding short-range drones, and that there were still “not enough orders to truly stimulate the industry.”

The world’s largest defense contractor is negotiating with NioCorp Developments for the supply of scandium, and Teck Resources and 5N Plus for the supply of germanium, both of which are used in military equipment ranging from aircraft components to infrared sensors, the sources said.

The deals would mark a significant step in the U.S. push to build domestic mineral supply chains, but face hurdles: Chinese suppliers have long offered lower prices, and U.S. mining and processing capacity remains limited.

Lockheed makes the F-35 Lightning II fighter jet, Patriot interceptor missiles and other weaponry for the U.S. government. As China has tightened controls on critical minerals exports in recent years, Trump has pressured Lockheed and its peers to support U.S. mines with long-term supply deals.

Last month, he signed an executive order making it harder for defense contractors to obtain waivers that had allowed them for years to buy minerals from China and other prohibited foreign suppliers.

That order has highlighted how far behind U.S. miners and processors are in their race to match China’s market dominance, even as dozens of U.S. projects for a range of minerals are under development, Reuters reported last week.

Colorado-based NioCorp Developments has signed a preliminary deal to supply Lockheed with 15 metric tons per year of scandium, one of the 17 rare earths that can be used to make lightweight, corrosion-resistant alloys for aircraft, according to a source familiar with the agreement and details seen by Reuters. These have not been previously reported.

NioCorp will supply the metal from its Nebraska mine, slated to open by 2028 with annual production of 100 metric tons.

The agreement would need to be finalized, although the two companies have an existing relationship as part of a Pentagon-funded research program.

The contracted volume would be roughly a quarter of global scandium demand, which the U.S. Geological Survey estimates at about 60 metric tons and rising.

“Both companies recognize how important scandium has become to the future of American defense technology,” said Mark Smith, NioCorp’s CEO.

Lockheed said it appreciated “the work NioCorp is doing to establish a domestic source of scandium.”

The U.S. has not mined scandium since 1969. Rio Tinto is the only North American scandium producer, with capacity to produce roughly nine metric tons annually.

Germanium negotiations

Separately, Lockheed is in talks with Teck Resources for a supply of germanium, used to make infrared sensors and other military equipment, a second person familiar with those negotiations said.

Teck mines and produces a zinc and germanium concentrate from its Red Dog mine in Alaska. That concentrate is then smelted in British Columbia and the two metals are separated.

Teck does not break out its annual germanium production but has called itself the largest North American producer and fourth-largest globally. The USGS estimates that global germanium consumption is roughly 60 metric tons annually and rising.

The U.S. imports more than half of its germanium needs.

Lockheed is also in germanium supply talks with Quebec-based 5N Plus, which earlier this year received Pentagon funding to process the metal from recycled feedstock in Utah, the second source added.

“What Lockheed basically wants is a long-term supply chain security,” according to the second source. “Because they are under pressure, so they really want to know if the supply is coming from China or elsewhere.”

Negotiations with both Teck and 5N have been going on for more than a year. Pricing and the length of the contracts have been sticking points, according to the source.

Representatives for 5N were not immediately available to comment. Teck declined to comment on specific commercial agreements, but said it has agreed to work with the Canadian government to increase germanium processing in British Columbia.

Asked about the germanium discussions, Lockheed said it continuously assesses “the global critical minerals supply chain to ensure access to materials that support our customers’ missions.”

Chinese critical minerals prices have for years been cheaper than those from Western sources due to differences in mining practices, regulatory standards and other factors. Reuters reported earlier this year that Western governments are trying to set regional minerals prices free from Chinese interference.

The Next Generation C-sUAS Missile project comes as the U.S. and other nations are pursuing lasers, microwaves and other alternatives to kinetic anti-drone weapons, such as missiles and cannon, which are seen as too expensive and in short supply.

The Army wants to quickly develop an “extended-range, quick-response missile to defeat Group 2 and Group 3 small Unmanned Aircraft System (sUAS) threats,” according to the Army’s Sources Sought notice. The deadline is August 20.

The initial specifications are for a missile that can intercept a drone flying at 6 kilometers altitude, at a range of more than 16 kilometers. The ultimate goal is to destroy drones flying 8 kilometers high, at a range of more than 25 kilometers. Missile guidance would be via a radar seeker.

NGCM appears intended as a step up — but still compatible — with the Army’s Coyote C-UAS missile system.

“The Army is looking for NGCM to be produced and integrated into the existing Coyote Launch System to provide extended range, rapid launch time, and reduced time-to-target over current effectors,” the notice said.

The weapon is intended to stop Group 2 and 3 drones. Group 2 drones have a maximum gross takeoff weight of 21 to 55 pounds, fly below 3,500 feet and have a speed of less than 250 knots, according to the Department of Defense’s UAV classification system. This includes models such as Boeing’s ScanEagle. Group 3 drones, such as Insitu’s RQ-21 Blackjack, have a takeoff weight under 1,320 pounds and fly below 18,000 feet at a speed of less than 250 knots.

The NGCM missile should take less than five seconds to leave the launcher after the operator gives the fire command.

“The missile must be compatible with the Coyote Launcher with minimal to no modifications,” the notice said.

In addition, the missile must also fit with existing air defense systems, including the Sentinel A3/A4, LTAMDS and TPQ-53 radars.

The Army envisions the NGCM missile system in two versions. The fixed-site version would be equipped with a variety of sensors. A mobile version would be “mounted on tactical vehicles for employment at the halt and on-the-move, providing a scalable capability at the tactical edge.”

The Army is aiming for Technology Readiness Level 7 — prototype testing in the field — by the end of fiscal 2027. Contractors will need to have 50 missiles ready for operational assessment by the beginning of 2028.

Significantly, the Army desires missiles costing less than $150,000 apiece as part of a bulk purchase of 5,000 missiles. While that’s a bargain compared to a $4 million Patriot air-defense missile, critics may still question the economics: An Iranian Shahed-136 drone costs around $35,000.

That’s one reason for the drive to develop anti-drone lasers that, theoretically, cost only pennies per shot. On the other hand, missiles can function in bad weather that disrupts laser beams.

Called the Guardian Angel, the four-wheeled UGV has already completed live-fire testing.

Thales Australia worked with two other Australian firms to create the new system. One was Chaos 1, which specializes in rapid assessments, prototyping and autonomous-system experimentation.

The second company was W&E Platt, which makes weapon mounts. Indeed, the Guardian Angel features its low-cost Remote Operated Weapon PLATTform, with an image showing the ROWP mounting a Dillon M134D Minigun.

Thales Australia said in a statement that this project showcases its “sovereign industrial strength, ability to meet the nation’s defense and security needs, and capacity to deliver and manufacture autonomous systems and solutions”.

The company said the project was driven by one aim: to keep Australian troops safe.

However, a spokesperson explained to Defense News, “The Guardian Angel is a prototype and wasn’t specifically built for market. It’s part of a program to test and strengthen our capability in autonomous systems and solutions.”

Nonetheless, its completion paves the way for future platforms, in which a containerized mission system could offer capabilities such as medical evacuation, troop support, cargo transport and fire support.

“UGVs can preserve soldiers by operating in high-risk environments while providing a clear tactical advantage, assisting operations on the battlefield,” Andrew Downes, vice president of Land Thales Australia, commented. “They offer scalable, agile, cost-effective capability that can increase operational reach without increasing risk to personnel.”

Meanwhile, Benny Johanson, Founder and CEO of Chaos 1, described the process as “rapid prototyping in true form — little time, extremely chaotic and high risk.“

“In just six weeks we moved from a concept graphic to live-fire demonstration, and many said it couldn’t be done,” Johanson said, adding that the Guardian Angel “proved the sheer horsepower industry can generate for the warfighter at speed.”

Australian industry has developed a number of UGV designs, and the army is actively experimenting with some of them. For instance, it is trialing M113AS4 armored personnel carriers converted into modular robotic vehicles by BAE Systems Australia.

BAE Systems Australia’s largest platform is the ATLAS 8x8, fitted with an unmanned turret and 25mm Bushmaster cannon. It is currently in a prototype demonstrator status.

The Australian Army has also tested the tracked Warfighter UGV from Cyborg Dynamics Engineering. The army is already using the Ground Uncrewed System, affectionately known as GUS and produced by Outlook Industries, for remote coastal surveillance.

A couple of attritable UGV platforms also being tested are GaardTech’s Jaegar-C and DefendTex’s Banshee, small vehicles that can carry kinetic payloads.

“We’re about to bring into the next exercise UGVs. We can practice breaching minefields, for example, with sacrificial UGVs that might drag a tube full of explosives across a minefield — and we can detonate that,” Brigadier Ben McLennan, commander of the Australian Army’s 3rd Brigade, recently told Defense News. “That’s just one application. There’s a raft of other applications we’re making.”

Ukraine had urgently sought partners to develop a weapon capable of stopping Russia’s ballistic missiles. The pan-European project was launched officially in Paris last month by 10 governments and 12 defense firms - including Eurosam, Leonardo, Thales and SAAB.

Kyiv currently relies on the U.S.-made Patriot system to down ballistic missiles that fly at several times the speed of sound, but global shortages of its interceptor missiles, exacerbated by the war in Iran, have left Ukraine exposed.

“Pretty much everything is agreed,” CEO Iryna Terekh told Reuters, saying 13 industrial partners had already joined. Fire Point aims to achieve its first successful interception by mid-2027, she added.

Ukraine’s Fire Point builds pan European Freyja missile

The Ukrainian company is providing the FP7.X – a faster version of its FP7 ballistic missile – as the interceptor and is now integrating that with the guidance system, known as a seeker.

“Right now we are in the most intense and also in the most complicated stage of finally assembling everything together with surveillance radars, with tracking radars, with the seekers,” Terekh said.

Norway’s Kongsberg is working on the command center integrating the various systems. The company did not immediately respond to a request for comment.

Industry publications have reported that Germany’s Diehl Defence — which produces a seeker for its own IRIS-T air defense system — will provide the guidance system.

A Diehl spokesperson confirmed the firm was in talks with Fire Point but declined to discuss details. Terekh declined to comment.

Fire Point aims to produce a ballistic interceptor for less than €1 million ($1.2 million) per missile, Terekh said — a quarter to a sixth of the cost of a Patriot.

“We’re trying to squeeze a program that usually takes 20 or 30 years into a matter of a couple of years,” Terekh said, adding that there had been at least five tests of the interceptor missile.

The project would use open-source architecture and allow different options to be swapped in and out — such as a Weibel radar for one made by Saab, according to Ukrainian officials.

The number of industrial partners could rise to around 20, increasing production capacity, Terekh said. She added Fire Point was in talks with Ukrainian state-owned missile makers, but declined to name them.

Terekh said the participating companies would finance research and development until a minimum viable product (MVP) was reached — which she said would mean the successful interception of a ballistic missile.

Attack missiles nearly ready for combat

“We expect the launcher to have from four to six missiles. So if from one batch there was an interception of a ballistic missile for MVP, this would be a wonderful result,” Terekh said.

A missile gets through only if all the interceptors in a launcher miss. Keeping the probability of six misses in a row below 5% — an industry standard — requires each interceptor to hit roughly 40% of the time, according to Fabian Hoffmann, missile expert at the Norwegian Institute for Defence Studies.

If it could really be done for €1 million, it would be “pretty impressive,” and “very cheap,” Hoffmann said.

The FP7 missile has an attack variant that can be used to strike ground targets. This has undergone about 15 test launches and is now being certified by the Ukrainian Defence Ministry, which she expected to take two to four more weeks.

Fire Point aims for first combat use of this version in early autumn, and late autumn for the much larger FP9 ballistic missile, which it says will be able to reach Moscow.

Terekh said the FP7’s architecture was based on Soviet-era designs for the S300 and S400 interceptors, but that Fire Point’s missile now shared only 20% similarity with those weapons.

In a recent interview, Fire Point co-founder Denys Shtilierman said the Soviet plans had been procured as a favor by Timur Mindich, a former business associate of President Volodymyr Zelenskiy who faces charges of corruption and is now a fugitive in Israel.

Fire Point says it declined an offer from Mindich to buy a stake in the company.

Fire Point is pressing ahead with building its own engine for its FP5 cruise missile, known as the Flamingo, which has hit several prominent military targets in Russia this year.

It had been using second-hand jet engines — “digging through the cemetery of the engines ... like in a thrift store,” Terekh said.

But these are getting harder and harder to find, so Fire Point is assembling the first 10 units of its own prototype.

“As soon as we’re happy with the results of tests of these test engines, there’ll definitely be many more Flamingos,” Terekh said.

The missiles are principally the Army’s surface-to-surface weapons, known as Army Tactical Missile Systems (ATACMS) and Precision Strike Missiles (PrSM). The U.S. has used “virtually all” of these weapons, according to two of the sources.

The degree to which the military is running out of ATACMS and Precision Strike Missiles has not been previously reported.

The long-range munitions are an important part of the military’s arsenal, allowing accurate strikes from a safe distance. U.S.-supplied ATACMS have played a key role in the war in Ukraine, allowing Ukrainian forces to attack targets inside Russia. The PrSM is a newer, more advanced generation that will replace the ATACMS, which have a shorter range.

Analysts say such weapons — which cost over $1 million each — would also be important in any conflict with China.

The sources declined to say how many of each munition the U.S. had left.

President Donald Trump launched the Iran war jointly with Israel in February, predicting that the conflict would last a short time.

But as the war drags on, the three people familiar with the matter expressed worry that the falling missile supplies could limit the U.S. ability to deter adversaries, including Russia and China.

A fourth person familiar with the matter said that while Central Command — which oversees U.S. forces in the Middle East — has nearly used up the land-based missiles it had before the war began, it has been able to reload from U.S. military supplies elsewhere in the world.

The sources interviewed for this story spoke on the condition of anonymity.

Asked for comment on the stockpile data, the White House issued a statement from Trump, saying the U.S. had “far more munitions than anyone in the world” and “far more than we need.”

“Our defense companies are, at this moment, making more munitions than they have ever made before, in addition to expanding their plants and equipment at record levels,” Trump said.

Analysts agree that certain munitions, including artillery shells and several types of missiles, are being produced at record levels but caution that supplies might far short of what is needed for a prolonged war.

Lockheed Martin, which makes the ATACMs and PrSMs, along with the anti-ballistic missile THAAD system, did not immediately respond to questions about Trump’s statements or about supply levels.

Raytheon, which makes Tomahawk missiles and Patriot interceptors, two important U.S. weapons, also did not immediately respond.

Responding to a request for comment, chief Pentagon spokesperson Sean Parnell said: “America’s military is the most powerful in the world and has everything it needs to execute at the time and place of the President’s choosing. We have executed multiple successful operations across combatant commands while ensuring the U.S. military possesses a deep arsenal of capabilities to protect our people and our interests.”

The supply figures have circulated inside the federal government over the last week during tense conversations inside the Trump administration about how much longer the U.S. can continue striking Iran without drawing down the stockpile to levels that would limit the military’s ability to respond to crises elsewhere.

WARNINGS OVER WEAPONS SUPPLIES

One of the sources said the drawdown of the ATACMS and PrSM stockpiles reflected a decision by the Trump administration to avoid riskier ways of attacking Iranian targets, such as by using piloted aircraft to drop bombs.

Because these weapons allow the military to attack targets from a distance, analysts say they would be valuable in a war against an adversary with strong air defenses, such as China.

They have been used to strike targets inside Iran, according to a March report by the Center for Strategic and International Studies (CSIS).

According to the report, PrSM stockpiles were low to start with, since it is a relatively new munition, but the U.S. military has ordered a large number of them for 2027. The Army has said that ATACMS are being phased out and that production is shifting to the newer PrSM missiles.

Military leaders have for weeks warned the president that stockpiles of defensive weapons — including Patriot interceptors, which are effective against ballistic missiles — were dwindling, said two of the sources.

Last week, several media outlets reported Trump had decided not to launch another massive offensive inside Iran in part because his military advisers had warned about the U.S. stockpile.

A U.S. official disputed those accounts, saying Trump chose not to move forward with another attack because of pressure from Gulf states.

The Middle East conflict has sparked intense debate about Trump’s authority to prosecute hostilities against Iran without congressional authorization. No request for a declaration of war or an authorization to use military force has been submitted to Congress.

DEFENSIVE WEAPON STOCKS ARE ALSO DIMINISHED

Last week, CSIS published a report estimating that between February and July about 65% of Patriot interceptors had been expended and that the number of THAAD ballistic missile interceptors in U.S. stockpiles was at least 38% lower than at the start of the war.

Patriots and THAADs are systems that detect and destroy incoming missiles and are among the most effective in the country’s arsenal.

While Reuters has not seen the supply figures, those numbers match internal U.S. data, two of the sources said.

The U.S. also burned through a little less than half of its global supply of Tomahawk cruise missiles, which are generally launched from ships, since the start of the war, one of the sources said.

Reuters could not independently verify that number.

The Tomahawk is a Navy weapon, launched from destroyers, cruisers and submarines, and has long served as the sea service’s principal means of striking heavily defended targets without risking pilots.

Raytheon, a unit of RTX, has reached a tentative multi-year agreement with the Pentagon aimed at boosting Tomahawk production, alongside increases in other munitions, as Washington races to rebuild stockpiles.

“The current industrial base has demonstrated significant challenges, including production delays, quality control issues, and critical obsolescence (i.e., diminishing manufacturing sources and material shortages) across key engine components,” warned the Air Force’s Request for Information. The deadline is Aug. 28.

“The government will pursue a strategic competition requiring industry to innovate manufacturing and guarantee supply chain resiliency,” the RFI said.

The initiative comes as the Air Force struggles with its jet engines.

For example, F-35 fighter deliveries and upgrades have been delayed by engine issues, with a Government Accountability Office report noting last year that “the engine contractor is still not delivering engines to contract specifications after 20 years of production.”

Meanwhile, B-52 modernization has been stalled in part by engine issues that have raised costs by $3 billion and delayed initial operational capability by 15 months, according to GAO.

In turn, the Air Force is now embarking on a multiyear fighter engine procurement project that envisions more than 180 engines per year by 2034. The RFI specifically cites engines for the F-15EX and F-16.

The RFI promises “five foundational pillars designed to drive a paradigm shift in engine procurement and sustainment,” as the government shifts from “legacy procurement toward incentivizing industry-led technological evolution and capacity expansion.” These include “holding vendors accountable” for delivering new engines that are more capable, reliable and cheaper.

The Air Force will focus “on the total lifecycle cost of the engine, not just the initial purchase price.”

Contractors are also responsible for ensuring reliable supply chains.

“We will implement an acquisition strategy that prioritizes ease of maintenance and establishes a resilient, sustainable supply chain from day one,” the Air Force said. “This effort is designed to solve key fleet-level issues by requiring a newer engine with improved supportability.”

“The result is a streamlined logistics footprint that reduces downtime, lowers the burden on our maintainers, and ensures the continuous flow of parts and support to maximize flightline readiness.”

Ultimately, the question is whether the U.S. defense industrial base can deliver. The Air Force intends to “enforce stringent producibility requirements.”

“We will select a partner capable of scaling production to meet surge requirements, guaranteeing a steady and uninterrupted supply of engines for USAF/FMS [Foreign Military Sales] aircraft (e.g. F-15EX and F-16) programs,” the RFI reads.

Companies responding to the RFI are asked to provide a variety of details, such as a timeline for developing and manufacturing an engine. They should also specify “at what minimum volume your supply chain can justify private capital investments (such as facility expansion, tooling modernization, or advanced automation) and how those investments will structurally lower your long-term unit costs.”

With nations competing to obtain raw materials — and China restricting sales of rare earths — the Air Force wants to be certain manufacturers can find the raw materials they need.

“From your company’s market perspective, what are the primary raw material constraints (e.g., specialized titanium/nickel alloys) or manufacturing process bottlenecks (e.g., advanced casting or forging capacity) that pose the highest risk to scaling up fighter engine production?” the RFI asks.

The agreements come as demand for Patriot and THAAD interceptors has increased following conflicts in Iran and Ukraine that strained U.S. missile inventories. They also come days after a Center for Strategic and International Studies analysis estimated the United States had depleted roughly two-thirds of its pre-war Patriot interceptor inventory during the conflict with Iran.

Defense officials said the agreements are intended to support the department’s long-term procurement objective of nearly 14,000 Patriot and THAAD interceptors by providing sustained demand signals to critical suppliers throughout the defense industrial base. The initiative is designed to triple production capacity for Patriot Advanced Capability-3, or PAC-3, Missile Segment Enhancement interceptors and quadruple production capacity for THAAD interceptors.

DoD said it will work directly with key component suppliers instead of relying solely on prime contractors, encouraging investment in advanced tooling, facility modernization and workforce development needed to sustain higher production rates.

“Building the Arsenal of Freedom requires robust, dynamic supply chains at every level of the industrial base,” Michael P. Duffey, under secretary of defense for acquisition and sustainment, said in a statement. “Framework agreements with munition components suppliers like Northrop Grumman are vital to accelerating the tripling of PAC-3 and quadrupling of THAAD interceptor production.”

The agreements establish a second source for Patriot solid rocket motors, expand production of ignition safety devices for PAC-3 interceptors and increase manufacturing capacity for key THAAD structural components, including mid-body shells, muzzle covers and rail car assemblies.

The initiative is part of the Defense Department’s Acquisition Transformation Strategy and was developed in coordination with the Missile Defense Agency, the Munitions Acceleration Council and the Economic Defense Unit to strengthen the resilience of the missile production supply chain.

The previously unreported findings offer a rare glimpse into how military and security-linked institutions in China are leveraging cutting-edge U.S. AI models as a shortcut to developing specialised systems of their own, despite Washington’s efforts to restrict Beijing’s access to advanced chips and other strategic technologies.

The documents show widespread use of a technique known as “model distillation,” in which outputs from a powerful AI system are used to train smaller, specialised models that can be deployed locally without the enormous computing requirements needed to build frontier AI systems from scratch.

Reuters’ review, which included research compiled by the Washington-based Jamestown Foundation and shared exclusively with the news agency, showed distillation is widely used by researchers linked to the People’s Liberation Army and other military institutions.

The papers suggest Chinese defense institutions see leading U.S. AI models as both a source of technical insight and a way to close the gap with American rivals.

The dispute centres on unauthorised extraction, not distillation itself, a widely used industry practice.

The issue has emerged as a major flashpoint ahead of U.S.-China talks on AI governance and safety. U.S. officials have accused some Chinese entities of using distillation to extract capabilities from American AI models, potentially undermining export controls and infringing intellectual property rights.

China has rejected the accusations, saying Washington is pursuing AI “hegemonism” while arguing that U.S. firms have engaged in similar practices.

Chinese developers have also disputed claims that their AI advances rely on foreign models. AI startup Moonshot last week denied allegations by the Trump administration that its Kimi K3 model was built using distillation, saying it was driven by proprietary innovations.

Sunny Cheung, a Jamestown fellow who analysed over 60 of the papers, said Chinese military scientists are systematically capturing the reasoning steps of Western models to adapt them for surveillance, cyber warfare and tactical decision-making.

“Teaching a model the right answer is one thing but teaching it the reasoning behind the answer is much harder,” said Cheung.

“These papers show Chinese military-linked researchers are trying to transfer that expensive, proprietary reasoning from Western models into smaller systems they can control and deploy locally.”

Reuters verified the academic literature and identified an additional two dozen military-linked case studies.

One paper published last year by researchers in PLA Unit 96941, a military intelligence and cyber-warfare unit in Beijing, described using OpenAI’s GPT-3.5 to process sensitive military source code.

The researchers said third-party models were unsuitable for handling classified information. To overcome that limitation, they used GPT-3.5 to summarize software code and trained a domestic model on those summaries to run entirely within Chinese military networks.

The White House, Pentagon, China’s foreign ministry, the PLA and OpenAI did not respond to requests for comment.

WIDE USE, FROM MONITORING TO MILITARY

Chinese researchers have used distillation for purposes ranging from content monitoring to military deployment, Reuters’ and Jamestown’s review of the papers showed.

At the North University of China, which has close links to the country’s weapons industry, researchers used Anthropic’s Claude 3 Haiku to generate synthetic training data for a text classification model for social media monitoring and content moderation.

Anthropic said it does not provide commercial access to Claude in China or to Beijing-controlled firms and uses monitoring systems to detect policy violations.

The company added that distilled models may lose the original systems’ safety safeguards, potentially allowing sensitive capabilities to be transferred to models beyond its control.

A 2024 paper from the PLA’s National University of Defense Technology described using distillation to shrink an image-processing model for deployment on unmanned aerial vehicles, allowing drones to analyse live video and support navigation and targeting decisions in real time even when communications are cut.

Similarly, researchers at China’s Academy of Military Sciences used distillation to run a target-recognition model on tactical hardware during simulated maritime operations involving drones, ships and unmanned submarines, a study published earlier this year showed.

BENEFITS AND LIMITS

China has embraced distillation as it seeks to compete with the U.S. in frontier AI while facing constraints on advanced computing resources due to Washington’s export controls on high-end chips.

Central and local governments have promoted “model lightweighting” and edge computing, directing subsidies and research funding toward technologies that enable AI models to run on drones, satellites and other devices with limited processing power.

Experts caution, however, that distillation has significant limitations.

As Chinese AI models close the gap with their U.S. counterparts, military researchers are also examining distillation as a potential security risk.

In January, researchers at the Army Engineering University published a paper on the threat of “data-free distillation,” a method of reverse-engineering a model’s capabilities without direct access to its core parameters.

To counter that vulnerability, they proposed defense mechanisms designed to mask the hidden logical information exposed in a model’s public outputs.

Distilled models also inherit only selected capabilities and cannot fully replicate the broad intelligence of frontier systems.

Trevor Koverko, co-founder of AI data company Sapien, said distilled models remain less capable than their teacher models.

“It is best understood as transferring selected capabilities into a cheaper, locally controlled system, not achieving independence from frontier AI.”

After decades of relying on the U.S.-made Patriot interceptor system and its hit-to-kill PAC-3 munition as the most proven air defense against ballistic missiles, three new tracks are now leveraging international cooperation and a dire global need to develop and manufacture cheaper interceptor platforms.

Some officials, meanwhile, are hoping the sense of urgency leads to the fielding of the first new prototypes by the end of 2026 — years faster than today’s Patriots can be made.

It’s an ambitious ask.

The missile defense world has long described the mechanics behind anti-ballistic defense as akin to hitting a bullet out of the sky with another bullet, multiplied in difficulty by the number of simultaneous air threats coming in — a stark reminder of the mass air raids seen today in Iran and Ukraine that stretch air defenses to the breaking point.

Today’s anti-ballistic momentum began with U.S. President Donald Trump’s seemingly off-the-cuff comment at the NATO summit in Ankara earlier this month, when he pledged to grant Ukraine permission to produce Patriot missiles for the first time.

“We’re going to give a license to you to make Patriots. That’s pretty cool. This way, you can’t complain that we’re not giving ‘em enough,” Trump said, adding that the companies that make the system’s components, primarily Lockheed Martin, had not yet been consulted on the plan.

Five days later, Ukraine and nine European countries launched a coalition in Paris to field Freyja, an entirely new anti-ballistic system centered on a Ukrainian interceptor priced at roughly one-fifth of a Patriot round.

A week after that, Lockheed Martin unveiled a cheaper, faster-to-produce Patriot missile of its own. And on Wednesday, the company announced the Pentagon had awarded it another $53.86 billion for PAC-3 production, bringing its multiyear deal up to $58.62 billion and aiming to triple production capacity by the end of 2030.

The new anti-ballistics arms race has manifested largely as a result of the munitions shortage created by the U.S.-Israeli war with Iran, during which American forces have fired at least 1,060 to 1,430 Patriots at roughly $3.9 million apiece, draining an estimated two-thirds of America’s pre-war Patriot inventory, according to a new analysis by the Center for Strategic and International Studies.

The diminished stockpile is compounded by the ongoing war in Ukraine, where ballistic missiles are the only threat Kyiv still needs help taking down and the one munition it has completely run out of.

With three new anti-ballistic tracks opened in July alone, NATO and its allies are aiming to shore up air defenses as quickly as possible.

Here is where the primary Patriot interceptor stands, and how the three new alternative pathways in the arms race stack up.

The standard: The Patriot interceptor

The Patriot, the U.S.-made gold standard of ground-based air defense, pairs a radar, a command post and launchers with two families of interceptor missiles, each fielded in several variants.

Lockheed Martin builds the PAC-3 MSE, the hit-to-kill round that rams ballistic missiles out of the sky, while Raytheon, which also makes the Patriot’s radars and ground systems, builds the older PAC-2 GEM-T, a round that explodes near its target and works best against aircraft and cruise missiles.

The MSE is the only Western munition that has reliably killed Russian ballistic missiles — from Iskanders to modified S-300s — in Ukrainian service. It has even downed the air-launched Kinzhal, which flies at hypersonic speeds.

That record is why the Pentagon on Wednesday awarded Lockheed a multiyear deal now worth up to $58.62 billion to triple production capacity by the end of 2030. Today, each round costs roughly $3.9 million.

“This is a once-in-a-generation moment, and we are moving with wartime urgency to deliver the Arsenal of Freedom,” Lockheed chairman and CEO Jim Taiclet said in a statement.

The grant: Ukrainian PAC-3s under US license

Trump’s pledge in Turkey would make Ukraine only the second country outside the U.S. licensed to build Patriot missiles, after Japan, which has produced them under license for decades.

Germany, the Netherlands and Spain are only now standing up a joint production line. Berlin is negotiating a license of its own and Germany’s existing GEM-T work runs through a joint venture with Raytheon rather than a national license, according to The Associated Press.

The license under discussion for Kyiv would likely cover the missiles — rather than complete batteries — and could mean final assembly from imported component kits instead of production from scratch, the AP reported.

Poland has offered to host the joint production on its territory for safety and security reasons, according to Polish news agency PAP.

“It is about securing this production, so that this production takes place in a safe location,” Polish Deputy Defense Minister Magdalena Sobkowiak-Czarnecka said in Washington on July 23.

Zelenskyy said he met with Lockheed Martin representatives while visiting the U.S. for Sen. Lindsey Graham’s funeral on July 28, posting on Telegram that “Our teams are already working on specific solutions to move to joint production as soon as possible.”

The cost of the licensed PAC-3, meanwhile, would stay the same at close $4 million per round.

Yehor Chernev, deputy chairman of the Rada’s committee on national security, defense and intelligence, estimates Ukraine needs at least 18 to 24 months to launch a first pilot production line, “followed by more time to complete the first weapons,” per The Associated Press.

Zelenskyy is pushing for even faster joint production.

“We expect that by the end of 2026, our Ukrainian team will have the technical capability to produce U.S. missiles,” he said on July 15.

The analogue: Freyja

Freyja is a full Patriot-style anti-ballistic system that includes an interceptor, launcher, radar and command-and-control network.

The system, designed by Kyiv startup Fire Point, is built around its FP-7.X interceptor missile and various capabilities supplied by European partners.

Zelenskyy called Freyja “an analogue of Patriot, but a system for more mass production and a cheaper system.”

His comments came as he formally launched the Integrated Anti-Ballistic Missile Coalition in Paris on July 13 alongside nine other countries, including Denmark, France, Germany, Italy, the Netherlands, Norway, Spain, Sweden and the United Kingdom.

The FP-7.X flew for the first time in early June and is built to kill ballistic targets at roughly 15 miles up using a high-explosive fragmentation warhead rather than the PAC-3’s hit-to-kill collision — which may come in later versions — at a target price of approximately $700,000 per interceptor, or roughly one-fifth the price of a PAC-3.

The company says it will build three interceptors a day starting in August. Zelenskyy wants the system up and running within 12 months, and the coalition is targeting its first real ballistic intercept for the end of 2027.

“We have an ambitious goal: to have an MVP ready by the first half of next year,” Davyd Aloian, deputy secretary of Ukraine’s National Security and Defense Council, told Reuters on July 27. “That is a prototype that can already demonstrate its first practical results.”

The Lockheed cost-cutter: PAC-3 ACE

Lockheed unveiled the PAC-3 Adapted Capability Effector, or ACE, at the Farnborough International Airshow on July 20.

Built on the PAC-3’s fire-control system and fully linked to the Patriot and the Integrated Battle Command System that allied air defenders already run, it is designed to counter airbreathing threats — meaning weapons that rely on oxygen for propulsion — along with cruise missiles and close- and short-range ballistic missiles, a tier below the high-end targets the MSE was built to counter.

“American and allied warfighters need a solution that is battle-tested and budget-smart, and PAC-3 ACE delivers exactly that by building on the unrivaled performance of the PAC-3 MSE,” Tim Cahill, president of Lockheed Martin Missiles and Fire Control, said in the announcement.

Lockheed says it will develop and produce the round jointly with American and European industry partners.

International manufacturing is also under consideration, with the munition’s first flight expected in early 2028.

The company advertises ACE at less than half the price of an MSE, or roughly $2 million a round, without disclosing an exact figure.

The program, described as “extreme teaming” with industry partners, entered the phase with “unprecedented maturity,” Gen. Dale White, director of Critical Major Weapon Systems, said in a Wednesday keynote address at an event in Dayton, Ohio.

The engineering and manufacturing phase includes maturing, integrating and testing all parts of the F-47. It will produce a small number of test aircraft for evaluation and includes priced options for low-rate initial production. White did not specify the number of test aircraft being produced.

The first Boeing F-47 is on track for its first flight in 2028. The Air Force plans to buy at least 185 F-47s, matching the size of the F-22 Raptor fleet it intends to replace.

“The F-47 will fly in this administration,” White said during his speech at the Life Cycle Industry Days, hosted by the Air Force Life Cycle Management Center.

White, who also acts as direct reporting portfolio manager to the deputy defense secretary, is tasked with managing weapons systems, such as the F-47 and B-21 programs.

In March 2025, President Donald Trump announced that the force will proceed with development of sixth-generation Boeing F-47s under the Next Generation Air Dominance program, or NGAD, intended to replace the F-22 Raptor.

“In terms of all of the attributes of a fighter jet, there’s never been anything even close to it, from speed to maneuverability, to what it can have, to payload,” Trump said at the time, insisting that the aircraft will be built and in the air during his administration.

“And this has been in the works for a long period of time,” he continued. “America’s enemies will never see it coming.”

NGAD is a “family of systems” that includes the F-47 and Collaborative Combat Aircraft designed to achieve air superiority. The F-47’s modular design is intended to accommodate emerging technology and integrate long-range strike capabilities to counter threats in contested environments.

The F-47 program was allotted $3.45 billion in fiscal year 2026 funding and over $5 billion in the fiscal 2027 budget request.

The Defense Department is granting a collective $76.6 billion to General Dynamics Electric Boat for five Columbia-class submarines and to both General Dynamics Electric Boat and Huntington Ingalls Industries-Newport News Shipbuilding for nine Virginia-class submarines to be built in the coming years.

“This historic investment underscores the department’s continued commitment to undersea superiority and the recapitalization of our nuclear triad,” said Vice Adm. Robert Gaucher, director of submarine programs. “By securing the continuous production of both the Columbia and Virginia classes, we ensure we will continue to deliver the world’s most lethal, survivable and resilient combat platform.”

The contract includes $29.5 billion for Columbia-class Build II submarines, $42.1 billion for Virginia-class Block VI submarines and $5 billion for investments in nuclear shipbuilding programs and shipbuilding infrastructure for both shipbuilders.

The Navy currently has seven Columbia-class submarines under contract, 26 active Virginia-class submarines and 23 more Virginia-class submarines in the pipeline for future construction, the service said.

The Navy has made its newest submarine class a top priority over the last several years.

The Columbia-class has big shoes to fill: the boats are being built to replace Ohio-class submarines as they phase out of service.

The latter continues to play a big part in underwater military operations. An Ohio-class submarine participated in military strikes against Iranian nuclear facilities during Operation Midnight Hammer on June 22, 2025.

The Columbia-class is expected to surpass the missile payload and stealth capabilities of the Ohio-class, as well as harness the Trident II D5 Strategic Weapons System and hypersonic missiles.

While construction began on the Columbia-class in 2020, the Virginia class has been around for some time, with the launch of its lead boat in 2003.

Virginia-class submarines, which were designed to replace Los Angeles-class submarines, can host special operation forces undergoing long deployments onboard in a reconfigurable torpedo room.

Despite Columbia-class fabrication beginning six years ago, the program has faced delays.

The lead submarine in its class was originally slated for a 2027 delivery but has since been pushed back to 2028 after delivery postponement involving steam turbines and the submarine’s bow and stern, according to USNI News.

Government watchdogs initially predicted a rocky construction timeline for the newest addition to the silent service.

A U.S. Government Accountability Office report from January 2023 expressed concern that the building process would encounter hiccups because the submarine’s contractor, General Dynamics Electric Boat, hadn’t conducted a “schedule risk analysis.”

The latter practice, which is recommended by the GAO and is part of the Defense Department’s guidelines for large acquisition programs, helps set expectations for a program’s completion.

The Navy’s fiscal 2027 budget request for $378 billion includes money for the purchase of one Columbia-class submarine and two Virginia-class submarines.

The purchase, valued at $60-$70 million, is one of Tehran’s largest-known efforts to strengthen its short-range air defenses since the outbreak of its war with the U.S. and Israel, which exposed gaps in Iran’s ability to protect military sites and strategic infrastructure.

The contract covers the purchase of between 300 and 400 man-portable air defense systems, or MANPADS, including Chinese-made QW-12 and FN-16 missiles, the sources said.

The deal was signed with Zhongqing Baoshang International Investment, a Hong Kong-based company that the sources said was acting as an intermediary between the Iranian side and the Chinese supplier.

IRAN REARMING AFTER MONTHS OF WAR

The sources spoke on condition of anonymity because of the sensitivity of the matter. Iran’s foreign ministry did not immediately reply to a request for comment.

“The relevant reports are completely groundless,” China’s Foreign Ministry said. “China has consistently played a role in promoting peace and ending the conflict.”

Queried about the deal at a regular press conference in Beijing on Thursday, Chinese defense ministry spokesperson Jiang Bin said he was “not familiar with the relevant situation”.

Beijing-based Zhong Qing Bao Shang Group, the parent company of Zhongqing Baoshang International Investment, did not immediately respond to an email request for comment on Tuesday.

Iran’s reported rearming efforts come after months of fighting in which the U.S. and Israel have struck facilities linked to its missile, drone and air defense programs, and Tehran responded with barrages of ballistic missiles and drones.

The conflict has highlighted the challenge of defending fixed military and strategic sites against advanced aircraft and precision-guided weapons.

Washington abruptly suspended two weeks of bombardment on Saturday, but President Donald Trump said strikes would resume if negotiations failed to end the five-month-old conflict, which has in theory been in a state of ceasefire since April.

Responding to this article, Trump said Iran receiving such equipment from China would be surprising given what he said were assurances from Chinese President Xi Jinping not to get involved in the war on Iran’s behalf.

“I mean, things like that happen, but that would be surprising. [Xi] told me very strongly he wouldn’t partake, but he knows I’d be quite disappointed,” Trump said on Wednesday in response to a question about this report.

The delivery of hundreds of MANPADS would significantly expand Iran’s inventory of short-range air defense weapons and underscore how military ties with China are deepening.

The sources cautioned that, although the agreement had been signed, delivery schedules, quantities and other implementation details could still change.

Under a plan agreed by the parties, deliveries will initially be by air from Urumqi in western China, then transiting through Pakistan to Iran, according to the sources, who did not clarify whether the transfers would take place by air or by road.

“Speculations of Pakistan being involved in supply of Air Defense weapons to Iran from China are absolutely concocted and false,” Pakistan’s military public relations wing ISPR said.

A spokesperson for the Pakistani Foreign Ministry did not respond to requests for comment.

SOURCES: CHINA, IRAN EYE LAND ROUTES FOR DELIVERY

While Iran has invested heavily in the past two decades in missiles, drones and radar, military experts say portable air defense systems are important because they can be dispersed quickly, operated by small teams and relocated frequently, making them less vulnerable than fixed air defense batteries.

A European security source said authorities in his country were aware of several contracts under discussion involving the possible sale of QW-series MANPADS to Iran, including QW-12, QW-18 and QW-19 systems.

A second security source, in the Middle East, said Iran had been seeking to purchase QW-12 and QW-18 missiles, but they were unaware that a deal had already been concluded.

The QW-12 and FN-16 are shoulder-fired, infrared-guided surface-to-air missile systems designed to engage low-flying aircraft, helicopters and drones. Their mobility allows them to be deployed rapidly around military installations, energy infrastructure and other sensitive sites.

Defense analysts regard the QW-12 as less capable than newer QW variants, including the QW-18 and QW-19, but say the systems can still provide an effective layer of short-range protection against drones and low-flying targets.

Two Western intelligence sources and an Iranian official said Tehran had also explored the use of overland routes to move Chinese military supplies and dual-use components more discreetly and reduce the risk of disruption.

The procurement highlights the Islamic Republic’s continuing reliance on a combination of domestic weapons production and foreign suppliers despite years of sanctions and restrictions on defense related imports.

Reuters previously reported that Iran was close to securing a separate agreement with China to acquire anti-ship cruise missiles, according to people familiar with those negotiations. Reuters could not determine whether the agreement went through.

The U.S. has supplied large quantities of ‌weapons to allies while also using munitions in its own military operations in Iran, raising concerns about inventories of key air defense and precision-guided weapons.

The Lockheed award converts a previous one-year deal worth $4.7 billion awarded in April into a seven-year draft agreement, creating a multiyear procurement plan for the interceptors from fiscal 2026 through 2032, the Army said.

Pentagon negotiators ​are pressing contractors to move much faster, with tentative production agreements struck earlier this year at the center of efforts to increase missile output. The administration of President Donald Trump has also steadily increased pressure on defense contractors to prioritize production over shareholder payouts. Trump signed an executive order in January to identify contractors deemed to be underperforming on government contracts while continuing to distribute profits to shareholders.

Industry executives have welcomed the production agreements, but said Congress must first appropriate funding before companies can invest more heavily in components and production capacity.

Exact terms and delivery dates for many Pentagon munitions deals are still under negotiation.

A similar framework deal had been struck with Raytheon’s parent company RTX to boost production of Tomahawk cruise missiles from the current rate of about 60 per year for the U.S. to eventually 1,000 units annually.

Lockheed, a Bethesda, Maryland-based defense contractor, said the funding would allow it to follow through on a promise to triple PAC-3 MSE production capacity by the end of 2030 and increase jobs at its Camden, Arkansas, plant by 50%, to about 1,850 from 1,200. Lockheed previously announced Patriot PAC-3 missile interceptor production would go to 2,000 units annually.

Lockheed Martin said it is investing $8 billion to $9 billion through 2030 to modernize more than 20 U.S. facilities, including new munitions centers in Alabama and Arkansas.

PAC-3 MSE is a hit-to-kill interceptor used within the Patriot air defense system to counter ballistic missiles, cruise missiles and aircraft.

The Center for Strategic and International Studies, a Washington-based think tank, estimated this week that the U.S. military has fewer than 1,000 Patriot interceptors on hand and fewer than 250 THAAD interceptors -- two key air defense systems. Both have seen recent heavy use in the Middle East.

Phillip “Donna” Smith, the Lift Challenge program manager and a lieutenant colonel in the Marine Corps Reserve, said that multirotor drones are limited in their usability because of their low payload-to-weight ratios, meaning they can only transport a payload equal to or less than their own weight.

“This means as payload requirements increase, so does the size and the cost of the drone,” he said. “With the Lift Challenge, our goal is to dramatically increase the useful load, which will then drive down the cost per pound of transported cargo.”

He described heavy vertical flight as the “next great technological inflection point that is economical for widespread adoption,” comparing its potential impact to the assembly line for automobiles and reusable rockets for spaceflight. He added that it could revolutionize industries like agriculture, logistics, construction, and more.

The competition aligns with the Defense Department’s Drone Dominance initiative, which aims to accelerate drone technology and reduce costs.

While Drone Dominance challenges a company’s ability to scale production, DARPA is open to anyone who can build a drone that meets the minimum standards.

The Lift Challenge has attracted more than 100 competitors for drones, ranging from drone manufacturers to engineers to academics to hobbyists.

One participant, YouTuber Hoarder Sam, who documents his DIY drone projects, said the challenge appealed to him because of its ambitious goal.

Sam recalled watching DARPA’s self-driving car challenge years before autonomous vehicles became commercially viable and said the Lift Challenge struck him in much the same way.

Competitors must build a drone capable of non-assisted vertical takeoff that weighs less than 55 pounds. During the competition, the drones will have to pick up a minimum payload of 110 pounds and move it back and forth on a 1,000-foot course 30 times, or five nautical miles, in less than 30 minutes.

“Carrying this much weight for that far of a distance isn’t going to be easy, and honestly, I think it might be almost impossible. That’s because DARPA is famous for setting the bar extremely high,” Sam said.

He added that when DARPA first held its self-driving car challenge, no team completed the course. “They had to run the challenge again the next year, and even then, only four cars finished the challenge,” he said.

Others see the challenge as a chance to advance research.

Hao Xu, an associate professor at the University of Nevada, Reno who is leading a team of five engineering students, called the challenge an “interesting opportunity” that will result in a “fruitful discussion among national partners for us to boost Nevada drone R&D and workforce development.”

Some have commercial goals. The Colorado-based company Alpine Combat Systems has been showcasing its design on social media as a way to highlight its products.

In an introduction video, Amanda Barron, who runs the business with her husband Jesus Barron, an Army veteran, said they entered the competition because they want to “network with DARPA and other agencies.”

Jesus Barron added that their “experimental” Samson drone was their “first drone build and it shows what Alpine Combat Systems can do when we put our minds to it.”

The competition begins Aug. 2 at the National Museum of the U.S. Air Force in Dayton, Ohio, and the final four days will open to the public. DARPA will also livestream the event on YouTube beginning Aug. 3.

Ukrainian F-16s have destroyed more than 2,500 Geran and Gerbera one-way attack drones, wrote airpower expert Justin Bronk in an analysis of the Ukraine air war for the Royal United Services Institute, a British think tank.

“[The] use of fighters against such drones has consumed an unsustainable number of airframe flying hours and air-to-air missiles ... since mid-2024, when the Ukrainian Air Force received its first Western aircraft and trained crews,” the analysis reads.

“Russian industry produces more than 6,000 [one-way attack] drones per month, and fighter aircraft have only a finite number of airframe hours available before they need time consuming deep maintenance cycles to be performed at a factory by expert technicians.”

Ukraine’s fleet currently operates an estimated 39 F-16s, out of about 79 promised by various Western European nations. Ukraine also flies an estimated four Mirage 2000-5 fighters, out of up to 20 promised by France, plus a few Soviet-era Su-27 and MiG-29 fighters.

The F-16s have been a game changer in the Ukraine air war. They enable Ukraine’s small air force to launch stand-off attacks against ground targets using American-made JDAM and French-made AASM Hammer glide bombs. The threat they pose to Russia’s air force became evident earlier this month, when a Ukrainian F-16 reportedly downed an Su-35 over eastern Ukraine.

Ironically, the F-16 has proven such a capable aircraft that it has become a victim of its own success.

“The F-16 fleet has been over-tasked, mostly by C-UAS [counter-drone] interception duties, for which there is almost unlimited demand over time,” Bronk told Defense News.

The root of the dilemmas is that Ukraine is squeezed between multiple aerial threats.

In addition to drone strikes, Russia has launched numerous cruise and ballistic missiles at Ukrainian cities. Russia has become adept at launching massive combined strikes that begin with waves of drones, followed by cruise missiles, such as the Kh-101, and then ballistic missiles, such as the Iskander-M and Kinzhal.

Ukraine has managed to at least partially tame the drone threat by creating dense belts of short-range air defenses, or SHORAD. These SHORAD belts combine short-range anti-aircraft missiles, anti-aircraft guns, mobile machine gun teams and a variety of homegrown interceptor-drones.

The drawback there is maintaining dense SHORAD coverage along the 745-mile front line — plus defending cities in the rear — with short-range weapons.

“What unites all these mobile air defense teams and counter-drone teams is that their equipment and ammunition is relatively cheap and thus their operations are sustainable,” the RUSI analysis noted. “However, they are relatively personnel intensive to deploy at scale and require both force density and geographical depth to be effective.”

These limitations also point to the difficulties NATO would face in creating its own Ukrainian-style SHORAD system.

“NATO cannot replicate the density of SHORAD defenses that Ukraine deploys for C-UAS coverage, due to the huge personnel requirements of doing so on a sustainable basis,” Bronk told Defense News.

However, NATO could invest in radar-guided anti-aircraft guns to protect key installations, such as airbases and headquarters, and develop cheaper drone-killing munitions for aircraft such as the APKWS II rocket.

Nonetheless, this still leaves Russia’s cruise and ballistic missiles, against which SHORAD is largely ineffective.

As with the U.S. and Israel versus Iran’s missiles, Ukraine must carefully manage limited stockpiles of air defense interceptors like the American-made Patriot and the European-made SAMP/T.

Ideally, Ukraine should rely on SHORAD to stop the drones, while reserving its F-16s for other missions, Bronk argues.

“Other systems need to be used wherever possible for [one-way attack] drones so that F-16 capacity can be used to intercept cruise missiles and deliver strike missions,” Bronk explained. “Within the Ukrainian Air Force inventory, it is by far the most efficient asset for this.”

Bronk believes that F-16 stand-off ground attacks could be even more effective — if Ukraine’s high command was less rigid.

“There is potential for the Ukrainian Air Force to have greater effects if squadrons and wings are given more authority to plan strikes themselves rather than being centrally tasked by Army-centric headquarters elements,” he said.

The Defense Department has put out a solicitation for robot boats that are capable of launching small attack drones — with technology mature enough to be deployed to the field within 120 days.

The goal for the Suitable Warfighting Adaptive Payloads, or SWAP-USV, project is to find “mature, market-ready [unmanned surface vessels] fully integrated with two or more mature, market-ready aerial drones to detect, identify, track, and defeat hostile threats,” according to the Defense Innovation Unit solicitation. The call out set a response deadline of Aug. 10.

To make this happen, DIU created a year-long contest backed by $100 million in prize money. DIU wants to “partner with established maritime manufacturers, autonomy developers, sensor manufacturers, and UAS developers to execute a multi-phase Prize Challenge.”

The SWAP-USV project is billed as a solution to a problem that has also plagued missile and drone defense on land: the economics favor the offense.

“The cost-exchange ratio for detecting and neutralizing asymmetric maritime threats in contested environments is heavily skewed in favor of the adversary,” the DIU solicitation states. Nor can the U.S. military continue to rely “on exquisite, multi-million-dollar naval and aviation assets to intercept these inexpensive targets.”

The solicitation paints the picture of a drone boat that can carry, launch and control at least two small UAVs. The UAVs together should be capable of conducting kinetic strikes with a combined payload of at least 2 kilograms, or just over 4 pounds.

DIU wants a mix of recoverable and one-way attack drones that can patrol ocean, coastal and riverine waters, and loiter on station. The drones, according to the solicitation, should “support one or more operational effects, including ISR, comms relay, electronic warfare, payload delivery, or precision engagement of moving or stationary, as applicable, under operator command.”

The Pentagon also wants the system to be mobile enough to fit into a standard cargo container, on road trailers or on C-17 and C-130 transports.

“Solutions that can launch from unimproved locations or provide additional launch flexibility, i.e. remotely from a container, will be looked upon favorably,” DIU noted, adding that the UAVs should be “technically mature and have an established production line.”

Interestingly, among the maritime threats the DIU solicitation cites are “‘go-fast’ smuggling boats, and semi-submersibles.” Drug cartels have used semi-submersibles to transport contraband from South America to the U.S., and such pseudo-submarines are hard to detect.

The SWAP-USV project calls for robot craft capable of “autonomous surveillance and interdiction of defined maritime operating areas, maximizing operational coverage, probability of detection, interdiction effectiveness, and time on station while minimizing daily operating cost, logistics burden, and required personnel.”

The surveillance elements of the solicitation state that the drone boat must be able to “autonomously follow or shadow a vessel of interest, and autonomously intercept a noncooperative, maneuvering vessel. Autonomous execution of these functions is desired but not required.”

The SWAP-USV Challenge, meanwhile, comprises three “sprints,” or phases, each with separate prize money. To sweeten the pot further, companies that pass the test in each phase will be eligible for procurement contracts backed by a $200 million budget.

Sprint 1 calls for in-water testing in fall 2026, with a goal of deploying a system in the field within 120 days.

“Solutions must include a complete mission ready USV with integrated drone capability system available for testing and evaluation within 29 days of down-selection for Sprint 1,” the solicitation specified. There will be $40 million in prize money.

Sprint 2 will have a fall 2026 deadline and in-water testing in early 2027, with the focus on “expanded payloads, upgraded autonomy, and multi-vendor integrations.” The prize money for that timeframe will also be $40 million.

Sprint 3 will take submissions in early 2027, with in-water testing in summer 2027. The goals of this phase will be announced later, but there will be $20 million in prizes.

Companies must specify which phase they want to join. “The government reserves the right to assign applicants to [Sprint] cohorts based on technical and manufacturing maturity,” the solicitation noted.

Just a little over two weeks after U.S. Central Command utilized three Corsair unmanned surface vessels to strike a submarine and ship maintenance facility at the Bandar Abbas naval base in Iran, marking the “first time American forces have employed sea drones in combat operations,” the Navy confirmed its first live-fire training exercise of its Global Autonomous Reconnaissance Craft uncrewed surface vessel.

Two former U.S. warships, the amphibious assault ship USS Peleliu and the cruiser USS Mobile Bay, were sent below the seas off the coast of Hawaii during a live sinking exercise, or SINKEX, event during the biennial Rim of the Pacific exercise.

On July 24, the Navy released footage of the sinking, including the USV targeting the hull of the USS Peleliu.

Sarah Weinstein, a surface warfare officer currently serving as the first Commanding Officer of Unmanned Surface Vessel Division 32, confirmed that her division, USVDIV-32, was behind the execution of the Navy’s first GARC live fire.

“It was incredible to watch my team execute with precision and we were thrilled to provide a perspective of the former USS Peleliu that often isn’t often captured in a SINKEX,” the officer wrote on LinkedIn.

The sinking, which took place on July 17, found the GARC at the center of the Peleliu SINKEX. Created by the Baltimore-based BlackSea Technologies, the company touts the GARC as the “most proven tactical sUSV on the water.”

With a payload capacity of up to 1,000 pound and a range of 700 nautical miles at a speed of 22 knots, BlackSea writes that the 16-foot GARC “combines modular payload flexibility, advanced autonomy, and rugged endurance.”

In addition, operators can control the vessels individually or as a swarm. It’s driven manually or given a target to follow by using radar.

In August 2025, the Navy announced that it was “experimenting with the Global Autonomous Reconnaissance Craft (GARC)” to support naval operations. And just last month, USVDIV-32 utilized the drone boats during Exercise BALTOPS 2026, one of NATO’s premier maritime exercises.

“We are at the beginning and we don’t even know where we’re going to take it yet,” Weinstein told The Wall Street Journal in June. “The GARC originally was designed to kind of do a limited skill set, and we’ve turned it into something that can do escort, that can do surveillance, intelligence, maritime domain awareness, and we’ve already with one platform been able to expand what is in the realm of possible.”

Now, with its hand in sinking the USS Peleliu, the GARC continues to surpass its testing milestones as it inches its way toward operational deployment.

With the acceptance of the 359th — and final — tiltrotor aircraft, the Marine Corps marked the end of the MV-22B Osprey program of record, a milestone that will now shift efforts towards “sustaining and modernizing the fleet for decades to come,” the V-22 Joint Program Office, which manages the Osprey program, said in a statement.

“The MV-22B ... fundamentally changed the way the Marine Air-Ground Task Force generates combat power,” Lt. Gen. William Swan, the Marine Corps’ deputy commandant for aviation, said in the statement. “It provides commanders with decision space that only speed and reach can provide, connecting ships, bases and distributed forces in ways previous generations could only imagine. Today, Marine commanders build operations around the assumption that the MV-22B will be there.”

Though the Navy and Air Force also use variants of the Osprey, the Marine Corps maintains the majority of the fleet.

The Corps intends to keep the Osprey operational through 2055 with efforts that include improving wiring, working towards pro-rotor gear boxes, standardizing the fleet and redesigning parts of the aircraft for better safety.

The aircraft has a history of safety issues and accidents that have led to the deaths of over 60 service members since 2000, according to prior Military Times reporting, and in 2023, the Defense Department grounded the aircraft after eight service members were killed when an Air Force Osprey crashed.

A 2025 government watchdog report found that the services had not appropriately shared information about Osprey issues amongst each other.

The Osprey was developed to reduce the gap between rotary-wing and fixed-wing aircraft. Since going operational in 2007, the platform has been involved in 114 deployments and flown more than 683,300 hours, according to the program’s office, which also said the Osprey represents three quarters of all Marine Corps rotary wing support.

The Osprey is produced jointly by Bell and Boeing and according to a Wednesday release from the companies, has been involved in various high-profile missions, including the ongoing Venezuela earthquake response, the 2022 earthquake response in Haiti, operations to defeat ISIS in Iraq and Syria, and the rescue of Capt. Richard Phillips in 2009 after his ship was hijacked by Somali pirates.