Defense Business Brief: Doubling down on C-UAS; Hypersonic flight; Could AI help the Navy build hulls faster?

The Pentagon wants to buy almost $1 billion—$994.1 million to be precise—worth of counterdrone tech in 2027, according to budget documents. 

The request, under other Army procurement for counter-small unmanned aerial systems, is close to double the $596 million enacted for 2026, which includes atypical funding from budget reconciliation. 

That funding spike extends to research and development too. The Army is asking for $26.5 million for counter-small unmanned aerial systems in applied research, which is more than double what is set aside for 2026. Plus, funding for c-UAS development could jump from $140 million in 2026 to $359.2 million proposed in 2027 if finalized by Congress, the documents show. 

While some of the increases may reflect budget line consolidation, the proposal comes as U.S. military counterdrone tech spending is expected to grow. That could mean more contracts domestically and abroad as drone threats proliferate and militaries continue to look to the Russia-Ukraine war for best practices and tech. 

The Pentagon’s counterdrone task force says it wants to buy $600 million in c-UAS tech to support the U.S.-Israel war on Iran, FIFA World Cup protection, and to protect critical infrastructure. 

Drone threats and systems used to defeat them could be at an “inflection point,” Brett Velicovich, who co-founded the startup, Powerus, which helps deliver Ukrainian drone tech to the U.S. military, told Defense One. “The question is no longer detection, but kinetic, interception solutions at scale” and the proposed budget could be “a chance to prioritize affordable, deployable interceptor solutions…that can actually stop threats in real time.”

It’s a numbers game.

“The Ukrainians, as an order of magnitude, consider that they need to lose four drones for every one that they take down,” said Doug Abdiel, a Marine Corps reservist and global vice president at Advanced Navigation, which focuses on GPS alternatives and autonomous systems. 

But being able to buy drones in large quantities is only part of the challenge. 

“It’s also a mindset shift around agility, and…how you use these assets,” he told Defense One, including “the notion that you would buy a drone to then do a kinetic kill on another drone. Or that you are going to have so much in your radar pattern that you’re going to be unable to process all that information.” 

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A new defense tech unicorn is born. Hypersonic aircraft maker Hermeus hit $1 billion valuation after a $350 million Series C funding round—and it plans to use that money to speed up production and make more prototypes. 

• The In-Q-Tel backed firm is also moving its headquarters from Atlanta to El Segundo, Calif., where it plans to expand prototyping and research and development efforts. While some employees are already in the new space, full relocation is expected in early 2027. 
• In the coming months, Hermeus’ Atlanta site will pivot to become the company’s manufacturing epicenter, producing its Quarterhorse aircraft.
• “The team is now scaling to a fleet of three F-16 scale aircraft, accelerating our path to Mach 3 and starting customer payload integration,” a company spokesperson told Defense One.

HII dives into physical AI through a new agreement with Gray Matter Robotics to explore how it can be integrated into shipbuilding for manned and unmanned vessels. 

• The move is part of a larger strategy to increase productivity in shipbuilding, which involves complex, precise, and yet variable tasks like “grinding, blasting and finishing of metal structure,” Eric Chewning, HII’s head of strategy and maritime systems, told reporters. “There is a broader set of industrial use cases where we need a single robot to do 100,000 tasks just once. And that’s where physical AI is a game changer.”
• Background: Navy Secretary John Phelan has pushed for more use of AI, automation, and robotics in shipbuilding—from back-office work to manufacturing and maintenance—to speed up deliveries and close workforce gaps. 
• But while robots aren’t necessarily new to shipyards, it may take a while before the HII-Gray Matter Robotics partnership has hard data on how much the technology can improve throughput. 
• “We’ve got to get the technology certified before we can put them in a production environment,” Chewning said, noting the paperwork process to get Gray Matter’s technology certified with the Navy is underway.
• The emphasis now is on demonstrating how well the tech works. 
• “Once we can begin to demonstrate these technologies are qualified, and that our hypothesis around their integration [and] the value stream works, then we can begin to get them deployed into the shipyard,” Chewning said, adding that HII plans to install a Gray Matter Robotics cell at Ingalls. “So as quickly as we’re able to, we’re going to get these things instituted to help drive throughput.”