Defense Tech VC’s Big Year; What’s Next for the Defense Industry?

INNOVATION

The Additive Manufacturing Mirage in Defense

The Pentagon has poured unprecedented funds into additive manufacturing as a potential game-changer for defense production. For example, in fiscal year 2024, the Department of Defense allocated roughly $800 million for additive, which was a 166% increase from the prior year.

By FY2026, projects involving 3D printing will swell to an estimated $3.3 billion, based on the budget request. That may sound enormous, but it is still only a small fraction of a research, development, test, and evaluation budget north of $100 billion.

DoD Selects First FY26 APFIT Winners

While the DoD didn’t release names of the companies in this batch of projects—as per—a quick look at the tech (we’re journalists, guys) points to Fuse Integration and Sea Machines/Leidos as a few of the lucky winners.

How Democratic Politicians Should Prepare for War

It is taking an exceptionally long time to organize democracies for cooperation after almost four years of war in Ukraine and in the deterrence of China from attacking Taiwan, both of which depend on demonstrated military capabilities. Liberal democracies are political systems with full citizenship franchise in which the electors bear the full fiscal responsibility of government expenditures. Politicians are therefore elected on the basis of maximizing services and minimizing taxes. There are six derivative steps.

INVESTMENT

Defense Tech VC’s Banner Year

We’d be the first to tell you that it’s been a banner year in defense tech.

As it turns out, the numbers back up our—and, if you’re reading Tectonic, your—excitement. According to a Q3 report from Pitchbook, defense tech venture capital is on track to close out the year “firmly in expansion mode.” We’re not gonna say it’s because the year started with Tectonic’s launch, but there is a correlation…

ARTIFICIAL INTELLIGENCE

The Case for Caution: Why the U.S. Military Shouldn't Organize Around AI… Yet

Whenever the U.S. national security community becomes anxious about a new “transformational” technology, the plot tends to be a familiar one. Pundits warn that America will fall behind without serious, additional investment. Military and civilian leaders at the U.S. Department of Defense argue that doctrine must adapt to match the newly emerging character of war.

Congressional staffers ping the Pentagon with questions about why it’s not moving faster. Before long, the entire defense establishment convinces itself that a revolution is underway, and it’s one that is both inevitable and necessary.

Inside China’s nascent, AI-powered military logistics system

The PLA is already testing technologies that range from widespread sensors to AI-enabled predictive planning, cargo drones, and tracked UGV mules.

TECHNOLOGY

Orqa will distribute drone manufacturing globally, reducing dependence on commodity hardware

Orqa, a Croatian FPV drone company, has announced it is starting a Global Manufacturing Program meant to raise annual drone output to more than one million units. The company will use a network of outside manufacturing collaborators and has said it already has capacity for 280,000 drones per year in Croatia and intends to distribute production to the rest of the world.

Frankenburg demonstrates first “hard-kill” intercept between rocket and Shahed-style drone

Rocket maker Frankenburg Technologies reported that it conducted “kill-chain hard-kill intercept against a fast-moving aerial target” on 12 December 2026 at the Ādaži NATO base in Latvia. The announcement is significant in context of Europe’s current air defense problem, where low cost aerial threats can exhaust expensive interceptors and strain limited inventories.

Israel's new laser system goes active

The Israeli Ministry of Defense and Rafael Advanced Defense Systems delivered the first Iron Beam system to the Israeli Air Force on Dec. 29.

Anduril and Boeing Team Up on IFPC SRMs

“This partnership underscores our commitment to forming innovative, disruptive and agile industry teams that deliver new capabilities to warfighters sooner,” Bob Ciesla, vice president, Boeing Precision Engagement Systems, said in a statement. He said Boeing is “confident that this partnership will result in a novel solution that helps meet the Army’s evolving air defense needs.”

POLICY

‘Very, very strange time’: After a big 2025, what’s next for the defense industry?

A year of rising profits, rising Pentagon demands, and continued Congressional dysfunction sets the stage for another turbulent year.

EUROPE

France's Safran.AI, UAE’s TII team up on agentic AI for geospatial intelligence

"We believe that AI agents, [specifically the] new generation of AI capabilities could serve better and more efficiently the clients and the end users," TII CIO Chawki Kasmi told Breaking Defense

Five Months After Launch, UK Defence Innovation is Still Missing in Action

In a guest post, an anonymous senior stakeholder in the defence innovation sector calls for the British Government to stop prevaricating and to launch UK Defence Innovation with urgency

SECURITY

How Cyberbiosecurity and Naval Strategy Collide in the Indian Ocean

Maritime chokepoints, naval spending, and the competition between the great powers have continued to dominate the security debates regarding the Indian Ocean.