Breaking Down the Defense Budget

Jul 21, 2025

Michael A. Brown, former leader of the Defense Innovation Unit, shares his insights on the complexities of the trillion-dollar defense budget. He discusses the current state of funding for cutting-edge technologies like unmanned systems and AI, and reveals where the Department of Defense is lagging. Brown highlights opportunities for startups to access defense funds and the implications of recent policy reforms like the SPEED and FoRGED Acts. With a focus on helping startups navigate this landscape, he offers valuable strategies for engaging with the military sector.

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INSIGHT

DoD Still Far Behind On AI

DOD lags commercial AI adoption; dedicated AI spending rose only from $1.5B to $2.2B.
Integration needs culture change and infrastructure to make data available for operational AI at scale.

INSIGHT

EW And Autonomy Are Critical Gaps

Electronic warfare and autonomy remain underfunded despite battlefield lessons from Ukraine.
High-volume, attritable unmanned systems are needed over more expensive manned platforms.

ADVICE

Build A Government Ground Game

Build a strong government ground game and identify stakeholders and contracting ceilings early.
Use SBIR Phase III, OTAs, and congressional engagement to secure funding and educate sponsors.

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What does this new trillion-dollar defense budget and "Big Beautiful Bill" mean for national security startups?

This week on the Mission Matters podcast, I sat down with my teammates Michael A. Brown and David Rothzeid, two former leaders at the Defense Innovation Unit (DIU), to unpack what the trillion-dollar defense budget really means for startups . With only $150B officially appropriated so far via the “Big Beautiful Bill,” there’s still a ton of complexity and opportunity ahead.We break down:

🔴 What’s actually been passed (hint: not the full trillion) and what’s still in flux

🔴 The current state of funding for cutting-edge technologies like Golden Dome, unmanned systems, space tech, and AI

🔴 Where DOD is lagging (AI, autonomy, EW) and what surprises are buried in the latest bill (F-35 cuts?!)

🔴 How startups should position themselves to win contracts

🔴 Where primes will dominate vs. where new entrants can thrive

🔴 What SPEED and FoRGED Acts mean for acquisition reform (spoiler: goodbye to some arcane accounting standards)

🔴 Why DoD “buying as a service” might finally stick

Whether you're a founder, investor, or policymaker—this episode’s for you. It’s a masterclass in how national security budgets translate into startup opportunity.

As always, please let us know your thoughts, and please reach out if you or anyone you know is building in the national security domain.

Keywords: Defense budget,NDAA, Appropriations Act, President's budget request, Big Beautiful Bill,defense spending, startups, commercial technology, unmanned systems, AI, cybersecurity,space technology, defense acquisitions, venture capital, dual-use technology.

Chapters:

Introduction to Defense Budgeting and Startups
Understanding the Defense Bill
Emerging Technologies: Space, AI, and Unmanned Systems
Challenges and Opportunities for Startups
Navigating the Defense Acquisition Landscape
The Debate on Defense vs. Dual-Use Startups
The Role of Space in National Security
Innovations in Defense Acquisition Policies
Impact of the Forge and Speed Acts
Executive Orders and Their Implications
Investment Thesis in Defense Technology