This week’s developments point to a defence market moving from technology promise to operational proof.

Counter-UAS, AI, laser communications and next-generation combat platforms are shifting into procurement, sustainment and coalition planning. Advantage is moving towards systems that can be integrated quickly, proven in the field and fielded across partner forces.

For governments, the priority is turning innovation into readiness. For suppliers, the opportunity lies in technologies that can meet urgent demand while fitting into wider command, communications and force structures.

This is reinforcing demand for companies able to demonstrate performance, interoperability and production resilience.

Visiongain Top Takeaways

• Counter-UAS procurement is becoming an allied market, with the US opening access for Australia, Poland and South Korea.
• AI use across the US War Department has surged by 1,775%, moving defence AI closer to operational scale.
• Drone procurement is becoming more competitive as the Pentagon widens access beyond a small supplier base.
• The UK’s laser communications breakthrough strengthens the case for faster, more secure space-based defence networks.
• Apache sustainment, Greek frigate upgrades and FCAS tensions show demand across support, naval modernisation and next-generation air combat.
• AUKUS remains a key signal for future joint development, from submarine delivery to Pillar 2 technologies such as hypersonics and AI.

Market Activity

United States: Counter-UAS Procurement Moves into Allied Frameworks

In the United States, Joint Interagency Task Force 401 will act as the procurement point for Australia, Poland and South Korea to acquire counter-small UAS technologies.

As the War Department’s lead organisation for synchronising counter-small UAS activity across the joint force and interagency community, JIATF 401 is helping allies and partners gain faster access to advanced counter-drone capability in response to the evolving drone threat.

The drone defence marketplace connects a broad range of solutions with an expanding user base that needs scalable, effective and interoperable technologies, including effectors, sensors, radars and electronic warfare systems. The initiative supports the Army secretary’s goal of giving partner nations timely access to essential capabilities and highlights JIATF 401’s central role in advancing that mission.

Maj. Matt Mellor, lead acquisitions specialist for JIATF 401, said:

“This partnership gives our allies and partners direct access to proven counter-drone technologies as we continue to expand the marketplace. Our mission includes working with international partners to aggregate demand for counter-drone capabilities.”

The agreements build on recent collaborations with key allies, including the United Kingdom and Romania, to improve interoperability and accelerate delivery. Collectively, these efforts point to a more cohesive and accessible counter-small UAS network across coalition partners.

JIATF 401 officials said expanded marketplace access will allow partners to acquire leading systems while helping shape the future development of the counter-small UAS industrial base.

Joint Interagency Task Force 401 has also awarded a three-year Indefinite Delivery/Indefinite Quantity contract with a $500 million ceiling to support enterprise-wide counter-unmanned aerial system operations.

The agreement accelerates the War Department’s capacity to deploy and scale low-cost, attritable air-to-air drone interceptors to protect warfighters and power projection platforms at home and overseas.

The contract was awarded to Perennial Autonomy for a range of AI-enabled counter-UAS systems, including Merops interceptors, Bumblebee quadcopters and Hornet midrange strike drones. These systems are currently being used by forces operating in U.S. Central Command.

Army Brig. Gen. Matt Ross, JIATF 401 director, said:

“[The task force] continues to advance our counter-drone capabilities by fielding systems that can operate across multiple domains and integrate with existing command and control architectures. This partnership provides the joint force with state-of-the-art, counter-UAS capability to remain lethal on today’s modern battlefield.”

The contract accelerates the acquisition of operationally proven systems and supports the rapid scaling and sustainment of priority technologies as threats evolve. By using a flexible enterprise-wide contracting approach, the task force is continuing to align counter-UAS capabilities across the joint force so warfighters can protect themselves and critical infrastructure from adversary drones.

Visiongain Insight: Counter-UAS procurement is moving from urgent point solutions towards structured allied frameworks. Demand aggregation and common access routes could give suppliers a clearer path to volume, while helping governments close capability gaps faster.

United States: AI Adoption Accelerates Across Defence

Also in the United States, a senior War Department technology official said the department’s use of artificial intelligence has increased by 1,775% over the past year.

During a panel on the lethality of artificial intelligence and its relevance to special operations forces, Emil Michael, undersecretary of war for research and engineering and War Department chief technology officer, said AI use across the department had risen by roughly 1,420,000 users over the past calendar year.

The panel formed part of Day 2 of Special Operations Forces Week 2026, a three-day annual event held in Tampa, Florida.

Michael said:

“You can see that every month, we have a new sort of amazing advancement in AI, and how we translate that down to the Department of War and to the warfighter is a fairly new concept.”

He noted that before he took the role nearly a year ago, the department had an average of about 80,000 AI users across more than 3 million personnel. Today, it has about 1.5 million users out of 3 million.

Michael said the department uses AI across three layers: enterprise, intelligence and warfighting. He described warfighting as the most important of the three.

He said:

“[We’re] embedding [AI] into our systems, so that warfighters can use it to be more precise, to be faster, to make better decisions and [to] bring combat power to the battlefield in a way that shortens time of any conflict, protects our warfighters to the maximum extent possible … and, frankly be as lethal as possible, which is what our warfighters want to do.”

As an example of how special operations forces and the wider department are using autonomous AI, Michael pointed to the Pentagon’s Drone Dominance Program, which has allocated $1.1 billion for the purchase of 200,000 small, lethal drones by 2027.

He said the department is working to make drone acquisition more competitive across multiple suppliers. In the past, he said, only a small number of companies were authorised to sell drones to the department, and they rarely had to invest heavily in upgrading their products.

Michael said:

“So, we kind of blew all that up, and the idea [now] is to create a scenario where we could use this money, take all the vendors out there [and] give them a shot [at] becoming one of the [DOW’s] prime vendors of drone and counter-drone capabilities.”

With AI advancing rapidly, Michael was also asked how the department is competing with the private sector for top-tier talent. He said that while it may not be able to match private sector compensation dollar for dollar, it is working to appeal to the next generation’s sense of patriotism and public service.

Michael said:

“What we’re trying to do is create sort of a … more patriotic point of view, or option, for kids coming out of college or out of grad school to come do something for their country, with their country, and then have that be valuable, so that [if] they go back to a private sector later, they don’t feel like they’ve lost time or energy.”

Visiongain Insight: AI is moving from experimentation into scaled defence adoption. The sharp rise in users suggests that future growth will depend on trusted integration into warfighting systems, decision support, autonomy and operational workflows, rather than AI tools sitting outside core mission activity.

United Kingdom: Laser Communications Strengthen Space-Based Defence Networks

In the UK, Archangel Lightworks has achieved the country’s first successful download of data from space using a deployable laser communications ground station for the Defence Science and Technology Laboratory, Dstl.

The demonstration provides a route towards faster and more secure communications for the UK’s armed forces.

During a 90-second satellite pass, many gigabits of data were downloaded from a satellite in low Earth orbit to an optical ground station in the Mediterranean region. The step change has been compared to moving from very slow internet to superfast fibre broadband. The wider field trial was repeated across multiple satellite passes, pointing to reliability as well as data-transfer speed.

Luke Pollard MP, Minister for Defence Readiness and Industry, said:

“Space is crucial for how our armed forces communicate, allowing our sailors, soldiers and aviators to conduct the operations which keep the UK and our allies safe. By developing laser communications we’re dramatically increasing how quickly and securely our satellites can talk to our bases on Earth, protecting these communications from interference and giving us an advantage over our adversaries.”

Dstl Chief Executive Dr Paul Hollinshead said:

“Laser communications will vastly improve the speed, size and security of data between our forces, whether they are in the air, on land, at sea or in space. This will greatly increase the security of our forces who will be able to convey critical information faster than their adversary. Our collaborative partnerships with industry catalyse innovation and enable Defence to be an engine for growth, supporting jobs and creating commercial opportunities.”

Dstl has been working closely with Archangel Lightworks, an Oxford-based SME that has been developing the optical ground station for the trial.

The technology is expected to be used across multiple UK Ministry of Defence capability areas. It could form part of the UK’s digital targeting web and be interoperable with the US Space Development Agency standard.

Archangel Lightworks recently completed a Series A funding round that included investment from the National Security Strategic Investment Fund. The company manufactures systems at a facility in Oxford and represents a sovereign UK capability that can support production scale-up for deployment, sale or export.

Visiongain Insight: Laser communications are becoming a core enabler of modern defence networks. Faster satellite-to-ground data transfer could strengthen targeting, command and control, and coalition interoperability, particularly as armed forces rely more heavily on resilient space-based infrastructure.

United Kingdom: Apache Engine Support Reinforces Sustainment Demand

Also in UK defence activity, GE Aerospace has won a three-year engine support contract for the British Army’s Apache AH-64E fleet.

The agreement, awarded by Boeing Defence UK, extends support for the T700-GE-T701D engines powering the aircraft. The Apache AH-64E is fitted with two GE T700-GE-701D turboshaft engines and can carry 16 Hellfire missiles, 70 Hydra-70 rockets and 1,200 rounds for its 30mm cannon.

The contract is structured as a Performance Based Logistics agreement and includes an on-site GE Aerospace field service representative at Wattisham Flying Station. Engine repair and maintenance for line-replaceable units will be handled through StandardAero in Gosport.

The award sits within the wider UK Apache sustainment framework. While the Mk1 fleet is maintained by Leonardo Helicopters until it retires from service, Boeing Defence UK holds the Long-Term Training and Support Service contract for the new AH-64E fleet. This replaced the initial support and conversion training provided by the US Government under the Foreign Military Sales programme.

Boeing Defence UK’s long-term support agreement covers aircraft design organisation services, maintenance, logistics support, and training for pilots, maintainers and ground crew. It is creating more than 200 jobs in the UK, including 165 at the Army Aviation Centre at Middle Wallop in Hampshire and 45 at Wattisham Flying Station in Suffolk.

Visiongain Insight: Sustainment remains a major source of long-term value in defence markets. As governments modernise fleets and extend aircraft availability, engine support, training, maintenance and logistics will remain critical to readiness, lifecycle performance and domestic industrial participation.

Greece: Hydra-Class Frigate Modernisation Advances Naval Readiness

Thales has signed a contract with Greece’s General Directorate for Defence Investments and Armaments to begin modernising the mission system of the Hellenic Navy’s Hydra-class frigates.

The project is intended to strengthen the operational effectiveness and readiness of the four MEKO 200-design ships, which were built in Germany and Greece and have been operational since the late 1990s.

Thales will perform the Mid Life Upgrade, as well as subsequent support and services, locally. The modernisation will include the integration of Thales systems such as the Tacticos Combat Management System, the NS100 radar and STIR fire control sensors.

Thales said the selected sensors and combat management system are proven and already in service with several NATO fleets. Localisation is also a key part of the programme, with Thales’ local service hub continuing to work with Greek industry to help the Hellenic Navy maintain readiness after the upgrade.

Visiongain Insight: Naval modernisation is being shaped by readiness, interoperability and mission-system upgrades. For many allied navies, extending the effectiveness of existing platforms through radar, combat management and fire control improvements can provide a faster route to capability enhancement while larger fleet renewal programmes remain costly and long-cycle.

Europe: FCAS Tensions Highlight the Challenge of Next-Generation Air Combat

Airbus Defence chief Michael Schoellhorn said on Wednesday that he sees some unbridgeable differences between Airbus and Dassault in the Future Combat Air System programme, although he does not expect the programme to fail entirely.

FCAS is the Franco-German-Spanish effort to develop a next-generation air combat system, including a future fighter, combat cloud and uncrewed aircraft designed to operate alongside crewed platforms.

Schoellhorn said the German and French defence ministries are working through how to move forward. He said he hopes for a political decision before Berlin’s ILA air show on 10 June.

He mentioned several possible options, including two different fighter jets or a new European partnership. However, he said Germany could not take on the project alone.

Schoellhorn added that two areas of the strategic project are expected to proceed: a Combat Cloud to network weapon systems and the Collaborative Combat Aircraft element.

Visiongain Insight: FCAS highlights the difficulty of delivering multinational defence programmes where political ambition, industrial leadership and workshare must align. Even if the fighter element faces delays, continued progress on Combat Cloud and Collaborative Combat Aircraft would keep networking, autonomy and teaming capabilities at the centre of Europe’s next-generation air combat strategy.

Market Outlook

Counter-UAS and AI remain two of the strongest areas of defence technology momentum, with investment expected to continue as governments respond to drone proliferation, autonomy and the need for faster decision-making.

The latest developments point to three shifts across the defence market. First, counter-drone procurement is becoming more allied, more structured and more closely linked to interoperability. Second, AI is moving from narrow experimentation into enterprise, intelligence and warfighting use. Third, secure space communications are becoming central to future targeting, command and control, and coalition operations.

AUKUS updates will be important for understanding the next stage of joint capability development, particularly around Pillar 1 submarine decisions and the less-discussed Pillar 2 areas, including AI, hypersonics and advanced technology sharing.

The market opportunity is not only in breakthrough technology. It is in systems that can be proven, procured, integrated and deployed across coalition architectures. Suppliers able to demonstrate operational performance, resilient production and compatibility with allied networks are likely to be better positioned as procurement accelerates.

Visiongain Insight: Defence markets are entering a phase where advanced technology must prove its value in deployment, not just development. Competitive advantage will depend on the ability to turn AI, autonomy, counter-UAS and secure communications into mission-ready networks that can support allied forces at pace.

From Visiongain

Visiongain’s market reports provide detailed forecasting and analysis to assess how these structural shifts will translate into long-term demand, investment priorities and competitive positioning.

• Military Simulation, Modelling and Virtual Training Market Report 2026-2036
• Military Artificial Intelligence (AI) Systems Market Report 2026-2036
• Distributed Fibre Optic Sensing (DFOS) Market Report 2026-2036
• Undersea Defence Infrastructure & Security Market Report 2026-2036
• Small Drones Market Report 2026-2036
• Hypersonic Missile Defence Systems Market Report 2026-2036
• Naval USV/UUV Market Report 2026-2036

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