Defense Secretary Hegseth moves to reshape DOD’s AI and tech hubs

Defense Secretary Pete Hegseth shared his team’s long-awaited new plans to outpace U.S. adversaries by rapidly advancing the military’s arsenal of AI, drones, hypersonics and other disruptive technologies — and drastically reshaping the Pentagon’s approaches for safely deploying them. Speaking onstage at SpaceX’s Starbase launch site in Texas, during a tour hosted by its billionaire CEO Elon Musk, Hegseth said: “In short, when it comes to our current threat environment, we are playing a dangerous game with potentially fatal consequences. We need innovation to come from anywhere and evolve with speed and purpose.” Hegseth’s speech and three accompanying memorandums released Monday reveal the Trump administration’s latest, fast-moving and multifaceted vision to overhaul the Defense Department’s technology enterprise and dismantle perpetual barriers that have historically slowed the military’s commercial capability adoption. Hegseth said that old era ends today, and that the department is done running what he called a peacetime science fair while our potential adversaries are running a wartime arms race. The revamped structure notably aims to anchor a “unified innovation ecosystem built around six execution organizations” that will now collectively operate under the purview of DOD Chief Technology Officer and Undersecretary for Research and Engineering Emil Michael. Those newer and more legacy entities include: the Pentagon’s Chief Digital and Artificial Intelligence Office (CDAO); Defense Advanced Research Projects Agency (DARPA); Defense Innovation Unit (DIU); Office of Strategic Capital (OSC); Strategic Capabilities Office (SCO); and Test Resource Management Center (TRMC).

Senate and House appropriators are eyeing White House work on IT, artificial intelligence and cloud infrastructure — and a continued presence for DOGE — as part of their fiscal year 2026 bill to fund Financial Services and General Government. On the executive branch funding released Sunday for the fiscal year ending Sept. 30, lawmakers agreed on $124.3 million for salaries and expenses in the White House’s Office of Administration, with up to $12.8 million used for IT modernization. No more than $10 million of that IT pie should be spent for security and continuity of operations improvements. The Information Technology Oversight and Reform (ITOR) bucket, which historically has supported the Office of the Federal CIO and the now-defunct U.S. Digital Service, would receive $8 million under the new budget. House Appropriations Republicans said in their press release that that money would be used to fund the so-called Department of Government Efficiency, which has replaced USDS as the U.S. DOGE Service. That $8 million figure is a fraction of the Trump administration’s initial ask. In its June 2025 budget proposal, the White House requested $45 million in funding for DOGE, the Elon Musk-created group that led the decimation of the federal workforce in the early days of the Trump administration under the auspices of rooting out waste, fraud and abuse of agencies, but ended up raising government spending. The White House also sought $19 million for the ITOR account.

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