2 June 2025

Free Market Involvement in AI Is the Key to the US Military’s Future Success

Pat Fallon

US military success depends on tapping free market innovation to rapidly develop AI systems and outpace emerging threats.

Houthi Attacks Expose a Costly Gap

For the better part of two years, Houthi drone and missile attacks threatened commercial shipping and US naval assets in the Red Sea. And while Houthi attacks on US assets have subsided for the time being, US Central Command has raised the alarm that the current status quo in terms of recognizing and deterring these threats is unsustainable in the long term.

Not only is it not fiscally possible to continue to spend millions of taxpayer dollars on expensive countermunitions to take down cheap, mass-produced Houthi drones and missiles, but the US military currently lacks a means to develop the AI software needed to quickly locate and counter these attacks.

Funding Delays Hinder AI Progress

As part of its acquisitions process, the Department of Defense needs a way to be able to access different “colors” of money—the varied forms of funding, including research and development, procurement, operations and maintenance, and BA-8—at the speed of relevancy. The DOD needs to be able to quickly access each of the colors to use for AI development when and where it is needed most.

To develop critical AI architecture, we first need access to high-quality data and the software applications to process it. Unlocking varied forms of funding would accelerate private sector development of these essential tools.

The Free Market Can Move Faster

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