Pentagon innovation surge: DIU wins and industry shifts

A string of moves across the Pentagon and defense industry is accelerating development of sensors, microelectronics, autonomy and directed-energy capabilities. The Defense Innovation Unit selected five firms to develop first-person-view drones and components under Project G.I., while Replicator-1 mass fielding has transitioned to the services after hundreds of systems were deployed. DIU and INDOPACOM also launched AI-focused challenges to speed tools for force management and decision support. Separately, Northrop Grumman opened three U.S. semiconductor facilities for use by other defense companies, expanding domestic microelectronics capacity. The Air Force Research Laboratory solicited industry input on alternate PNT solutions to coordinate drone swarms in GPS-denied environments. The Pentagon is pursuing directed-energy acceleration through new solicitations for fast-steering mirrors and an industry consortium, and is reviewing consolidation opportunities across authorized cybersecurity operators. Private investment and targeted awards are supporting scaling: Apex raised $200 million for production expansion, and the DOD granted $2 million to ReElement Technologies for rare-earth separation. Organizational shifts include the AI office moving under the research chief and an updated zero-trust strategy expected later this year.