For the past three and a half years, Justin Fanelli, the Chief Technology Officer for the Department of the Navy, has been on a mission to fundamentally re-engineer how the military interacts with the private sector. When he first articulated this vision last year, he spoke of dismantling what he colorfully described as "your granddaddy’s government"—a bureaucratic labyrinth characterized by a "spaghetti chart" of entry points that left startups struggling to navigate the defense procurement ecosystem. His goal was to replace that confusion with a streamlined funnel, one where high-performing companies are systematically integrated into the Navy’s technology base as enterprise-grade services.
In a recent follow-up conversation, the urgency of Fanelli’s work was underscored by the reality of his daily life. Speaking via video call while literally sprinting to catch an unannounced, destination-less flight on orders from his superiors, Fanelli embodied the high-stakes, fast-paced environment of modern defense technology. "You have an hour and 15 minutes to get on a plane," he recounted, describing the frantic nature of his duties. As he walked toward his car, still unsure of his destination or what he needed to pack for an indefinite trip, his enthusiasm for the mission remained palpable. Despite the chaos of his immediate schedule, his focus was squarely on the "demand signal" he has been broadcasting to investors—a signal that he believes is finally gaining traction.
Fanelli’s strategy centers on transparency. By publishing the Navy’s long-term technology priorities, he is providing a roadmap that allows venture capitalists and startups to align their R&D efforts with the military’s future needs. The success of this initiative is evident; investors have noted that these disclosures have fundamentally changed how they approach the Navy’s procurement plans. To ensure the current list remains grounded in market reality, Fanelli’s office vetted this latest iteration with a handful of venture investors before release, ensuring that the Navy’s needs are both ambitious and achievable within the current tech landscape.
The scale of the Navy’s financial footprint is staggering. While Fanelli was quick to distinguish between total purchasing power and specific investment strategies, he noted that the Navy operates in the $150 billion annual spending range. The challenge, he explains, is shifting how that capital is deployed. Historically, the Navy relied on writing massive checks to established prime contractors. Today, the focus is shifting toward "co-investment"—a model where the Navy puts its weight behind companies that have already secured private capital. Taking a direct equity stake remains the most aggressive and rare version of this approach; more commonly, the Navy acts as a customer for mature products, waiting for companies to de-risk their technology before integrating it into the fleet.
This shift in strategy reflects a broader change in the maturity of the companies the Navy now targets. "We mostly buy Series D through F type companies," Fanelli explained. In years past, the Navy attempted to handle early-stage research—the seed-through-Series-B gap—in-house. Today, the strategy is to offload that early-stage risk to commercial investors. "The cost of that, or the responsibility, is for us, if we’re not going to do it ourselves, to cast a cleaner signal," he noted. By signaling clear demand for specific technologies, the Navy hopes to encourage private markets to solve the problems they face, allowing the military to benefit from commercial innovation without having to fund the initial R&D from scratch.
The practical application of this philosophy is already visible in recent acquisitions. This month, the Navy awarded a $562 million contract for the MQ-25 Stingray, an autonomous refueling drone designed to extend the operational range of carrier-based fighter jets. Beyond major hardware, the Navy is increasingly turning to commercial tech for operational efficiency. The service has begun purchasing edge compute hardware from Armada, essentially modular shipping containers packed with servers that can be deployed on ships or in remote locations. Similarly, the Navy has engaged Gecko Robotics to handle hazardous inspection tasks that were previously done manually—a move that saw little internal resistance precisely because the work was undesirable for human personnel.
In the realm of software, Domino Data Lab is now powering the Navy’s machine learning pipeline. Perhaps most telling is a recent procurement success involving shipboard camera systems. When a defense contractor’s proprietary system faced years of delays, the Navy pivoted to commercial cameras paired with software from Applied Intuition. The result was a dramatic reduction in development time—cutting four years off the original schedule—while expanding the system’s deployment to more ships than initially planned.
These successes raise questions about whether such technologies are currently being deployed in active flashpoints, such as the Strait of Hormuz, which has seen increased tensions over the past year involving tanker strikes and shipping-route disputes. Fanelli remained cautious about discussing specific deployments, noting that his role often involves moving between classified and unclassified environments, and he would need to verify the disclosure status of such operations.
A key component of this operational shift is the speed of decision-making. According to Fanelli, procurement decisions are handled by a small, focused "source selection committee" rather than the sprawling, multi-layered review processes that many outsiders assume define the military. The goal is to keep the process merit-based, stripping away unnecessary bureaucratic friction that often kills innovation.
When asked about the common pitfalls of bringing commercial tech into the military, Fanelli pointed to the budget as the primary culprit. He noted that technology failures are rarely technical in nature; rather, they are budgetary. The Navy operates on long, rigid planning cycles. For a new tool to survive, it must demonstrate that it can replace or "turn off" an existing, expensive legacy system. Without this replacement mechanism, new innovations often struggle to find a permanent home in the budget.
Before departing, Fanelli shared an updated internal list of the Navy’s technological priorities, co-authored by his office and the Portfolio Acquisition Executive for Mission Systems. This roadmap, broken down into five core categories, is designed to serve as a beacon for developers and investors.
First, the Navy is prioritizing applied AI. This includes machine learning and agentic software aimed at converting raw data into actionable decisions, ranging from sensor fusion and targeting support to autonomous behaviors and cyber operations that rely on software-defined architectures.
Second, the Navy is looking at quantum information science. The focus here is not necessarily on developing quantum hardware, but on applying quantum-adjacent techniques to improve navigation, secure communications, and cryptographic systems.
Third is advanced networking. In contested environments where connections are frequently degraded or intermittent, the Navy requires robust systems that can move data securely across both its own fleet and the networks of coalition partners.
Fourth, the Navy is targeting electromagnetic spectrum operations. This involves developing technology that can sense, manage, and adapt to the spectrum in real-time, moving away from fixed configurations toward systems that can dynamically adjust in contested conditions.
Finally, the fifth category is digital engineering and interoperability. This is the "plumbing" of the modern fleet: open APIs, model-based systems engineering, and zero-trust architectures. The ultimate goal is to enable different Navy systems to communicate seamlessly without requiring costly, custom integration work for every new project.
Fanelli emphasized that these priorities are not binding funding commitments. They are intended to be a living, evolving roadmap that reflects emergent needs. "It will change based on emergent, near-term, and long-term needs," the memo notes. For investors and companies, the message is clear: if you are making decisions about where to allocate capital today, this document provides the best available insight into where those technologies will be needed inside the Navy in the years to come. By providing this transparency, the Navy hopes to foster a more resilient and responsive defense industrial base, one that moves at the speed of the modern, digital battlefield.
