Rewiring the Arsenal of Democracy

The post–Cold War international order slowly withered for decades, but it reached a clear inflection point on June 1, 2025. On that day, Ukraine deployed less than a million dollars’ worth of hobby-shop technology to destroy Russian strategic bombers worth billions. Russia’s exquisite air defenses and geographic depth made no difference, and images of burning Russian bombers finally settled the debate as to whether drones are a tactical aberration or a tectonic shift in geopolitical power. Operation Spider’s Web, as the Ukrainian operation was named, codified the rules of the new era: bespoke platforms are luxury items and “mass”—the ability to employ more weapons faster and for a longer period—is essential.

This radical change necessitates continued reform in the United States’ defense ecosystem. As many have noted, the technological advances of private commercial firms are outpacing those made by traditional defense industries, artificial intelligence is accelerating innovation, and the wide diffusion of technology is blurring the capabilities of state and nonstate actors. Less appreciated, however, is how this new era is also changing the currencies of international statecraft. By transforming the application of violence and expanding warfare from limited conflicts to existential risks, this inflection point requires a new way of thinking about and constructing alliances.

Since the end of World War II, the United States’ greatest deterrence factor has been unified alliances whose combined military might is preeminent. But this allied might is only as dominant as the sum of the parts. As the war in Ukraine and conflict in the Middle East have demonstrated, many large militaries are not prepared for the current era of mass-produced precision strikes and interceptions. Defense industries are still structured around expensive, exquisite, and proprietary military platforms.

The United States’s strength depends on strong alliances, with a shared defense industrial base that can aggregate capabilities for a new era of warfare. To get there, Washington must encourage a free-market, international defense ecosystem defined by open architecture and industrial, software, and hardware compatibility. The United States’ greatest deterrent, the foundation of its diplomatic clout, and the primary factor in its ability to win on the modern battlefield this next century will be its collective allied industrial capacity and military interoperability. If it fails to secure such a strategy of compatibility, other state and nonstate actors will be meaningfully more likely to take escalatory actions.

THE SWIVEL SLOWDOWN

Conceptually, the idea of interoperability and collective defense innovation is well trodden. But, practically, it has never come to fruition at scale. The global defense architecture is still oriented toward a Cold War–era industrial model. This model generally involves United States defense companies creating small batches of exquisite equipment that is operated with proprietary, siloed software. Allies would purchase this equipment and combine it with their own nation’s military offerings, wherever possible. Most companies were incentivized to create defensive moats around their products once they were sold to prevent competition from replacing them.

All this unfolded at a time of relative global peace, so the special interest decision-making model amplified the entrenchment of these companies and created a mosaic of military platforms and systems. The United States and its allies recognized the digital revolution of the past 20 years would require more compatibility, but they deferred to the momentum of their acquisition processes and chose to only tinker on the margins rather than embark on fundamental change.

This complacency led to the level of unpreparedness that U.S. President Donald Trump inherited last year. The U.S.-led defense architecture had successfully deterred large-scale conflict for decades, but the U.S. Army in 2025 looked shockingly similar to that of 1975. Because the incentive was to maintain the status quo rather than steer the future of warfare, the U.S. defense industry had devolved into an oligopoly. A handful of so-called prime contractors developed exquisite platforms with built-in firewalls and produced them in custom-built factories. Meanwhile, decades of government statutes and policies, along with poor acquisition incentives, optimized for job distribution over efficacy and ultimately encouraged contractors to make platforms that are expensive and slow to replace—in other words, the antithesis of affordable mass. Overregulation also paralyzed foreign military sales, and procedural and financial barriers to entry locked out small and medium-sized companies.

With all these same dynamics at play in other countries, U.S. allies each suffered from their own isolated oligopolies. The allied industrial base—and thus Washington’s ability to fight as a coalition—atrophied.

Contrast this dynamic with private technology companies, which are perpetually at war for their survival. Over the same time period, these companies have made advances that have driven humanity into the future. They race toward minimally viable products, tighter innovation cycles, and ever-evolving and improving offerings. And they pursue open data architectures to ensure their products meet industry standards to exchange data across the Internet. A smartphone that cannot exchange data, after all, is simply an expensive paperweight.

The stark divide between open and closed systems is something I witnessed firsthand earlier this year. At Grafenwoehr Training Area in Germany, I watched allied forces and Ukrainian forces test counterdrone capabilities in a combat scenario. The allied soldiers performed well in a scenario that mimicked previous conflicts with limited air threats, but their systems were not designed for the large drone swarms of modern combat. As the air threats were layered into the exercise, I watched an allied air defender swivel from one screen to the next, manually transferring data from one proprietary system to another. The kill chain—the sequence of steps between identifying a target and destroying it—was only as fast and accurate as his keystrokes.

The Ukrainian soldiers, by contrast, were able to monitor threats and activate offensive and defensive capabilities from one system, on one screen, and with just a few keystrokes. Faced with the existential risk of Russia’s full-scale invasion in 2022, the Ukrainians have embraced open-source data standards and AI-enabled kill chains. The result is seamless data transfer fused onto a single user interface. It was amazing to see what is possible when all elements of the system are knit together from the factory floor to the foxhole. I also saw clearly the limit of allied military power: isolated capabilities that cannot withstand the intensity of today’s battlefields.

When domestic defense industries create bespoke, proprietary software, it results in inconsistent technical specifications. Systems physically cannot share data across platforms, and each country’s exquisite capabilities resemble a walled garden—impressive on their own but useless to anyone on the other side of the wall. This degrades combat effectiveness since modern command and control requires split-second detection and engagement.

Countering future threats is beyond human cognitive capacity—only AI can manage the speed and volume of data, which is why compatibility is the linchpin of modern military strategy. The only way to achieve this is to break down the walls and abandon top-down military standardization. Washington and its allies must embrace private-industry best practices that enforce compatibility from inception, lower barriers to entry, and respond to consumer demand.

MASTERY PLUS MASS

I am often asked whether the U.S. military should prioritize high-volume, low-cost equipment or exquisite programs. Unfortunately, the answer is both. The United States and its allies still need exquisite aircraft, nuclear submarines, fifth-generation stealth fighters, and other high-end capabilities. But they should be optimized for specific use cases because they are too expensive to risk and too slow to replace in protracted conflicts.

The United States’ military operation in Venezuela in January, for instance, was stunningly complex and high risk, and it could never have been accomplished with cheap, mass-produced capabilities. Washington will always need such platforms, especially at the outset of a limited conflict, but they become less useful the longer the conflict lasts. Until one party’s will or ability to fight is broken, the battle lines are typically held through mass. Bespoke capabilities simply cannot win a major existential conflict. Mass and synchronized combat power remain the greatest deterrent, since an adversary is far less likely to start a war it believes it cannot sustain and win.

And yet the United States and its allies’ current defense architecture overemphasizes exquisite capabilities while their adversaries, namely China and Russia, possess vast industrial capacity to scale military production. Moreover, these adversaries, together with North Korea and Iran, place a fundamentally lower value on human life, which means that, in this new era of warfare, a protracted conflict plays to their strengths: they can sustain losses—in lives and treasure—that democratic governments cannot.

The entire Western defense ecosystem must be reformed from the ground up to avoid this fate and ensure it is structured for full-spectrum warfare. This ecosystem consists of three layers: a physical layer of critical precursors and infrastructure, a digital layer that enables free data flow, and an innovation layer that meets the future of warfare.

Regarding the first layer, the United States and its allies have let their physical foundation erode for decades. The U.S. Army alone has accumulated over $150 billion in unmet infrastructure needs, with many soldiers living and working on dated equipment in crumbling facilities. At the same time, it has offshored the critical raw materials necessary to build its most powerful systems and allowed manufacturing supply chains to wither. The U.S. military can’t close this gap quickly or efficiently on its own since federal budget processes are, by design, slow and inefficient with congressionally authorized projects generally taking years to even break ground.

Western militaries must instead think creatively to tap into latent resources and commercial expertise to close the infrastructure gaps that prevent industrial scaling. For instance, under Trump and Defense Secretary Pete Hegseth’s leadership, the U.S. Army stopped acting solely as a consumer of goods and began operating as a market incubator. By employing enhanced-use leases, it is trading land access to private industry in exchange for infrastructure investments. Mineral processing companies, for example, are building refinement centers on U.S. military bases to secure critical minerals and reshore supply chains. Similarly, the U.S. Department of Energy is bringing microreactors onto army bases for resilient, off-grid power supply, and hyperscalers are building on-base data centers with organic power generation to safeguard the compute necessary for AI-enabled command control and business enterprise functions. The most common structure has the private partners financing, building, and maintaining these facilities—at no upfront taxpayer cost—which frees the army to focus its resources and energy on other modernization efforts.

U.S. allies must pursue similar reforms. Protracted warfare necessitates secure, resilient infrastructure and supply chains to scale and synchronize military capability. Washington’s adversaries amassed industrial capacity and the materials to fuel it—the United States must continue to seize back its independent production capability.

JAILBREAKING AND FAILING FAST

The United States and its allies must also think creatively about digital compatibility. They must reverse decades of entrenched proprietary thinking across combat systems, factory floors, and everything in between. Over the past five years, the U.S. Army spent hundreds of millions of dollars attempting to connect hundreds of disparate systems. But it didn’t work, because of contractual limitations with many of the vendors and the sheer volume of human hours required to rewire decades of bad design. So, in the first year of Trump’s second term, the army started jailbreaking them instead, which practically freed data that was previously held hostage in proprietary systems.

This allowed data to flow smoothly to any repository or system that was helpful for the army. The army connected hundreds of enterprise business systems that, among other things, allowed it to conduct the first personnel audit in over 50 years, saving an estimated $2 billion a year in redundant roles. The army also hosted the largest hackathon in history and, with the help of over 550 software developers, unlocked data transfer between more than 200 pieces of proprietary warfighting equipment. Systems that previously could not communicate—such as those demonstrated in Grafenwoehr—were integrated into a common operating picture in a matter of days.

If Western militaries can freely share data, the United States and its allies can overlay agentic AI models across the entire warfighting enterprise. Such tools can automate a wide range of operations, such as complex budgeting processes and create digital twins of the government-owned or government-operated manufacturing arsenals, maintenance depots, and ammunition plants. This will allow the most critical strategic manufacturers to run the same types of predictive supply chain analytics that are used in the private sector and provide an opportunity for allies to cross-load work across a connected manufacturing network. The collective alliance would become exponentially more productive and efficient, both on and off the battlefield. For future procurement, every military should enforce open-source standards to ensure that all capabilities can instantly communicate across digital networks.

Lastly, the United States and its allies must reform the third layer of the defense ecosystem: the innovation timeline. Securing physical materials and open digital networks is useless if capabilities are fielded at the speed of bureaucracy. Western militaries must adopt commercial iteration and speed. Although they will likely always require bespoke capabilities such as tanks, helicopters, and rocket artillery that take years to field, they should mostly purchase commercially available technologies and services because it allows them to field capabilities in weeks, not years.

This so-called commercial-first approach will also help bridge the “valley of death” between prototyping and scaling that most defense innovations face. To further this cause, the U.S. Army last year established FUZE, a $750 million internal venture capital–like mechanism, to identify promising dual-use commercial technologies and provide funding to scale them. For compelling offerings, the U.S. Army quickly provides capital but then also transports winners directly to the field to test and iterate with soldiers. This is a huge innovation in itself since, in the past, programs like the Booker tank, the Commanche helicopter, and the Future Combat System spent years in development and cost billions of dollars—all before the military operators declared them failures. Now, the army has established a concierge booking platform that provides access within 30 days to domestic and international ranges where commercial developers can test and experiment side-by-side with soldiers. This model turns iterative failure and “failing fast” into a defining feature of innovation.

U.S. allies must similarly establish innovation engines that change the acquisition paradigm. The definition of success should not be exquisite capabilities that take decades to field but rather rapidly fielded solutions, preferably with commercial technology handed directly to deployed units who can test it and provide immediate, real-world feedback that refines the product. The United States and its allies must get private software developers in the mud with soldiers so that the innovation loop is as tight as possible.

THE MARKETPLACE MODEL

With these reforms in place, the global defense ecosystem then needs a single, open marketplace where allied nations can transact as freely as any commercial market, without political barriers and bureaucratic friction. Domestic defense companies are currently isolated from one another because they survive in a monopsony: their government represents a majority of their sales, the company creates jobs and industry for its country, and it is therefore shielded from competition. But this stunts innovation, growth, and the competition that defines Western capitalist economies, particularly technology sectors. Introducing market forces to the Western defense ecosystem is the critical catalyst that will prepare the United States and its allies for the future of warfare.

The army recently launched marketplaces for its Unmanned Aircraft Systems and Counter-UAS. These began as a solution for domestic counterdrone interagency coordination, but they rapidly evolved into a more optimal model for achieving international military compatibility. Within months of their launch, the marketplaces had processed hundreds of millions of dollars in orders, and to date, over 25 allied countries have signed on to the programs. The marketplace will continue to expand to allow foreign vendors from allied nations to offer their products.

The marketplace functions like any consumer-facing interface where participants log on to browse and purchase capabilities. Creating a market mechanism where compatibility is the price of admission forces traditional defense companies to compete with agile startups, ultimately lowering unit costs and guaranteeing better integration for the entire allied enterprise. All products adhere to strict open-system requirements where any listed capability must natively plug into the established digital architecture. This shifts the burden of integration away from the consumer and onto the producer, ensuring customers can be confident that every system will operate seamlessly with the equipment and command structures of participating countries. It enforces compatibility by design through market forces and excises bureaucratic micromanagement.

A Western marketplace model for defense would aggregate global demand, unleashing the capitalist functions that actually won the Cold War. Pure, diversified market forces would create industry competition—domestically and internationally—and would drive down costs and prevent monopolization. Persistent demand, meanwhile, would smooth out the erratic peaks and troughs of the federal budget processes that have paralyzed defense companies for decades, providing continuous revenue streams instead. And aggregated demand will stimulate production at home and abroad, allowing companies to invest in capital expenditures that were previously too risky.

Critically, the marketplace also transforms allied commercial factories into a ready weapons production network the moment it is needed. It is not enough for allies to simply purchase American technology. True alliance resilience requires each country to build its own defense economy ecosystem. The marketplace provides a mechanism for allied countries to immediately access cutting-edge capabilities while the mandatory compatibility standards allow hardware to be produced in any participating nation, separate from proprietary software. This introduces a revolutionary defense economic incentive: participants can purchase licenses to produce hardware if they have sufficient unused commercial industrial capacity. The intellectual property owner then generates steady profit through licensing rights, while the purchasing country spins up its own domestic manufacturing capacity. This can replace or supplement the current system, which sees countries preposition stock—much of it technologically obsolete or long overdue by the time it arrives—and it transforms domestic factories into a source of strength.

Such a marketplace could spark a military revolution among the United States and its allies. Indeed, connecting defense ecosystems from the ground up does for national security what the Internet did for the global economy: it turns isolated, fragmented pieces into a network whose combined power dwarfs the sum of its parts. Most important, the relentless innovation it fosters will produce a capability overmatch U.S. adversaries simply cannot replicate.

THE COMPATIBILITY DIVIDEND

The ultimate value of this transformation and marketplace model is that it builds a defense ecosystem that can actually scale and adapt when deterrence fails. In a protracted, low-level conflict, secure, resilient mineral processing and energy infrastructure ensure the steady, commercial-rate production of drones and munitions. Digital compatibility would allow for real-time artificial intelligence fusion of sensor data and link battlefield lessons back to the factory floor. And because the systems are compatible by design, adaptations can occur in days and be diffused throughout the alliance network rather than waiting for a prime contractor to push a proprietary update.

If a medium-scale crisis erupts, requiring a sudden, concentrated application of force, the vertically integrated stack would surge precision munitions and expendable platforms in weeks. Depots could reconstitute expended stocks on site, as quickly as mineral precursors can be extracted and processed. If there is demand the industrial base cannot satisfy, it can be fed to private industry—because the capabilities are compatible by design with private-sector manufacturing lines.

In the event of large-scale war, the existential survival of the alliance relies on rapid, total industrial mobilization. This is currently impossible—bespoke military platforms are, by design, incompatible with the broader commercial industrial base. But an open-interface, commercially grounded ecosystem would blur the lines between the defense industrial base and private industry. A major commercial automotive or technology manufacturer can pivot to building low-cost interceptors or attack drones in days because the blueprints plug into the established digital architecture. Digital and industrial compatibility is thus the bedrock of national industrial mobilization.

In the emerging era of warfare, the United States cannot bear the deterrence burden alone. If Operation Spider’s Web reveals anything, it is that standing militaries are not a measure of deterrence. The war in Ukraine, meanwhile, exposed a hollowed-out Western defense industrial base, and the conflict in the Middle East is showing that dispersed manufacturing facilities across an alliance with redundant supply chains matter more than ever.

But while authoritarian regimes can mass-produce, they cannot match the entrepreneurial power of free markets. To deter—and ultimately defeat—their adversaries, the United States and its allies must align their defense ecosystems. The U.S. Army’s recent innovations, under Trump and Hegseth’s leadership, can be a blueprint for all of Western defense. Digital and industrial capacity, adaptability, and compatibility are the new measures of strength for the United States and its allies.

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