🔷 $12 Billion Mineral Vault

In That Number

60 hours

DZYNE’s Group 5 ULTRA Turbo drone flew a 60-hour mission-representative ISR flight. For those that don’t math: That’s a two and a half day flight!

Dear DZYNE, congrats on the accomplishment, but for something that flies for so long, why are almost all photos of your drone on the ground? Seriously, it’s a sweet-looking drone—get some aerial pics!

On the Radar

$12B mineral vault. The U.S. announced Project Vault, a $12B strategic mineral stockpile initiative designed to insulate the U.S. private sector from Chinese supply shocks. The initiative, modeled after the Strategic Petroleum Reserve, combines a $10B loan with private capital. Participating companies include GM, Boeing, GE, and Google.

• The Merge’s Take: While the U.S. has long maintained a small defense-only stockpile, Project Vault marks a pivot toward "industrial-strength" insurance for the entire economy. China is the world’s largest supplier and processor of these minerals. Sourcing raw mineral ore is not nearly as difficult as processing it, though, and that bottleneck is in China. Keep an eye on this to see whether it will be a warehouse of dirt and rocks or a processing facility for cobalt, lithium, and the 17 rare earth elements. If the latter, who gets tapped for processing will be important to watch.

New START expired. The final day of the New START treaty has passed, leaving the U.S. and Russia without a strategic nuclear arms control agreement for the first time in more than 50 years. The treaty limited both nations to 1,550 warheads and 700 deployed delivery platforms (bombers, ICBMs, subs), though both nations have more in reserves.

• The Merge’s Take: New START was a 15-year bilateral management agreement between the U.S. and Russia that largely normalized behavior, but China is the one to watch. While China has had nukes since 1964, and had ~240 warheads in 2011, they are currently building 100 warheads a year in a full sprint to field 1,000+ nuclear weapons by 2030. China has a long-standing No First Use (NFU) policy, but there is a world where they build the arsenal then kill the policy, imposing a strategic recalibration in the Pacific. The image above ain’t Russian—those are Chinese DF-41 mobile ICBMs.

The $1.5T defense budget narrative is picking up steam. HASC Chairman Mike Rogers is pushing for $450B in defense spending through a "Reconciliation 2.0" bill to bridge the gap between the Pentagon’s $1T FY27 budget request. The surge is intended to fund big-ticket modernization, including the Golden Dome, 6th-generation fighters, ships, and the Sentinel ICBM. Beyond the topline, the effort will also incentivize commercial companies to enter the market and expand the defense industrial base.

• The Merge’s Take: Though the effort has bicameral support from the HASC and SASC chairmen, there are some big hurdles to navigate. These are authorizers—not the appropriation committees that actually write the checks. That said, passing a reconciliation bill only requires a simple majority in both chambers (not the typical 60 votes in the Senate). Given this is the year of mid-term elections, expect nothing less than a full-court press to pass this before the risk of losing seats comes.

Drone Gauntlet begins. The Pentagon has tapped 25 vendors for "the Gauntlet," a live-fly evaluation at Fort Benning starting this month. This is the first part of the broader $1.1B Drone Dominance Program, which aims to field 300,000+ low-cost one-way attack drones by 2027.

• The Merge’s Take: The clear demand signal—and commitment to follow through—is exactly what the U.S. industry needs. That said, buying 300,000 Group 1 drones is easy. Integration is an entirely different kind of gauntlet. To be successful means to organize, train, and equip—not just equip. Eventually, dozens of vendors must align on standards for certain systems and interfaces so training and operations can be implemented at scale.

• The Merge’s Spicy Take: FPV quadcopters look cool, but does nothing to bolster deterrence in the Pacific. A “Group 2 Drone Gauntlet” would fix that.

TRIVIA

Which globally popular soda was invented in Nazi Germany during WWII after U.S. syrup supplies were cut off to Coca-Cola’s German bottlers?

A) Sprite
B) Dr Pepper
C) Fanta
D) RC Cola

They Said It

“I did not expect to be told to build a battleship when I got this job.” 

— Rear Adm. Derek Trinque, the Navy staff’s surface warfare director, discussing the surprise directive to develop the Trump-class battleship as the centerpiece of the "Golden Fleet"

On the Show!

We have the untold origin story about the Fury unmanned fighter jet!

We talk with the people who created it, what led them to sell their company to Anduril, and how that experience led them to create an investment fund called the DoD Accelerator to help other companies with what they lived through.

Check it out!

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Knowledge Bombs

• The Air Force conducted a live-fire test of the ERAM cruise missile

• L3Harris won a $86.2M contract for the Marine Corps AH-1Z helicopter cruise missile program

• RTX announced a massive Pentagon deal to ramp up production of five missile lines

• D-Wave, Anduril, & Davidson partnered to enhance missile defense using quantum computing

• Palladyne AI announced SwarmOS, software to integrate autonomous systems

• SpaceX proposed a million-satellite orbital data center constellation powered by solar energy

• SpaceX acquired xAI to unify large-scale AI and space data center ambitions

• Picogrid won a $9M Air Force contract for AI-written counter-drone software

• Overland AI raised $100M in funding to scale ground autonomy for the military

• Machina Labs raised $124M in Series C funding to build a robotic manufacturing factory

• Kratos & NCSIST revealed they have tested the Mighty Hornet IV (a weaponized Firejet target drone)

• Congress finally passed an $839B defense budget for fiscal year 2026 (which started 4 months ago)

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ANSWER C.) Fanta. The U.S. cut off Coke syrup shipments to Germany, so Coca-Cola Deutschland invented Fanta to keep selling soda under the Nazi regime. It became a global brand after the war.