🔷 F-35 Block 4 Minus

In That Number

4

The Navy has selected 4 vendors—Boeing, Northrop Grumman, General Atomics, and Anduril—to design conceptual carrier-based autonomous combat drones for its Collaborative Combat Aircraft (CCA) program.

On the Radar

Japan’s defense budget request for FY2026 is a record $60B, a 4.6% increase from the prior year. The plan includes tripling spending on drones, a multi-layered littoral defense system, 12 F-35s, and 3 KC-46s.   

The Merge’s Take: If approved, this will be Japan’s 13th straight defense budget increase—and expect the streak to continue. This request is to fund year 4 of Japan’s 5-year Defense Buildup Program (DBP), its roadmap to reach 2% of GDP on defense by 2027. But it may go even higher; there is growing support to raise defense spending above the 2% GDP goal.

JIATF 401. Get to know that bold text—the Pentagon launched Joint Interagency Task Force 401 (JIATF 401) to focus on counter-drone systems. Along with the announcement is a mandate to designate a test range within 30 days, deliver a resource and implementation plan within 60 days, and demonstrate results within 36 months.

• The Merge’s Take: Is this another bureaucratic reshuffling of deck chairs on the Titanic? We don’t think so. The JIATF 401 will be the first counter-drone effort that will (attempt to) place the holy trinity of leadership together: the authority, resources, and accountability. In the mandate is an up to $50M-per-effort authority at the director level, and based on the memo language, will be pulling from a (very) large pot of money once the FY26 reprogramming is complete. This unity of effort also includes absorbing Replicator 2 (DIU’s counter-drone effort).

Navy robot re-org. SECNAV John Phelan ordered a 30-day pause on all Navy robotic contracting efforts and is mandating a restructure to unify all autonomy programs under one leader. A new deputy assistant secretary for Robotic and Autonomous Systems (RAS) will run the effort, aided by a dedicated PEO portfolio acquisition executive. The timeline is ambitious—have a plan in 30 days and be operating within 90 days.

• The Merge’s Take: We think the unity of effort is great, but it will be interesting to see the dynamics play out in execution. Given how cross-cutting RAS will be—from CCAs to autonomous torpedoes—and the intra-service cultures, there is likely to be some brown-shoe on black-shoe crime (and vice versa). OBTW, this also takes over the Navy-related Replicator efforts—making 2 announcements this week about things leaving the purview of DIU.

F-35 Block 4 shrinks. After a series of delays and issues, the F-35 Block 4 upgrade program is scaling back some of the tech upgrades in the bundle. Block 4 was originally a $10B 53-capability upgrade to field in 2026, in increments starting in 2019…that turned into 66 capes, $6B over budget, and 6 years behind schedule. Now, Block 4 is being restructured to a ‘subprogram’ with reduced scope to eliminate the engine and cooling upgrade dependency, and develop a plan to deliver results by 2031.

• The Merge’s Take: Remember that the original F-35 capabilities were designed for a 2025 fight—which is why Block 4 had a 2026 fielding completion date. Well, here we are in late 2025, and maybe the first Block 4 update is about to hit the fleet. Call us crazy, but given it had so many dependencies on the critical path (TR-3, new engine, new cooling, etc.), waiting until the deadline to restructure the upgrade program was entirely foreseeable years ago.

• The Merge’s Spicy Take: After the F-22 program got knifed from 750 to 187 jets, the Air Force created a disdain narrative for 4th-gen fighters to consolidate support for the F-35 program when it was struggling. We often imagine what a $16B tech upgrade would do to an F-15EX or F-16...

TRIVIA

On this day in 1776, during the Revolutionary War, the Turtle marked the first use in combat of what?

A) land mine
B) sea mine
C) torpedo
D) submarine

They Said It

“It started early this year [with] nothing in mind, and… We had an industry day, and it grew up to like 150 companies that are expressing interest in this activity. We had a gold mine of interest in this area.”

— Maj. Gen. Stephen Purdy, Military Deputy and Acting Assistant Secretary of the Air Force for Acquisition and Service Acquisition Executive, on the surge of commercial industry engagement in the Space Force’s Geosynchronous Space Situational Awareness Program.

The Show

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Knowledge Bombs

• The US is set to redefine large drones as aircraft in the Missile Technology Control Regime (MTCR) agreement to unblock foreign sales

• Cambridge Aerospace emerged from stealth mode with 2 air threat interceptor products

• Kraken & Applied Intuition are teaming up on autonomous USVs

• NUVIEW was awarded a $5M DoD contract to enhance its space-based LiDAR payloads

• AV delivered its first two LOCUST laser weapon system prototypes to the Army

• Saab unveiled a new low-cost anti-drone missile called Nimbrix

• Australia conducted its first flight with an AI-assisted aircrew on board a P-8A Poseidon aircraft

• Stormwatch Defense is now producing its jet-powered interceptor

• MGI Engineering announced the launch of the TigerShark drone 

• Metron won a $48.6M Army contract to bring AI-based planning to expeditionary maneuver and air-ground recon

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ANSWER
D) The Turtle was the first submarine in warfare. The Turtle attempted (several times) to attach explosives to British warships in the New York Harbor.