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In That Number
38 & two-thirds
The Congressional Budget Office put the U.S. military cost of the war with Iran at $38B through Aug. 1, and it consumed upwards of two-thirds of the combined Patriot, THAAD, SM-3 and SM-6 interceptor inventory.
Replacing the munitions alone will cost an estimated $21.7B and 5+ years.
On the Radar
DIU
Gauntlet Whiplash. The Drone Dominance Program published Gauntlet II results and the top 5 performers across 2 mission areas. Now, winners will draw from a 60,000-drone order pool—triple Gauntlet I.
The Merge’s Take: Tournaments may not be the best way to build a production base. Only half of Gauntlet I winners’ drones have been delivered, yet 8 of 11 of those winners just lost the demand signal six months later. That creates production whiplash: suppliers invest to ramp, then orders vanish. As Gauntlets proceed, the volumes grow, and so does the whiplash—there is no other demand signal in the U.S. remotely close to the Gauntlet orders. Expect only the best-capitalized companies to survive, which means we’d bet on Neros—who just raised $250M.
AI
Space weapons go public. Air Force Secretary Troy Meink revealed that the Space Force has on-orbit weapons, the first public disclosure of this capability. He would not say whether they are kinetic or whether they have been tested.
The Merge’s Take: The capability is not new; the disclosure is. Meink called the phrasing “very well thought out,” which signals deterrence without announcing it. Against this backdrop, Golden Dome’s space-based interceptor program went from contract to flight-ready hardware in under a year.
USAF / Honda
Bones + HondaJet. The B-21 is replacing the B-1 and B-2 fleets, but the Air Force is now extending the legacy bombers’ service life into the next decade. Because of B-1 fleet readiness issues, the Air Force is bringing in HondaJets so pilots can stay proficient.
The Merge’s Take: This is a race. The B-21 is on schedule, but it cannot arrive fast enough. Watch the B-21 production ramp and the B-1 readiness cliff: every delay in building quantity makes the legacy bridge longer—and more expensive. If you're wondering how this happened, the service lost a decade+ of progress during the GWOT era. The NGB B-3 bomber program started in the late 1990s and was planned to field in 2018, but was killed in 2009. Out of the ashes came the LRS-B effort, which became the B-21 program.
a16z
a16z backlash. Venture firm a16z released an essay advocating for low-cost munitions, heavily criticizing the Pentagon for allocating 97% of its munitions budget to legacy missiles.
The Merge’s Take: Their heart may be in the right place, but the internet raked them over the coals for this graphic. They framed the choice between high-end weapons and low-cost weapons solely on price, which has 2 flaws. First, they compare the actual contracted costs of legacy weapons with the future objective costs of start-up weapons. Second, the comparisons they make ignore the fact that they have different warhead sizes, sensor suites, range, survivability, and effectiveness metrics. You know, all the things that make cheap weapons more expensive.
TRIVIA
On this day in 1951, the U.S. Air Force successfully shot—and recovered—live animals from a rocket flight for the first time. What animals were in the rocket?
A) dog and cat
B) monkey and mice
C) guinea pig and rabbit
The Show!
Mike sits down with Jenn Wilson, Head of Federal at Nominal, to talk about test and evaluation and how their software helps accelerate the process.
Check it out!
They Said It
“We can no longer treat point defense as a side hustle.”
— Gen. Kenneth Wilsbach, Chief of Staff of the Air Force, on the service’s push to defend air bases from drone and missile attack. A new career field will be created, and the service is figuring out which portfolio acquisition executive will own it.
Knowledge Bombs
Swarm Aero unveiled its large Reaper replacement drone
Castelion won a $200M Navy order to produce Blackbeard missiles
Pratt & Whitney licensed Hermeus to build the F100 turbofan, a US first
The Army awarded TERN $11.3M for GPS-free vehicle positioning
The Army awarded Heaviside and RII $196M for spectrum warfare sensors
Lockheed Martin announced AGM-158 FLEX, a modular JASSM
Swarmer is acquiring Ukraine's Ratel Robotics for $224M
Lockheed Martin signed a deal to accelerate AIM-260 production
The Navy awarded $280M to 3 companies to prototype landing craft
GM Defense delivered its first Patriot missile parts (PAC-3 MSE housings)
Rafael is integrating SPICE 1000 missiles onto Israeli F-35s
Impulse Space raised a $308M Series D extension at a $5.4B valuation
Anduril won an $85M IDIQ for digital aircraft design tools
The Air Force plans to buy a 737 MAX for VIP airlift
Saudi Arabia was cleared to buy 48 F-35s (potential $24B deal)
The Pentagon invested $450M into Elmet to onshore tungsten processing
Turkey fired a ballistic missile from an Akinci drone
Northrop Grumman & True Anomaly were tapped for GEO recon satellites
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ANSWER
B) On September 20, 1951, the Air Force put a monkey and 11 mice into an Aerobee rocket and shot it to an altitude of 236,000 feet. The parachute deployed, the recovery capsule landed, and the animals were found alive. These monkey missions were known as “Albert” missions, and this monkey was Albert VI (sadly, all previous Albert missions were unsuccessful, and this Albert died a few hours after landing).
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