The post–Cold War international order had been withering for decades, but it reached an unmistakable inflection point on June 1, 2025. On that day, Ukraine deployed less than a million dollars’ worth of hobby-shop technology to successfully destroy Russian strategic bombers worth billions. Russia’s exquisite air defenses and vast geographic depth made no difference. Images of burning Russian bombers finally settled a long-standing debate among military strategists, confirming whether unmanned aerial drones are merely a tactical aberration or a tectonic shift in geopolitical power.
Operation Spider’s Web, as the Ukrainian operation was named, codified the harsh new rules of a new military era: bespoke, highly customized military platforms are effectively luxury items, while “mass”—defined as the ability to employ more weapons faster and for a sustained period—has become essential.
This radical change necessitates continued and urgent reform within the United States’ defense ecosystem. As many military analysts have noted, the rapid technological advances of private commercial firms are steadily outpacing those made by traditional defense industries. Furthermore, artificial intelligence is accelerating innovation cycles, and the wide diffusion of technology is dangerously blurring the capabilities of state and nonstate actors alike. Less appreciated, however, is how this new era is simultaneously altering the fundamental currencies of international statecraft. By transforming the application of violence and expanding warfare from limited regional conflicts to existential risks, this historical inflection point demands an entirely new way of thinking about and constructing international alliances.
Since the end of World War II, the greatest deterrence factor for the United States has been unified alliances whose combined military might is preeminent. Yet, this allied might is only as dominant as the sum of its parts. As the war in Ukraine and ongoing conflicts in the Middle East have painfully demonstrated, many large militaries are fundamentally unprepared for an era defined by mass-produced precision strikes and autonomous interceptions. Legacy defense industries are still rigidly structured around expensive, exquisite, and proprietary military platforms that cannot scale.
The future strength of the United States depends on robust alliances underpinned by a shared defense industrial base capable of aggregating capabilities for a modern era of warfare. To achieve this, Washington must actively encourage a free-market, international defense ecosystem defined by open architecture and industrial, software, and hardware compatibility. The United States’ greatest deterrent, the foundational bedrock of its diplomatic clout, and the primary factor in its ability to win on the modern battlefield in the coming century will be its collective allied industrial capacity and military interoperability. If the West fails to secure such a strategy of compatibility, hostile 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. Yet, practically speaking, it has never come to fruition at scale. The global defense architecture remains stubbornly oriented toward a Cold War–era industrial model. This legacy model generally involves U.S. defense prime contractors creating small batches of exquisite equipment operated via proprietary, siloed software. Traditional allies would purchase this expensive equipment and attempt to combine it with their own domestic military offerings wherever possible. For decades, most corporate defense entities were economically incentivized to create defensive moats around their products once sold, actively preventing outside competition from replacing them.
All of this structural stagnation unfolded during a prolonged period of relative global peace. Consequently, a special-interest decision-making model amplified the entrenchment of these defense contractors, creating a fractured mosaic of military platforms and systems worldwide. While the United States and its allies recognized that the digital revolution of the past 20 years would eventually require deeper technological compatibility, they continually deferred to the entrenched momentum of their slow-moving acquisition processes, opting instead to tinker only on the margins rather than embark on fundamental change.
This institutional complacency directly led to the level of deep-seated unpreparedness inherited by U.S. President Donald Trump last year. Although the U.S.-led defense architecture had successfully deterred large-scale global conflict for decades, the U.S. Army in 2025 looked shockingly similar to the army of 1975. Because the institutional incentive was to maintain the lucrative status quo rather than actively steer the future of warfare, the U.S. defense industry steadily devolved into a tight oligopoly. A handful of primary contractors developed exquisite platforms with built-in digital firewalls, producing them inside custom-built, highly specialized factories.
Meanwhile, decades of compounding government statutes and internal policies, paired with poor acquisition incentives, optimized federal spending for job distribution across congressional districts rather than combat efficacy. Ultimately, this encouraged contractors to build platforms that are both exorbitant in cost and painfully slow to replace—in other words, the exact antithesis of affordable mass. Excessive and outdated regulations also paralyzed foreign military sales, while steep procedural and financial barriers to entry effectively locked out innovative small and medium-sized technology companies.
Because these exact same economic and bureaucratic dynamics were replicated in other allied nations, U.S. partners each suffered from their own isolated industrial oligopolies. Consequently, the broader allied industrial base—and with it, Washington’s operational ability to fight cohesively as a unified coalition—atrophied significantly.
Contrast this defensive stagnation with private technology companies, which are perpetually engaged in a brutal war for their own survival. Over the exact same time period, these commercial firms have engineered advances that have rapidly driven humanity forward. They constantly race toward minimally viable products, tighter innovation cycles, and ever-evolving, continuously improving offerings. Crucially, they pursue open data architectures to ensure their digital products meet universal industry standards, allowing seamless data exchange across the global internet. After all, a modern smartphone that cannot exchange data with external networks is simply an expensive paperweight.
The stark, dangerous divide between open commercial systems and closed military systems is something witnessed firsthand earlier this year at the Grafenwoehr Training Area in Germany. There, allied forces and Ukrainian soldiers gathered to test modern counterdrone capabilities in a simulated combat scenario. The allied soldiers performed admirably in a scenario that mimicked previous conflicts featuring limited air threats. However, their systems were fundamentally not designed to cope with the massive drone swarms characteristic of modern combat.
As complex air threats were layered into the military exercise, an allied air defender was observed desperately swiveling from one computer screen to the next, manually transferring targeting data from one proprietary system to another. The entire kill chain—the critical sequence of steps required to identify a target and destroy it—was only as fast and accurate as the operator’s manual keystrokes.
By stark contrast, Ukrainian soldiers participating in the exercise were able to monitor multiple aerial threats and activate offensive and defensive capabilities simultaneously from a single system, on one unified screen, using just a few intuitive keystrokes. Faced with the immediate, existential risk of Russia’s full-scale invasion in 2022, Ukrainian forces had little choice but to rapidly embrace open-source data standards and AI-enabled kill chains. The result was seamless data transfer fused directly onto a single user interface.
Witnessing this operational efficiency highlighted the immense possibilities when all elements of a military system are knit together seamlessly from the factory floor to the foxhole. It also exposed the severe limits of traditional allied military power: isolated, proprietary capabilities that simply cannot withstand the punishing intensity of today’s electronic and kinetic battlefields.
When domestic defense industries insist on creating bespoke, proprietary software, the inevitable result is wildly inconsistent technical specifications. Hardware systems physically cannot share critical data across different platforms, and each allied nation’s exquisite capabilities resemble a walled garden—impressive and formidable on their own, but entirely useless to anyone stranded on the other side of the wall. This structural failure severely degrades joint combat effectiveness, given that modern command and control warfare demands split-second detection and engagement capabilities.
Effectively countering future military threats has already outstripped human cognitive capacity; only advanced artificial intelligence can manage the staggering speed and sheer volume of battlefield data. This is precisely why technical compatibility is the indispensable linchpin of modern military strategy. The only viable path forward is to systematically break down these corporate walls and abandon top-down, rigid military standardization. Washington and its partner nations must fully embrace private-industry best practices that enforce software and hardware compatibility from inception, dramatically lower barriers to entry, and aggressively respond to real-world consumer and battlefield demand.
MASTERY PLUS MASS
Military leaders frequently ask whether the U.S. military should prioritize high-volume, low-cost equipment or highly sophisticated, exquisite programs. Unfortunately, the correct answer is both. The United States and its key allies still desperately need exquisite aircraft, nuclear submarines, fifth-generation stealth fighters, and other high-end capabilities to maintain strategic superiority. However, these assets must be carefully optimized for specific, high-risk use cases because they are ultimately too expensive to risk casually and far too slow to replace during protracted, attrition-heavy conflicts.
The U.S. military operation executed in Venezuela in January, for instance, was stunningly complex and high-risk, and it could never have been successfully accomplished using cheap, mass-produced commercial capabilities alone. Washington will always require such specialized platforms, particularly at the outset of a limited conflict. Yet, their utility diminishes the longer a protracted conflict drags on.
Until one belligerent party’s political will or physical ability to fight is entirely broken, active battle lines are typically held through sheer mass. Bespoke, low-quantity capabilities simply cannot win a major, existential conflict. Massive and synchronized combat power remains the greatest deterrent against aggression, since an adversary is far less likely to initiate a war that it firmly believes it cannot sustain and win.
And yet, the current defense architecture of the United States and its allies overemphasizes exquisite capabilities, while primary adversaries such as China and Russia possess vast, mobilized industrial capacity to scale military production rapidly. Moreover, these adversaries, operating alongside strategic partners like North Korea and Iran, place a fundamentally lower value on human life. In this new era of attrition warfare, protracted conflicts directly play to their core strengths: authoritarian states can readily sustain catastrophic losses in both human lives and financial treasure that democratic governments simply cannot politically tolerate.
The entire Western defense ecosystem must therefore be reformed from the ground up to avert this grim fate and ensure it is structurally prepared for full-spectrum warfare. This ecosystem fundamentally consists of three distinct layers: a physical layer comprising critical precursors and infrastructure, a digital layer that enables free and secure data flow, and an innovation layer designed to meet the unpredictable future of warfare.
Regarding the physical layer, the United States and its allies have allowed their foundational infrastructure to erode for decades. The U.S. Army alone has accumulated more than $150 billion in unmet infrastructure needs, with countless soldiers living and working on dated equipment housed in crumbling, outdated facilities. Simultaneously, the nation has offshored the critical raw materials necessary to build its most powerful systems, allowing vital manufacturing supply chains to wither. The U.S. military cannot close this capability gap quickly or efficiently on its own, largely because federal budget processes are intentionally slow and bureaucratic, with congressionally authorized infrastructure projects generally taking years just to break ground.
Western militaries must instead think creatively to tap into latent resources and commercial expertise to close the infrastructure gaps that currently prevent industrial scaling. For instance, under the leadership of President Trump and Defense Secretary Pete Hegseth, the U.S. Army stopped acting solely as an isolated consumer of goods and began operating as an active market incubator. By employing enhanced-use leases, the military is trading land access to private industry in exchange for vital infrastructure investments directly on base.
For example, mineral processing companies are currently building advanced refinement centers on U.S. military bases to secure critical rare-earth minerals and reshore domestic supply chains. Similarly, the U.S. Department of Energy is introducing microreactors onto army bases to provide resilient, off-grid power supplies, while hyperscalers are constructing on-base data centers equipped with organic power generation to safeguard the massive computational power required for AI-enabled command, control, and business enterprise functions. The most common financing structure involves private partners fully funding, building, and maintaining these critical facilities at zero upfront taxpayer cost. This frees the army to focus its strained resources and energy on other urgent modernization efforts.
U.S. allies must pursue similar, aggressive structural reforms. Protracted warfare inherently necessitates secure, resilient infrastructure and manufacturing supply chains to rapidly scale and synchronize military capability. While Washington’s adversaries have amassed enormous industrial capacity and the raw materials required to fuel it, the United States must continue to forcefully reclaim its independent production capabilities.
JAILBREAKING AND FAILING FAST
The United States and its allies must also think creatively to achieve true digital compatibility. They must reverse decades of deeply entrenched proprietary thinking across combat systems, factory floors, and every administrative layer in between. Over the past five years, the U.S. Army spent hundreds of millions of dollars attempting to connect hundreds of disparate, non-communicating systems. Ultimately, these efforts failed due to restrictive contractual limitations imposed by legacy vendors and the sheer volume of human hours required to painfully rewire decades of flawed foundational design.
Consequently, during the first year of Trump’s second term, the army began "jailbreaking" these systems instead, practically freeing operational data that had previously been held hostage inside proprietary corporate silos.
This radical approach allowed military data to flow smoothly to any digital repository or system that proved helpful to the force. The army successfully connected hundreds of enterprise business systems, enabling it to conduct its first comprehensive personnel audit in over 50 years, which saved an estimated $2 billion annually in redundant roles. Furthermore, the army hosted the largest hackathon in history. With the direct assistance of more than 550 software developers, participants successfully unlocked data transfer protocols between more than 200 distinct pieces of proprietary warfighting equipment. Systems that previously could not communicate with one another—such as those observed struggling at Grafenwoehr—were successfully integrated into a common operating picture in a matter of days.
If Western militaries can freely and securely share operational data, the United States and its allies can overlay advanced agentic AI models across the entire warfighting enterprise. Such powerful tools can automate a wide array of complex administrative operations, such as intricate budgeting processes, and create digital twins of government-owned or government-operated manufacturing arsenals, maintenance depots, and ammunition plants.
This will empower critical strategic manufacturers to run the exact same types of predictive supply chain analytics routinely used in the private sector, providing a unique opportunity for allies to cross-load manufacturing work across an interconnected production network. The collective alliance would thereby become exponentially more productive and efficient, both on and off the battlefield. For all future military procurement, every branch should strictly enforce open-source standards to ensure that all newly acquired capabilities can instantly communicate across shared digital networks.
Finally, the United States and its allies must reform the third vital layer of the defense ecosystem: the innovation timeline. Securing physical raw materials and open digital networks is entirely useless if advanced military capabilities are fielded at the sluggish speed of bureaucratic red tape. Western militaries must instead adopt commercial-style iteration and speed. Although they will likely always require bespoke, heavy capabilities like tanks, helicopters, and rocket artillery that inherently take years to field, they should predominantly purchase readily available commercial technologies and services. Doing so allows armed forces to field functional capabilities in weeks rather than years.
This commercial-first procurement approach will also help bridge the notoriously lethal "valley of death" between initial prototyping and full-scale production that most defense innovations historically face. To further this critical cause, the U.S. Army last year established FUZE, a $750 million internal venture-capital-like mechanism designed to identify promising dual-use commercial technologies and provide rapid funding to scale them.
For compelling commercial offerings, the U.S. Army quickly provides capital and directly transports the winning technologies to the field to test and iterate alongside deployed soldiers. This represents a massive operational innovation in itself. In the past, major defense programs like the Booker tank, the Comanche helicopter, and the Future Combat System spent decades in development and consumed billions of taxpayer dollars before military operators finally declared them expensive failures.
Today, the army has established a streamlined concierge booking platform that provides commercial developers access within 30 days to domestic and international testing ranges, allowing them to experiment side-by-side with active-duty soldiers. This progressive model transforms iterative failure and the commercial ethos of "failing fast" into a defining, positive feature of military innovation.
U.S. allies must similarly establish agile innovation engines that fundamentally alter the traditional acquisition paradigm. The ultimate definition of military success should no longer be exquisite capabilities that take decades to field, but rather rapidly deployable solutions—ideally leveraging commercial technology handed directly to deployed operational units who can test them and provide immediate, real-world feedback to refine the product. The United States and its allies must get private software developers directly into the mud with soldiers so that the operational innovation loop remains as tight as humanly possible.
THE MARKETPLACE MODEL
With these foundational reforms successfully in place, the global defense ecosystem must establish a single, open marketplace where allied nations can transact as freely as any commercial market, entirely free from political barriers and bureaucratic friction. Domestic defense companies are currently isolated from one another because they survive within a strict monopsony: their home government represents the vast majority of their sales, the company creates domestic jobs and industrial output for its country, and it is consequently heavily shielded from genuine market competition.
This artificial insulation severely stunts innovation, corporate growth, and the fierce competition that defines robust Western capitalist economies, particularly within dynamic technology sectors. Introducing authentic market forces to the Western defense ecosystem is the single most critical catalyst that will adequately prepare the United States and its allies for the future of warfare.
The U.S. Army recently launched dedicated commercial marketplaces for its Unmanned Aircraft Systems and Counter-UAS equipment. These programs began primarily as a localized solution for domestic counterdrone interagency coordination, but they rapidly evolved into an optimal model for achieving international military compatibility. Within months of their official launch, these marketplaces successfully processed hundreds of millions of dollars in military orders. To date, more than 25 allied countries have formally signed on to the programs. The marketplace will continue to expand, eventually allowing foreign defense vendors from allied nations to offer their specialized products directly.
The marketplace functions like any consumer-facing digital interface where authorized participants can log on to browse and purchase military capabilities. Creating an open market mechanism where technical compatibility is the strict price of admission forces traditional legacy defense companies to directly compete with agile commercial startups. Ultimately, this dynamic lowers unit production costs and guarantees superior system integration for the entire allied enterprise.
All listed products must adhere to stringent open-system requirements, meaning any offered capability must natively plug into the established digital architecture. This crucial shift places the heavy burden of system integration squarely onto the producer rather than the consumer, ensuring customers can maintain absolute confidence that every purchased system will operate seamlessly with the existing equipment and command structures of all participating allied nations. It successfully enforces technical compatibility by design through organic market forces, while actively excising bureaucratic micromanagement.
A Western marketplace model for defense would effectively aggregate global demand, unleashing the powerful capitalist functions that ultimately won the Cold War. Pure, diversified market forces would naturally generate fierce industry competition—both domestically and internationally—driving down skyrocketing costs and permanently preventing monopolization. Meanwhile, persistent, aggregated demand would smooth out the erratic, destructive peaks and troughs of federal budget processes that have paralyzed defense contractors for decades, providing predictable, continuous revenue streams instead. Furthermore, aggregated demand will powerfully stimulate industrial production both at home and abroad, allowing private companies to confidently invest in capital expenditures that were previously viewed as too financially risky.
Critically, this marketplace model also transforms allied commercial factories into a ready, mobilized weapons production network the exact moment it is needed. It is simply not enough for allied nations to merely purchase American-made technology. True alliance resilience requires each individual country to build its own robust defense economic ecosystem.
The marketplace provides a practical mechanism for allied countries to immediately access cutting-edge military capabilities, while mandatory technical compatibility standards allow essential hardware to be produced in any participating nation, entirely separate from proprietary software constraints. This introduces a revolutionary defense economic incentive: participating nations can easily purchase legal licenses to manufacture hardware locally if they possess sufficient unused commercial industrial capacity.
The original intellectual property owner generates a steady stream of passive profit through licensing rights, while the purchasing country simultaneously spins up its own domestic manufacturing capacity. This innovative approach can effectively replace or supplement the current, outdated system—which often sees countries stockpile military gear that is technologically obsolete or long overdue by the time it physically arrives—and transforms domestic industrial factories into a profound strategic source of strength.
Such an expansive marketplace could spark a historic military revolution among the United States and its allies. Indeed, connecting national defense ecosystems from the ground up accomplishes for global national security precisely what the internet did for the global economy: it turns isolated, fragmented pieces into an integrated network whose combined power vastly dwarfs the sum of its individual parts. Most importantly, the relentless, competitive innovation it fosters will produce a decisive capability overmatch that U.S. adversaries simply cannot replicate.
THE COMPATIBILITY DIVIDEND
The ultimate value of this sweeping transformation and marketplace model is that it constructs a resilient defense ecosystem that can genuinely scale and adapt when deterrence inevitably fails. In a protracted, low-level conflict, secure and resilient mineral processing and energy infrastructure ensure the steady, commercial-rate production of millions of drones and munitions.
Digital compatibility would simultaneously allow for real-time artificial intelligence fusion of battlefield sensor data, instantly feeding combat lessons directly back to the factory floor. And because all systems are engineered to be compatible by design, tactical adaptations can occur in a matter of days and be rapidly diffused throughout the entire alliance network, rather than waiting months or years for a traditional prime contractor to push a proprietary software update.
Should a medium-scale crisis suddenly erupt, requiring a rapid and concentrated application of military force, this vertically integrated stack would enable the immediate surge of precision munitions and expendable platforms within weeks. Logistics depots could reconstitute expended munitions stocks directly on-site, operating as quickly as raw mineral precursors can be extracted and industrially processed. If a sudden demand arises that the primary defense industrial base cannot immediately satisfy, that production overflow can be seamlessly fed directly to private commercial industry—because the military capabilities are compatible by design with standard commercial-sector manufacturing lines.
In the event of a catastrophic, large-scale global war, the existential survival of the alliance will rely entirely upon rapid, total national industrial mobilization. Under the current legacy system, this remains virtually impossible, as bespoke military platforms are purposefully designed to be incompatible with the broader commercial industrial base. However, an open-interface, commercially grounded ecosystem would successfully blur the rigid historical lines separating the defense industrial base from private enterprise. A major commercial automotive or consumer technology manufacturer could pivot to building low-cost interceptors or attack drones in a matter of days simply because the digital blueprints plug directly into the established architecture. Digital and industrial compatibility thus serves as the essential bedrock of true national industrial mobilization.
In the rapidly emerging era of modern warfare, the United States cannot bear the heavy burden of global deterrence entirely alone. If Operation Spider’s Web reveals anything to the world, it is that static standing militaries are no longer a reliable measure of true strategic deterrence. Meanwhile, the ongoing war in Ukraine has ruthlessly exposed a hollowed-out Western defense industrial base, and current conflicts in the Middle East demonstrate that dispersed, resilient manufacturing facilities spread across an allied coalition with redundant supply chains matter now more than ever.
While authoritarian regimes certainly retain the ability to mass-produce basic military hardware, they fundamentally cannot match the dynamic entrepreneurial power of free markets. To effectively deter—and, if necessary, decisively defeat—their formidable adversaries, the United States and its allies must fundamentally align and modernize their defense ecosystems. The U.S. Army’s recent, sweeping innovations, executed under the leadership of President Trump and Defense Secretary Hegseth, can serve as an invaluable blueprint for the entire architecture of Western defense. Enhanced digital and industrial capacity, operational adaptability, and uncompromising technical compatibility are the new, non-negotiable measures of strength for the United States and its global allies.
