Justin Fanelli, the Department of Navy’s chief technology officer, continues his three-and-a-half-year effort to modernize how the U.S. military engages with the private sector. During a recent video interview, Fanelli revealed he was simultaneously sprinting to catch an unannounced flight ordered by the Navy, illustrating the urgency that defines his approach to procurement reform.
Fanelli, who previously described moving away from a chaotic “spaghetti chart” of startup entry points toward a streamlined funnel, used this opportunity to reiterate the Navy’s growing demand for commercial innovation. The updated list of technology priorities, vetted by several unnamed venture investors before publication, signals where the Navy intends to direct its spending over the coming years.
Although total Navy purchasing operates in the $150 billion range annually, Fanelli emphasized a strategic shift toward co-investment. Rather than writing checks directly to established prime contractors, the service increasingly seeks to invest alongside private capital or acquire mature products developed by the private sector. This approach has shifted the typical vendor profile toward Series D through F companies, effectively offloading early-stage research risks to commercial investors.
The Navy has recently secured several high-impact contracts reflecting this strategy. These include a $562 million award for the MQ-25 Stingray autonomous refueling drone, partnerships with Armada for edge compute hardware, and the adoption of Gecko Robotics for dangerous ship inspections. In one notable instance, the Navy replaced a years-delayed contractor camera system with commercial solutions from Applied Intuition, cutting four years off the timeline and expanding deployment across more vessels.
Fanelli highlighted a compact source selection committee process designed to keep procurement merit-based and efficient, contrasting it with the sprawling review systems often perceived by outsiders. When asked about the deployment of such commercial technologies in volatile regions like the Strait of Hormuz, Fanelli remained cautious, noting that specific operational details are often classified.
The updated priority framework identifies five key areas for defense technology investment:
- Applied AI, focusing on agentic software, sensor fusion, and autonomous cyber operations.
- Quantum information science, particularly for navigation, secure communications, and cryptography.
- Advanced networking, aimed at maintaining data flow in degraded or intermittent environments.
- Electromagnetic spectrum operations, utilizing adaptive sensing in contested conditions.
- Digital engineering and interoperability, centered on open APIs and zero-trust architecture.
Fanelli cautioned that these categories do not constitute binding funding commitments nor do they rank specific programs. He described the document as a roadmap for investors and developers, noting that priorities will evolve based on emergent needs. The goal is to provide clarity for private capital so that innovations funded today can find a pathway into the Navy’s enterprise services within a few years.
Sprinting to catch a flight while outlining five-year priorities? Talk about living the urgency he’s preaching.
I didn’t realize they were targeting Series D to F startups. That’s a huge shift from supporting early-stage innovation.
Cutting four years off deployment by ditching the old contractor camera for commercial tech is exactly what we need more of.