With the release of the new AI Strategy memorandum on January 9, 2026, the Pentagon is mandating an “AI-first” approach across all components to ensure the United States maintains its competitive edge. For contractors in the defense industrial and tech base, or those hoping to enter the market, understanding what 2026 will bring for AI procurement is critical.

The following key takeaways distill the most significant strategic shifts and procurement opportunities emerging from this directive:

  • The “AI-First” Mandate: The Pentagon is moving beyond simply integrating AI into existing workflows and incrementally adding “AI”. Instead, it is seeking to re-imagine whole operational concepts from the ground up with AI at its foundation. In this open environment, unsolicited proposals for innovative AI tools may find receptive audiences if done well.
  • Pace-Setting Projects (PSPs): Seven initial PSPs are announced, designed to demonstrate rapid execution and provide foundational enablers for the rest of the Department. These should be seen as not just opportunities for contractors to get engaged but also illustrative of the new procurement model in this space.
  • AI Model Parity and 30-Day Deployment: A new primary procurement criterion requires that the latest and greatest AI models are available to military users within 30 days of their public release. Watching for signs of adoption will be essential to see how the Pentagon user base is reacting to model change and advancements.
  • Modular Open System Architectures (MOSA): To prevent vendor lock-in, DoW will strictly enforce MOSA and “DoD Data Decrees,” ensuring that components can be replaced at commercial speed without total prime contractor support. This provides opportunities for smaller vendors in theory, but they must have established pathways to procurement and be able to act quickly.
  • “Hard-Nosed Realism” in Responsible AI: A pivot towards “model objectivity,” removing policy constraints aimed at mitigating harms in order to procure AI services at the bounds of “any lawful use.”

These changes present lots of opportunities for contractors, but not without risks. For example, MOSA enforcement represents a significant shift for traditional defense contractors. By requiring modular interfaces and documentation sufficient for third-party integration, the Pentagon is intentionally lowering barriers for non-traditional tech firms and startups, but those contractors should be prepared to operate in an ecosystem where their components must be essentially interoperable by default, and capable of being updated or replaced rapidly. This may represent a high price for some commercial providers, requiring changes to commercial offerings and end-user license agreements. Balancing the speed and cutting-edge tech of commercial offerings with the desire to mandate requirements may also be a challenge for the Pentagon in implementation, just as it could pose a stark risk-reward calculation for contractors.

Furthermore, the Chief Digital and AI Office (CDAO) will serve as a “Wartime CDAO,” and work alongside the Chief Information Officer to aggressively eliminate “blockers” such as slow Authorizations to Operate (ATOs) and data-sharing hurdles. The establishment of a monthly “Barrier Removal Board” will give those inside the Department authority to waive non-statutory requirements to maintain speed. For industry partners, this may mean a faster path to fielding, but it also requires flexibility to adapt to what this process may impose on contractors.

The Pentagon’s new AI strategy continues in the mode that this Administration is intent on rapid AI adoption (see e.g., the AI Action Plan) and defense procurement transformation (see e.g., the Acquisition Transformation Strategy and previous Fluet writings on this topic here and here). By prioritizing model adoption and distribution, open architecture, and a “wartime approach” to AI, the Department is setting a new “AI fitness standard” for the Joint Force.

As these changes take hold, staying aligned with these new procurement and technical standards, being open to non-traditional procurement and business development practices, and accurately assessing the risks and rewards for your company will be essential. Defense contractors and technology providers seeking guidance on how these new directives impact current contracts or future proposals can contact Fluet’s Government Contracts team to discuss strategic AI approaches.