Defense News Digest: January 2025

Welcome to IDGA’s monthly news roundup. For over two decades, the Institute for Defense and Government Advancement has served as a non-partisan events and thought leadership organization connecting the Defense and Security communities interested in solving high-level challenges. Now, through this weekly series, we look to educate the community on the latest research, program updates and news in the defense and government sector.

In what was a news-filled month for the defense industry and the U.S., IDGA is here to provide five news stories that might have flown under the radar, including AI investments, generative AI guidance for the Marines, and more. 

Marine Corps Issues Guidance on Generative AI

The U.S. Marine Corps has issued new guidance on the use of generative AI, adopting a cautious but forward-leaning approach to the technology. The "Guidance on Generative Artificial Intelligence" (NAVMC 5239.1), released in December 2024, outlines how Marines should integrate GenAI while mitigating risks. Rather than banning the use of AI outright, the policy encourages commands to develop governance frameworks that balance the benefits of AI with operational security concerns. Marines are advised to “distrust and verify” AI-generated outputs, recognizing that the technology can produce inaccurate or misleading information.

A key directive in the policy requires major commands to establish AI task forces, which will assess existing and emerging GenAI tools to determine their utility for specific mission needs. These task forces will also generate a list of preferred AI capabilities to guide future adoption across the Corps. Additionally, the policy mandates that all AI developers and users adhere to established risk management frameworks, including the DoD Responsible AI Toolkit and the NIST Risk Management Framework, ensuring compliance with ethical and security standards.

This guidance signals the Marine Corps’ intent to explore AI innovation while maintaining strict oversight. A forthcoming memorandum will provide additional details on the implementation of AI task forces and governance processes.

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Pentagon to Tighten Rules on Foreign Influence in Defense Contracts

In 2025, the DoD is set to implement major reforms to limit Chinese influence over its commercial tech partners while continuing to engage startups for innovation. Under new policies mandated by the 2020 National Defense Authorization Act, any defense contract over $5 million will be subject to increased foreign influence vetting. This shift aims to secure unclassified research and technology, as China increasingly exploits open-source intelligence to gather information on U.S. capabilities.

While traditional defense contractors can more easily comply, startups with foreign investors—especially in AI and quantum computing—face challenges. The Defense Advanced Research Projects Agency (DARPA) has pioneered a risk-based approach that allows researchers with foreign ties to participate under strict security measures, including physical and information isolation.

Special Operations Command (SOCOM) offers an alternative approach, favoring controlled unclassified discussions with allies to accelerate innovation while managing the risk of adversaries gaining access. The Pentagon’s evolving security strategy underscores a critical balancing act: safeguarding national security without stifling technological advancement.

Industry Coalition Presses DOGE to Act on Digital Identity

A coalition of digital identity advocates is urging the Trump administration’s Department of Government Efficiency (DOGE) to accelerate the adoption of mobile driver’s licenses (mDLs) and other digital identity verification solutions to combat cybercrime and fraud. In a letter to DOGE, the Better Identity Coalition praised the administration’s focus on fraud prevention in government benefits programs but emphasized the need for broader action to address cyber threats from criminal groups and nation-states.

The coalition is advocating for a federal digital identity strategy that enhances digital infrastructure, provides state grants to upgrade credentialing systems, and fosters public-private collaboration to give Americans more secure online identity verification options. While the Biden administration had considered an executive order on digital identity, it never materialized. However, Biden’s recent cyber executive order included provisions for fraud prevention, standards for remote identity verification, and a pilot program to notify individuals of potential identity misuse.

Trump Announces $500 Billion AI Infrastructure Investment in the U.S.

Earlier this month, President Trump unveiled "Stargate," a historic AI infrastructure project backed by OpenAI, SoftBank, and Oracle. Announced at the White House, the initiative will begin with a $100 billion investment and is expected to grow to $500 billion over time, creating 100,000 jobs. The project aims to establish large-scale AI data centers across the U.S., with the first million-square-foot facility already under construction in Texas.

SoftBank will provide financial backing, while OpenAI will oversee operations. AI leaders, including Sam Altman, have stressed the importance of domestic AI infrastructure to maintain U.S. technological leadership over China. Oracle emphasized the project’s potential to boost national security and economic growth.

Air Force Expands Next-Gen Fighter Engine Contracts

The Air Force is advancing its Next Generation Adaptive Propulsion (NGAP) program, awarding GE Aerospace and Pratt & Whitney contract ceilings of $3.5 billion each to continue engine development for the potential sixth-generation Next Generation Air Dominance (NGAD) fighter. These contracts, extending through July 2032, aim to produce full-up engine prototypes, though one vendor will ultimately be eliminated.

GE and Pratt’s efforts build on previous Adaptive Engine Transition Program (AETP) advancements, promising improved thrust and fuel efficiency. With $1.3 billion planned in NGAP development through FY27, the Air Force is weighing affordability concerns amid ongoing budget debates. 

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