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Military

Pentagon primes defense industry for AI windfall at San Diego conference

Navy Secretary John Phelan sits on a stage at the 2026 WEST conference in San Diego.
Andrew Dyer/ Staff
Navy Secretary John Phelan answers audience questions Thursday at the 2026 WEST conference at the San Diego Convention Center, Feb. 12, 2026.

Pentagon leaders told the defense industry this week they're ready to move fast in the department's effort to incorporate the latest AI technology in all aspects of warfare.

Each year the WEST conference brings the Navy and Marine Corps together with the defense industry in San Diego so contractors can hear first-hand what new weapons technologies the services are looking to buy.

The record $890 billion defense budget for 2026 and new mandates to integrate AI were all the buzz at this year's conference.

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KPBS tallied at least 38 panels over three days at the conference that were either explicitly about AI or that featured one or more experts on the technology.

Last month, Defense Secretary Pete Hegseth ordered the services to go all-in on AI in a memo.

"We will employ to pursue this strategy (and) will continue to encompass our substantial program funding and workforce focused on AI across the services and components," Hegseth wrote. "We will also use the timely financial resources provided by Congress in the form of One Big Beautiful Bill, along with expanded budget withhold (Joint Acceleration Reserve) flexibility, to catalyze our accelerated pace of Military AI integration in the immediate term."

The memo was immediately followed by the announcement of the Pentagon's new AI Acceleration Strategy. It said, in order to become an "AI-first warfighting force," the services must eliminate "bureaucratic barriers."

Navy Secretary John Phelan told a packed audience at the conference Thursday that means cutting "red tape," when it comes to contracting.

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"We are making deliberate choices to implement systemic change," Phelan said. "The weight of calculated action outweighs the comfort of caution — it is better to bear the burden of bold attempts than carry the regret of what could have been … "

On Wednesday, Justin Fanelli, the Navy's chief technology officer, told an audience of contractors the Pentagon has a fresh appetite for risk when it comes to investing in AI — as long as the industry brings data to back up their claims.

"If we can show that the acquisition risk goes up, but the operation risk goes down — that's something we can get behind," Fanelli said.

Experts on panels consistently struggled to make the use-case for the technology, however.

Stuart Wagner, the Navy's chief AI officer, said that AI systems process data at "superhuman" speeds.

"How that impacts warfare is not yet knowable," Wagner said. "We can guess, but it's not knowable."

The demand to integrate AI into daily military operations comes from the top.

In December, the Department of Defense launched its own generative AI platform — GenAI.mil. It uses Google Cloud's Gemini for Government to "leverage generative AI capabilities to create a more efficient and battle-ready enterprise," according to the Pentagon.

Retired Adm. Christopher Grady, a former vice chairman of the Joint Chiefs of Staff, pointed out there's a problem with the top-down demand to adopt AI.

"Now we have to teach our operators and officer corps and the rest on how we use the data — right down to 'what's the right way to write a prompt?'" he said during a panel discussion Wednesday.

The Pentagon plans to spend more than $145 billion on research and development in 2026.

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