Inside the Push for Autonomous Systems
25 February 2025 - A Weekly Publication by New North Ventures
Army Bets on Scale and a Free Market to Close the Drone Gap
At the conclusion of the Army’s inaugural Best Drone Warfighter Competition, Army Secretary Dan Driscoll outlined an ambitious vision for rapidly expanding America’s drone capabilities. Central to that goal is a fundamental cultural shift, drones should no longer be treated as accountable equipment signed out of an arms room, but as expendable ammunition consumed in the field. For investors and founders, that reclassification matters: it signals a move toward high volume, low cost, attritable systems rather than expensive long lifecycle platforms.
The Army is also launching a soldier rated drone marketplace next month, allowing private companies to sell directly to units, with open competition expected to drive prices down and quality up. This is an unusually direct path to Department of War adoption for startups, one that bypasses much of the bureaucratic friction that has historically made defense a difficult market to enter.
A few numbers worth noting:
1 million drones targeted for procurement within 18-24 months
5 to 15 million drones China produces annually. US is racing to close this gap
200+ soldiers competed in the inaugural Best Drone Warfighter Competition
The broader takeaway for capital allocators and founders: the drone market is no longer speculative, it is a stated national priority with procurement architecture being purpose built around speed and volume. The whitespace isn’t just in the drones themselves, but across the full stack: manufacturing scale up, counter drone systems, AI-enabled autonomy, logistics software, and training platforms. The Army wants partners who can move fast and iterate in near real time. That’s a startup friendly posture worth paying close attention to.
Energy Departments team up to advance future of nuclear power, military base energy security
In a striking demonstration of where defense energy policy is heading, the U.S. Air Force loaded a next generation nuclear reactor, the Ward 250 a 5 MW unit small enough to fit inside a C-17 cargo aircraft, and flew it to Hill Air Force Base Utah for testing and evaluation. The joint operation between the Departments of War and Energy, dubbed Operation Windlord, is part of a broader push to build energy infrastructure that doesn’t depend on the civilian power grid. The rationale is straightforward: the future of warfare is extraordinarily energy intensive, spanning AI data centers, directed energy weapons, space systems, and cyber infrastructure. The commercial grid simply wasn’t built to support it.
The policy tailwind here is significant. President Trump signed four executive orders in May 2025 specifically targeting nuclear energy modernization, streamlining reactor testing, reforming the NRC, and directing advanced reactors toward national security applications. Secretary of Energy Chris Wright has stated publicly that the administration expects three small reactors to be operational by July 4th of this year. The message from Washington is clear: the nuclear industrial base is being deliberately reactivated, with private capital and American innovation as the engine.
For investors and founders, this is the moment that micro and small modular nuclear has been waiting for. The military is the ideal first customer. It has the budget, the urgency, the regulatory runway, and a use case (energy independent forward bases) that makes the value proposition undeniable. But the implications extend well beyond defense. A reactor that can be airlifted and deployed anywhere is also a transformative asset for data centers, remote industrial operations, disaster recovery, and grid resilience. Companies building in this space, whether in reactor design, fuel supply, deployment logistics, or the regulatory and permitting stack, are operating in a market that now has explicit government backing, a defined procurement pathway, and a technology that the broader economy increasingly cannot afford to ignore.
More links to explore:
Cybera was selected for Mastercard's Start Path Security Solutions program, an accelerator focused on cybersecurity, fraud prevention, and digital identity. The company's agentic AI platform takes a proactive approach to fraud. Rather than acting after money has already moved, Cybera identifies verified mule accounts in advance so banks can block transactions before funds ever leave. The Mastercard partnership opens the door to thousands of financial institutions, expanding Cybera's reach at a time when AI enabled scams and real time payments are making fraud harder than ever to stop.
Anno.AI is building the Lake Superior Test Range, an ecosystem spanning Duluth, Lake Superior, and reclaimed Iron Range mines, designed for companies and defense partners to rigorously test AI enabled autonomous vehicles, aircraft, and maritime platforms. Anno.AI was recently selected for Phase I of the Department of War Drone Dominance Program. This is a fast paced acquisition effort to rapidly field low-cost, one-way attack drones at scale; the evaluation began Feb 18th at Fort Benning and will lead to roughly $150 million in prototype delivery orders, with the broader four phase, $1.1 billion initiative aiming to drive down costs, increase production, and field hundreds of thousands of weaponized drones by 2027.
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