Even mid-sprint to a secret flight, the Navy’s tech chief has a pitch for investors
Navy CTO Justin Fanelli talks co-investing alongside VCs instead of funding early research himself, recent buys like a $562 million autonomous refueling deal, and the Navy's updated wish list — from AI to quantum — for where founders should be building next.
Justin Fanelli, the Department of Navy's Chief Technology Officer, has been working for three and a half years to make the U.S. Navy more open to doing business with startups. In a recent video call, he spoke about streamlining the procurement process and being rushed to catch a flight for an unexpected assignment. This effort was prompted by increased demand signals from investors, leading to a new list of Navy's tech priorities to be shared with venture investors.
The Navy spends approximately $150 billion annually, with most of that money going through traditional channels. However, the agency is shifting towards co-investment, which involves sharing equity with companies alongside private capital. Fanelli highlighted a few recent Navy acquisitions, such as the MQ-25 Stingray drone, edge compute hardware from Armada, and Gecko Robotics for inspection work.
Other companies like Domino Data Lab and Applied Intuition have also been contributing to the Navy's machine learning pipeline. As for the Strait of Hormuz, Fanelli was cautious about sharing specific details due to classification issues. The Navy's source selection committee, small and merit-based, approves purchases rather than a lengthy approval process.
Fanelli mentioned that most technology failures in the Navy aren't due to technical issues but budgetary constraints. The updated list of Navy's technology priorities falls into five broad categories: applied AI, quantum information science, and others.
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