The Insider

Despite the Army's decision to cancel two modernization programs earlier this year that Textron was involved in, the company’s CEO believes there will still be business opportunities in the area of unmanned aerial systems going forward.

As part of its sweeping transformation initiative rolled out in May, the Army cancelled both the Future Tactical Unmanned Aerial Systems program and the Robotic Combat Vehicle program -- both competitions in which Textron had been a finalist.

When asked by an investor Thursday during a third-quarter earnings call how Textron’s unmanned portfolio was performing, CEO Scott Donnelly acknowledged that the “next significant tranche was really going to be around FTUAS.”

“With that program not happening at least in the way it was envisioned, that was a hit. But look, the reality is, these brigades need ISR,” he said, referring to intelligence, surveillance and reconnaissance capabilities.

Donnelly said ultimately FTUAS didn’t move forward because Army Chief of Staff Gen. Randy George had become frustrated over the length of time it was taking to field the equipment. The chief has instead directed industry to take systems directly to brigades during their transforming in contact exercises.

“So that’s what we’re doing right now. And that’s why I say, while FTUAS didn’t happen as a program, we will see a number of opportunities as we go out and sell that technology directly to the warfighter,” Donnelly said.

Textron also announced this week that Donnelly will be stepping down from his CEO role to become the company’s executive chairman on Jan. 4. Lisa Atherton, who currently leads the company’s Bell segment, will succeed Donnelly as CEO on that date.

The Senate Foreign Relations Committee today advanced a legislative proposal that would loosen arms export control regulations between the United States, Australia and United Kingdom under the AUKUS security pact.

Senators approved the “AUKUS Improvement Act of 2025” along with several other proposals by voice vote during a committee meeting this morning.

The legislation, which was introduced in June by Sen. Pete Ricketts (R-NE) with bipartisan support, would give the U.S. greater flexibility to sell and exchange defense items with the other two AUKUS nations without first receiving formal approvals.

AUKUS -- a Biden-era pact designed to help Australia establish its own nuclear-powered attack submarine fleet and to facilitate greater defense tech collaboration among the three signatories -- received an endorsement from President Trump earlier this week.

Meanwhile, defense officials are wrapping up a review of the agreement, initiated by the Trump administration in June. On Monday, Navy Secretary John Phelan said the aim of the review is to improve upon the original framework and clarify “ambiguity” within it.

Rep. Joe Courtney (D-CT) later said lawmakers expect the review to yield a series of recommendations focused on improving domestic industrial base performance.

President Trump has nominated Brian Birdwell, a Texas state senator, to serve as the assistant secretary of defense for sustainment.

Birdwell was congratulated on X by Texas Lt. Gov. Dan Patrick, who highlighted his military service and receipt of a Bronze Star, Purple Heart, and Legion of Merit awards.

“A survivor of the 9/11 Pentagon attack, he endured 39 surgeries on his road to recovery,” Patrick said. “America is in great hands with my friend in this key position.”

According to his posted biography, Birdwell was serving on the Army staff when American Airlines Flight 77 crashed into the Pentagon on Sept. 11, 2001. He suffered burns on more than 60% of his body.

The Space Force is seeking feedback on a draft request for proposals for the next generation of “neighborhood watch” satellites for on-orbit space domain awareness.

The service posted the draft yesterday under the title “Andromeda Draft RFP” but clarified the program is part of RG-XX. The program intends to award multiple indefinite delivery, indefinite quantity contracts, according to the notice, with firm, fixed prices.

Eventual contractors will “define, design, and build technologies and space-based systems for the Space Domain Awareness mission area,” the notice states.

The government is looking for feedback on feasibility, clarity, testability and cost drivers of the requirements among other topics in the draft, the notice states.

The RG-XX program is intended to replace the legacy Geosynchronous Space Situational Awareness Program (GSSAP).

Acting space acquisition chief Maj. Gen. Stephen Purdy said last month that he expects the official request to be posted by the end of the year so long as funding comes through.

Purdy would not give a number for how many satellites the service intends to buy, only saying he would like “as many as possible . . . as rapidly as possible.”

The publicly viewable version of the draft RFP does not provide many details about capabilities, but Purdy has said that requirements were modified to ensure the program could be viable for commercial entrants. He also stated that space access, mobility and logistics (SAML) capabilities will be baked into the request.

Aerospace and software company Shield AI is entering the multirole fighter jet market with its new X-BAT fully autonomous aircraft, the company announced today.

X-BAT-- a runway-independent platform -- will be powered by Shield AI’s self-driving Hivemind software, which allows the platform to operate in GPS- and communications-denied environments.

Shield AI first implemented its unmanned software on its V-BAT intelligence, surveillance and reconnaissance drones that also have vertical takeoff and landing features. Hivemind fits into the open architecture configuration used by the Air Force and Navy.

X-BAT is the “next natural step” in the company’s intention to use its AI-enabled autonomy to “close the kill chain,” Shield AI wrote in a news release.

“Unlike legacy crewed aircraft, X-BAT frees human aviators for missions that demand critical human judgment -- an essential advantage in today’s fast-moving and unpredictable conflict zones,” Shield AI said.

X-BAT has modular payload bays which can support ISR, electronic warfare and precision strike, Armor Harris, Shield AI’s senior vice president of aircraft engineering, told Inside Defense.

“Because it is AI-powered by our combat-proven Hivemind, it can fly solo, or act as a drone wingman, collaborating and maneuvering with crewed fighters,” Harris said.

In 2023, the San Diego-based company announced a goal of building a version of its Hivemind software that could control fighter aircraft by 2025.

Shield AI is not planning to pitch X-BAT for the first increment of the Air Force’s Collaborative Combat Aircraft program, Harris said, because the team does not expect to conduct initial vertical takeoff and landing demonstrations until fall 2026 at the soonest. All-up flight testing and operational validations could occur in 2028, he added.

“X-BAT delivers capabilities beyond the first Increment 1 CCAs, including electronic warfare, greater payload capacity and extended range. We view Increment 1 CCAs as important and capable systems, designed to meet the initial set of program requirements,” Harris said. “X-BAT, by contrast, was built to give combatant commanders geographically distributed long-range fires and effects.”

The Air Force has apparently down-selected a classified group of five software firms to contribute mission autonomy for the earliest CCA jet -- envisioned as missile trucks to accompany manned fighters in battle. Shield AI’s Hivemind will provide the autonomy that will eventually fly the YFQ-44A CCA prototype under development by Anduril Industries, according to reporting from Aviation Week.

RTX will likewise supply the autonomy software suite for General Atomics Aeronautical Systems’ YFQ-42A loyal drone wingman prototype, the Aviation Week report said.

The Air Force would not confirm which firms were awarded a CCA increment one mission autonomy contract. Shield AI and RTX declined to comment and deferred questions to the Air Force.

“Subcontractors of the CCA program are protected by enhanced security measures,” a service spokesperson told Inside Defense in September.

X-BAT is “designed for rapid deployment and operations in austere environments,” with a range of about 2,000 nautical miles with a full mission payload, the company wrote in its news release.

The multirole, attritable fighter can take off from ships, remote islands or austere locations, according to Shield AI, making it a candidate for use in the Air Force’s Agile Combat Employment concept, which encourages dispersed operations across the Indo-Pacific.

Up to three X-BATs can fit into the deck space of one legacy fighter or helicopter, Shield AI said, adding to the amount of combat capability one sortie could produce in a contested environment.

“This removes reliance on traditionally vulnerable infrastructure and ensures forces can respond swiftly, even in the most challenging conditions,” the company said. “X-BAT delivers high-end capability for a fraction of the cost of traditional fighter jets. Its affordability and small footprint allows forces to enable larger and more resilient fleets, absorb losses without crippling operations, and adopt more flexible strategies -- reshaping how future conflicts are fought and sustained.”

This Tuesday INSIDER Daily Digest begins with a look at the U.S.-Australia plan to boost that nation’s fleet of submarines, a deal between the two countries for critical minerals, news from the U.S. Space Force and the Army’s accelerated push to get a new tank delivered.

According to the president, things are moving for Australia’s buy of U.S. subs:

Trump says AUKUS sub sales are on track

President Trump today voiced support for the AUKUS security partnership and suggested the United States could be moving to expedite delivery of nuclear-powered submarines to Australia.

A deal worth up to $8 billion for critical minerals was announced this week:

U.S., Australia sign critical minerals agreement worth up to $8B

The United States and Australia signed a landmark Critical Minerals Framework today that includes more than $3 billion in immediate investments in critical mineral projects, with up to $8 billion in total financing possible through additional U.S. Export-Import Bank support, signaling a major step in securing supply-chain and defense resources.

The Space Force revealed plans for the next group of GPS receivers:

Space Force planning prototypes for next GPS receivers

The Space Force is speeding up its plans for the next-generation, low-power Maritime and Aviation Receiver Card program, according to Space Systems Command, as industry input suggested the program’s schedule could be accelerated.

The Army plans to have new tanks operational near the end of 2026:

Army 'commercialization' push accelerates M1E3 tank delivery by 7 years

The Army's fast-track development of its next evolution of the Abrams tank, the M1E3, will deliver a preprototype by the end of this year and a platoon of operational vehicles by late 2026, one of the service's most aggressive modernization drives in decades -- and a striking embrace of foreign-born technology at the heart of the new tank's powertrain.

The Air Force’s software factory, Kessel Run, is seeking industry input on about 200 requirements relating to end user services, infrastructure and application platforms, according to a notice posted last week.

Kessel Run -- part of the Command, Control, Communications and Battle Management Integrated Program Executive Office -- listed dozens of requirements statements under the three categories that cover efforts including service enterprise tools, IT service management systems, hybrid networking connectivity, cybersecurity, integration with other programs and resiliency.

“[I]t is the intent of KR to solicit responses from responsible sources to this Request for Information (RFI) to collaboratively review and refine the attached requirements, ensuring they are clear, comprehensive, and fully actionable,” the notice states.

The organization wants to ensure the requirements are clear and complete, it states, and can support a “robust application platform and IT services organization.”

Kessel Run is not, at this time, looking for feedback on implementing the requirements.

Interested businesses have until Oct. 31 to respond. Along with highlighting areas of concern within the requirements or statements that could use more clarity, businesses can note the requirement blocks that they can deliver on along with examples of relevant capabilities they have delivered in the past three years.