Federal spending · FY2025
National Defense
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The National Defense function encompasses the broad range of activities undertaken by the U.S. government to protect national security interests, deter aggression, and project power globally. This includes maintaining a robust military force, developing advanced weaponry and technologies, conducting intelligence operations, and engaging in diplomatic and security cooperation with allies. The public purpose is to ensure the safety and sovereignty of the nation and its citizens, preserve international stability, and advance U.S. foreign policy objectives. Success is defined by the nation's ability to deter adversaries, respond effectively to threats, maintain technological superiority, and support global security. Key agencies include the Department of Defense and elements of the intelligence community. Major program streams involve personnel, operations and maintenance, procurement, research and development, and strategic forces.
The problem
National Defense outlays of $1.3T with a 4.9% trend increase, classified as critical, indicate significant fiscal pressure and potential sustainability concerns within the defense budget. While defense spending is a core government function, the current scale and growth trajectory warrant scrutiny regarding efficiency and strategic alignment. Specific causes for concern include the persistent cost overruns in major procurement programs, where initial cost estimates are frequently exceeded due to program stretch-outs, evolving technological requirements, and contractor inefficiencies. Furthermore, the substantial investment in readiness and sustainment, while necessary, may not always demonstrate optimal return on investment in terms of measurable strategic advantage or operational effectiveness. Fragmented acquisition processes and a lack of rigorous program-of-record cost-benefit analysis for certain systems contribute to baseline creep. The critical status highlights the risk that current spending levels, if unchecked, could significantly crowd out investments in other national priorities or necessitate unsustainable levels of borrowing.
The solution
For National Defense, AI strategies must be tailored to enhance acquisition efficiency, optimize resource allocation, and improve readiness outcomes. Develop AI-powered early warning systems that analyze contractor burn rates, supply chain data, and performance metrics to predict cost overruns and schedule delays in major acquisition programs, enabling proactive intervention. Implement AI-driven simulations to rigorously assess trade-offs between readiness, sustainment, and modernization, identifying optimal investment strategies that maximize strategic advantage within fiscal constraints. AI can also be used to analyze operational data to identify underperforming or obsolete platforms and programs, providing data-driven recommendations for cancellation or restructuring. Furthermore, AI can optimize logistics and maintenance schedules to improve asset availability and reduce lifecycle costs, ensuring that defense spending translates into tangible capabilities and mission effectiveness.
The biggest part of National Defense is Department of Defense-Military: $1.1T (83.1%).
How to read it: Tap a row to open what's inside. Colours match the chart above, and each row's share is its part of the row it sits under.
| Where it went | Gross outlays | Share | Action |
|---|---|---|---|
| $1.1T83.1% | 83.1% | ||
| $182.8B13.8% | 13.8% | ||
| $41.6B3.1% | 3.1% |