Pentagon AI Budget Hits $13 Billion: Beyond DARPA, Who Else Is Funding?

DARPA gets the headlines. Its $4.5 billion annual budget, its program manager mystique, its reputation for funding the impossible — researchers know the brand. What they often miss is that DARPA accounts for roughly a third of the Pentagon's dedicated AI and autonomy spending. The other two-thirds flows through offices most external researchers have never approached.

The FY2026 defense budget request earmarks $13.4 billion for AI and autonomous systems — the first time the Department of Defense has given these technologies a standalone budget line. That money does not land in a single place. It moves through a half-dozen funding offices, each with its own solicitation calendar, proposal culture, and definition of what "AI research" means. Knowing who holds what slice of that budget is the difference between a competitive submission and a misrouted proposal.

The Offices Running the Money

Office of Naval Research (ONR) is one of the military's oldest and most accessible research funders, and its current Long Range BAA N00014-25-S-B001 accepts proposals on a rolling basis through September 30, 2026. ONR's AI priorities center on autonomous maritime systems, human-machine teaming, and machine learning for sensor fusion. Its Young Investigator Program awards roughly $510,000 over three years to tenure-track faculty within seven years of their PhD; the FY2026 cycle closed in early winter, but the FY2027 cycle typically opens in fall. For teams rather than individuals, ONR's Multidisciplinary University Research Initiative (MURI) provides $1.5 million per year for three to five years. ONR also just opened a separate AI-specific solicitation: N0001425SBC03, the GlobalX Innovation Joint Challenge: AI for Advancing Maritime Security, targeting AI tools that improve domain awareness and decision speed in naval operations.

Air Force Office of Scientific Research (AFOSR) runs the Air Force's basic research portfolio under the AFRL umbrella. Its standing BAA FA9550-25-S-0001 covers AI, autonomous systems, cybersecurity, and information sciences through a program officer structure — each officer manages a specific research portfolio and expects researchers to contact them before submitting a full proposal. Typical awards run $100,000 to $300,000 per year for up to five years. AFOSR's University Research Initiative (URI) and its own Young Investigator Research Program ($150,000 per year for three years) provide additional entry points for academic researchers. Proposals go through grants.gov or directly through the BAA instructions.

DEVCOM Army Research Laboratory (ARL) funds foundational science that feeds Army modernization. Its BAA W911NF-23-S-0001 is a rolling solicitation open until November 20, 2027, with AI and machine learning listed as explicit priority areas alongside cyber-physical systems and advanced learning-enabled systems. ARL expects up to 2,000 awards over the BAA's life and explicitly welcomes universities, nonprofits, small businesses, and foreign organizations. Unlike DARPA, which expects researchers to fit into a named program, ARL's core BAA gives investigators room to propose their own direction as long as it maps to Army science priorities. The agency strongly recommends contacting the technical point of contact for each research topic before submitting — those TPOCs are listed in the BAA document and will tell you whether your idea is in scope.

CDAO and DIU: The New Funding Channels

Two organizations reflect how seriously the Pentagon is treating AI as an operational priority, not just a research interest.

The Chief Digital and Artificial Intelligence Office (CDAO) received $139.9 million in its FY2025 budget and oversees the DoD's enterprise AI strategy. CDAO's Tradewinds Solutions Marketplace is its primary mechanism for engaging commercial AI companies — a streamlined contracting vehicle designed to cut procurement timelines for non-traditional vendors. CDAO awarded $200 million in 2025 to commercial AI providers including Anthropic, OpenAI, Google, and xAI, and it explicitly aims to reduce time-to-award for companies that have never done defense work. CDAO does not fund basic research; it procures AI capabilities. If you are building a product, not publishing a paper, this is your channel.

The Defense Innovation Unit (DIU) operates on a similar logic: it buys commercial technology at commercial speed. Its FY2026 budget request stands at $979 million, including $661 million under RDT&E. DIU uses Commercial Solutions Openings (CSOs) rather than traditional RFPs — any commercial entity can respond, and the process is designed to be accessible to companies without a cleared facility or a DoD contract history. DIU's current open solicitations are listed at diu.mil/work-with-us/open-solicitations. Its Thunderforge project, launched in 2025, is integrating commercial AI into theater-level planning and represents exactly the kind of operational AI deployment DIU is funded to execute. If you have a mature AI product that can demonstrate value against a defense use case, a DIU CSO is one of the fastest routes to a prototype contract.

SBIR: The Open Door for Small Businesses

Every office above also runs or contributes to SBIR/STTR programs, and the DoD's combined SBIR/STTR budget exceeds $2 billion annually. AI and machine learning topics appear across virtually every component. The Army's AI/ML Open Topic accepts proposals on automated detection, data labeling, and biometric applications with no specific deadline. Navy SBIR topics for FY2025 include autonomous systems, undersea sensing, and human-machine teaming. Air Force SBIR through AFWERX uses an open-topic model — rather than prescribing a narrow technical problem, it describes a capability gap and lets small businesses propose their own solutions.

Phase I SBIR awards typically run $50,000 to $275,000 for six to twelve months. Phase II runs $750,000 to $1.75 million for twenty-four months. All DoD SBIR topics are searchable on the DSIP portal; proposals submit through the same system. SAM.gov registration is required before any award can be made, and the process takes two to four weeks, so start early.

How to Actually Find Solicitations

The DoD does not make it easy to see the full opportunity landscape in one place, which is why so many researchers default to DARPA's well-publicized BAAs and miss everything else.

The most reliable approach: identify which office's mission most closely matches your work, then go directly to that office's funding opportunities page. ONR's solicitation calendar lives at onr.navy.mil. AFOSR's BAAs post at afrl.af.mil and on grants.gov. ARL's rolling BAA is at arl.devcom.army.mil. DARPA's office-wide BAAs — the Tactical Technology Office's open solicitation accepting rolling proposals through June 22, 2026; the Defense Sciences Office BAA HR001125S0013; the Information Innovation Office covering AI, cybersecurity, and data analytics — all live at darpa.mil/research/opportunities/baa. For DARPA's Young Faculty Award, the next cycle (YFA 2026) sought executive summaries in fall 2025 and full proposals by January 2026 — watch for YFA 2027 to open in mid-2026.

Every office prefers that you contact its technical points of contact before submitting. This is not optional politeness. Program officers and TPOCs can tell you whether your idea fits, which topics have funding, and whether a white paper would be welcomed. A ten-minute conversation before writing saves weeks of wasted proposal effort.

The January 2026 Strategy Memo Sets the Direction

In January 2026, the Pentagon published its Artificial Intelligence Strategy for the Department of War, establishing seven "Pace-Setting Projects" spanning autonomous swarms, AI-enabled battle management, and department-wide generative AI deployment, with initial demonstrations due by July 2026. The document signals where program offices will prioritize new awards: decision-support AI, AI for logistics and predictive maintenance, and autonomous systems integration.

Whether your work is basic science proposing to ONR, a product seeking a DIU CSO, or an SBIR responding to an Army ML topic, that strategy memo is worth reading before you draft your technical approach. Funding follows priorities, and the Pentagon just made its priorities explicit.

Granted tracks open DoD solicitations alongside 85,000 other federal and private funding opportunities, making it easier to find the right door before the proposal window closes.

Sources:

• Pentagon Seeks $13.4 bn for AI and Autonomy FY 2026 Budget Request - CDO Magazine
• DoD Says Budget Request Includes $13 Billion For Autonomy And Related Systems - Defense Daily
• FY25 Long Range BAA for Navy and Marine Corps Science and Technology - ONR
• GlobalX Innovation Joint Challenge: AI for Advancing Maritime Security - ONR
• AFOSR BAA FA9550-25-S-0001 - Simpler Grants
• DEVCOM ARL BAA W911NF-23-S-0001 - ARL
• Breaking Down the DOD's AI Office Budget for FY25 - ExecutiveGov
• DIU FY2026 Expanding Role - Nerdrums
• DIU Open Solicitations - diu.mil
• Army SBIR AI/ML Open Topic - armysbir.army.mil
• DARPA Office-Wide BAAs - darpa.mil
• DARPA Young Faculty Award 2026 - darpa.mil
• Artificial Intelligence Strategy for the Department of War - defense.gov
• DoD Moves CDAO Under Research, Engineering Arm - MeriTalk
• DIU Thunderforge Project - diu.mil