Space or sky? Pentagon pivots ISR amid defense budget debate, wants next-gen stealth fighter

As the House Appropriations Committee considers the $832 billion defense spending bill, Defense Secretary Pete Hegseth has shifted US military priorities, emphasizing advanced technology and space-based intelligence while questioning the future of legacy airborne systems. In testimony before Congress, Hegseth outlined President Trump’s directive to “make the big difficult decisions,” moving away from equipment shielded by parochial interests and toward capabilities poised for a potential conflict with China.

Next-generation air power and AI investments

At the top of the Air Force’s acquisition priorities is the F-47, a next-generation stealth fighter designed to control AI-enabled drone wingmen and evade sophisticated Chinese air defenses. The Pentagon is requesting $3.5 billion for the program, although House appropriators have capped their offer at $3.2 billion. A Republican-led bill introduces $400 million to accelerate the F-47’s production, which Hegseth called “the most advanced, lethal, and adaptable fighter ever developed,” as reported by Air & Space Forces Magazine.

Another major initiative is the Collaborative Combat Aircraft program, which seeks to provide AI-enabled drones to support manned fighters, with an $804 million request. House members have yet to finalize their commitment.

The debate over airborne battle management

Hegseth’s appearance also highlighted a growing divide over the Air Force’s plan to replace its aging E-3 AWACS with up to 26 Boeing E-7 Wedgetail aircraft—a capability already used by Australia and the UK. While Air Force leaders tout the E-7’s importance, Pentagon officials now view space-based intelligence, surveillance, and reconnaissance (ISR) as the future, notes Defense News.

“We’ve learned from Ukraine and from China’s modernization,” Hegseth said, suggesting the E-7 could be cut in favor of investments in satellites that provide ISR. However, lawmakers like Rep. Tom Cole (R-Okla.) urged caution, noting that space-based technology is not yet mature enough and warning against retiring proven capabilities until replacements are fully operational. Former Air Force officials have encountered technical challenges with a purely space-based solution, including concerns about power, cloud penetration, and resistance to enemy attacks.

Uncertainty and urgency

Despite the White House’s delay in presenting a detailed budget, the House Appropriations Committee is pressing ahead, with a vote scheduled for 12 June. Rep. Ken Calvert (R-Calif.) summarized the urgency: “We don’t have the luxury of time… But it’s hard for us to do our job without detailed information.”