U.S. Department of Defense Technology Spending Set to Surge 71% from 2020 to 2026
Published November 10, 2025
By Alan Kennedy | Visual Capitalist
The U.S. Department of Defense (DoD) is planning a significant increase in its technology spending over the next several years, with a budget request of $384 billion for 2026 focused on modernizing defense systems and accelerating research and development (R&D). This marks a 71% increase compared to 2020 expenditures, underscoring the military’s strategic emphasis on advanced technology amid evolving global security challenges.
Key Highlights of the DoD’s Technology Budget Growth:
- Total planned spending on defense procurement and R&D rises from $162.3 billion in 2020 to $278 billion requested for 2026.
- Missile Defense Programs are projected to see the most dramatic funding boost, growing 247% from $11.6 billion in 2020 to $40.2 billion in 2026.
- Other significant spending increases are planned for Space-Based Systems (up to $34 billion) and Shipbuilding and Maritime Systems ($65 billion).
- Aviation and Related Systems and Command, Control, Communications, Computers, and Intelligence (C4I) Systems also receive notable increases, with budgets reaching $68.3 billion and $23.2 billion respectively.
- Ground Systems is the sole category forecasted to see reduced funding, dropping 21% from $14.6 billion in 2020 to $11.6 billion in 2026. Driving Factors Behind the Increased Investment
The remarkable growth in DoD technology spending reflects a strategic push to equip the U.S. military with cutting-edge capabilities capable of addressing complex threats in multiple domains, including air, sea, space, and cyberspace. Missile defense, for instance, is becoming increasingly vital in countering potential missile threats worldwide. Similarly, expanding investment in space-based systems aligns with the growing importance of satellite technologies for communication, navigation, and intelligence.
A broader global context of intensifying geopolitical tensions and technological competition has led governments around the world to ramp up their defense expenditures. In 2024, global defense spending reached $2.5 trillion, highlighting the scale and urgency of military technology advancement.
Investment Implications
As defense budgets swell, opportunities emerge for investors interested in the defense technology sector. The Global X Defense Technology ETF (ticker: SHLD), for example, provides investors with diversified exposure to companies engaged in developing and manufacturing innovative defense technologies, including robotics, artificial intelligence, aircraft, and big data systems.
Visual Capitalist’s ongoing Investing in Defense series offers a comprehensive look at defense spending trends both in the U.S. and internationally, mapping out how expenditure patterns are shifting in response to contemporary security demands.
Summary Table: U.S. Department of Defense Technology Spending (in Billions USD)
| System | FY2020 | FY2026 (Requested) |
|---|---|---|
| Aviation and Related Systems | 57.7 | 68.3 |
| Command, Control, Communications, Computers, and Intelligence (C4I) Systems | 10.2 | 23.2 |
| Ground Systems | 14.6 | 11.6 |
| Missile Defense Programs | 11.6 | 40.2 |
| Missiles and Munitions | 21.6 | 35.7 |
| Shipbuilding and Maritime Systems | 34.7 | 65.0 |
| Space Based Systems | 11.9 | 34.0 |
| Total | 162.3 | 278.0 |
As the DoD presses forward with these investments, the modernization of military capabilities will continue to be a critical component of U.S. national security strategy. The substantial allocation of funds across emerging and traditional domains reflects the dynamic nature of defense technology and its pivotal role in future conflict preparedness.
For more insights on global defense spending and technology trends, visit Visual Capitalist and explore the full Investing in Defense series in partnership with Global X ETFs.
About Visual Capitalist:
Visual Capitalist creates and curates rich visual content breaking down complex topics such as markets, technology, energy, and economics to help readers grasp important trends through engaging data visualization.
Sponsored by Global X ETFs:
Global X ETFs offers thematic investment opportunities in innovative sectors including defense technology. Learn more about the Global X Defense Technology ETF (SHLD) and how it provides exposure to the evolving defense landscape.
