$11.9 Billion the Pentagon Isn’t Buying — Yet
What Indo-Pacific Command’s Unfunded Priority List Reveals About Where Defense Spending Is Heading
USS Boxer, 11th MEU conduct well deck ops in U.S. 3rd Fleet. | Photo Credit: Mass Communication Specialist Seaman Apprentice Sailor O’Rear
At the Brookings Institution in November 2024, Admiral Paparo, Commander, U.S. Indo-Pacific Command (INDOPACOM), laid out a framework that continues to shape how INDOPACOM talks about the threat timeline. He described the conditions under which Beijing would consider military action against Taiwan a "war of necessity,” a breach of the Anti-Secession Law, and separately characterized 2027 as the readiness deadline for what he called a "war of choice." The distinction matters: necessity has no timetable, and choice has no expiration date. Both require that the joint force be ready now.
By January 2026, at the Honolulu Defense Forum, Admiral Paparo was framing the operational challenge in terms of trends reshaping modern conflict: information technology and the proliferation of uncrewed systems among them. His Deputy, Lt. Gen. Joshua Rudd, had sharpened that framing months earlier at AFCEA’s TechNet Indo-Pacific conference. He identified three meta trends: information and cognitive operations, the democratization of drones, and penetrating strike and precision effects, all bound together by what he called the "ubiquitous competition for networks."
That framing matters when you look at where the money is. And where it isn’t.
What the UPL Translates To
The Unfunded Priority List (UPL) is the Combatant Commander’s formal submission to Congress outlining requirements that did not make it into the President’s budget request. UPLs provide the combatant command’s own view of unmet demand , advocated, but not fully adjudicated through the Department’s programming process. In practice, they offer a more unfiltered look at where operational leaders believe additional resources could have immediate impact across the theater. Both are artifacts of the Planning, Programming, Budgeting, and Execution (PPBE) process, and each reflects different stages of prioritization within that system. It is the closest thing the Department of Defense publishes to a priced demand signal.
“...the closest thing the Department of Defense publishes to a priced demand signal.”
It answers a simple question: if the Commander had one more dollar, where would it go?
INDOPACOM's FY2026 UPL totals $11.886 billion. That sits alongside the Pacific Deterrence Initiative (PDI), the portion of the DoD budget Congress tracks as Indo-Pacific spending. The FY2026 PDI totals $10 billion, up modestly from prior years. Together, they point to roughly $22 billion in stated demand for the theater: the funded baseline and the Commander's marginal priorities combined. While not directly additive given differences in scope, methodology, and what each excludes, together the PDI and UPL provide a useful directional view of funded priorities and marginal demand across the theater.
But the distinction matters. Funded programs show where DoD is spending. The UPL shows where DoD is going next. And that's where things get interesting.
“Funded programs show where DoD is spending. The UPL shows where DoD is going next. And that’s where things get interesting.”
The chart below puts those two numbers side by side across three fiscal years. The gap on the right side of each pair represents the delta between what the Combatant Commander formally requests and what the Office of the Secretary of Defense (OSD) ultimately programs — and it’s been widening in recent cycles. That gap reflects where Combatant Commanders are signaling unmet demand — shaped not just by operational need, but by budget constraints and prioritization decisions within OSD. More precisely, it is a directional indicator of pressure building inside the system.
The Priority Stack
The largest single UPL line item is $4.44 billion for All Domain Unmanned Systems, nearly 40% of the total list. The details are classified, but the implication is clear: this is not a bet on drones as platforms alone. It's a bet on the ecosystem around them: autonomy, communications resilience, payload integration, launch and recovery, and sustainment under contested conditions.
Next is $2.98 billion for the C‑C5ISRT cluster, which includes $1.04 billion in directed energy and counter-directed energy, $607 million in distributed electronic warfare, and $300 million in near-term space control. This is the connective tissue: sensing, networking, and surviving in a denied environment.
The rest of the list fills in the constraints: $989 million for non-traditional find, fix, track, and target; $977 million in critical munitions across ten sub-lines; $1.21 billion in posture and infrastructure; and roughly $1.24 billion in other categories including campaigning, exercises, and enhancing allies and partners. Read together, the pattern is consistent: the commander is prioritizing what keeps a distributed force alive and effective under denial.
Here is the full picture: every major category in the FY2026 UPL, totaling to the $11.886 billion grand total. The dominance of the unmanned line at nearly 40% of the list tells its own story.
The full line-item detail behind that chart is below, drawn directly from the enclosure table INDOPACOM submitted to Congress, with sub-lines indented under their parent categories.
The C‑C5ISRT cluster alone is nearly $3 billion, and it breaks down into several distinct capability areas that are worth understanding separately because they represent different markets. Directed energy accounts for the largest share, but distributed Electronic Warfare (EW) and space control are both substantial in their own right.
The Constraint Is the Market
The UPL becomes more useful when paired with what leadership is saying publicly.
In April 2025 testimony before the Senate Armed Services Committee, Admiral Paparo quantified the logistics gap: the Combat Logistics Force is operating at roughly 60 percent of the requirement, tanker capacity is insufficient, and he explicitly welcomed dual-use uncrewed airlift for contested environments. At LANPAC two months later, he framed sustainment as existential in the Indo-Pacific, calling logistics "a critical challenge… due to the vast distances" and arguing that effective sustainment "isn't just important, it's existential."
This is the key point: the UPL doesn't just list priorities. It exposes constraints. And constraints, not ideas, are what drive real markets.
“This is the key point: the UPL doesn’t just list priorities. It exposes constraints. And constraints — not ideas — are what drive real markets.”
From Unfunded to Inevitable
One of the most useful ways to read the UPL is over time. In FY2025, the Guam Defense System appeared as Priority 1 on the UPL at $573 million. In FY2026, Guam defense is no longer a marginal ask. It has migrated into the PDI with a dedicated $720 million line. This pattern holds: what appears on the UPL this year often becomes funded in the next cycle.
There is typically a 12–24 month window between problem acknowledgment on the UPL, budget alignment in the PDI or base budget, and scaled procurement.That window is where new entrants can still shape requirements and establish position before programs harden and incumbents lock in. The visual below maps this pipeline and the opportunity window it creates.
While not all UPL items transition into funded programs, examples like Guam illustrate how unfunded priorities can migrate into formal budget lines over time.
A complication worth noting: GAO flagged in early 2026 that PDI exhibits across fiscal years can present an inconsistent mix of programs due to unclear selection guidance from OSD, which limits strict year-to-year comparability. In other words, even the funded baseline is harder to track over time than it should be. That is not a reason to ignore the PDI; it is a reason to cross-reference it carefully against the UPLs, which provide the Combatant Command’s own less filtered view of unmet demand.
What This Means for Builders and Investors
For founders/builders and investors, the distinction between funded and unfunded priorities is not a binary choice. It is a sequencing problem. Funded programs come with appropriations, buyers, and timelines, but also competition and predefined requirements. UPL priorities come with uncertainty, but also validated demand and room to shape the solution. The strongest companies operate across both: building against UPL-defined problems early and scaling into funded programs as the dollars materialize.
If you are a founder building in this space, the UPL is telling you something specific. The problems on this list are not speculative, they have been prioritized by a four-star, priced in dollar terms, and submitted to Congress under statutory authority. That is a different kind of validation than a conference conversation or a program office's verbal interest. It also means the competitive window is visible: once a UPL item migrates into the PDI or base budget, requirements begin to harden and procurement vehicles take shape. The founders who are positioned when that happens, with working technology, operational credibility, and an integration story that fits existing architectures, are the ones who win those programs.
With that sequencing in mind, here is where the UPL points most clearly in the “INDOPACOM’s UPL: Five Signals for Builders and Investors” table below.
How We Read It
At Veteran Ventures Capital, we treat the UPL as a sourcing tool. It is a forward map of where demand is forming before it is fully funded, structured, or crowded.
We invest in dual-use technologies across autonomy, sensing, space, cyber, and advanced hardware: categories that map directly to the problems reflected in INDOPACOM's priorities and across the broader defense landscape. Several of our portfolio companies operate in domains aligned with the UPL's largest line items, from autonomous systems to spectrum operations. Our team has operated in and around the INDOPACOM theater across prior roles in operational technology, intelligence, and security cooperation, which means we've seen these capability gaps from the operator side before reading them in a budget document. That experience shapes how we source, evaluate, and support investments.
For founders and investors, the takeaway is not that these numbers define the market, but that they reveal where pressure is building inside the system.
The Takeaway
The defense venture ecosystem spends a lot of time trying to infer what the Pentagon wants. For INDOPACOM, the answer is published annually — with prices attached.
Funded programs show where DoD is spending. The UPL shows where it is going. And for investors and founders, the opportunity sits in the gap between the two. The companies that win in this space are the ones that read the primary sources early, build against validated problems before they are fully funded, and position themselves to scale when the dollars move from the UPL into the PDI and base budget.
That cycle is visible, it is recurring, and it is accelerating. The FY2026 list makes the demand signal harder to ignore than ever.
We'll continue tracking how UPL priorities migrate into funded programs and where that creates opportunities for new entrants. If this analysis was useful, share it with a founder or investor who should be reading the primary sources. And if you're building against one of the problems on this list, we'd like to hear from you.
Sources
*All sources are publicly available official documents or verified media coverage. Where UPL documents are not hosted on .gov domains, the linked version is the document as obtained by defense media.
Posture Statements and Congressional Testimony
Admiral Aquilino, HASC Posture Testimony (Mar. 20, 2024): [Written Statement (PDF)](https://www.congress.gov/118/meeting/house/116960/witnesses/HHRG-118-AS00-Wstate-AquilinoJ-20240320.pdf)
Admiral Paparo, SASC Posture Statement (Apr. 2025): [Written Testimony (PDF)](https://www.armed-services.senate.gov/download/testimony/testimony-of-admiral-samuel-j-paparo-jr?download=1)
SASC Full Hearing Transcript (Apr. 10, 2025): [Transcript (PDF)](https://www.armed-services.senate.gov/imo/media/doc/4102025fulltranscript.pdf)
Admiral Paparo, Brookings Institution (Nov. 2024): [Brookings Recap](https://www.brookings.edu/articles/six-takeaways-from-commander-of-us-indo-pacific-command-admiral-samuel-paparo/)
Conference Remarks
Admiral Paparo, LANPAC Keynote (May 13, 2025): [U.S. Army Article](https://www.army.mil/article/285494/indopacom_commander_underscores_importance_of_land_forces_deterrence_and_ai_in_indo_pacific_security)
Lt. Gen. Rudd, TechNet Indo-Pacific (Oct. 30, 2025): [Breaking Defense](https://breakingdefense.com/2025/10/ubiquitous-competition-of-networks-is-a-mega-trend-in-the-pacific-indopacom-deputy/) | [AFCEA Signal](https://www.afcea.org/signal-media/defense-operations/how-us-indo-pacific-command-views-tech-priorities)
Honolulu Defense Forum (Jan. 11–13, 2026): [USINDOPACOM Release](https://www.pacom.mil/Media/NEWS/News-Article-View/Article/4380929/honolulu-defense-forum-drives-multi-domain-dialogue-for-indo-pacific-region/) | [Indo-Pacific Defense Forum](https://ipdefenseforum.com/2026/02/indo-pacific-alliances-strategic-center-of-gravity-in-turbulent-times/)
INDOPACOM Unfunded Priority Lists
INDOPACOM FY2025 UPL: [Breaking Defense (Mar. 2024)](https://breakingdefense.com/2024/03/guam-defense-tops-indopacs-unfunded-priorities-northcom-wants-more-it/)
INDOPACOM FY2026 UPL: [Breaking Defense (Jul. 2025)](https://breakingdefense.com/2025/07/a-look-at-the-wish-lists-for-centcom-northcom-southcom-indopacom-and-stratcom/) | [Defense Daily (Jul. 2025)](https://www.defensedaily.com/unmanned-systems-top-indo-pacific-commands-11-9-billion-unfunded-priorities-list/congress/)
DoD Pacific Deterrence Initiative Exhibits
DoD PDI FY2025 Exhibit: [Comptroller (PDF)](https://comptroller.war.gov/Portals/45/Documents/defbudget/FY2025/FY2025_Pacific_Deterrence_Initiative.pdf)
DoD PDI FY2026 Exhibit: [Comptroller (PDF)](https://comptroller.war.gov/Portals/45/Documents/defbudget/FY2026/FY2026_Pacific_Deterrence_Initiative.pdf)
GAO
GAO-26-107698, Defense Budget: Clearer Guidance Is Needed: [Highlights](https://files.gao.gov/reports/GAO-26-107698/index.html) | [Full Report (PDF)](https://www.gao.gov/assets/gao-26-107698.pdf)
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*For the full evidence appendix with additional sources, contact Veteran Ventures Capital.*
