Domain 01 · Trends & outlook

Which defense advantages are strengthening—and which are becoming more fragile?

The strongest public signals point to continued PRC gains in maritime scale, air-system pressure, space sensing, and critical-input leverage. U.S. and allied movement is clearest in long-range fires and coalition integration. Four areas remain too opaque or internally offsetting for a responsible overview arrow.

Evidence current through
August 8, 2026
Outlook through
August 8, 2028
Directional signals
6 of 10
Source records used
73
How to read direction

Position is now. Direction is movement.

The outlook does not move the current position marker or create a forecasted position score. Position and direction remain separate judgments. The outlook carries the observed relative direction forward, then adjusts it for current policy, funding, fielding, and delivery evidence. Planned activity is weighted by its demonstrated probability of producing usable capability within the horizon.

Relative movement

Observed trajectory and two-year outlook.

Every direction is tied to public evidence. Low-confidence and insufficient-basis findings remain visible here, but do not produce an arrow on the relative-position overview.

01
Current position

Air dominance

U.S. edgeModerate confidence
Observed trajectory

Toward PRC advantage

The U.S. retains the stronger top-end air system, but readiness and delivery have deteriorated while the PRC has added advanced aircraft and airborne sensing.

ConfidenceModerate
  1. F-35 mission-capable rates fell from 67% in fiscal 2021 to 44% in fiscal 2025; full mission capability fell from 38% to 25%.

  2. Growing J-16 and J-20 inventories, combined with KJ-500 airborne early warning, are improving PRC integrated counterair capacity.

  3. Aircraft delivered in 2024 averaged 238 days late, and 174 accepted TR-3 aircraft remained non-combat-capable as of May 2025.

Two-year outlook

Toward PRC advantage

Without a faster readiness recovery, the existing U.S. edge is likely to narrow. Current collaborative-aircraft and dispersal work can improve the path, but does not yet offset delivered PRC scale or fleet-availability pressure.

ConfidenceModerate
Shown on relative-position overview
Current policy, funding & delivery
  • Production-representative Collaborative Combat Aircraft contracts and an open autonomy architecture create a credible path, but no operational squadrons or sustained output are yet public.

  • Large Indo-Pacific exercises are practicing allied, distributed, and austere operations.

Countervailing forces
  • The U.S. still holds advantages in low-observable aircraft, mission systems, allies, and operational integration.

  • The public record cannot compare signatures, electronic-warfare performance, combat-coded availability, or weapons sufficiency symmetrically.

What would change this outlook
  • Sustained F-35 mission-capable recovery
  • Operational CCA units with accepted output
  • Comparable theater weapon and ready-sortie data
Open the current-position analysis
02
Current position

Maritime & undersea

ContestedModerate confidence
Observed trajectory

Toward PRC advantage

PRC fleet and shipbuilding scale are rising while every major U.S. battle-force shipbuilder faces delivery problems and submarine production remains below plan.

ConfidenceHigh
  1. Virginia-class production was about one submarine per year as of June 2025—half the Navy goal—and both 2025 deliveries were more than three years late.

  2. None of the seven U.S. battle-force shipbuilders was positioned to meet delivery goals; DDG-51 Flight III delays reached 22–58 months by February 2026.

  3. China remains the largest navy by platform count and the leading commercial ship producer by most measures, with new-yard expansion and new classes entering the water.

Two-year outlook

Toward PRC advantage

The relative surface and industrial balance is likely to move further toward the PRC. U.S. undersea quality and allied access remain powerful counterweights, but a two-year horizon is too short for shipyard investment to erase existing backlogs and throughput gaps.

ConfidenceModerate
Shown on relative-position overview
Current policy, funding & delivery
  • Private repair capacity has improved since 2019, and the Navy is investing in maintenance and industrial capacity.

  • Naval strategy relies on allied access and a joint ecosystem while pursuing robotic and autonomous systems.

Countervailing forces
  • U.S. and allied undersea performance, sensing, bases, and repair access could preserve mission advantage despite platform-count trends.

  • No symmetric public measure resolves submarine acoustic performance, detection probability, or combat-effective availability.

What would change this outlook
  • Virginia-class output sustained near two per year
  • Material reduction in major-ship delivery delays
  • Operational autonomous formations at combat scale
Open the current-position analysis
03
Current position

Long-range fires

Competitor edgeModerate confidence
Observed trajectory

Toward U.S. / allied advantage

The PRC still holds the current theater-scale edge, but U.S. and allied land-based fires have moved from development into production, deployment, and multinational use.

ConfidenceModerate
  1. PrSM Increment 1 entered production and deployment after Milestone C in July 2025.

  2. An Australian Army HIMARS fired PrSM during Talisman Sabre 2025, demonstrating an allied launcher and employment pathway.

  3. A 2025 delivery order procured 400 missiles, followed by a 2026 framework for tooling, facilities, test equipment, and potential multiyear production.

Two-year outlook

Toward U.S. / allied advantage

Fielded PrSM, broader allied launcher access, and munitions-production investment should modestly narrow the current PRC edge. The shift is unlikely to erase the gap because maritime targeting, hypersonic fielding, inventories, and production depth remain constraining.

ConfidenceModerate
Shown on relative-position overview
Current policy, funding & delivery
  • The fiscal 2026 request spans PrSM, JASSM, LRASM, SM-6, and Tomahawk, while direct investment targets the shared solid-rocket-motor bottleneck.

  • New entrant and low-cost cruise-missile efforts could broaden the supplier base, but tests and military utility assessments precede large production.

Countervailing forces
  • China fields multiple regional-range ballistic, cruise, and hypersonic systems at theater-relevant ranges.

  • Navy hypersonic integration is delayed, production is below goal, and PrSM Increment 2 early operational deliveries are not expected before fiscal 2029.

What would change this outlook
  • Accepted annual missile output against theater demand
  • Operational multimode-seeker maritime targeting
  • Demonstrated resilient sensor-to-shooter performance
Open the current-position analysis
04
Current position

Space

U.S. edgeModerate confidence
Observed trajectory

Toward PRC advantage

PRC sensing, proliferated communications, launch capacity, and counterspace pressure are expanding faster than publicly demonstrated U.S. mission-level resilience.

ConfidenceModerate
  1. China launched 67 ISR-capable satellites in 2024, taking the assessed total above 500 and improving Pacific monitoring.

  2. China began launching proliferated communications constellations and added launch sites intended to support more frequent launches.

  3. The Space Force terminated the delayed OCX program, while GAO found schedule and architecture-level risk in proliferated missile-warning work.

Two-year outlook

Toward PRC advantage

U.S. proliferation and responsive launch should add resilience, but PRC sensing and counterspace growth are likely to narrow the current U.S. edge unless ground integration, staffing, and mission restoration improve on schedule.

ConfidenceModerate
Shown on relative-position overview
Current policy, funding & delivery
  • The final GPS III launch completed a 32-satellite active constellation and demonstrated a launch-provider change in under seven weeks.

  • Tranche 1 transport satellites are in launch and integration, with initial warfighting capability planned for 2027.

Countervailing forces
  • GAO found readiness, unplanned-work, schedule-transparency, and workforce gaps that could delay conversion of satellites into usable mission capability.

  • No public exercise demonstrates full mission restoration after representative satellite and ground-segment loss.

What would change this outlook
  • Operational Tranche 1 service on schedule
  • Mission-restoration exercise results
  • Comparable tasking-to-target custody data
Open the current-position analysis
05
Current position

Cyber & electronic warfare

ContestedLow–moderate confidence
Observed trajectory

Insufficient basis

PRC campaigns show access and scale, while U.S. reporting shows a mission-ready but undersized cyber force. Public evidence cannot convert those different observations into one relative direction.

ConfidenceLow
  1. U.S. and allied agencies confirmed PRC access in critical infrastructure and a global campaign against telecommunications and edge networks.

  2. Cyber Command reported mission-ready forces in 2026 but also stated that the force is not scaled for the threat environment.

  3. No public series compares recovery, reprogramming, or mission success under representative cyber and spectrum attack.

Two-year outlook

Insufficient basis

The evidence supports rising pressure and ongoing U.S. adaptation, but not a defensible two-year net direction. Unknown is not stable, and no overview arrow is shown.

ConfidenceLow
Overview arrow withheld
Current policy, funding & delivery
  • CMMC, zero-trust plans, public-private collaboration, and electronic-warfare reprogramming investments are expanding.

  • Joint advisories provide detailed observed tactics and mitigations across allied networks.

Countervailing forces
  • Implementation gaps remain across the defense industrial base and major DOD systems.

  • Cyber effects, accesses, and electronic-warfare performance are inherently incomplete in public reporting.

What would change this outlook
  • Comparable service-restoration data
  • Representative EW reprogramming timelines
  • Repeated mission outcomes under contested conditions
Open the current-position analysis
06
Current position

AI & decision

U.S. edgeModerate confidence
Observed trajectory

Toward PRC advantage

The U.S. frontier remains ahead, while PRC models, patent output, cost efficiency, and military-commercial diffusion are strengthening. The rate of relative convergence is not yet measured robustly.

ConfidenceLow
  1. CAISI estimated DeepSeek V4 lagged the U.S. frontier by about eight months, while outperforming a similar-capability U.S. reference on cost in five of seven benchmarks.

  2. China led international priority patent counts across several critical technologies in 2024, while U.S. research and patents retained higher-impact advantages.

  3. The PLA has access to commercial and academic AI advances, but public sources do not measure operational unit adoption or mission effect symmetrically.

Two-year outlook

Toward PRC advantage

Continued PRC cost and diffusion gains could narrow the current U.S. edge, but frontier-model leadership is not the same as military decision advantage. Confidence is too low for an overview arrow.

ConfidenceLow
Overview arrow withheld
Current policy, funding & delivery
  • Eight leading AI companies have agreements to make advanced capabilities available on classified networks.

  • The NAIRR is expanding access to compute, data, models, and expertise across U.S. research teams.

Countervailing forces
  • PRC access to frontier accelerators remains constrained while efficiency and domestic alternatives improve.

  • Public benchmarks and deployment monitoring remain immature and can diverge sharply from real-world performance.

What would change this outlook
  • Repeated independent frontier-gap measurements
  • Comparable operational adoption and outcome data
  • Measured human-plus-AI decision performance
Open the current-position analysis
07
Current position

Alliances & logistics

U.S. edgeModerate confidence
Observed trajectory

Toward U.S. / allied advantage

The U.S. alliance and access network is becoming more integrated through exercises, sensor and infrastructure investment, and technology-release reform.

ConfidenceModerate
  1. Valiant Shield 2026 integrated allied activity across air, sea, land, space, and cyber over a wide Indo-Pacific operating area.

  2. Australia, Japan, the Philippines, and the United States reported coordinated sensor and infrastructure investments.

  3. DOD reported completing 26 of 33 technology-release and foreign-disclosure reform actions by May 2026.

Two-year outlook

Toward U.S. / allied advantage

Exercises, access, and disclosure reform should deepen the existing U.S. network advantage. The gain will remain bounded until fuel, pre-positioning, repair, and release processes demonstrate wartime throughput.

ConfidenceModerate
Shown on relative-position overview
Current policy, funding & delivery
  • Pacific Deterrence Initiative projects add fuel infrastructure at Yokota, Wake Island, and Camp Butler.

  • Services have some organic and allied repair access, and exercises increasingly integrate joint and allied participants.

Countervailing forces
  • Fuel storage and delivery risks, pre-positioning management problems, and battle-damage repair throughput remain unresolved.

  • Foreign military sales and release decisions can still take months or years.

What would change this outlook
  • Measured allied logistics throughput in exercises
  • Implemented fuel and pre-positioning recommendations
  • Shorter release and delivery cycle times
Open the current-position analysis
08
Current position

Energy

U.S. edgeModerate confidence
Observed trajectory

Insufficient basis

U.S. hydrocarbon production and planned electric additions are rising, while China is adding generation and nuclear capacity at exceptional scale. Theater fuel delivery remains a separate unresolved constraint.

ConfidenceLow
  1. U.S. primary energy, crude oil, and natural-gas production reached records in 2025.

  2. China added 421 GW of renewable capacity in 2024 and had 36 nuclear reactors under construction by May 2026.

  3. The U.S. planned a record 86 GW of utility-scale capacity additions for 2026, while military fuel-delivery recommendations remained open.

Two-year outlook

Insufficient basis

The two-year record supports growth on both sides but not one aggregate relative direction across hydrocarbons, electricity, refining, and contested logistics. No overview arrow is shown.

ConfidenceLow
Overview arrow withheld
Current policy, funding & delivery
  • Record planned U.S. generation additions and installation microgrid projects should improve capacity and local resilience.

  • Pacific fuel-storage and distribution projects target known regional gaps.

Countervailing forces
  • U.S. refining capacity declined in 2025, and public data do not resolve priority military-fuel coverage by theater node.

  • China's generation build is large, but imported crude and seaborne transport remain major dependencies.

What would change this outlook
  • Comparable military-fuel coverage by node
  • Delivered rather than planned generation and resilience projects
  • Stage-specific refining and transport stress evidence
Open the current-position analysis
09
Current position

Critical resources & supply chains

Competitor leadHigh confidence
Observed trajectory

Toward PRC advantage

Processing concentration has increased and PRC export controls are converting structural concentration into observed supply and price disruption.

ConfidenceHigh
  1. Excluding rare earths, the leading refiner's average share across key minerals rose from 70% in 2023 to 72% in 2025.

  2. PRC export controls expanded across critical-mineral tariff codes, with observed bans or controls affecting germanium, antimony, and tungsten pathways.

  3. U.S. exposure remains acute in several stages, including heavy rare earths, gallium, antimony, graphite, and titanium sponge.

Two-year outlook

Toward PRC advantage

Current non-PRC investments should add selected capacity, but qualification and midstream delivery are unlikely to outpace concentration and exercised export leverage across the full set of exposed pathways within two years.

ConfidenceModerate
Shown on relative-position overview
Current policy, funding & delivery
  • U.S. NdPr oxide output reached a record and commercial-equipment magnet manufacturing began in December 2025.

  • Public finance and Defense Production Act investments are expanding mineral, magnet, and solid-rocket-motor capacity.

Countervailing forces
  • Commitments still exceed disbursement and several announced projects lack accepted output, qualification coverage, or independent feedstock.

  • Allied supply materially mitigates some cobalt, germanium, and titanium pathways but can retain shared upstream exposure.

What would change this outlook
  • Qualified non-PRC midstream output at disclosed scale
  • Diversified feedstock and offtake coverage
  • Sustained reduction in top-refiner concentration
Open the current-position analysis
10
Current position

Experience & force cohesion

U.S. edgeLow–moderate confidence
Observed trajectory

Insufficient basis

U.S. recruiting improved and allied exercises are deepening, but readiness, depot, crewing, civilian-workforce, and specialty gaps persist. PLA exercise activity and leadership disruption point in opposing directions.

ConfidenceLow
  1. All five active services met or exceeded fiscal 2025 accession goals, while the Army Reserve reached 75% of its goal.

  2. GAO reports two decades of readiness degradation and persistent specialty, training, depot, and crewing problems.

  3. PLA exercises increased joint and live-fire activity, while corruption-related removals may impair readiness by an unknown amount.

Two-year outlook

Insufficient basis

Public data do not support a defensible relative direction for complete-team performance, replacement depth, or cohesion under loss. No overview arrow is shown.

ConfidenceLow
Overview arrow withheld
Current policy, funding & delivery
  • Recurring joint and allied exercises create opportunities to convert experience into repeatable mission performance.

  • New guidance emphasizes linking training to mission priorities and organizational performance.

Countervailing forces
  • Civilian workforce reductions, instructor shortages, and specific technical vacancies may erode the experience base despite aggregate recruiting gains.

  • Neither side publishes comparable complete-team performance after communications, logistics, infrastructure, and key-personnel loss.

What would change this outlook
  • Comparable team-performance measures
  • Specialty-level retention and proficiency series
  • Closed-loop evidence that exercises produced sustained improvement
Open the current-position analysis
Forecast discipline

Evidence first. Unknown stays unknown.

Direction is reassessed at scheduled intervals and whenever decisive evidence arrives.

01

Observe before projecting

Observed trajectory describes the relative direction supported by comparable changes already visible in readiness, output, fielding, exercises, capacity, or operational behavior.

02

Continue, then adjust

The outlook is the observed direction continued through the forecast horizon unless funded and executing efforts are likely to arrest or reverse it.

03

Discount promises

Announcements and appropriations matter only in proportion to their demonstrated path to delivered, usable output inside the horizon.

04

Withhold weak arrows

An overview arrow appears only when the two-year direction has moderate or high confidence. Insufficient evidence produces no arrow; it is not treated as stability.

Six-month reviewFebruary 8, 2027
Twelve-month reviewAugust 8, 2027

Revise earlier when authoritative evidence materially changes a direction, confidence level, or current-position judgment.

Structured outlook

Inspect the complete model and baseline.

The public JSON preserves direction, confidence, evidence, counterforces, revision conditions, source records, and the frozen current-position snapshot.