Image generated using ChatGPT. Manufacturing plant with designing scalable systems, iterations, and sourcing critical minerals. September 18, 2025.

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The global security environment is entering a new era — one defined not just by the sophistication of military systems, but by the speed, scale, and resilience with which they can be deployed. At IQT, we believe the Defense Industrial Base (DIB) must evolve. And we propose “DIBS” as the solution: Design, Iterate, Build, and Source.

This shift is not theoretical. It’s grounded in real-world scenarios, such as the growing tensions in the Taiwan Strait. In a crisis, the U.S. and its allies may urgently need swarms of unmanned systems. But the supply chains for critical subsystems (batteries, flight controllers, and motors) remain fragile, concentrated in a few factories in a few countries, some of which are already conflict zones.

The war in Ukraine has underscored this vulnerability. Despite the availability of drone technology, Ukrainian forces have faced persistent shortages of key components. The issue isn’t innovation — it’s the lack of a resilient, scalable supply chain.

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Design: From Performance to Agility

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Historically, defense systems have been created for performance, not resilience, which has driven businesses to optimize specifications. But in today’s dynamic threat environment, performance alone is not enough. Systems must be designed for agility, speed, and security from the outset.

Designing for agility means planning for scale from day one. It requires modularity and interchangeability — principles that simplify production, enable flexible sourcing, and allow for frequent iteration. In modern conflict zones, systems are modified in days or weeks, not years. Anduril exemplifies “design for agility” with its open source platform Lattice — a flexible, component-agnostic software platform built to rapidly develop systems across industries.

Next, we need to design for speed — accelerating the entire design process from A to Z. This is all the more essential when planning for environments in which systems are likely to be modified frequently. Artificial intelligence can be a powerful force multiplier here, both for existing product developers, and for new entrants looking to develop systems without decades of existing processes and methodologies to draw on. Using AI to augment design cuts the time humans need to devote to the process and shortens the feedback loop — boosting efficiency between digital versioning and physical realization of designs. For example, IQT portfolio company nTop is using AI to speed up design creation and optimize outputs for production, cutting time without compromising quality.

Last, but not least, we must design for security. Swarms of autonomous vessels cannot protect national interests if they’re vulnerable to cyberattacks. Startups, including IQT portfolio company Cycuity, are building verification tools to identify vulnerabilities in hardware components and firmware — ensuring that security is treated as a first-order design principle, not an afterthought.

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Iterate: Speed as a Strategic Advantage

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In modern warfare, victory belongs to those who adapt fastest. A drone that works today may be rendered obsolete tomorrow — unless it can be rapidly modified.

Ukraine has become a proving ground for this reality. When Ukrainian forces began using low-cost drones to target Russian assets, Russia responded with advanced electronic countermeasures. In turn, Ukraine hardened its drones and adopted fly-by-wire systems to maintain control. The battlefield became a laboratory for rapid innovation.

Quantum Systems exemplifies this approach. The company pushes frequent firmware updates to its unmanned aerial vehicles (UAVs) in Ukraine, often based on direct feedback from soldiers in the field. Neros, founded by former drone pilots, continuously refines its systems based on real-world performance data, which helps ensure that their drones stay ahead of adversary countermeasures.

For rapid iteration strategies to succeed, companies need access to testing environments that closely reflect operational ones, while also recognizing that field data remains the most effective way to validate a system’s performance. They also need frictionless ways to share lessons across the ecosystem. At IQT, we take a hands-on approach to this, quite literally. We convene our mission partners with our portfolio companies to provide information on and actively test emerging technologies and give our portfolio companies real-time user feedback for their product iteration.

But iteration must be paired with interoperability. Systems must evolve without losing the ability to operate in concert. For example, Auterion provides an integrated software stack that ensures compatibility across strike, recon, and sea-based systems. These are capabilities already being deployed in Ukraine and potentially vital in future Taiwan scenarios.

Build: Scaling Innovation for Strategic Impact

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Design and iteration are only as powerful as the ability to manufacture at scale. And here, the U.S. faces a critical challenge.

Too many systems still rely on components from a single supplier, or worse, from adversarial nations. When China sanctioned a major drone manufacturer in 2024, production was disrupted overnight. This is why the ability to scale is now a core criterion in evaluating defense technology investments. CloudNC is using AI to bridge the gap between digital design and physical production — cutting translation time by up to 80%. And Havoc AI is building autonomy subsystems that can be deployed across distributed platforms, enabling swarming capabilities across domains.

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Source: The Strategic Foundation

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There is one more letter to add to the DIB architecture — S for “Source”.

Sourcing the raw materials we need to make systems is fundamental to our strategic success, and in recent years we’ve seen the U.S. take concrete steps to address access to these critical resources.

Through Compass, IQT is strategically investing in technologies that give the U.S. greater ownership and optionality in critical materials supply chains. Companies like Alta Resource Technologies are developing biological platforms to extract minerals from electronic waste, and Noveon Magnetics is the only commercially ready rare earth magnet manufacturer owned and operated in the U.S.

 These innovations are essential to reducing dependency on foreign-controlled supply chains and to ensuring that the U.S. can lead in the next generation of defense manufacturing.

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A Call to Action

The future of national security depends on the ability to Design, Iterate,  Build, and Source — not in years, but in weeks or even days. DIBS isn’t just a framework. It’s a strategic imperative.

The U.S. and its allies must be the first to reimagine the design process — leading through agility, speed, and security. The first to iterate faster than adversaries can counter. The first to build at scale. And the first to secure the materials and technologies that make all of this possible.

Together with our government partners and portfolio of innovators, we can do this.

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