Hegseth calls US$1.5 trillion defence budget ‘critical’ to counter China

US Defence Secretary Pete Hegseth has called a nearly US$1.5 trillion defence budget request “absolutely critical”, warning that whoever falls behind in autonomy, robotics and AI will fall “even further behind” as Washington eyes China’s rapid military modernisation.

Speaking at a panel discussion during the Association of the United States Army (AUSA) Annual Meeting and Exposition on Wednesday, Hegseth said that Project Agincourt, the Pentagon’s initiative to accelerate drone and autonomous warfare capabilities, is the “end state” of what the administration has focused on since “day one”.

Under the current US Department of Defence plan, announced by Hegseth on September 30 during his State of the Force address at Marine Corps Base Quantico, Project Agincourt includes the creation of a four-star Autonomous Warfare Command by October 1, 2027, building on the Replicator initiative from the Joe Biden administration and the Drone Dominance Programme initiated in 2025.

Asked how significant the increase to nearly $1.5 trillion in the defence budget is, Hegseth replied that it is “absolutely critical” and a “one-time generational investment” that gives Washington a chance to “fully rebuild” the military amid threats from adversaries.

“We’re in a different moment. We’ve got a near-peer adversary who’s building a military, the most historic military build-up potentially in world history,” said Hegseth, in a tacit reference to China’s recent military modernisation drive.

“That’s not hyperbole. That’s just objective truth. You add up the step changes in autonomy, in robotics, in space, AI, whoever’s ahead now is going to get much further ahead. Whoever’s behind now is going to fall even further behind. And so investments now are going to matter, and they’re going to ripple not just for years but for decades across our joint force.”

The rare panel discussion had Hegseth speaking alongside the civilian heads of the Army, Navy and Air Force – acting Army Secretary Adam Telle, acting Navy Secretary Hung Cao and Air Force Secretary Troy Meink – as well as Derrick Anderson, assistant secretary of defence for special operations and low-intensity conflict.

The Pentagon has requested US$54.6 billion for the Defence Autonomous Warfare Group (DAWG), established last year for coordinating, testing and integrating autonomous weapons across all military domains, for the financial year 2027 budget, an almost 24,000 per cent increase from US$225.9 million in the previous year.

According to the Department of Defence Fiscal Year 2027 Mandatory Budget Overview published in April, which explains the fiscal allocation of the Trump administration’s record-breaking $1.5 trillion defence budget request, DAWG was allocated $53.6 billion under the $350 billion reconciliation package, leaving $1 billion under the base request.

The budget included $39.2 billion for a multi-year investment in autonomous systems procurement, domestic production capacity and advanced capabilities, and $14.4 billion for counter-unmanned systems development and deployment.

The Trump administration has repeatedly used budget reconciliation to secure increases in defence spending. The process allows legislation to pass the Senate by a simple majority, bypassing the usual 60-vote threshold and reducing the need for Democratic support.

Hegseth defended the use of the process as a means to “supercharge” the architecture of Autonomous Warfare Command and “reestablish a deterrent to rebuild the military around the world” by acquiring “a million” drones.

China’s drone build-up has been one of the major drivers for the Trump administration to ramp up its autonomous systems acquisition. During the panel discussion, Meink referred to China as having “the largest weapons build-up probably in the history of the world,” resulting in Beijing “leveraging” over Washington, such as using low Earth orbit satellites to target US weapons systems.

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“So the question is, what do we do about that? How do we degrade their systems? How do we make sure our systems are survivable no matter what domain we are in?” said Meink.

“And that’s what we’re working with entire joint forces to do. And the autonomous systems are going to be part of that.”

Under the 15th five-year plan released in March, covering the period from 2026 to 2030, China prioritised the People’s Liberation Army’s transition towards ‘intelligentised’ warfare, emphasising artificial intelligence, unmanned and autonomous systems, networked information infrastructure and emerging technologies.

A satellite imagery analysis also suggests that the People’s Liberation Army (PLA) has stationed over 200 obsolete 1960s-era J-6 supersonic fighter jets – converted into attack and cruise-missile-like drones – across six airbases near the Taiwan Strait.

China is also known to be the world’s largest exporter of drones. According to a report by the Washington-based think tank Centre for Strategic and International Studies, Chinese companies accounted for more than 80 per cent of global drone supplies.

Hegseth criticised the previous Biden administration for treating the world as “stagnant” and taking a “nap” on advanced military technologies such as hypersonics, space weaponisation and drones, even as adversaries like China were rapidly expanding their capabilities. He said the Trump administration was now working to regain its “competitive advantage”.

“Now we’re changing the cost paradigm for our adversaries on the battlefield, and they’re the ones having to understand how to deal defensively with our capabilities,” said Hegseth.

“The drones that this will require, all of those investments are part of reconciliation of that 350 [billion dollars] … The coming months will be critical, and it’s not hyperbolic to state whether or not we rebuild our military to meet the threats of the country will depend on funding the president’s vision for US$1.5 trillion, and our goal, come hell or high water.”

On the question of how he came up with the decision to establish a four-star Autonomous Warfare Command despite Congress’ call to reduce the number of general officers in the past 15 years, Hegseth said that it “completely meets the intent” as it requires sufficient authorities to “ensure we can drive change quickly”.

Hegseth said building up drone capabilities required more than training and cooperation with industry. It also meant getting the technology into the hands of frontline commanders, who could test it on the battlefield and learn how to “iterate it, change on it, innovate on it”.