Navy CTO Justin Fanelli Urges Co-Investing with VCs, Highlights $562M Refueling Deal

The U.S. Navy’s Chief Technology Officer, Justin Fanelli, announced a strategic shift in how the service engages with emerging technology. Rather than directly funding early‑stage research, the Navy will now partner with venture capital firms to co‑invest in promising startups, allowing the Department to tap into private expertise while sharing risk and reward. Fanelli said the new model would accelerate the adoption of breakthrough solutions and streamline the procurement pipeline.

In a recent showcase of the Navy’s new approach, the service completed a $562 million purchase of an autonomous refueling system that can transfer fuel to ships without human intervention. The deal, one of the largest of its kind, demonstrates the Navy’s commitment to integrating unmanned capabilities into its fleet. Alongside this acquisition, Fanelli outlined an updated wish list for future innovations, prioritizing advances in artificial intelligence, quantum computing, and other high‑impact technologies that could reshape naval operations.

The Navy’s updated strategy signals a broader effort to stay ahead of emerging threats while fostering a robust ecosystem of defense entrepreneurs. By co‑investing with venture capital partners and targeting next‑generation technologies, the Department aims to secure a competitive edge and maintain operational readiness in an increasingly complex security environment.