The Department of Defense's flawed requirements and acquisition processes, not the defense industry, are the primary impediment to U.S. military innovation.
The United States is in a critical race with China to field autonomous weapon systems and may be falling behind due to bureaucratic inertia and a lack of cultural open-mindedness.
The conflict with Iran is a strategic diversion of critical resources and attention away from the more significant, long-term threat posed by China, which he views as a more formidable adversary than the Soviet Union.
The U.S. defense industrial base suffers from critical production capacity limits, especially for interceptor missiles, which will force difficult strategic choices like 'preferential defense' in a prolonged conflict.
True adoption of new technology in the U.S. military is driven by the services' own demand; top-down efforts by political leadership or organizations like DIU to push unwanted products onto the services are ultimately doomed to fail.
Historical Context
Kendall references the first Gulf War, noting the U.S. military's inability to destroy mobile Scud launchers as an enduring challenge relevant to the current Iran conflict.
During Tenure as Under Secretary (AT&L)
Kendall oversaw the DoD's acquisition system from a centralized office (AT&L), which he believes was a mistake for Congress to later break up, as it eliminated a single point of responsibility for weapon system lifecycles.
During Tenure as Secretary of the Air Force
Kendall created a centralized organization to manage requirements and modernization for the Air Force.
Post-Secretary of the Air Force
Kendall states that after his departure, the Air Force reversed his initiative, devolving modernization authority back to the 4-star commands.
Start of Iran Conflict
Kendall assesses that the U.S. achieved initial surprise, successfully striking high-value targets and Iranian leadership, catalyzed by an Israeli tip-off.
Current Phase of Iran Conflict
Kendall observes the conflict is shifting from striking fixed targets to a more difficult phase of hunting dispersed and concealed tactical assets, while political and economic factors are becoming more dominant.
▶The Pentagon as the Primary Obstacle to InnovationMay 2026
Kendall consistently argues that the root cause of slow defense modernization is not the defense industry, but the Department of Defense itself. He points to a broken acquisition system, dysfunctional bodies like the JROC, and a culture where services will only buy what they want, making it nearly impossible for top-down innovation efforts to succeed.
Investors in defense tech should focus on companies whose products align with the explicit, funded priorities of a specific military service, as Kendall's analysis suggests that even superior technology will fail to achieve scale without service-level buy-in.
▶The Strategic Imperative of the Automation Race with ChinaMay 2026
A central theme is Kendall's belief that warfare is transitioning to an era dominated by automated systems. He frames this as a direct race between the U.S. and China, expressing significant concern that China's willingness to make fundamental changes may allow it to 'steal a march' on the U.S., which is hampered by bureaucratic inertia.
Analysts should monitor changes in U.S. military force structure, such as the creation of UAS brigades, as key indicators of whether the Pentagon is overcoming the cultural resistance Kendall describes and truly committing to this technological transition.
▶Industrial Base Fragility and Finite MunitionsMay 2026
Kendall highlights the critical vulnerability of the U.S. defense industrial base, particularly its limited capacity and long lead times for producing sophisticated interceptor missiles like Patriot and THAAD. He notes these production lines were already maxed out for Ukraine, and the conflict with Iran will quickly deplete finite stockpiles, forcing difficult strategic trade-offs.
The constraints Kendall describes suggest a high, sustained demand for munitions and production capacity, creating opportunities for companies involved in missile manufacturing, supply chain logistics, and potentially lower-cost alternative systems.
▶The Iran Conflict as a Strategic DiversionMay 2026
Kendall views the current conflict with Iran as a dangerous distraction from the primary long-term strategic challenge: China. He characterizes China as a far more formidable opponent than the Soviet Union ever was and worries that the U.S. is expending critical resources and focus on a secondary theater.
This perspective suggests that any prolonged conflict in the Middle East could degrade U.S. readiness and resource availability for a potential conflict in the Indo-Pacific, a risk factor that should be incorporated into geopolitical and market analysis.