U.S. Munitions Magazine Depth Faces Production Constraints and High Costs Amid Calls for Commercial Alternatives

U.S. Munitions Magazine Depth Faces Production Constraints and High Costs Amid Calls for Commercial Alternatives The deterrent value of the U.S. munitions inventory is strained by high unit costs, slow replacement timelines, and rapid expenditure rates seen in recent operations and wargames. While historic defense authorizations aim to rebuild stockpiles, debates persist over whether funding should continue supporting expensive legacy systems or pivot toward commercialized, low-cost weapons from new defense entrants. Wargames and recent engagements like Operation Epic Fury highlight rapid magazine depletion, where replacing expended major munitions could take 8 to 14 years at historical production rates. Legacy munitions rely on bespoke aerospace components and cost-plus dynamics that inflate unit costs, whereas defense startups leverage commercial automotive, aviation, and electronics supply chains funded by private capital. The FY27 NDAA markup authorizes historic defense funding and mandates procurement reforms, including hard unit-cost ceilings, commercial component requirements, and second-sourcing for solid rocket motors. While low-cost offensive strike munitions are maturing into production, defensive interceptors remain prohibitively expensive, driving high cost-exchange ratios against adversary saturation tactics. Stockpile Depletion and Industrial Replacement Realities Wargames indicate that the United States would exhaust preferred munitions in the initial days of a conflict, with resupply unavailable in the short term. During the first 39 days of Operation Epic Fury, independent tallies reported the Navy expended over 1,000 Tomahawks from a stockpile of approximately 3,100, the Air Force used roughly 80 percent of its JASSM-ER inventory, and Patriot batteries fired 943 interceptors within four days—consuming 18 months of manufacturing throughput. Because replacing major-program inventories takes between 8 and 14 years under historical production rates, a bipartisan congressional commission determined that the defense industrial base cannot satisfy U.S. and allied munitions needs. Cost Structures and Legacy Versus Commercial Manufacturing Legacy weapons depend on bespoke aerospace parts designed for erratic government order volumes, which amplifies unit costs, as demonstrated when a low FY25 Army order of 23 JAGM missiles pushed the unit price to $360,000 compared to a lifetime average of $212,000. Additionally, government flyaway figures omit research, development, test, and evaluation (RDT&E) expenses that account for 25 percent or more of lifecycle costs. In contrast, emerging defense firms self-fund development using private capital to avoid government cost-accounting overhead. Systems like Anduril's Barracuda assemble in around 30 labor-hours using roughly 70 percent commercial parts, delivering strike platforms at a fraction of the cost of legacy counterparts. The Debate Over Affordable Mass and Battlefield Utility Disagreements exist regarding whether cheap commercial weapons can substitute for complex munitions. Critics point out that lower-cost systems may lack the engineering sophistication or Pacific-theater operational reach of traditional rounds, noting that mass should focus on cost per effect rather than mass for its own sake. Conversely, adversaries are intentionally deploying swarms of cheap systems—such as Russia shifting toward a 10-to-1 ratio of one-way attack UAVs to cruise and ballistic missiles—to exhaust high-end defenses. Although skeptics observe that spending a $4 million interceptor on a $20,000 drone remains justified to protect a $2 billion ship, continuing to trade high-cost rounds against low-cost saturation threatens overall magazine sustainability. Legislative Reforms and Procurement Interventions The Senate Armed Services Committee advanced an 18–9 markup of the FY27 NDAA, which authorizes a record $1.15 trillion topline and requires accelerated adoption of low-cost munitions across eight critical areas. The legislation introduces multiyear procurement authorities, mandates second sources for solid rocket motors, establishes fixed-price contracts, and requires commercial components unless waived. Despite these mandates, less than 3 percent of the Munitions Acceleration Council's plan currently funds low-cost munitions from market entrants, with 97 percent remaining dedicated to legacy programs despite official forecasts showing munitions growing toward 41 percent of Army procurement. Disparity Between Strike Munitions and Air Defense Interceptors The market for offensive strike weapons has matured to include multiple competitors offering systems between $300,000 and $700,000 with signed contracts and delivery schedules. However, defensive interceptor development continues to lag behind strike rounds. Current interceptors remain exceptionally costly, with PAC-3 MSE at $3.9 million, THAAD between $12 million and $22 million, and SM-3 Block IIA exceeding $28 million. With the Congressional Budget Office estimating that a homeland-defense architecture like Golden Dome would cost $1.2 trillion over two decades under existing manufacturing practices, lawmakers have called for focused development initiatives to achieve lower-cost defensive interceptors.

美军弹药储备危机与低成本规模化替代路线之争 面对现有军火库在高烈度消耗战下的快速见底，美国正就武器采购路线展开博弈：传统定制军工的高单价和供应链瓶颈难以维系持续威慑，而借助汽车、民航等民用供应链与私有资本研发的低成本替代方案正加速进入国会防务授权与军种采购规划。 参议院军事委员会主席罗杰·威克警告称，若无法实现武器快速出厂就无法成为‘民主兵工厂’，目前弹药加速委员会超97%的资金仍流向传统武器，仅不到3%支持新兴低成本弹药。 战棋推演与实战表明弹药消耗远超补给能力，传统战斧巡航导弹（200万至400万美元）及昂贵拦截弹替换耗时达8至14年，而新兴方案如Barracuda与Anthem成本降至前者的五分之一到十分之一。 防务新兴企业利用私有资本自主研发，摆脱政府成本加成审计，利用民用供应链降低制造工时与瓶颈，但批评者指出低单价武器不能牺牲可靠性与杀伤效果。 2027财年国防授权法案草案授权创纪录的1.15万亿美元防务支出，并强制要求在八大关键领域引入低成本弹药、设定单价硬上限并拓展固体发动机等第二供应商。 传统军工体制导致的弹药库深度危机 美军弹药库威慑力不仅取决于库存，更取决于产能。传统弹药依赖定制航空部件、单一专业供应商以及波动的订单采购，导致单价高昂且扩产周期长达数年，例如陆军在2025财年仅采购23枚联合空地导弹（JAGM），致其单价飙升至36万美元。在‘史诗狂暴行动’前39天内，海军消耗了约3,100枚战斧库存中的1,000余枚，空军消耗了约80%的JASSM-ER库存，而爱国者防空系统在4天内消耗的943枚拦截弹相当于18个月的产能。两党国会委员会已警告国防工业基地无法满足当前需求，按历史速率补充这些主战库存需要8到14年。 商用供应链与私营资本重塑打击武器成本 新兴防务企业通过自主承办研发避免了政府严格的成本核算与审查负担，将商业供应链（如汽车、消费电子与民航）引入军工制造。例如Anduril的Barracuda导弹装配仅需约30工时，70%采用商业现成零部件，单价远低于传统导弹；Castelion的高超音速Blackbeard进入门槛低于50万美元，已获海军及多项采购规划支持。空军低成本规模化巡航导弹项目将单价限制在40万美元以内，海军MACE项目亦对高超音速弹药设立了30万美元的硬上限。然而分析人士也警告防务采购不能仅追逐纯粹的低成本，必须考量武器可靠性与杀伤效费比。 拦截弹困境与多重战略争论 与进攻性打击弹药已有半数以上竞争者进入30万至70万美元区间不同，防空拦截弹市场仍严重滞后。现役拦截弹价格居高不下，PAC-3 MSE单价为3.9万美元，THAAD在1,200万至2,200万美元之间，SM-3 Block IIA更达2,800万美元以上。国会预算办公室评估，采用现有拦截弹构建的‘金穹’本土防御架构20年耗资将达1.2万亿美元。尽管有观点认为使用数百万美元拦截弹保护价值20亿美元驱逐舰并不亏损，且消耗库存未必直接削弱针对特定亚太战役的威慑，但威克参议员指出对手正在利用大量低廉系统压垮高价防御，必须发起类似曼哈顿工程的项目解决拦截弹成本问题。 国会立法与2027财年采购政策重塑 参议院军事委员会推进的2027财年国防授权法案（NDAA）总额达1.15万亿美元，行政部门亦要求增加188%的导弹采购资金。该法案强制要求五角大楼在8个关键弹药类别中加速采用低成本弹药，推行多年采购合同与固定总价合同，设定严格单价上限，并强制建立固体火箭发动机等关键部件的第二供应商。此外，法案还涵盖美德联合生产项目以及对中国台湾地区的战争储备授权，试图通过民用部件授权和商业化采购打破导致盟友等待5至7年交付的产能死锁。

[America](https://www.a16z.news/t/america) | [Tech](https://www.a16z.news/t/technology) | [Opinion](https://www.a16z.news/t/opinion) | [Culture](https://www.a16z.news/t/culture) | [Charts](https://www.a16z.news/t/charts) In March, Senate Armed Services Chairman Roger Wicker pressed a panel of four Pentagon officials during a hearing on this potentially existential issue—munitions magazine depth. “We cannot be the Arsenal of Democracy,” Wicker reminded the hearing, “if we cannot get weapons out the door.” There has been ample concerning coverage in recent months on the challenges we face in maintaining our national munitions stockpiles. Whether our next conflict is a continental land war like Ukraine, or a battle for sea control in the Pacific, we will need a spectrum of munitions—defensive and offensive, traditional and new—in the arsenal. At its core, the deterrent quality of our magazine is a function of two factors: the disposition of munitions on hand, and the capacity to produce more. Production carries vastly more weight in any rational actor’s calculation than inventory alone. For the U.S., maintaining a warm production line of deterrent capacity has been an affordability challenge. These legacy munitions have been intricately designed and built with bespoke aerospace components, to fulfill erratic and inconsistent orders from the military. This has made our current arsenal of munitions incredibly expensive at unit cost. New entrants to this space have recognized two opportunities to deliver quality munitions at greater volumes in less time. First, they are designing new munitions from the ground up for manufacture at high rate, drawing on readily available automobile, civil aviation and consumer electronics supply chains. Second, they have conviction in the long-term need, and are funding production with private capital now to overcome jittery government demand. According to Wicker’s hearing, “[less than three percent](https://www.wicker.senate.gov/2026/03/24/2026-3-chairman-wicker-leads-sasc-hearing-on-low-cost-munitions/)” of the department’s munitions plan funds low-cost munitions. The plan, assembled by the Munitions Acceleration Council, assigns 97 percent of funding to legacy munitions; the remaining three percent goes to new entrants building lower-cost, highly capable products that use modernized design and manufacturing. This seems like the wrong ratio to us, and the Pentagon is coming around to it. We’re not advocating for completely pivoting the US Arsenal towards new entrants, but we *are* arguing, if we shift that spend into new options that are both privately funded *and* low-cost supply chains, by changing *how* we buy, we’ll get more for our money *and* be in a stronger place to defend America and her allies. Take cruise missiles as example A: Tomahawks run about $2-4 million, on the high end. Versus a new class of commercially built strike weapons—Covenant’s Anthem or Anduril’s Barracuda family—that are only about 1/5 to 1/10 the cost. Then examine close and short range ballistic missiles as example B: The “legacy” (brand new) Lockheed Martin PrSM Increment 1 missile—initially priced at $2.7m (now $1.7 million with scale)—is less performant than Castelion’s Hypersonic Blackbeard GL, entering with a cost under $500,000. So each incremental legacy missile costs about [five to ten times](https://www.wicker.senate.gov/2026/3/chairman-wicker-leads-sasc-hearing-on-low-cost-munitions) as much as its new entrant alternative. In practice, the gap might be closer to twelve to fifteen times, because the flyaway price on a legacy munition the government pays today doesn’t account for the RDT&E the government committed to designing it—roughly 25% of the overall cost of legacy munitions.[1](https://www.a16z.news#footnote-1) The new generation of startups develops their technology from their own balance sheets, often with capital from investors like a16z. Market competition sets the ultimate price. The budget is complicated, and people like to hide behind the complexity, so let’s just make it simple. Congress gives the Pentagon $100 for munitions. We’ll say the legacy missile price is $1 and the new entrants are ten cents. Apply the Pentagon’s current 97-to-3 split: after accounting for R&D to design the legacy missile at government expense ([25+% of lifecycle costs for missiles](http://www.waru.edu/sites/default/files/Migrated/CopDocuments/B3%20Intro%20to%20Cost%20Analysis%20Feb%2011%20rev%20c.pdf)), the $97 fields about 73 rounds and the $3 fields 30 new entrants. A [CSIS study](http://www.csis.org/analysis/calculating-cost-effectiveness-russias-drone-strikes) showed that between 2022 and 2024, for every costlier cruise or ballistic missile the Russians fired at Ukraine, they were firing nearly four one-way attack UAVs. As Russian capacity to build Shaheds scaled in late 2024, this ratio looked more like 1:10. We include the 1:3 ratio here as a guidepost for comparison to another major military power. No one is saying that’s the ideal mix, but we’d argue it’s a helpful proxy for the direction of future warfare. If we wanted this same ratio in our stockpile, the same $100 could buy 61 legacy missiles plus 180 new entrant missiles. The question worth putting to the people who hold the war plans — and one hopes they are asking it — is: which magazine would you rather take to war? Critics will say “well, a $300,000 missile is not a $3 million missile.” We’re happy to concede that our fleet of munitions includes some true feats of engineering. But the American taxpayer should never be paying for superfluous capability. Certainly not in a world where we are $30 trillion in debt! We need to produce the required capability to win, as fast and inexpensively as possible. Ultimately, though, our claim is that the volume of effects a military force can deliver and replace across a long fight is what influences adversary decision making. The good news for the U.S. and our allies is that high-quality munitions at lower cost are an option today. Munitions come in a variety of shapes and sizes, from mortars to intercontinental ballistic missiles. When we talk about munitions in this article, we are by and large discussing short- to intermediate-range precision strike munitions.[2](https://www.a16z.news#footnote-2) There are similar magazine-depth dynamics around ground-based interceptors; we touch on those below and may return to them properly in a Part II. Most of the shouting in the munitions-affordability debate comes from people answering different questions, because “munitions affordability” conflates several issues. *Do we have enough rounds* (depth question)? *Are precision weapons too expensive per shot* (unit cost)? *Can industry build and replace them fast enough* (industrial capacity)? *Is it sustainable to fire a $4 million interceptor at a $20,000 drone* (cost-exchange)? And *is the cure buying more of the same, building munitions differently, or, everyone’s favorite boogieman, reforming acquisition* (system design)? The five sections that follow take those questions in turn: *Munition magazine depth is the critical variable;* *unit cost of legacy munitions is what makes depth unaffordable;* *cost-exchange dilemma is best fixed by stocking up on affordable mass;* *manufacturing throughput is—at least partially—a function of design;* *and the remedy is to buy differently within the money we have.* One assumes adversary war planners in Beijing see things the same way we do. They’re asking how many rounds the United States can fire, for how many weeks, and how fast the production lines can replace what is expended. Deterrence means persuading an adversary that the operation cannot succeed at acceptable cost. Initial magazine depth, and the production capacity behind it, are a critical factor. There is not much disagreement that our stockpiles are insufficient. One of the most widely cited set of wargames said “the U.S. will run out of preferred munitions in the early days,” and once the shooting starts, “resupply is not an option.” Across the first thirty-nine days of Operation Epic Fury, by independent tallies, the Navy fired more than 1,000 Tomahawks from a stockpile of roughly 3,100, and the Air Force expended about 80 percent of its JASSM-ER inventory, while Patriot batteries fired 943 interceptors in the first four days — about eighteen months of output at current throughput capacity. The counterargument [is that](https://www.brookings.edu/articles/why-lower-munitions-stocks-wont-undercut-deterrence-of-china/) drawing down stocks does not meaningfully erode deterrence with China, whose calculation to go to war revolves around a wider set of factors, and that the munitions spent over the Red Sea or gifted to Kyiv are not exclusively those required for a Pacific war — which would also demand torpedoes, anti-ship missiles, and guided bombs. Those people are kidding themselves. Deterrence is weaker when the United States has fewer of the weapons needed to win a conflict, even if that weakness alone would not cause Beijing to launch. The same long-range strike weapons and missile-defense interceptors support [multiple war plans,](https://www.csis.org/analysis/last-rounds-status-key-munitions-iran-war-ceasefire) and firing them in one theater leaves every other plan with fewer rounds and less margin for error. Operation Epic Fury consumed munition stockpiles relevant to a Pacific contingency—Tomahawk, JASSM, Patriot, THAAD, SM-2, and SM-6. Rebuilding those inventories is, per [follow-on analysis, a multiyear project](https://www.csis.org/analysis/rebuilding-us-missile-inventory-multiyear-project): at historical production rates, replacing major-program inventories takes eight to fourteen years. A [bipartisan commission](https://www.armed-services.senate.gov/imo/media/doc/nds_commission_final_report.pdf) chartered by Congress to review defense strategy stated flatly that the defense industrial base “is unable to meet” U.S. and allied munitions needs. One school of analysts said it best—“[production is deterrence.](https://www.cnas.org/publications/reports/production-is-deterrence)” A hot production line, capable of surging, is in some ways even more convincing to an adversary than warehouses full of missiles. Senator Wicker closed his hearing statement with the observation that the adversary fields large numbers of low-cost systems “on purpose,” intending “to overwhelm our defenses, aware that our magazine is full of expensive weapons that we will use to defend against their low-cost systems.” Every round expended against Iran, or some other adversary, reduces the magazine available to deter China and Russia, allowing one war to consume the munitions meant to prevent another. We’ve found that cost data is generally piecemeal, but the comptroller’s 2027 weapons-price exhibit consolidates some of it. As mentioned, a Tomahawk, the military’s heavy warhead, deep strike cruise missile, costs about $2-4 million. [LRASM](https://www.airandspaceforces.com/navy-shoots-four-lrasm-air-force-multiyear-buy/), an air-launched missile designed to destroy ships at long range costs $3.2 million. At the top of the ladder sit the hypersonics: the Army’s ground-launched Dark Eagle and the Navy’s sea-launched Conventional Prompt Strike, conventionally armed weapons built to strike distant targets within minutes, cost between $41 million and $70 million per missile. The defensive interceptors are also steep: a PAC-3 MSE, the ground-to-air interceptor used against aircraft, cruise missiles, and short-range ballistic missiles, costs $3.9 million; a [THAAD](https://www.congress.gov/crs_external_products/IF/PDF/IF12645/IF12645.9.pdf) round, designed to intercept ballistic missiles in their terminal phase of flight, costs between $12 million and $22 million; and an [SM-3 Block IIA](https://www.missiledefenseadvocacy.org/missile-defense-systems/missile-interceptors-by-cost/), the Aegis interceptor that destroys ballistic missiles outside the atmosphere, costs $28 million and up. The publicly conducted wargames call for thousands of long-range land attack munitions in the opening weeks. Epic Fury consumed a thousand Tomahawks in thirty-nine days against a regional power; a Taiwan scenario would demand a multiple of that, sustained for months if not longer, with much greater constraints on the ability to deliver resupply. The same is true for anti-ship munitions: giving the joint force even four thousand LRASM-class weapons – modest for a Taiwan scenario – is a $13 billion magazine at current prices, procured at a production line throughput capacity that just reached [about 1,100 missiles a year (shared with JASSM](https://breakingdefense.com/2025/08/air-force-surges-munitions-buys-with-4-3-billion-for-jassm-and-lrasm-3-5-billion-for-amraam/)). Even the largest defense topline in American history cannot procure deterrence-sized depth at seven and eight figures a round. There is concern that new products advertised as affordable now will get far more expensive before delivery—a phenomenon [Augustine’s Law](https://www.waru.edu/sites/default/files/Migrate/ARJFiles/ARJ72/ARJ-72_Augustine.pdf?Web=1) warns about. [Studies of weapons cost growth](https://www.csis.org/analysis/updating-augustines-law-fighter-aircraft-cost-growth-age-ai-and-autonomy) have updated this for the age of autonomous weapons: the Collaborative Combat Aircraft—intended, I’ll remind you, to complement a fighter, not substitute for one—has exceeded its $3 million target to $25–30 million. Cost inflation is a concern, but Augustine’s Law describes what happens when requirements float free under cost-plus contracts with a monopoly supplier. The new programs are built around competition and aggressive cost strategies: the Navy’s MACE program caps its hypersonic round at a [hard $300,000 ceiling](https://sam.gov/opp/3a3d52dca5824a4da62e874f888764b2/view), the Air Force’s affordable-mass cruise missile line at [about $400,000](https://www.airandspaceforces.com/air-force-5-year-plan-12b-28000-cheap-cruise-missiles/), and Senator Wicker counted [several new companies](https://www.wicker.senate.gov/2026/3/chairman-wicker-leads-sasc-hearing-on-low-cost-munitions) now competing for the government’s business in the $300,000-to-$600,000 band. Overall, there is strong evidence that commercially developed technology comes in far cheaper than the same capability developed under a government R&D program; for example the [Falcon 9](https://www.csis.org/analysis/updating-augustines-law-fighter-aircraft-cost-growth-age-ai-and-autonomy) program. “For too long,” Wicker told his committee in March, “we have equated the cost of a munition with the capability of that munition.” Most of a modern target set (trucks, radars, small ships, drones, buildings, massed infantry) does not require a $3 million munition. The now infamous cost-exchange stat from Epic Fury is the [$4 million Patriots against $20,000 drones](https://www.bloomberg.com/news/articles/2026-03-02/iran-strikes-missile-math-20-000-iranian-drones-take-on-4-million-patriots), though cost-exchange pressure of this kind has been a feature of the modern battlefield for some time. Skeptics [call the ratio misleading](https://warontherocks.com/the-hidden-cost-of-a-missile-why-the-headlines-get-cost-wrong/) because it ignores the value of the defended asset. When defending [an asset worth](https://www.csis.org/analysis/cost-and-value-air-and-missile-defense-intercepts) hundreds of times its price, a $4 million interceptor protecting a $2 billion destroyer is a bargain. What Epic Fury exposed is a magazine without optionality: every cheap drone got the $4 million Patriot because that was the only answer in inventory. Whether that gap can be closed affordably remains an unsolved problem. On the strike side, the inexpensive, effective option now exists as a production item. Castelion’s Blackbeard, a hypersonic strike missile targeted below $500,000, has a [signed framework for 500 or more missiles per year](https://www.castelion.com/news/castelion-and-department-of-war-sign-agreement/) and a Navy program of record planning [4,510 rounds across FY27–31](https://aviationweek.com/defense/missile-defense-weapons/budget-records-reveal-mace-low-cost-hypersonic-missile). The Air Force’s Family of Affordable Mass Munitions plans [nearly 28,000 weapons for $12.6 billion](https://www.airandspaceforces.com/air-force-5-year-plan-12b-28000-cheap-cruise-missiles/) with production starting this September. Anduril will supply the Army [at least 3,000](https://theaviationist.com/2026/05/16/anduril-to-supply-surface-launched-barracuda-500m-us-army/) of its surface-launched Barracuda-500Ms, with first deliveries in mid-2027. Thousands of rounds are now on contract at prices an order of magnitude below the incumbents’. The [Pentagon recognizes](https://www.war.gov/News/Releases/Release/Article/4545594/department-of-war-announces-landmark-agreements-with-new-entrants-to-accelerate/) the shift, and we think it’s time to pour gas on the fire so that planners can tailor munitions to required effects. [Some critics argue](https://www.usni.org/magazines/proceedings/2024/march/replicate-ordnance-not-cheap-drones) that mass production should focus on ordnance rather than other classes of unmanned systems. The Pacific is a theater of brutal distances, and regardless of the ability of the drone to create an effect on target, they argue that the, now prolific, quadcopter is incapable of relevant operational reach in the Pacific. [Drone-warfare studies](https://www.cnas.org/publications/reports/swarms-over-the-strait) reach a similar conclusion: distance forces you back toward more expensive, long-range systems with rocket motors and sophisticated guidance. But the low-cost class now includes cruise missiles — Barracuda-500, [RAACM-ER](https://www.twz.com/air/new-raacm-er-low-cost-cruise-missile-features-tomahawk-like-range), and [Covenant’s newly launched Anthem](https://www.politico.eu/article/germany-taps-israeli-ukrainian-missile-companies-after-donald-trump-setback/) — that compete with Tomahawk on range, on quality, and increasingly on warhead size—capable of delivering commensurate effects at lower cost per effect than the legacy munition. None of this makes the Tomahawk obsolete: it means we can launch a heterogeneous salvo from multiple directions, ultimately improving air defense penetration. Analysts have [warned](https://www.hudson.org/information-technology/new-pentagon-drone-program-needs-avoid-replicating-past-mistakes-bryan-clark-dan-patt) against a race to the bottom on production cost because mass for its own sake is not the goal. We must remain focused on cost per effect. When we reframe targeting to consider the weapon’s end effect as the priority instead of its raw capability, the round of choice will skew overwhelmingly towards the cheaper option—preserving our exquisite legacy rounds for the most hardened, heavily defended targets. This decision becomes even more imperative when a single Tomahawk replenishment becomes a multiyear proposition. Simply put, new entrant rounds will cover the bulk of targets based on the cost per effect model. The most useful definition of affordable mass [treats it as a property of the production system](https://warontherocks.com/cogs-of-war/from-slogan-to-standard-how-the-pentagon-should-define-affordable-mass/) rather than the price tag. Affordable mass is the condition in which a force replaces munitions as fast as it expends them with the caveat that “a $200K weapon with half the reliability is really a $400K solution.” By that standard, the new class was designed for the right war. Anduril’s Barracuda assembles in about 30 labor-hours from roughly 70 percent commercial components. The supply chain the production line draws from is the small-aviation and automotive industries rather than aerospace sub-tiers. Castelion runs [flight tests monthly](https://www.wicker.senate.gov/2026/3/chairman-wicker-leads-sasc-hearing-on-low-cost-munitions) and makes supply chain and design choices for manufacturability from the get-go. The LUCAS drone went from obscurity to combat employment in Epic Fury at [$35,000 a copy](https://defensescoop.com/2026/03/17/lucas-drone-production-emil-michael-operation-epic-fury/). It’s harder and more expensive to scale the legacy production lines—but still necessary. PAC-3 MSE is headed from [about 600 interceptors a year toward 2,000](https://news.lockheedmartin.com/2025-09-03-us-army-awards-lockheed-martin-9-8-b-contract-to-bolster-missile-defense-with-pac-3-mse) under a seven-year framework, THAAD from [96 toward 400](https://www.lockheedmartin.com/en-us/news/features/2026/Lockheed-Martin-and-the-U-S-Department-of-War-Expand-THAAD-Interceptor-Production.html), SM-6 from 125 toward [more than 500](https://news.usni.org/2026/02/04/raytheon-to-bolster-tomahawk-and-sm-6-production-in-critical-munition-deal). Unfortunately, the American people are going to have to shoulder much of the burden for those capex projects. The greatest challenge to maintaining warm production capacity is unreliable government demand. [One study of two decades of munitions budgets](https://warontherocks.com/cogs-of-war/magazine-breadth-not-just-depth-is-key-to-munitions-industrial-base-resilience/) found funding swinging more than 50 percent year-over-year across eighty programs, and [survey work on defense entrants](https://tnsr.org/2024/01/shining-a-light-on-the-defense-departments-industrial-base-problems/) identifies those inconsistent signals as a principal driver of perceived risk. The government’s capricious buying decisions drive unit cost. When the Army bought only 23 JAGM missiles in FY25, the unit price hit $360,000 against a [program-life average of $212,000](https://www.esd.whs.mil/Portals/54/Documents/FOID/Reading%20Room/Selected_Acquisition_Reports/FY_2022_SARS/JAGM_SAR_DEC_2022_CAO_2023-04-10_FINAL.pdf). Jittery buying is itself part of what makes munitions expensive. When the Deputy Secretary of War began [calling missile-industry CEOs weekly](https://www.wsj.com/politics/national-security/pentagon-pushes-to-double-missile-production-for-potential-china-conflict-ee153ad3) to push for increased output, the executives’ answer was the same one they have given for a decade: the targets are not realistic without contracts to finance them. The new entrants are funded largely on private capital precisely to avoid such constraints. Critics counter that at this point, money alone cannot fix the [production lines](https://www.csis.org/analysis/rebuilding-us-missile-inventory-multiyear-project): “the problem today isn’t money; it’s time.” Complex missiles take two years to build, plant expansions take three, and no appropriation compresses the queue for solid rocket motors, seekers, and energetics. But that two-year build time only applies to old-style missiles—custom-designed, built from parts that come from a single specialized supplier, and assembled by high skill technicians at a workbench. There are fewer (but admittedly perhaps still some) bottlenecks for a missile built from plentiful automotive, consumer electronics and civil aviation supply chains, on lines built and paid for ahead of need by private capital. The FY27 NDAA that cleared the Senate Armed Services Committee in June authorizes [$1.15 trillion for national defense](https://www.armed-services.senate.gov/imo/media/doc/fy2027_ndaa_exsum.pdf), the largest topline in history. The administration asked for a [188 percent increase in missile procurement](https://breakingdefense.com/2026/04/the-pentagon-wants-a-188-percent-bump-for-missile-procurement-can-industry-deliver/). The Munitions Acceleration Council’s [priority list is over $47 billion](https://www.stripes.com/theaters/us/2026-05-01/pentagon-14-critical-munitions-production-priority-21549157.html), and official budget projections show missiles and munitions [climbing toward 41 percent of Army procurement](https://www.cbo.gov/publication/61017). Congress has already granted multiyear procurement authorities. The department spent the 2010s explaining that it lacked the money, the demand signal, and the authorities to buy munitions at scale. As of this budget, it has all three. Yet under the current plan, the vast, vast majority of spending goes to legacy technology. That is how a historic topline can still produce an insufficiently deep magazine. It would be a generational mistake to take the largest pool of resources the Pentagon has ever been handed and simply stock up on 1970s technology. The committee, to its credit, has proposed a remedy. The markup it [advanced 18–9 on June 11](https://www.armed-services.senate.gov/press-releases/sasc-completes-markup-of-national-defense-authorization-act-for-fiscal-year-2027) [requires the department to accelerate the adoption and purchase of low-cost munitions](https://www.armed-services.senate.gov/imo/media/doc/fy2027_ndaa_exsum.pdf), directs accelerated acquisition programs for low-cost alternatives in eight critical categories, authorizes multiyear munitions procurement, and requires second sources for the solid rocket motors that bottleneck every line (though we believe [liquid propulsion technologies](https://www.tectonicdefense.com/icymi-a16z-backed-galadyne-enters-the-missile-game/) as a complement to solid motors are the only way to truly unstick this logjam). The fact that our sovereign demand outpaces supply has a knock-on effect on foreign military sales. Our allies and partners face five- to seven-year backlogs for some traditional munitions—and are growing weary of the wait. Facing existential threats of their own, our allies cannot afford—in both time and money—to wait for US legacy rounds and are now turning to [non-US component manufacturers to bridge the gap](https://ubn.news/britain-and-germany-seek-long-range-weapons-for-ukraine-without-reliance-on-us-components/). “We cannot be the Arsenal of Democracy,” Wicker reminded the hearing, “if we cannot get weapons out the door.” A $300,000 missile built from commercial components is one an ally can actually afford in quantity and, where policy allows, license and co-produce. The bill’s directed U.S.–German co-production program and its war-reserve stockpile authority for Taiwan represent progress, so long as the underlying designs are manufacturable affordably at scale. The authorization addresses some key cost levers such as hard unit-cost ceilings, fixed-price awards, two or more vendors, commercial components unless waived, and multiyear orders big enough to justify a factory. Over the last two years, price has followed the size and steadiness of the order. This article focused on offensive strike munitions, where the low-cost alternative has already matured — more than half a dozen competitors in the $300,000–$700,000 band, production contracts signed, deliveries scheduled. The interceptor market is further behind. Senator Wicker called lower-cost air defense interceptors “perhaps, our greatest area of need,” demanding [“a Manhattan Project-type effort, which should develop affordable alternatives to the current Patriot, THAAD, and Standard Missile series and do so rapidly.”](https://www.wicker.senate.gov/2026/3/chairman-wicker-leads-sasc-hearing-on-low-cost-munitions) CBO puts the Golden Dome homeland-defense architecture at [$1.2 trillion over twenty years](https://www.cbo.gov/publication/62379) if it is built the way we build interceptors today; the administration’s proposed budget is a fraction of that, and General Guetlein has been emphatic that we cannot bankrupt the country to build it. Whether interceptors can follow strike weapons down the cost curve is an open question — the engineering problem is harder, and no one has demonstrated the answer yet. So, back to the opening question: is 97-to-3 right? We’re skeptical. Whatever minimum number of legacy rounds the war plans demand, the current plan buys them and little else. Depth has been affordable at current prices for a while now. We know which magazine we’d rather take to war. *Anduril, Covenant, and Castelion, discussed throughout, are portfolio companies of Andreessen Horowitz. All figures cited are from public budget documents, government statements, and press reporting. This newsletter is provided for informational purposes only, and should not be relied upon as legal, business, investment, or tax advice. Furthermore, this content is not investment advice, nor is it intended for use by any investors or prospective investors in any a16z funds. This newsletter may link to other websites or contain other information obtained from third-party sources - a16z has not independently verified nor makes any representations about the current or enduring accuracy of such information. If this content includes third-party advertisements, a16z has not reviewed such advertisements and does not endorse any advertising content or related companies contained therein. Any investments or portfolio companies mentioned, referred to, or described are not representative of all investments in vehicles managed by a16z; visit [https://a16z.com/investment-list/](https://a16z.com/investment-list/) for a full list of investments. Other important information can be found at [a16z.com/disclosures](http://a16z.com/disclosures). You’re receiving this newsletter since you opted in earlier; if you would like to opt out of future newsletters you may unsubscribe immediately.* In Fiscal Year 2025, the Pentagon’s [missile and munitions request](https://comptroller.war.gov/portals/45/Documents/defbudget/FY2025/FY2025_Weapons.pdf) ran about two-thirds procurement to one-third research and development — money spent designing weapons rather than building them. Self-funded development also spares a company the oversight machinery required in government R&D programs (the cost-plus audits, the cost accounting system implementation, the requirements reviews, the program-office apparatus), a second reason commercially developed rounds price like commercial products. Using the [formal range](https://www.missiledefenseadvocacy.org/missile-threat-and-proliferation/missile-basics/ballistic-missile-basics/) definitions: close and short range is under 1,000 km, medium 1,000–3,000 km, intermediate 3,000–5,500 km, and “long-range” AKA intercontinental is reserved for systems that fly beyond 5,500 km. By that taxonomy everything discussed here sits at or below intermediate range — including systems with “long-range” in the name, like the Army’s Long-Range Hypersonic Weapon, and deep-strike focused new entrants like Anthem.