Massachusetts Pursues Military Tech Boom Amid Federal Changes

Massachusetts is positioning itself as a significant player in the military technology sector, seeking to offset economic challenges stemming from reduced federal support for industries like life sciences and clean energy. As venture capital investments surge in defense, Boston-area startups are attracting attention with innovations in autonomous ships and aircraft. On Monday, state officials convened executives in Boston to announce a new initiative aimed at bolstering the defense industry.

Kim Driscoll, Massachusetts Lieutenant Governor, emphasized the state’s readiness to expand its role in defense, akin to its established life sciences and climate tech sectors. In a recent interview, she stated, “We’re putting our hand up,” highlighting the opportunity to leverage the state’s capabilities in the defense arena.

Massachusetts is poised to benefit from record levels of venture capital flowing into defense technologies, particularly as the United States and its allies seek to modernize their military capabilities. This shift follows observations of the effective use of drones in the Ukraine conflict, prompting military leaders to explore more agile procurement processes. The move could enable emerging companies to secure federal contracts traditionally dominated by larger contractors.

The focus on military technology comes at a critical juncture for Massachusetts, which has faced setbacks in life sciences and clean energy due to policies enacted during the Trump administration. Governor Maura Healey had previously prioritized these sectors as part of a $4 billion economic development bill signed last year. However, cuts to scientific research funding have impacted local universities and hospitals, critical players in the state’s biotechnology hub.

In addition to funding cuts, the biotechnology sector is grappling with increased competition from China and a pre-existing investment slowdown. Currently, over a quarter of the region’s laboratory space is available for rent, illustrating the significant challenges faced.

In contrast, defense spending has seen a boost. The Trump administration allocated $150 billion for defense initiatives, including autonomous vessels and missile defense systems, indicating a shift in priorities that aligns with Massachusetts’ new focus. Jay Ash, former state economic development secretary and now CEO of the Massachusetts Competitive Partnership, noted, “The defense industry is a place where our interests align with the interests in Washington.”

While the potential for growth in defense technology is substantial, risks remain. The primary customer for defense products is the U.S. government, which has demonstrated a tendency to redirect funds away from states perceived as political adversaries. This has affected Massachusetts, particularly when the White House froze more than $2 billion in funding to Harvard University.

Despite these challenges, investor interest in defense tech is strong. In the second quarter of 2025, venture capitalists invested $19.1 billion in defense technology, tripling the amount from the previous year, according to PitchBook. Companies like Merlin Labs, which is developing pilotless aircraft technology, have successfully attracted significant funding. The firm plans to go public next year after raising $130 million from investors, including Alphabet Inc.’s venture capital arm.

Massachusetts boasts a robust ecosystem for defense technology, with a strong pool of engineering talent and robotics expertise. Local universities continue to produce graduates who meet the needs of defense firms. The Massachusetts Institute of Technology (MIT) not only contributes to this workforce but also operates its own federally funded military research center.

The state ranks among the top ten U.S. regions for defense spending, with contracts from companies like General Electric Co. and MITRE Corp. contributing nearly $17 billion to the local economy in the fiscal year 2023. While RTX Corp. relocated its headquarters to Virginia in 2022, it remains the largest defense contractor in Massachusetts, currently expanding its missile sensor facility in Andover.

Furthermore, Anduril Industries Inc. is significantly increasing its presence in the state by opening a new office in Waltham and acquiring an infrared camera manufacturer near the New Hampshire border.

In a concerted effort to enhance the state’s military capabilities, Governor Healey appointed Driscoll as co-chair of a task force dedicated to increasing jobs and investments related to military bases. This initiative is bolstered by state officials’ meetings with Pentagon representatives earlier this year.

U.S. Representative Jake Auchincloss, a veteran of the U.S. Marine Corps, sees maritime technology as a particularly promising area for Massachusetts. He plans to attend the unveiling of a 100-foot unmanned test vessel by Boston-based Blue Water Autonomy, a startup that has raised $64 million and is collaborating with the U.S. Navy.

As Massachusetts navigates the evolving landscape of military technology, state officials are optimistic about the potential for growth and innovation in this sector. With strategic initiatives and strong local capabilities, the Bay State aims to emerge as a leader in defense technology amidst ongoing federal shifts.