The company said the shared architecture allows Strigo hardware to be reconfigured for different missions, including air defense, missile defense and air-to-surface strike.

Lockheed calls the Strigo Product Center a storefront for “ready-now and near-ready” hardware that it said can be adapted to customer needs. The company said the modular approach also lowers life cycle costs, though it stopped short of citing dollar figures. Lockheed said it has made a $250 million internal investment in the product center to date.

The center was established less than two years ago and has already carried several concepts from initial design through testing, according to the release. The company said the center can move a concept from sketch to tested solution in months rather than years, allowing it to have parts on the shelf before the military even asks for them, in some cases.

Stacy Kubicek, vice president and general manager of Lockheed Martin Sensors and Global Sustainment, said in the release that the product center’s emphasis on early research allows the company to “test and deploy new solutions at unprecedented speed,” adding, “That’s how we turn ‘what if’ into ‘what’s next’ faster than ever before.”

Lockheed said technologies developed through the Strigo family played a role in developing the Increment 2 seeker package for the U.S. Army’s Precision Strike Missile (PrSM), which is replacing the Army Tactical Missile System. The seeker package adds a sensor in a missile’s nose that locates and tracks its target in the final phase of flight.

Lockheed said it flew Increment 2 for the first time in March, travelling 350-kilometers, or more than 217 miles, in a flight that gathered performance data. The company did not report an intercept.

Strigo is the latest in a string of announcements this year in which Lockheed has pitched itself as building weapons faster and cheaper. In March, the company opened a Rapid Fielding Center that builds prototypes and early production runs under one roof, part of a larger plan to build or upgrade factories.

In July, it introduced the PAC-3 ACE, a Patriot interceptor it says will cost less than half as much as a PAC-3 MSE. These latest moves are pitched as supporting the Arsenal of Freedom, the Pentagon’s term for the munitions industrial base buildup.

Lockheed’s release was short on details regarding the size, structure or location of the Strigo Product Center. It did not name any contracts, customers or delivery timelines beyond the PrSM reference.

The previously unreported findings offer a rare glimpse into how military and security-linked institutions in China are leveraging cutting-edge U.S. AI models as a shortcut to developing specialised systems of their own, despite Washington’s efforts to restrict Beijing’s access to advanced chips and other strategic technologies.

The documents show widespread use of a technique known as “model distillation,” in which outputs from a powerful AI system are used to train smaller, specialised models that can be deployed locally without the enormous computing requirements needed to build frontier AI systems from scratch.

Reuters’ review, which included research compiled by the Washington-based Jamestown Foundation and shared exclusively with the news agency, showed distillation is widely used by researchers linked to the People’s Liberation Army and other military institutions.

The papers suggest Chinese defense institutions see leading U.S. AI models as both a source of technical insight and a way to close the gap with American rivals.

The dispute centres on unauthorised extraction, not distillation itself, a widely used industry practice.

The issue has emerged as a major flashpoint ahead of U.S.-China talks on AI governance and safety. U.S. officials have accused some Chinese entities of using distillation to extract capabilities from American AI models, potentially undermining export controls and infringing intellectual property rights.

China has rejected the accusations, saying Washington is pursuing AI “hegemonism” while arguing that U.S. firms have engaged in similar practices.

Chinese developers have also disputed claims that their AI advances rely on foreign models. AI startup Moonshot last week denied allegations by the Trump administration that its Kimi K3 model was built using distillation, saying it was driven by proprietary innovations.

Sunny Cheung, a Jamestown fellow who analysed over 60 of the papers, said Chinese military scientists are systematically capturing the reasoning steps of Western models to adapt them for surveillance, cyber warfare and tactical decision-making.

“Teaching a model the right answer is one thing but teaching it the reasoning behind the answer is much harder,” said Cheung.

“These papers show Chinese military-linked researchers are trying to transfer that expensive, proprietary reasoning from Western models into smaller systems they can control and deploy locally.”

Reuters verified the academic literature and identified an additional two dozen military-linked case studies.

One paper published last year by researchers in PLA Unit 96941, a military intelligence and cyber-warfare unit in Beijing, described using OpenAI’s GPT-3.5 to process sensitive military source code.

The researchers said third-party models were unsuitable for handling classified information. To overcome that limitation, they used GPT-3.5 to summarize software code and trained a domestic model on those summaries to run entirely within Chinese military networks.

The White House, Pentagon, China’s foreign ministry, the PLA and OpenAI did not respond to requests for comment.

WIDE USE, FROM MONITORING TO MILITARY

Chinese researchers have used distillation for purposes ranging from content monitoring to military deployment, Reuters’ and Jamestown’s review of the papers showed.

At the North University of China, which has close links to the country’s weapons industry, researchers used Anthropic’s Claude 3 Haiku to generate synthetic training data for a text classification model for social media monitoring and content moderation.

Anthropic said it does not provide commercial access to Claude in China or to Beijing-controlled firms and uses monitoring systems to detect policy violations.

The company added that distilled models may lose the original systems’ safety safeguards, potentially allowing sensitive capabilities to be transferred to models beyond its control.

A 2024 paper from the PLA’s National University of Defense Technology described using distillation to shrink an image-processing model for deployment on unmanned aerial vehicles, allowing drones to analyse live video and support navigation and targeting decisions in real time even when communications are cut.

Similarly, researchers at China’s Academy of Military Sciences used distillation to run a target-recognition model on tactical hardware during simulated maritime operations involving drones, ships and unmanned submarines, a study published earlier this year showed.

BENEFITS AND LIMITS

China has embraced distillation as it seeks to compete with the U.S. in frontier AI while facing constraints on advanced computing resources due to Washington’s export controls on high-end chips.

Central and local governments have promoted “model lightweighting” and edge computing, directing subsidies and research funding toward technologies that enable AI models to run on drones, satellites and other devices with limited processing power.

Experts caution, however, that distillation has significant limitations.

As Chinese AI models close the gap with their U.S. counterparts, military researchers are also examining distillation as a potential security risk.

In January, researchers at the Army Engineering University published a paper on the threat of “data-free distillation,” a method of reverse-engineering a model’s capabilities without direct access to its core parameters.

To counter that vulnerability, they proposed defense mechanisms designed to mask the hidden logical information exposed in a model’s public outputs.

Distilled models also inherit only selected capabilities and cannot fully replicate the broad intelligence of frontier systems.

Trevor Koverko, co-founder of AI data company Sapien, said distilled models remain less capable than their teacher models.

“It is best understood as transferring selected capabilities into a cheaper, locally controlled system, not achieving independence from frontier AI.”

But instead of a service member resting a finger on the trigger well in preparation for the next shot, in video footage of the Bullfrog weapons system, a hulking, metal machine tilts the weapon just slightly, refocusing itself.

As the U.S. contends with steep expenses to counter cheap drones, Allen Control Systems, or ACS, announced Monday that the Marine Corps has chosen the Bullfrog autonomous weapon system to integrate into its airborne defenses.

The futuristic apparatus is an AI-enabled weapon system that detects, tracks and then automatically aims firearms against aerial threats like drones. That Marine Corps selected the system under its Ground Based Air Defense, or GBAD, program, which develops and fields capabilities to protect forces from airborne attacks.

The service plans to incorporate the Bullfrog into its Light Marine Air Defense Integrated System (L-MADIS), a counter-unmanned aircraft system mounted on two vehicles that relies heavily on electronic warfare.

The system is already in use in the Army and Navy and has been approved by Joint Interagency Task Force 401, the Pentagon’s unit established to streamline the acquisition of counter-drone technology.

The Defense Department’s focus on countering drones comes as conflicts in Ukraine and the Middle East have underscored the increasingly important role of cheap drones on the modern battlefield. The Pentagon has placed a growing emphasis on developing and fielding counter-drone technology that is more scalable and less pricey.

Their prevalence has exposed the economic imbalance of U.S. air defense, as small, relatively inexpensive drones have forced the country to expend expensive interceptor missiles that can cost millions of dollars to make.

The challenge has become especially pronounced during the U.S. war with Iran, where American forces have relied heavily on costly defenses to counter Iran’s Shahed drones, which can cost around $35,000 compared to around $4 million for some interceptors. Experts have warned that the cost of a prolonged war may drastically deplete U.S. interceptor stores.

An ACS press release on the Marine Corps deal linked to the Bullfrog M240, which is compatible with the U.S. military’s belt-fed, fully automatic M240 machine gun. According to the company, the M240 system has a maximum effective range of nearly half a mile and can attack medium and large drones weighing up to 1,320 pounds. Without ammunition, the system weighs 300 pounds.

According to the company, which also has variants that support the M2 machine gun and M320 chain gun, the M240 system has “a cost-per-kill as low as $10.”

Other defense firms are also working to procure more affordable counter-UAS defenses. This week, Lockheed Martin announced a cheaper Patriot interceptor missile that they say will have a price tag of less than half of what other multimillion-dollar interceptors cost.

The business, which operates a plant in Singapore, is discussing cooperation with local partners elsewhere to extend its production footprint in the coming two years, an executive said.

Ira Hughes, a senior director of sales at Doodle Labs, told Defense News the company specializes in long-range, wireless mesh networking solutions that power drones and robotics. In Ukraine, the business works with local suppliers of unmanned systems and the Ukrainian military to adapt its radio solutions to the evolving threats on the battlefield.

“One of our customers makes two different types of drones. They make an inexpensive drone … with a cheap radio and camera system in it, and then they make a drone with our radio in it, and they use that for higher-value targets,” Hughes said. “They’ll go back to us and say: For vehicles with jammers, tanks with jammers, we go with your radios first, and this lets us change channels very quickly if we come under a jam.”

“We also have a very wide range of frequencies we can upgrade to in a single radio,” Hughes added. “So if we can move from the channels that they’re trying to jam to an unjammed channel, we continue to operate, and we can continue to get to the target.”

Amid rising demand for its radio systems, Doodle Labs is holding talks with manufacturers in the U.S. and Europe to launch local production. In particular, the company keeps an eye on a specific stateside policy provision.

“We are working on the ability to do U.S. manufacturing when needed. We’ll manufacture with a third party … and as the NDAA requirements change in the United States and the Made in America incentives come, we’ll be prepared and able to manufacture in the United States,” Hughes said, referring to the National Defense Authorization Act, an annual legislative vehicle for enacting defense-acquisition policies.

As drone production continues to increase in Western countries, allied nations will also need to ramp up their radio production as the existing supply chains lag behind the demand for unmanned systems, according to Hughes.

“A lot of those systems need advanced radios to be able to operate at the ranges and in the difficult conditions that they operate in,” he said. “We can make tens of thousands of radios a month, millions of radios a year if we need to.”

Such has been the case at London’s 2026 Farnborough Airshow, where Lockheed Martin on Monday introduced what it hopes will be a low cost per kill solution to the ever-evolving unmanned threat.

The Morfius X-Rotor is a ground-launched “one-to-many” airborne high power microwave, or HPM, counter-UAS system the company says can “neutralize more than 50 enemy drones in a single flight.”

Built, notably, to be recovered and reused, the Morfius is capable of using any command and control system and does not rely on any unique sensor or fire control radars, the company announced.

Morfius “sets a new benchmark for counter-drone capability — delivering a high kill rate while keeping the cost per kill low,” Randy Crites, vice president and general manager of Lockheed Martin Missiles and Fire Control Advanced Programs, said in a release. “By leveraging a lightweight, field reusable high-power microwave architecture, we provide the most effective, low-cost solution on the market today.”

The company announced it is accelerating prototype production of both the drone and its HPM payload in the interest of getting it into the hands of frontline troops.

The system was recently flight-tested in Arizona, California and Oklahoma, the company stated, where it also demonstrated interception and lethal capabilities. Additional tests are slated in the months ahead.

Monday’s announcement comes as the U.S. looks to reduce dependence on cost-prohibitive interceptors to defend against cheaper munitions, a juxtaposition that has come under increased scrutiny as U.S. forces have quickly expended interceptor stockpiles to combat Iranian missiles and Shahed drones.

Lockheed Martin on Monday also introduced a cheaper Patriot interceptor as a potential off ramp to the reliance on exorbitantly priced interceptors.

The system, called Hypnosis, consists of an array of mobile “stations” around a defended area, working in unison to disrupt the command-and-control signals of incoming threats, according to the manufacturer.

The company said the technology is the product of IAI’s experience in navigation warfare, of NAVWAR.

The soft-kill weapon is meant as a method for taking out large numbers of drones at once, in situations where hard-kill — or kinetic — intercepts would be tricky to execute because of the number of airborne objects.

The unveiling comes amid a resurgence of military confrontation between the United States and Iran and heightened tension across the Middle East as a result of it, as well as an intensifying exchange of missile and drone strikes between Russia and Ukraine.

Defense companies around the world have been working on technology enabling swarms of drones to attack targets with an inherent logic of their own.

Similarly, companies are also chasing defensive offerings for such scenarios.

Swarms are difficult to defend against because they can saturate and overwhelm traditional air defense networks, increasing the chances of at least one warhead making it through.

Each platform would carry between nine and 12 Hermes 650 Spark aircraft along with the deck infrastructure, control systems and mission support needed to operate them. Elbit described the approach as an alternative to acquiring a traditional aircraft carrier, aimed at giving naval forces extended maritime reach without the associated cost and complexity.

The Hermes 650 Spark is built around a front-mounted engine that provides a wider speed envelope and additional power margin, supporting short takeoff and landing (STOL) capability, heavier payloads and longer missions. The aircraft carries two payload bays, satellite communications and diagnostic systems, the Israeli company notes.

Elbit says the aircraft is built for compatibility with the ground control infrastructure of its larger Hermes 900 drone, meaning the smaller 650 Spark would be managed as part of a combined array with the Hermes 900 from a land-based control system. In such a setup, ships would serve as remote launch and recovery sites. According to the company, the arrangement is intended to reduce manpower requirements and the number of control stations needed, the company said.

The Israeli defense company cited Japan’s expansive maritime geography, Denmark’s responsibilities around Greenland, and Germany’s security environment in the Baltic Sea as examples of the kind of large, distant maritime areas the concept is meant to address. For Israel, a maritime UAS-carrier concept holds appeal given Israel’s encompassing offshore gas platforms that sit dozens of kilometers from shore and require monitoring against both conventional threats and drone and missile attacks from Iran and its proxies.

A converted vessel carrying multiple long-endurance UAS could extend early-warning coverage over these installations and fit Israel’s broader doctrinal preference for cost-effective, unmanned-heavy solutions over large manned platforms.

The company did not specify a timeline for when the system would become operational, nor did it name any customers or governments that have expressed interest in the idea.

Elbit’s announcement seeks to position the company as a player in this segment mainly against Turkey’s Baykar and South Korea’s Hanwha and can be interpreted as an attempt to export an existing system, the Hermes 650, in new operational packaging.

The sea service “is exploring the industrial base’s capacity to deliver highly capable, autonomous platforms optimized for operations from Ford-class and Nimitz-class Nuclear Aircraft Carriers,” according to the RFI. The response deadline has been set for Aug. 13.

The drones the service is targeting, part of the Air Wing of the Future Family of Systems, can be designed as “a single-role platform, a multi-role platform, or a modular FoS [family of systems],” according to the service.

But whatever the solution, the Navy wants the platforms to be capable of performing eight different missions: strikes against surface ships, strikes against land targets, anti-submarine warfare, air-to-air combat against enemy aircraft and missiles, electronic warfare, ISR, aerial refueling, and resupply flights for a naval task force.

The service is soliciting “industry expertise to identify a mix of platforms that can provide affordable mass, risk-tolerant platforms that can perform the above missions to counter current and emerging threats,” the request states.

The RFI lists a few specific requirements, including a minimum 1,000-nautical mile range for strike missions.

Drones must also possess “flight autonomy (e.g., carrier pattern, taxiing) and mission autonomy (e.g., dynamic tasking/retasking, threat evasion, automated aerial refueling) maturity.”

Additionally, they must be compatible with existing Unmanned Carrier Aircraft control systems, according to the RFI.

Significantly, while the RFI mostly focuses on carrier-based drones, the Navy also wants vertical-takeoff UAVs that can operate from other types of vessels, such as destroyers and mobile sea bases.

“The Navy is interested in novel concepts that can operate from any air capable platform in addition to the CVN (e.g., DDG, ESB) using Vertical Take-Off and Landing (VTOL),” the RFI said.

The RFI is indicative of the Navy’s desire to eventually move on from fourth-generation carrier air wings to an air wing composed of fifth- and sixth-generation manned and unmanned aircraft.

The new drones “must demonstrate increased combat effectiveness over current fourth generation platforms at a given spot factor.”

The Air Wing of the Future, as designed, appears to be modeled for an old-fashioned battle of attrition, in which combat is waged by affordable — and expendable — drones rather than a handful of expensive platforms.

Contractors responding to the RFI are asked to “detail how your production approach supports rapid scaling and elasticity in a surge scenario,” and what techniques they will use to “keep unit recurring flyaway (URF) and sustainment costs within sustainable limits.”

Companies should also explain how their proposed designs will minimize maintenance requirements and fit into existing naval supply chains, according to the RFI. Potential manufacturers should also submit “planned capital investments (CAPX) or Internal Research and Development (IRAD) commitments to mature the solution.”

The Air Wing of the Future Family of Systems is part of the Trump administration’s Golden Fleet expansion plan for the Navy.

Existing family-of-system drone projects include the MQ-25A Stingray tanker and the Collaborative Combat Aircraft, or CCA.

The system is called the Arctic Over-The-Horizon Radar (A-OTHR), and the deal is worth some US$1.75 billion to Australia.

Gordon Frazer – Founder and CEO of the Australia-based HF radar technical services company FrazerLab – told Defense News Canada’s decision would fill an urgent need.

“I used to say to people, you could fly a jumbo jet from Beijing to Canberra if it had its transponders off and no one would know,” he said, arguing the same is likely true for Canada.

“Russia could fly a Tu-95 from one of their bases, Engels Air Base or something like that, to Canada and possibly no one would know.”

He added, “That’s why NORAD is so concerned, and why they’ve been pushing so hard to get this sort of technology done.”

Frazer was formerly an engineer involved in Australia’s OTHR program known as the Jindalee Operational Radar Network (JORN).

Expanded surveillance coverage

While NORAD maintains the North Warning System, a line of microwave radars in Canada’s frozen north, Frazer said it would be “almost a trivial problem to defeat it” by flying at low altitude between these known and stationary radar sites.

Instead, because OTHR bounces high-frequency signals off the ionosphere, it can look down on airborne targets — and sometimes even surface vessels — with ease, including aircraft and missiles.

An over-the-horizon radar results in radar coverage stretching far beyond what traditional line-of-sight radars can achieve due to the curvature of the Earth.

With its particular A-OTHR contract, BAE Systems Australia will transfer technology and expertise for Canada to build its own OTHR radar sites to monitor its periphery. Officially, Canberra says JORN can detect targets 3,000 kilometers (1,700 miles) away, but its capability almost certainly reaches far beyond that.

Ottawa stated in a press release: “The signing formalizes Canada’s partnership with Australia and enables the delivery of Australia’s proven OTHR technology in support of Canada’s A-OTHR program. It marks a major milestone in the program, transitioning A-OTHR from the planning phase into delivery phase.”

Natural challenges

Canada has already been researching the application of OTHRs in its north, where environmental and solar conditions are far different than they are in Australia.

Furthermore, significant differences exist between operating OTHRs in equatorial, mid-latitude, high-latitude and polar areas. Frazer pointed out that Canada, despite the “Arctic” in the A-OTHR nomenclature, is actually buying a high-latitude system.

Polar regions present even more complicated challenges for OTHRs due to the Earth’s magnetic field, which creates serious background clutter. In fact, some 40% of Canadian territory lies above the Arctic Circle.

Although it may sound counterintuitive, Frazer said Canada’s A-OTHR radar facilities would be built as far south as possible. This is in order to bounce radar signals off the ionosphere ahead of the zone where the worst distortion occurs.

However, Canada will also have the future opportunity to expand its OTHR network with trans-polar coverage, which would allow it to see deep into Russia.

Positioned thus, the technology could enable NORAD to see Russian strategic bombers taking off or ballistic missiles being launched, for example.

If Canada does seek transpolar radar coverage, it would likely want to place those radar installations as far north as possible, Frazer explained.

Australia has three JORN radar sites, but it is unclear how many sites Canada will establish. In North America, Frazer expects the Pacific west coast will be covered by an American system, the Atlantic east coast will be covered by Canada, and then an additional system can cover the north. If NORAD wants 360-degree coverage, Frazer suggested five or six radar installations would be needed.

Australian expertise

Craig Lockhart, CEO of BAE Systems Australia, said: “Canada’s acquisition of a cutting-edge Australian OTHR system supports the strategic interests of both nations through enhanced detection and tracking of threats to North America, strengthening Five Eyes situational awareness.”

Frazer said Australia developed world-leading OTHR talent “because of multi-generational consistency” in its investment in the technology.

The New Zealand-born engineer pointed out that around 15% of the cost of OTHR technology sits in equipment to inform human operators how to set the radar’s parameters to account for constantly changing atmospheric conditions.

Frazer highlighted that OTHRs are bespoke, national systems built only once per generation. However, he hopes the Canadian deal will benefit both countries.

“I think you’re starting to get the critical mass of being able to keep the technology pipeline from design to sustainment to upgrade to far-reaching tech.”

Because over-the-horizon radar coverage can vary drastically due to solar conditions, other methods help plug surveillance gaps.

Airborne early-warning aircraft, for example, are complementary to OTHR. In May, Canada selected Saab’s GlobalEye as its future airborne early-warning platform.

Canada expects its A-OTHR to reach an initial operational capability by December 2029.

The equipment office of the German armed forces signed a contract with MBDA Deutschland and Rheinmetall Waffe Munition in June to develop the full system, from reconnaissance to target tracking and engagement, the companies said in statements on Thursday. The contract value is in the “mid three-digit” million-euro range, Rheinmetall said.

Several European navies are working on laser weapons, with the United Kingdom’s Royal Navy planning to fit the DragonFire directed-energy weapon on a destroyer by 2027, in work led by MBDA in partnership with Leonardo and QinetiQ. Naval vessels are particularly suited to deploy powerful lasers, as they can provide the physical space, electrical power, sensors and cooling required.

“The laser weapon system will provide our personnel deployed on naval vessels with a significantly higher level of protection, particularly when it comes to countering drones,” Roman Koehne, head of Rheinmetall’s weapons and ammunition division, said in a statement.

The laser weapon system from MBDA and Rheinmetall has a “very high level” of technological maturity, the companies said. The demonstrator has been deployed on the German frigate Sachsen, covering 28,000 nautical miles from the Baltic Sea to the Mediterranean, and firing over 1,000 shots at air, sea and land targets in more than a year of testing, according to MBDA and Rheinmetall.

The containerized laser effector will also be a cost-effective weapon for port security, MBDA Deutschland Managing Director Thomas Gottschild said. The system can focus power on an area measuring just a few centimeters, and has proven to be effective even in adverse weather conditions, according to Rheinmetall and MBDA.

The MBDA-Rheinmetall joint venture will place “particular emphasis” on German supply chains and local systems expertise to secure national sovereignty in the technology, the companies said. Serial production will “largely” take part in Germany, according to Koehne.

In other weapon-development news, the French-German Research Institute of Saint-Louis said it tested its electromagnetic railgun outdoors for the first time in June, moving the system out of laboratory conditions. The institute will now work on higher energy levels and longer distances as a path towards a possible future deployable system, it said in a statement on Thursday.

Railguns use electromagnetic acceleration rather than chemical propellants to fire a projectile, and could provide a possible counter to hypersonic threats.

Meanwhile, Belgium said it will buy 20 of Rheinmetall’s Skyranger 30 anti-drone cannons as well as 14 Thales GM200 radars, in addition to a previously announced plan to buy 10 NASAMS air-defense systems from Kongsberg. The country is investing €3.1 billion ($3.5 billion) to build up a layered air defense system, after two decades of going without, Defense Minister Theo Francken said.