Massachusetts entrepreneurs and politicians see an opening to make the state more of a military technology powerhouse and blunt the economic damage caused by the loss of federal support for industries such as life sciences and clean energy.
Boston-area startups are winning venture investments for their autonomous ships and planes, while defense giant RTX Corp. and the Massachusetts Institute of Technology are looking to add to the billions of dollars in contracts they already bring in. State officials are angling for more, convening executives in Boston on Monday to unveil a new initiative to boost the defense industry.
“We’re putting our hand up,” Massachusetts Lieutenant Governor Kim Driscoll, who led a delegation to the Pentagon earlier this year to tout the state’s capabilities, said in an interview. “The way we have a life sciences industry or a climate tech industry, we think there’s an opportunity to really lean in when it comes to the defense sector.”
Massachusetts is looking to cash in on record venture capital investments in defense, as well as a boost in public spending as US and foreign forces seek to modernize their arsenals after watching Ukraine’s effective use of drones against Russia. Military officials also want to be more nimble in procurement, opening the door for upstart companies to grab some of the federal dollars that have traditionally been gobbled up by the biggest contractors.
Defense tech offers a potential pivot for the Massachusetts economy amid the struggles in life sciences and clean energy, both of which have been targeted by President Donald Trump.
Governor Maura Healey had bet heavily on expanding those sectors before Trump’s reelection, making them the centerpiece of a $4 billion economic development bill she signed last year.
Since then, the White House has cut scientific research funding to the universities and hospitals that have made the Boston area a biotechnology hub. Trump’s moves aren’t the only challenge: Facing steeper competition from China, the biotech industry is also suffering from an investment slowdown that predates his second term. More than a quarter of the region’s laboratory space is available for rent.
Trump has also slashed funding for climate technology and canceled planned New England wind farms, projects that were supposed to generate jobs and investment in Massachusetts. But he’s taken a different tack on defense. His tax cut law, the One Big Beautiful Bill Act, included $150 billion for defense initiatives, including autonomous ocean vessels and a missile defense shield.
The defense industry “is a place where our interests align with the interests in Washington,” said Jay Ash, a former state economic development secretary who now serves as chief executive officer of the Massachusetts Competitive Partnership, a collection of the state’s most powerful CEOs.
The state’s new focus on defense tech carries some risk. While European countries are bolstering their militaries, the primary customer for defense tech is the US government, which under Trump has shown a penchant for steering federal funds away from states or organizations he sees as opponents. Such moves have hit Democratic-dominated Massachusetts, most notably when the White House froze more than $2 billion in funding to Harvard University.
There’s also skepticism regarding the degree to which the Defense Department’s rhetoric on working more with startups will match the reality. While “promising young” defense tech companies have won large contracts, “they’re going to have to prove they can build military-spec hardware on cost and on schedule,” said Melius Research analyst Scott Mikus.
VC Deals
Right now, though, there’s investor appetite aplenty. In the second quarter of 2025, venture capitalists put $19.1 billion into defense tech, triple the amount from a year prior, according to PitchBook.
Merlin Labs, which is developing technology enabling planes to fly without pilots, plans to go public next year after raising $130 million from Alphabet Inc.’s venture capital arm, Baillie Gifford and others. It’s tested its tech in California and Rhode Island, but announced last month it would move the operations to Massachusetts’ Hanscom Field, next to an Air Force base, because of the local talent pool, said CEO Matt George.
Several years ago, “we were regularly turned away from certain VC firms because we were working with the military,” George said. “That has shifted 180 degrees.”
Massachusetts is well-positioned to grab more defense business, with a startup ecosystem full of the robotics and engineering specialists needed to make autonomous vehicles. Local universities pump out the engineering students coveted by defense tech firms.
MIT is a major contractor in its own right. The school operates Lincoln Laboratory, a federally funded military research center in the Boston suburb of Lexington.
Massachusetts already ranks among the top 10 states in US defense spending, and contractors from General Electric Co. to MITRE Corp. brought almost $17 billion into the state in fiscal year 2023.
While RTX moved its headquarters to Virginia from Massachusetts in 2022, it remains the Bay State’s biggest defense contractor. It recently broke ground on an expansion of a missile sensor plant in the town of Andover. Anduril Industries Inc. is quadrupling its local presence by opening an office in Waltham, and it acquired an infrared camera maker on the New Hampshire-Massachusetts border this month.
Healey is angling for more. Earlier this year, she appointed Driscoll as co-chair of a task force dedicated to increasing jobs and investments in the state’s military bases. Driscoll and other state officials met with Pentagon officials in May.
US Representative Jake Auchincloss, a veteran of the US Marine Corps, agrees that maritime technology is a particularly promising area for Massachusetts, given its expertise in artificial intelligence and software. He plans to be on hand later this week when Boston-based Blue Water Autonomy unveils its 100-foot (30-meter), unmanned test vessel at a port on the state’s southern coast. The startup has raised $64 million from Alphabet’s venture capital arm and other investors and is working with the US Navy.
