The bullet train of growth in the advanced defense tech sector may be slowing, as a perfect storm in Washington, Silicon Valley and Wall Street could spark a wave of consolidation in an industry that until recently seemed poised for endless expansion. National Security Correspondent Ben Wolfgang offers an exclusive deep dive on how the situation may unfold over the months to come.

Should expectations of a $1.5 trillion Pentagon budget be dashed after the midterms, the money simply would not be there for companies hoping their groundbreaking technology will become part of the Defense Department’s Drone Dominance Initiative, President Trump’s proposed Golden Dome missile shield or other major projects.

The unprecedented wave of private venture capital that has propelled startups and new entrants in the industry — many building autonomous systems, artificial intelligence-driven tools or other cutting-edge capabilities — may reach its peak and recede. Sky-high valuations for some defense tech companies may drop. Smaller companies may merge or be gobbled up by industry giants.

The Iranian rial dropped to a record low Tuesday, signaling that the U.S.-led war and the Trump administration’s economic pressure campaign against the regime may be nearing a turning point.

The Associated Press reported that the Iranian economy has been under duress for years in the face of international sanctions, but a U.S. naval blockade on Iranian oil and new sanctions imposed since the start of the war have sent it into free fall.

Iran last week proposed a seven-day peace plan to U.S. negotiators. Mr. Trump publicly rejected it, implying that Iran wanted to make a deal because “they’re losing so badly.” Iranian Foreign Minister Abbas Araghchi said Monday that his own team “saw the first reaction from the U.S. president, but nothing has yet been conveyed to us by the mediators.”

Mr. Trump on Monday denied offering to sell U.S. weapons to China during his summit with Chinese President Xi Jinping. “I’ve never heard of that one. I’m going to have to ask him,” Mr. Trump said when asked about U.S. Ambassador to China David Perdue’s comment over the weekend that the president had made the offer to Mr. Xi.

The ambassador’s comments prompted the State Department to issue a denial that American weapons sales to China were offered or allowed. “U.S. law prohibits arms sales to China, and there is no offer or plan to sell arms to China,” a State Department official said.

The U.S. agreed to allow sales of select weapons to China in 1981 and 1986. All sales were halted after China’s use of military forces to attack unarmed pro-democracy protesters in Beijing’s Tiananmen Square in 1989. Congress codified the arms ban into law in 1990.

The U.S. Army says 97% of troops have taken the Neurocognitive Assessment Tool test to track brain health and to support recovery from traumatic brain injuries. Pentagon Correspondent Mike Glenn reports that treatment programs will include risk assessment and mitigation, exposure tracking, cognitive monitoring, and illness and injury reporting.

The National Institutes of Health has said continuous exposure to blast shock waves is linked to traumatic brain injury. From 2000 to 2022, more than 450,000 U.S. service members were diagnosed with TBI during training or combat. 

The 2020 National Defense Authorization Act required the Pentagon to study the effectiveness of routine neuro-imaging in diagnosing, treating and preventing brain injury. All U.S. soldiers must take the NCAT test at least once every three years. Troops whose career fields regularly put them in contact with explosives must take it annually.

Two days before meeting Mr. Xi, Mr. Trump held a “highly visible meeting with [Japanese] Prime Minister Sanae Takaichi at the United Nations,” writes Miles Yu, director of the China Center at the Hudson Institute and an opinion contributor to Threat Status.

Mr. Trump and Ms. Takaichi “discussed China, cooperation on artificial intelligence, semiconductors and critical minerals, deterrence, the Quad and a free and open Indo-Pacific,” Mr. Yu writes in his biweekly “Red Horizon” column for The Washington Times. “No sooner had Mr. Xi departed for home than Ms. Takaichi received a detailed briefing on the summit directly from ‘Dear Donald.’

“The larger picture could hardly have been lost on Mr. Xi,” writes Mr. Yu. “China gets presidential pageantry, and Japan remains America’s principal Indo-Pacific ally and the cornerstone of America’s power and influence in the region.”

• Sept. 30 — Regional Reactions to the U.S.-China Summit, Hudson Institute

• Oct. 1 — Japan as a Maritime Great Power and the China Challenge, Center for Strategic and International Studies

• Oct. 1 — Winning the Adoption War: Diffusing AI Across the U.S. Military, Foundation for Defense of Democracies

• Oct. 2 — What’s Next for U.S.-China Relations? A Conversation with former Australian Prime Minister Kevin Rudd, Brookings Institution

• Oct. 12-14 — AUSA Annual Meeting and Expo, Association of the U.S. Army

• Oct. 15 — The Rise and Fall of the U.S.–Pakistan Relationship After 9/11, Stimson Center

• Nov. 20-22 — Halifax International Security Forum in Nova Scotia, Canada, HFX