US missile stocks shrink as Pentagon bets on cheaper weapons

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The war with Iran is draining U.S. missile stockpiles, putting new scrutiny on the Pentagon’s effort to replenish its arsenal with cheaper weapons from defense technology startups.

The clearest warning signs are in air defense. The Center for Strategic and International Studies estimates the U.S. has fewer than 827 Patriot interceptors from its most modern variants, down from roughly 2,300 before the war. The think tank also estimates the THAAD interceptor inventories have fallen from 452 to fewer than 278.

CNN reports three sources familiar with Pentagon data said the CSIS estimates closely match internal government figures.

Why the shortage matters

Patriot and THAAD systems form the backbone of U.S. defenses against incoming ballistic missiles.

CSIS warns depleted stockpiles could force the U.S. and its allies to take greater risks when deciding which threats to intercept.

NBC News reports U.S. commanders have already chosen not to intercept some Iranian projectiles headed toward unpopulated areas of American bases in order to conserve missiles.

The shortage could also affect U.S. readiness beyond the Middle East. CSIS analyst Mark Cancian told CNN continued fighting with Iran could push stockpiles low enough to affect the U.S. military’s ability to respond to China or North Korea.

The Pentagon’s defense-tech bet

To relieve pressure on traditional missile stockpiles, the Pentagon is expanding its use of defense companies focused on cheaper weapons that can be produced more quickly.

Defense Secretary Pete Hegseth met in late June with executives from more than a dozen defense tech firms, telling them they would play a key role in rapidly rebuilding U.S. weapons supplies, according to people familiar with the meeting.

The shift reflects a broader Pentagon push to buy lower-cost munitions. The Defense Department’s fiscal 2027 budget aims for nearly half of all munitions to be low-cost, rising to 70% by fiscal 2031, according to a CSIS analysis.

Cheaper weapons, bigger expectations

The shift is already underway.

In May, the Defense Department announced multiyear agreements with companies including Anduril, Castelion, CoAspire, Leidos and Zone 5 to expand production of lower-cost strike weapons.

The Pentagon hopes to purchase10,000 low-cost cruise missiles over the next three years, beginning in 2027. It also has expressed interest in buying up to 12,000 of Castelion’s Blackbeard hypersonic missiles over five years if testing is successful.

Castelion CEO Bryon Hargis told the Washington Post the company’s Blackbeard missile could cost about $500,000 each, compared with roughly $5 million for comparable weapons.

The scale problem

The bigger question is whether those companies can scale production fast enough to meet the wartime demand. Jerry McGinn, director of the Center for the Industrial Base at CSIS, told the Post that building a weapon is different from mass-producing one.

As McGinn put it: “Can they deliver?”

Startup executives also pointed to slow Pentagon contracting, the need for up-front financing and supply chain bottlenecks. CoAspire CEO Doug Denneny told the Post that companies now have to prove they can manage supply chains and produce at scale.

What the Pentagon says

Pentagon officials say the military still has what it needs.

Chief Pentagon spokesperson Sean Parnell said the U.S. military “has everything it needs to execute at the time and place of the President’s choosing.”

Trump said Monday U.S. weapons inventories remain “in very good shape,” while acknowledging the need to replenish “the more sophisticated stuff.” Gen. Dan Caine, chairman of the Joint Chiefs of Staff, told senators last week the Pentagon will “not get the munitions” it needs without additional funding.

Analysts say fully replacing high-end systems such as Patriot and THAAD could take three or more years.

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