Navy CTO: AI, Data Strategy Gives Service ‘Permission to Sprint’

The Department of the Navy’s new artificial intelligence and data strategy gives the service “permission to sprint” to rapidly deliver battlefield capabilities, CTO Justin Fanelli told GovCIO Media & Research.

Fanelli said the strategy gives clear direction to prioritize measurable mission impact over technology demonstrations as the Navy works to become an AI-first maritime force.

“I’m excited because it is permission from the secretary to sprint,” Fanelli said. “It is clear guidance to stop focusing on the activity only and make sure that everything connects to an outcome.”

Acting Secretary Hung Cao noted that the plan is a “blueprint for becoming an ‘AI-first’ maritime force where speed is the decisive variable in maintaining dominance.”

From AI Pilots to Operational Outcomes

Fanelli said the strategy reflects a broader shift inside the Navy away from isolated AI pilots and toward technologies that produce measurable operational improvements.

“We are doing structured challenges,” Fanelli said. “We’re still doing a ton of piloting to say, ‘Bring us your biggest impacts.’ And then we evaluate. This allows us to do some divesting. This allows us to scale what’s working.”

Rather than measuring success by the number of launched AI projects, Fanelli said the Navy is evaluating investments based on improvements in mission speed, cost and operational effectiveness.

“Where we can measure against the previous baseline, here’s how much we’re spending. Here’s how long this process takes,” Fanelli said. “Here’s how much we’ve compressed what we call the OODA loop — the observe, orient, decide, act loop — and can we get that down to infinitesimally small numbers?”

This emphasis on measurable outcomes also extends to the workforce.

“What I’m excited about is we have a stack of wins and growing that set of wins for this workforce … getting the type of talent that we need in the workforce of people who can get a significant win — a touchdown, not a first down — in three months,” Fanelli said.

Accelerating the Path From Data to Effects

To support that shift, the strategy introduces a five-stage digital adaptation framework called the Bits2Effects Cycle that continuously transforms data into battlefield effects. The framework includes:

1. Instrumentation and collection: Automatically capturing raw data from sensors, weapons systems and platforms rather than discarding it.
2. Data transport: Moving data to processing hubs, even in communications-degraded or denied tactical environments.
3. Classification and access: Automating security markings and access controls so data can be shared and used rapidly.
4. Development and analytics: Providing AI/ML tools and computing infrastructure to engineers and operators.
5. Testing and employing effects: Delivering real-time software updates, tactics or automated capabilities directly to warfighters and feeding operational feedback back into step one.

The strategy establishes mean time to effect (MTTE) as its primary performance metric, tracking how quickly the Navy can transform operational data into battlefield outcomes.

“Organizations trained merely to field static capabilities face significant disadvantages against those that are structured to continuously learn and adapt,” the strategy states. “Over a protracted conflict with more learning cycles, the force that learns and adapts faster will dominate its enemy.”

A Wartime Development Model

The strategy also calls for changes to governance and risk management intended to accelerate the delivery of AI capabilities.

Adopting a “wartime footing” ensures “the risks of not moving fast enough outweigh the risks of imperfect alignment,” according to the plan. By the first quarter of fiscal 2027, the Navy plans to establish an AI War Council and begin deploying generative AI capabilities aboard ships.

Fanelli said those efforts are part of a broader transformation to build a software-defined fleet capable of continuously adapting to emerging threats through modular software, AI and data-driven capabilities.

“[We want] data-driven wins … and ultimately, front-end, back-end solutions and having an AI-first workforce and a software-defined fleet that allows us to forever be LEGO blocks,” Fanelli said.