Opportunity and Exposure Under the New National Security Science & Technology Strategy

The White House released the NSSTS in August 2026, providing guidance for how the United States will develop, protect, and deploy technology in support of national security objectives. The strategy is built around four pillars: (i) focusing techno-strategic competition, (ii) building technological resilience, (iii) accelerating the pace of innovation, and (iv) protecting national security science and technology. The administration will address these through foreign investment screening, outbound investment restrictions, export controls, research security, and federal defense procurement and R&D funding. For companies working in advanced technologies and life sciences, the NSSTS is both an invitation to compete for new federal funding and a warning that regulatory exposure is expanding.

Significance for Companies and Investors Across Tech and Life Sciences

The NSSTS signals where the administration intends to direct federal dollars, regulate, and draw the line between permissible and impermissible investment and trade. The strategy is explicit that the private sector contributes critical capabilities the government does not possess, and it calls for removing regulatory burdens that inhibit American industry from contributing to national security needs. That creates genuine openings for commercial innovators, but it also expands the universe of technologies and transactions subject to national security review, creating exposure for companies whose operations touch sensitive technology or adversarial capital.

Emerging and critical technology companies that do not traditionally serve defense customers will face increasing regulatory risk. That includes companies developing AI, autonomous systems, quantum information systems, semiconductors and microelectronics, biotechnology, advanced communications and networking, and space technologies. It also includes companies handling large volumes of sensitive personal data such as genomic, geolocation, biometric, health, and financial data, which the strategy singles out for protection. International investors should also be aware of the strategy, as should research institutions and companies that receive federal funding while collaborating with foreign entities.

Expanding Foreign Investment Screening and Outbound Investment Restrictions

A major focus of the NSSTS is foreign investment screening. The strategy commits to strengthening CFIUS under the America First Investment Policy announced in early 2025, directing CFIUS to consider U.S. technology leadership in assessing risks and to weigh factors such as foreign availability of a technology, feasibility of military applications, and whether a transaction may advance U.S. innovation, resilience, or security in critical technology domains. The administration also intends to seek authority to monitor certain greenfield investments and expand CFIUS’s critical technology jurisdiction. In addition, the strategy introduces a proportionality: CFIUS will calibrate restrictions based on an investor’s verifiable distance and independence from foreign adversaries, and the United States will encourage foreign investment from allied and partner sources.

The strategy also addresses outbound investment restrictions. It references the Outbound Investment Security Program, codified by the Comprehensive Outbound Investment National Security Act of 2025, and states that the administration will continually refine restrictions on outbound investment in areas including AI, quantum information systems, semiconductors, supercomputers, and hypersonics. The administration also intends to target additional areas implicated by China’s military-civil fusion strategy and to encourage allies to adopt similar restrictions. The strategy emphasizes that the Foreign Ownership, Control, or Influence (FOCI) framework, which the Defense Counterintelligence and Security Agency administers to mitigate foreign control over U.S. government contractors holding facility security clearances, and the review conducted by the Committee for the Assessment of Foreign Participation in the United States Telecommunications Services Sector (Team Telecom), which screens foreign participation in telecommunications licensees, will also remain available for mitigation measures on specific transactions.

Export Controls, Data Security, and Research Security

The strategy frames export controls as a strategic instrument for safeguarding technologies while influencing their development. It commits to updating controls to keep pace with emerging risks while eliminating outdated rules that impede innovation and international collaboration. The Commerce Department’s Bureau of Industry and Security has already issued an interim final rule streamlining controls for drone exports to allies, and further reforms to missile technology control regime implementation may follow.

The strategy also elevates the Data Security Program, established in May 2025, which protects government-related data and bulk genomic, geolocation, biometric, health, financial, and other sensitive personal data of Americans against foreign adversary access. Companies handling large datasets involving personal or health information should expect potential new compliance obligations.

The research security element extends into commercial sectors. Building on National Security Presidential Memorandum 33, the strategy calls for tracking federal research funding recipients, prohibiting funding to high-risk entities with Chinese ties, developing automated research security vetting of proposals, and establishing cybersecurity guidelines for research institutions. Companies participating in federally funded research with foreign researchers should expect greater scrutiny of their relationships and activities.

Acquisition Reform and Federal R&D Funding: The Opportunity Side

The NSSTS also accelerates defense acquisition and expands federal R&D funding, representing a significant opportunity for commercial companies. The strategy references Executive Order 14265 and its directive to reform the defense acquisition process with an emphasis on speed, flexibility, and execution. It encourages agencies to use Other Transaction Authorities for research, prototype, and production projects, to employ milestone-based fixed-cost contracting with multiple competing participants and performance-based down-selections, and to mix traditional and nontraditional contract mechanisms. The strategy calls for streamlined pathways for small and nontraditional performers to secure Cooperative Research and Development Agreements and Agreements for Commercializing Technology, and for strategic capital investment structures to accelerate commercial technology application to national security missions. For R&D funding, agencies are directed to complement rather than compete with private sector investment; to pursue public-private partnerships for early- and mid-stage development in AI, quantum, nuclear energy, biotechnology, and space; and to rely on the private sector as a customer for later-stage development.

Key Industries and Technologies Targeted

The strategy provides an updated list of critical and emerging technologies that functions as a roadmap for both funding opportunity and regulatory exposure. The list includes advanced manufacturing and materials, AI and autonomy, biotechnology, communications and networking, directed energy, future computing technologies, hypersonics and advanced missile technologies, information management and cybersecurity, nuclear energy, positioning navigation and timing, quantum information technologies, semiconductors and microelectronics, sensing and signature management, and space technologies. Priority areas for battlefield dominance and power projection include undersea capabilities, space, and AI and autonomy. Biotechnology is identified as critical to countering biological weapon threats, and quantum information technologies are noted as potentially transformative for sensing, communications, computing, and information security.

Many of these technologies are developed primarily for commercial markets. A company building foundation models, a biotechnology firm engineering novel therapeutics, a semiconductor designer creating specialized AI hardware, or a data platform handling genomic or health information may have no direct relationship with the Department of Defense, yet each operates in a technology area designated as critical to national security. Companies seeking to engage should identify the funding mechanisms, partnership pathways, and acquisition reforms the strategy describes and determine where their capabilities align with stated national security needs. The administration views the private sector as essential to national security and intends to reward companies that align with its priorities while constraining those that do not.

What’s Next

The NSSTS is a policy document, not a regulation, but it signals implementation direction that may follow through rulemaking, executive action, and congressional engagement. Companies operating in the identified critical and emerging technology should assess their exposure to foreign investment, outbound capital flows, export controls, data security, and research security. The strategy creates openings for companies that position themselves to capture funding and favorable regulatory treatment, and risks for those that fail to recognize where their operations intersect with national security policy.