The Pentagon has unveiled plans for the next stage of the U.S. defense-technology pact with Britain and Australia, including loading AI on submarine-hunting planes and launching exercises to test out unmanned gear.

This second “pillar” of AUKUS will aim to develop a host of new technologies, including AI and autonomy, electronic warfare, hypersonics, and quantum technologies. The Pentagon says Pillar One, the plan to deliver nuclear-powered attack submarines to Australia in the early 2040s, is on track. 

But the success of Pillar Two will require altering the laws that govern the export of sensitive technology, a senior defense official told reporters ahead of a Friday gathering of AUKUS defense ministers in California.

“We think that we need to pass these legislative proposals now, and failure to do so by Congress would send the wrong message to allies and partners,” the official said. “We think it’s absolutely vital for the long-term success of AUKUS.” 

One of the proposals would loosen the restrictions on exports to Australia and the UK, the official said. 

If Congress doesn’t greenlight that in this year’s defense policy bill, near-term Pillar Two efforts will survive, “but the deeper we go in capability collaboration and the broader we go in capability collaboration, the more that legislative proposal becomes essential,” the official said.

Some have expressed concern that this could make it easier for adversaries to obtain U.S. secrets.  

U.S. Defense Secretary Lloyd Austin met with his British and Australian counterparts on Friday to announce new milestones for Pillar Two, including an “exercise series” that will test surface and undersea autonomous systems.

“Beginning of next year, our three countries will conduct a series of integrated trilateral experiments and exercises. They will enhance capability development, improve our interoperability, and rapidly accelerate the sophistication and scale of autonomous maritime systems that we can deploy and operate together,” Austin told reporters after the meeting.

The Pentagon wouldn’t disclose the type of unmanned systems that will be tested in these exercises, but said some of the assets will be “smaller collection vehicles,” similar to ones used by the U.S. Navy’s Task Force 59, a group testing unmanned systems in the Middle East, the senior defense official said.

Another development in the second pillar of AUKUS includes plans to put common AI algorithms on the countries’ P-8 submarine-hunting planes. 

“Our teams have been working together to develop algorithms that all three nations can employ, so that we can process data from each other’s sonobuoys and that could dramatically enhance our ability to to understand what’s going on in the maritime domain and enhance anti-submarine warfare and we are already working on the transition of those capabilities as we test them so we can work to roll them out in our P-8s and potentially other platforms as soon as possible,” the official said. 

The AUKUS pact has already demoed tech this year, including a successful autonomous swarm exercise in the U.K. in April and trials of “trusted” robotics and autonomous systems in Australia in October, the official said.

Austin also announced an “AUKUS innovation challenge series” in which companies from all three nations will compete for prize money on a specific technology. The Pentagon did not disclose how much money defense contractors could win, but said the first challenge will be focused on electronic warfare and will be launched early next year. The countries are also establishing an “AUKUS industry forum” with members of government and industry to help inform policy for the effort. The group will have its first meeting in 2024. 

As the trilateral partnership sets milestones for Pillar Two, the U.S. is set to spend billions in coming years to shore up its own industrial base to handle the demands of AUKUS.

In addition to the export-control legislation, the department has asked Congress to approve the transfer of $3 billion from Australia to help revamp the U.S. submarine industrial base. That proposal is being blocked by Sen. Roger Wicker, ranking member of the Senate Armed Services Committee, who is also blocking another proposal—to allow the transfer of Virginia-class submarines to Australia—unless the submarine industrial base gets more money from the broader defense supplemental package. 

While the state of AUKUS legislation remains up in the air until Congress finishes negotiating a defense policy bill, the senior defense official said it’s important to get the funds from Australia. 

“Those investments will uplift the U.S. submarine industrial base and provide enduring benefits for AUKUS and U.S. submarine construction and maintenance efforts,” the official said.

Earlier on Friday, the U.S. State Department announced a possible foreign military sale of up to $2 billion worth of “training and training devices” to Australia for the Pillar One program.

“The sale will advance the AUKUS trilateral agreement by providing the equipment to train Royal Australian Navy crews in areas such as submarine navigation, communications, ship control, and other capabilities. Additionally, it will also provide the means to train select Australian civilians and contractors at United States naval shipyards. This trained workforce will grow Australia’s submarine capability, which is expected to ultimately incorporate technologies from all three AUKUS partner nations. Australia will have no difficulty absorbing this equipment and services into its armed forces,” State’s press release said.