Margarita Howard’s HX5 Embraces Defense Tech’s AI Revolution

According to the Aerospace Industries Association, the U.S. aerospace and defense industry generated over $955 billion in sales in 2023, marking a 7.1% increase from the previous year. Within this expanding sector, as in most technology sectors, federal contractors face a clear choice regarding artificial intelligence adoption. Those who implement AI capabilities position themselves for future contracts, while those who delay risk obsolescence. 

Margarita Howard and HX5 have chosen early adoption, investing in both internal AI development and preparing for government-wide AI integration.

“We believe that in the years to come, and certainly by 2035, government agencies will increasingly utilize AI to streamline procurement processes, evaluate contractor performance, and probably predict future needs based on historical data that they collect,” Howard says. This assessment is driving HX5’s current technology investments.

AI Implementation at HX5 and in U.S. Government Contracting

The company has moved beyond planning to active implementation. 

“We’re actually developing AI tools internally that we’re using and seeing benefits from,” Howard says. “We certainly have found that with AI, it definitely can improve productivity, so I believe that AI will be one of the driving forces for the time to come.”

Howard’s views mirror those of the agencies that provide government contracts. In July 2025, the Department of Defense awarded contracts worth up to $200 million each to Anthropic, Google, OpenAI and xAI for AI development. 

“The adoption of AI is transforming the Department’s ability to support our warfighters and maintain strategic advantage over our adversaries,” said the Pentagon’s Chief Digital and AI Officer Doug Matty at the time. “Leveraging commercially available solutions into an integrated capabilities approach will accelerate the use of advanced AI as part of our Joint mission essential tasks in our warfighting domain as well as intelligence, business, and enterprise information systems.” 

Preparing for Automated Compliance

Beyond operational uses, Margarita Howard and HX5 anticipate a gradual increase in AI’s role in government contracting administration. 

“Compliance protocols will be automated,” she predicts. “Contractors will be required to integrate systems that provide continuous reporting and real-time audit capabilities.”

This prediction aligns with current federal initiatives. The 2025 National Defense Authorization Act includes Section 1532, which mandates expansion of secure, high-performance computing infrastructure for federal defense agencies to support AI training and development. The legislation emphasizes building data and cloud computing resources for faster AI adoption.

Workforce Adaptation for AI Integration

The aerospace and defense industry faces demographic pressures that make AI adoption essential as contractors seek to attract a new generation of talent. Industry data from PwC shows only 7% of aerospace and defense employees are under 25 years old, while 25% are aged 56 or older. Additionally, 43.3% of the workforce has been with their current company for less than five years.

For younger employees entering the workforce, AI integration is becoming part of expectations about modern work environments. 

“We believe, or we’re seeing, that Gen Z thrives in digital-native environments,” Howard says of her company’s younger employees. “We’ve modernized some of our internal communication processes to include those platforms that we believe that they’re comfortable in, such as instant messaging, interactive project management, and some tool/workspace changes.”

Security Considerations in AI Adoption

Howard sees cybersecurity requirements as running parallel to AI implementation for defense contractors. 

As AI systems interact with classified data, contractors must ensure their implementations meet federal security standards.

“We have already seen cybersecurity standards being enforced more across the board,” Howard says. “These are heightened cybersecurity requirements that contractors will not have a choice but to implement if they want to be a government contractor.”

Broader Industry Context for AI Adoption

In a June 2025 report, the DoD projected the AI market to reach $407 billion by 2027, with investment in AI already reaching $25.2 billion in 2022, before the technology truly reached widespread public adoption and use.  

Federal agencies beyond the Pentagon are pursuing AI capabilities. The House approved provisions in the 2025 defense authorization bill intended to spur military adoption of AI, including requirements for data synchronization and modern data format implementation across weapons systems, command-and-control systems, and sensors.

But the same DoD report notes that the U.S. dominates the AI startup market but there is no certainty that will continue. Talent shortages create implementation obstacles as companies rely on foreign talent and shift R&D abroad to meet their AI needs. The aerospace and defense sectors increasingly compete for limited AI talent while navigating standardization gaps. 

Meanwhile semiconductors, most of which are manufactured overseas, remain critical components of AI infrastructure, with advanced AI chips required for models to function effectively. 

Leadership Evolution in Technology Decisions

As HX5 transitions to this new era of AI, Howard’s management approach has evolved from hands-on control to empowerment of her team. 

“I learned that my job was less about solving every problem and more about creating a culture where solutions could come about organically,” she says.

This evolution shapes how HX5 approaches major technology decisions like AI adoption. The company benefits from diverse perspectives in its leadership team when evaluating new technologies. Howard has made proactive AI investments based on assessment of future requirements and input from her management team, rather than waiting for specific government mandates.

Margarita Howard and HX5 recognized AI adoption as necessary for survival rather than optional enhancement. The company’s early investments are designed to position it to meet coming federal requirements while improving current operations. 

Looking toward 2035, the convergence of AI adoption, automated compliance, and demographic shifts in the defense workforce could reshape government contracting. Contractors who establish AI capabilities now will likely hold advantages when these changes accelerate. HX5’s proactive approach demonstrates one path forward: measured investment in internal capabilities combined with preparation for government-wide automation initiatives.

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