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Wes Streeting has insisted that the UKs Armed Forces must boost their use of artificial intelligence (AI).
The Defence Secretary said the country must match the speed at which our adversaries are developing AI technology.
He refused to commit to the UK increasing its defence spending to 3% of GDP but insisted he does not want the sector to operate on the cheap.
The Cabinet minister said Prime Minister Andy Burnham and Chancellor John Healey both understand defence and its immediate pressures and priorities.
His comments come as BAE Systems announced the Ministry of Defence (MoD) has given it a contract extension worth 708 million.
This will allow the arms company to continue developing a next generation combat aircraft as part of the Global Combat Air Programme.
Mr Streeting described the new deal with BAE Systems as a ground-breaking moment for UK defence on a visit to Hampshires Farnborough Airshow.
The newly appointed Defence Secretary was there as BAE Systems revealed a new unmanned fighter jet, boosting Britain's entry into one of the defence industry's hottest and most fiercely contested markets.
The UK's biggest defence company showcased a model of its new jet, Brontanax, derived from the ancient Greek words for thunder and king, at the Airshow.
It is about the size of a Hawk trainer and would be ready to start flight testing next year, BAE said.
Mr Streeting said: This is a clear vote of confidence in British industry, and the thousands of highly skilled workers who are helping to keep our country safe.
This investment in advanced combat air technology for the UK Armed Forces will strengthen our defence and deterrence.
He added: The UK has always been a leading light on defence spending.
But the world is changing, and in these dangerous, uncertain times, it is clear that we have needed to go further.
Mr Streeting revealed that the UK has agreed more than 11.8 billion of contracts in the 10 days since the publication of the 298 billion defence investment plan.
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