In late December 2001 a Department of Defense Program Budget Decision (PBD) called for purchasing at least eight additional AC-130U Spooky gunships, and initiating work on a possible replacement gunship aircraft. The PBD added funding to accelerate and fully fund an Advanced Concept Technology Demonstration for the AC(X) aircraft. The AC(X) could be either a further upgrade to the existing AC-130 an entirely new follow-on system. A formal procurement program for the AC(X) was expected to begin in Fiscal Year 2005 (FY05).

Special operators want the new gunship, or AC-X, to be much smaller than a C-130, with fewer crew members. They want it to be stealthy, with the speed and maneuverability of a long-range jet fighter. They want it equipped with directed energy weapons and non-lethal technologies, and it should be able to engage targets from any angle-above and below, front and back.