An amazing achievement no doubt; but why does this fall under the budget of DoD rather than say, something specifically medically related?
Maybe they think Cancer is an imminent threat to the well being of the people of the U.S.?
Edit://Remember that the DOD also studies diseases(not limited to cancer) so there may be broader uses for this
DoD, via Defense Health Agency, also spends about $50B on medical care annually, and a few of those $B are on cancer, including hundreds of oncologists, pathologists, and thousands of surgeons. Quite a few more $B are spent by the VA on cancer care.
If you work out the timeline, you'll also see the work was early in the current AI wave, i.e. do you think a Navy physician in training was talking to Googlers without formal agreements in place already? So walk back that August 2016 email to initial talks taking place at least several months, maybe a year or more, and probably ideation even earlier.
It's about sat imagery probably. CT scans serve as a proxy to sat photos.