James "Rhodey" Rhodes, an Air Force officer and Tony's best friend, is introduced as Tony's military contact. Director Jon Favreau cast Terrence Howard partly because he could play War Machine in a sequel.
Rhodes, now played by Don Cheadle, puts on one of Tony's suits to stop a drunk Tony and takes it to the Air Force. Weaponized, it becomes War Machine.
Planned from the first film: the friend in uniform becomes the second armored hero. His military loyalty is what puts the suit in the government's hands.