It's not your decision, you need to respect your friend's choices, even when they're against what you would do.
Best you can do is sit him down and state your concerns, but unless you're willing to throw away the relationship, you have to make it very clear up front that you're going to stick with him no matter what.
Also, while there is always the chance of getting stuck in a bad situation, the military is extremely open minded with respect to the trans aspect. The upper leadership has made that very clear to Congress. Might want to make sure your assumptions are correct before you start the conversation.