Brendan Ryan
DoD Hunger for AI Capability Has Spurred a Private Sector Shakeup
AI offers a multitude of use cases for the U.S. Department of Defense and the greater Intelligence Community. Major suppliers have quickly sought to integrate AI into modern warfare technology, with some obvious examples being autonomous vehicles, decision support systems, and expanded counterterrorism capabilities. AI presents a new frontier in unmanned warfare, and its capability could help prevent threats before they even occur.
Implementing technology backed by AI systems has been tricky for the U.S. Military, as the models require data for training; however, this data is often highly sensitive. The Pentagon does have access to the huge amounts of extremely valuable data these systems need to be trained with. Still, despite this, it has struggled to create a method that effectively captures and applies it for this purpose. AI use for defense also creates a new challenge in cybersecurity. Bad actors may seek to extract information from the databases used to train and support AI-infused tech, creating an extreme vulnerability for the Armed Forces and U.S. allies.
The DoD dwarfs all other U.S. government agencies in terms of AI investment in an attempt to address this challenge. Despite the billions invested, some have expressed concerns, saying that even with this recent spending surge, this level of funding may still be insufficient to compete with adversaries like China. Air Force Secretary Frank Kendall stated at a conference in late October, “There are people who’ve said that… the AI competition is essentially going to determine who’s the winner in the next battlefield. I don’t think that’s all that far off”.
The two major defense tech firms selected to lead the production ramp-up of AI-infused systems are Palantir and Anduril Industries. The U.S. Department of Defense has placed increased importance on its software ecosystem, which Palantir and Anduril have been paramount in addressing. The two companies announced on December 6th a strategic consortium to address the obstacles in the path of the DoD’s adoption of AI. Palantir’s AI platform and Maven Software System will be integrated with Anduril’s next-gen products, such as the Menace command and control system and Lattice software. Additionally, Anduril has announced a collaboration with ChatGPT producer OpenAI, saying that the partnership will serve to mitigate the rapidly evolving threat U.S. and allied forces face from unmanned drones and other aerial systems.
The urgency for adopting next-generation, AI-based tech has led the Department to move away from more traditional defense contractors. Anduril and Palantir have led this revolution over the past year with notable contract wins. In April, the Air Force selected Anduril and General Atomics to build its Collaborative Combat Aircraft (CCA), a hotly contested contract for an unmanned vehicle that saw the duo beat out household names such as Lockheed Martin and Northrup Grumman. Several less-recognized names have benefitted greatly, too. In conjunction with these two new major firms, small-to-medium scale startups like Applied Intuition, Epirus, and Shield AI have all claimed prizes in the form of top contracts from the Army, Coast Guard, and Intelligence Community at the expense of traditional suppliers.
This shakeup has been driven by the Silicon Valley-style attitude of creating cutting-edge tech before the government knows it needs it, a concept new to the defense industry. In what has traditionally been a rather stuffy industry, new personalities like Hawaiian shirt-wearing Anduril founder Palmer Luckey have spearheaded this change. Prior to his defense venture, Luckey was the founder of Oculus VR and the Oculus Rift, which he ultimately sold to Facebook. Palantir was also born in Silicon Valley in 2004, where it gradually gained influence in the world of government business until shifting its HQ to Denver, Colorado, in 2020. Elon Musk’s SpaceX, a frequent AI and ML user in launch systems and mission safety, is another firm expected to receive more contract awards under the upcoming Trump Administration.
AI presents numerous positive benefits but also poses significant threats to American lives and interests. The Department of Defense must allocate additional spending and effort to keep up with adversaries, most notably China, in this modern arms race. AI capability will be imperative to protecting the U.S. Armed Forces and allies on the battlefield, as well as providing advanced tactical analysis to outmaneuver enemy defenses. Companies like Anduril, Palantir, SpaceX, and more, which are not part of the traditional group of defense businesses, have an unmissable opportunity to capture crucial contracts and become the future of American defense and security.
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