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Palantir and Anduril, two of the most important U.S. defense technology firms, are currently negotiating with a couple of dozen competitors to form a consortium that can jointly bid for U.S. government contracts to disrupt the country's oligopoly of “prime contractors.”
The consortium plans to announce in January that it has reached agreements with quite a lot of technology firms. Companies negotiating to hitch include Elon Musk's SpaceX, ChatGPT maker OpenAI, autonomous ship maker Saronic and artificial intelligence data group Scale AI, in line with several people accustomed to the matter.
“We are working together to create a brand new generation of defense firms,” said an individual involved within the group’s development.
The move comes as technology firms seek to grab a bigger share of the U.S. government's massive $850 billion defense budget from traditional prime contractors equivalent to Lockheed Martin, Raytheon and Boeing.
The consortium will mix the strength of a few of Silicon Valley's Most worthy firms and use their products to provide the U.S. government a more efficient strategy to deliver cutting-edge defense and weapons capabilities, in line with a second person involved.
Defense technology startups have received record amounts of funding this 12 months as investors bet they might be among the many winners of increased federal spending on national security, immigration and space exploration under the brand new administration of Donald Trump.
Wars in Ukraine and the Middle East, in addition to geopolitical tensions between the US and China, have increased the federal government's reliance on technology firms developing advanced AI products that may be used for military purposes, encouraging investors within the sector.
Palantir's stock price has risen 300 percent previously 12 months, giving the corporate a market capitalization of $169 billion – greater than Lockheed Martin. The data intelligence group was co-founded by technology investor Peter Thiel, who also provided initial backing for Anduril, which launched in 2017 and was valued at $14 billion that 12 months.
Meanwhile, SpaceX was valued at $350 billion this month, making it the world's largest private startup, and OpenAI has risen to a price of $157 billion since its founding in 2015.
Each of those firms has sought to secure a share of the federal government's defense budget. While SpaceX and Palantir have won large public contracts for 20 years, some are even newer in public procurement. OpenAI updated its terms of service this 12 months to not explicitly prohibit the usage of its AI tools for military purposes.
U.S. defense procurement has long been criticized as slow and anticompetitive, favoring a small variety of decades-old powerhouses equivalent to Lockheed Martin, Raytheon and Boeing. These giant conglomerates typically produce ships, tanks, and aircraft which are costly and take years to design and manufacture.
Silicon Valley's burgeoning defense industry has prioritized producing smaller, cheaper, autonomous weapons that they claim would higher protect the U.S. and its allies in a contemporary conflict.
An individual involved within the consortium's development described it as an “industry alignment” to “execute the Defense Department's technical priorities” and “solve critical software capability issues.”
Some collaborations between the technology groups expected to be a part of the consortium have already been agreed and integration work will begin immediately.
Palantir's “AI platform,” which enables cloud-based data processing, was integrated into Anduril's autonomous software “Lattice” this month to supply AI for national security purposes.
Similarly, Anduril combined its anti-drone defense systems with OpenAI's advanced AI models to collaborate on U.S. government contracts related to “aerial threats.”
A joint statement from Anduril and OpenAI on this partnership said it “goals to be sure that the U.S. Department of Defense and the intelligence community have access to probably the most advanced, effective and secure AI-driven technologies available worldwide.”
Anduril, OpenAI and Scale AI declined to comment on the consortium's development. Palantir, SpaceX and Saronic didn’t reply to requests for comment.
