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Tech Titans Create Partnership to Shake Up US Defense Space

Defence Technology

Palantir, Defense, Consortium, Elon Musk

Business Honor
23 December, 2024

Palantir, Anduril, SpaceX, and OpenAI envision a new wave of US defense contracting.

Palantir and Anduril, two of the top US defense technology companies, are in talks with roughly a dozen competitors to combine forces into an alliance that will jointly submit a bid for these government contracts. The alliance is poised to upend the long-held supremacy of the traditional defense majors: Lockheed Martin, Raytheon, and Boeing-whose contracts have defined the landscape of the defense industry for centuries.

The consortium, to be announced as early as January, will include major companies such as Elon Musk's SpaceX, OpenAI, autonomous-ship builder Saronic, and AI data group Scale AI. This partnership will use cutting-edge technology for the supply of innovative defense capabilities to the US government.

Tech companies have been salivating at a bigger cut of the US government's defense budget, which stands at $850 billion. This has been the form of more efficient, cost-effective solutions than traditional large, expensive military projects led by entrenched defense contractors. This has come at a time when the Department of Defense is scrounging for higher-level technologies, such as artificial intelligence (AI), to enhance national security amid high levels of global tensions.

In the last couple of years, defense tech start-ups have attracted enormous investments, with a bet on more federal spending in areas such as national security, immigration, and space exploration. Palantir's market value has jumped to $169 billion, while SpaceX is valued at $350 billion. Companies such as these, and newcomers such as OpenAI, have achieved some impressive milestones in terms of public contract wins and further entrenchment as significant players in this shifting landscape of defense.

This will incorporate core technologies such as Anduril's autonomous system and Palantir AI platform to get smarter and quicker solutions for the defense challenge and marks a shift in US military thinking about the method of approaching procurement for defense in the future.