Palantir, Anduril Form Tech Consortium Targeting Pentagon Contracts
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Palantir and Anduril are spearheading the formation of a consortium of tech groups to challenge the dominance of traditional defense contractors in bidding for US government contracts, the Financial Times reported on Sunday.
The consortium, expected to be formally announced in January, is in discussions with approximately a dozen tech companies, including SpaceX, OpenAI, Saronic, and Scale AI. The goal is to combine the resources and expertise of these companies to offer the US government a more efficient and innovative approach to defense procurement, leveraging cutting-edge technologies such as AI and autonomous systems.
"We are working together to provide a new generation of defence contractors,” said a source involved in the consortium's development, to the Financial Times.
This initiative comes as tech companies seek a larger share of the substantial $850 billion US defense budget, currently dominated by established contractors like Lockheed Martin, Raytheon, and Boeing. The influx of funding into defense tech startups reflects investor confidence in the sector's growth potential under the incoming Trump administration.
The consortium aims to leverage the combined strengths of some of Silicon Valley's most valuable companies, offering a more agile and cost-effective alternative to traditional defense procurement, which has often been criticized for its slow pace and lack of competition.
Several of the potential consortium members have already secured government contracts, while others, such as OpenAI, are newer to the defense sector. OpenAI recently updated its terms of service to permit the use of its AI tools for military purposes.
The consortium's formation reflects a broader trend in the defense industry towards smaller, cheaper, and autonomous weapons systems, seen by proponents as more effective in modern warfare. A source described the consortium's aim as "aligning industry" to address the Department of Defense's technical priorities and "solve critical software capability problems”.
Several of the potential consortium members have already initiated collaborations. Palantir and Anduril recently integrated their respective AI platforms for national security applications, while Anduril and OpenAI have partnered on counter-drone defense systems.