In an unprecedented wave of collaboration, leading AI firms are teaming up—sometimes with rivals—to meet the growing demands of the Pentagon and Congress to integrate artificial intelligence into military applications. This alignment may signal an era in which software companies gain influence previously held by traditional defense contractors.
Byron Callan, managing director at Capital Alpha Partners, stated, “There’s an old saying that software eats the world… It’s going to eat the military too,” in an interview with Investors Business Daily.
Recently, several AI companies, including Palantir, Anduril, Shield AI, OpenAI, Booz Allen Hamilton, and Oracle, announced partnerships to develop products specifically catering to defense needs. Notably, the House passed the 2025 National Defense Authorization Act (NDAA), which emphasizes closer collaboration between the Defense Department and technology firms regarding AI advancements. Additionally, the Department of Defense (DOD) announced the establishment of another office to accelerate AI adoption.
Among the most significant partnerships announced is one between Palantir and Anduril, both companies that provide capabilities for battlefield data integration. Palantir manages the Maven program, an important DOD initiative aimed at utilizing extensive data from satellites, drones, and sensors for intelligence purposes. Meanwhile, Anduril has developed a mesh-networking product called Lattice that rapidly collects and analyzes battlefield data.
Palantir and Shield AI also expanded their partnership by including the deployment of Palantir’s Warp Speed tool, which integrates data into operational workflows. This collaboration is designed to combine Shield AI’s autonomous systems capabilities with Palantir’s data processing platforms, thereby enhancing commanders’ situational awareness on the battlefield.
Moreover, Anduril announced new partnerships with Oracle, which will provide cloud infrastructure to support Anduril’s autonomous systems for real-time data analysis, and with Archer to develop hybrid-propulsion aircraft for military purposes. In addition, Palantir has teamed up with Booz Allen Hamilton to create AI tools geared towards logistics and autonomous systems.
On December 6, 2023, the House approved the 2025 Defense Authorization Bill featuring provisions aimed at accelerating military adoption of AI technologies. One of the key measures is Section 1532, which mandates the creation of secure computing infrastructure to support AI development. This includes collaborations with commercial cloud providers for building scalable AI systems that can adapt to mission changes.
Section 236 of the bill also pushes for deeper partnerships between the Pentagon and the private sector, requesting regular updates to Congress on technology progress, particularly in areas like biotechnology and autonomous drones.
According to DIU Director Doug Beck, the Pentagon must adapt its acquisition strategies to better engage with software firms, suggesting that more flexibility should be granted to companies to propose innovative defense solutions. He noted that companies like Anduril have been successful in producing and testing products even before formal requests from the Defense Department.
There is a growing sense that the partnerships being formed could influence future defense procurement strategies, especially as the next administration prepares to take office. Palantir CTO Shyam Sankar has been considered for a leadership role in the Pentagon’s research and engineering sectors under this new administration.
Accountability and governance for these evolving collaborations will be overseen by the Chief Digital and Artificial Intelligence Office (CDAO), which is tasked with promoting AI use within the DOD. On December 6, the CDAO and the Defense Innovation Unit announced the formation of an AI rapid capabilities cell to facilitate faster adoption of generative AI technologies.
The NDAA compels the CDAO to enhance synchronization of data sharing across the department and implement strategies that support the use of modern data formats, which are crucial for advanced systems like weapons and command-and-control infrastructure.
These coordinated efforts among defense contractors and initiatives from Congress suggest a burgeoning “AI military-industrial complex.” Notably, in November 2023, Palantir exceeded Lockheed Martin in market capitalization, with founder Alex Karp asserting that a major shift is underway, declaring, “A juggernaut is emerging. This is the software century, and we intend to take the entire market.”
Overall, the alliances forming among AI firms indicate a collective push to reshape military capabilities in the face of modern technology and defense needs.
