Are AI defense firms about to eat the Pentagon?

Published on December 19, 2024

In an unprecedented wave of collaboration, leading AI firms are teaming up—sometimes with rivals—to serve a Pentagon and Congress determined to put AI to military use. Their growing alignment may herald an era in which software firms seize the influence now held by old-line defense contractors.

“There's an old saying that software eats the world,” Byron Callan, managing director at Capital Alpha Partners, told Investors Business Daily on Wednesday. “It's going to eat the military too."

Over the last week, Palantir, Anduril, Shield AI, OpenAI, Booz Allen, and Oracle announced various partnerships to develop products tailored to defense needs. Meanwhile, the House passed the 2025 National Defense Authorization Act with provisions that push the Defense Department to work more closely with tech firms on AI, and DOD announced yet another office intended to foster AI adoption.

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