Will military technology companies displace Lockheed Martin?

It’s a fascinating document. Anduril, a new technology company in the defense sector, has released a “mission document” titled “Rebooting the Democracy Armory.” This essay takes down military giants like Lockheed Martin in detail, and argues that their days of usefulness are over and are being replaced by more nimble and cost-effective (arguing) upstart technology companies like Anduril. It suggests that it needs to be replaced. Skilled in developing advanced software and other fundamental elements of future weapons.

Before considering the manifesto on the future of arms procurement, it is useful to know how Anduril fits into the current military-industrial landscape. Anduril is an up-and-coming military technology company founded by 32-year-old tech geek Palmer Lackey. He made his fortune developing the Oculus virtual reality headset before moving into the world of weapons development. Anduril makes everything from small drones to surveillance towers that enable unmanned vehicles used in U.S.-Mexico border security. Anduril is also deeply involved in the AUKUS submarine contract, a major initiative built around the US/UK/Australia partnership to provide Australia with next-generation attack submarines. Among other things, Anduril will supply Ghost Shark unmanned underwater vehicles (UUVs) to Australia as part of the deal.

Palmer Lackey is a strong advocate of government deregulation and a more hawkish foreign policy, and is an ardent supporter of President-elect Trump. As I have pointed out elsewhere, his exaggerated view of what technology can accomplish and a simplistic “us versus them” worldview are a dangerous combination, especially when it comes to U.S. foreign policy and military From someone who is actively shaping the future of policy. .

The beginning of the document briefly states Anduril’s views on the Old Guard.

“The only thing that can reliably deter war is superior military technology. Since World War II, the lead America and its allies have had in military technology has been critical to preventing World War III.” That technological superiority is now at stake. Existing defense companies are unable to build the technology needed to reassert our nation’s technological superiority. We need a new kind of defense enterprise to restart the. (emphasis added).

In support of that blanket statement, Anduril said: Tesla has more AI than any other U.S. military vehicle. (And) the computer vision in the Snapchat app is better than any system the Department of Defense owns. ” The document even suggests that purchasing next-generation technology could lead to budget cuts for the Pentagon, but makes no explicit promise that such savings will actually materialize.

The document ends with a series of proposals to change the way the Pentagon develops technology and purchases completed weapons systems, making the systems simpler and more aligned with the way technology companies do business. While there is no doubt that the current Department of Defense processes have excessive regulation that serves no useful purpose, there are also important items that should be maintained or improved. In other words, some regulations should be abolished, while others should be strengthened.

One of the key reforms is to provide DoD contracting officials with adequate information about the historical costs of key parts in order to stop the kind of price gouging that caused the Pentagon to pay as much as 3,800 percent in price increases. This includes providing information to Additionally, a 2023 investigation by CBS 60 Minutes found that the Department of Defense routinely overcharged by 40 to 50 percent for basic items. Sen. Elizabeth Warren (D-Mass.), Sen. Mike Braun (R-Ind.), Sen. Chuck Grassley (R-Iowa), Rep. John Garamendi (D-Calif.), Chris Representative Delgio (D-Pennsylvania) has authored a bill called the Stop Act. This would require contractors to provide accurate historical pricing data for the items they sell to the Department of Defense so that government contracting officials do not act blindly. Negotiate the price of the items you purchase.

Another important oversight mechanism that must be maintained is the Department of Defense’s Independent Testing Agency, which regularly assesses the status of major weapons programs. Military industry lobbyists have regularly sought to reduce the power of government agencies or make their research findings less accessible to the general public. As new technologies are integrated into the military, a truly independent testing bureau becomes important to avoid wasting billions of dollars on a new generation of “miracle weapons” that may or may not work as advertised. It will be higher than ever.

A key question is whether the early influence of emerging military technology champions like Elon Musk, Marc Andreessen and Steven Feinberg (the Pentagon’s No. 2 candidate) is playing a role. They all say pilotless systems and AI will actually change the way the Department of Defense spends money. A huge portion of the Pentagon’s spending on weapons research, development, and production goes to the Big Five: Lockheed Martin, Raytheon (now RTX), Boeing, General Dynamics, and Northrop Grumman. These five companies alone receive more than $100 billion annually in Pentagon contracts to build virtually every major weapons system used by the U.S. military. tanks and armored personnel carriers. Aircraft, missiles, and submarines carrying nuclear weapons. bombs and missiles. missile defense system. And a battleship. The only major exceptions to this rule are HII (formerly known as Huntington Ingalls), which builds aircraft carriers and attack submarines, and BAE, which builds artillery systems.

But even though the Big Five account for a huge portion of the Pentagon’s weapons spending, tech companies are starting to rack up some big contracts. Microsoft recently won a contract with the Army worth up to $22 billion over 10 years for the Integrated Vision Enhancement System, high-tech goggles that allow soldiers to see further than the naked eye. The company also won a quarter share of the Department of Defense’s $9 billion cloud computing contract. Palantir has a $619 million contract to supply AI to the Army. And a recent Washington Post profile described Elon Musk’s SpaceX as “one of the world’s most important defense contractors” based on the future military applications of its space technology. However, implementing next-generation technology will present serious challenges. Back in 2022, the Pentagon’s inspector general ruled that purchasing Microsoft’s high-tech goggles could “waste billions of dollars” without thorough research to ensure soldiers are comfortable using them. I warned you that there is. It’s unclear whether the issue was fully resolved before the company signed a multibillion-dollar contract to supply goggles to Microsoft.

Will the Department of Defense cut spending on these legacy systems and increase investment in emerging technologies? Elon Musk, co-chair of President-elect Trump’s Department of Government Efficiency (DOGE), asked on the X Show: It has raised eyebrows among weapons manufacturers, slamming Lockheed Martin’s F-35, the company’s most lucrative program, as unnecessary and dangerous. Fighter aircraft are obsolete in the age of drones. . . It just kills the pilot. ”

However, if the F-35 is abolished or the number of purchases by the Department of Defense is reduced, the powerful F- It will likely conflict with the 35 supporters.

And the latest sign that the tech industry intends to take on the Big 5 is the news that Anduril, Palantir, SpaceX, Open AI, and many more companies are forming a consortium within which they will bid. . Teams under certain Department of Defense contracts.

An alternative to the Silicon Valley vs. Big 5 budget battle would be for the Pentagon to provide sufficient funding to both groups. But that would mean significantly increasing the Pentagon’s budget, which is already soaring toward $1 trillion a year.

What technologies are most likely to keep us safe in the coming decades, and more importantly, in the midst of potential financial battles between the two wings of the military-industrial base? The question has arisen as to what strategy should be used to introduce them. . Although the “cover the globe” interventionist strategy that prevailed during this century cost trillions of dollars and hundreds of thousands of lives of Iraq War and Iraq War-affected combatants and civilians. , failing to achieve its objective of promoting stability. Afghanistan. A change in policy is desperately needed. In determining the right strategy, Congress and the public must discount the arguments of both wings of the arms industry: the Big Five and Silicon Valley techno-optimists.