Tech Giants Form Consortium to Bid on Pentagon Contracts, Challenging Traditional Defense Contractors

Can Palantir's Pentagon bid send its stock soaring?

Palantir Technologies and Anduril Industries are forming a consortium with about a dozen other tech companies to bid for U.S. government defense contracts. This initiative aims to compete with traditional prime contractors like Lockheed Martin, Raytheon, and Boeing. The consortium plans to announce its alliances as early as January 2024, seeking to leverage the strengths of Silicon Valley's tech giants in the $850 billion defense budget. Key players in the talks include SpaceX, OpenAI, Saronic, and Scale AI. Each of these companies has made significant strides in securing government contracts, with SpaceX valued at $350 billion and Palantir's market cap reaching $169 billion, surpassing Lockheed Martin. Meanwhile, OpenAI has seen its valuation soar to $157 billion since its inception in 2015. These companies are poised to challenge the long-standing dominance of traditional defense contractors, which have been criticized for their slow procurement processes and costly projects. The ongoing geopolitical tensions, particularly regarding conflicts in Ukraine and the Middle East, have heightened U.S. dependence on advanced technologies. This situation has amplified the focus on innovative solutions from tech firms developing AI-driven capabilities. A person involved with the consortium remarked about the need to "align industry" and address the Department of Defense's technical priorities, in addition to solving critical software capability issues. Palantir joins Nasdaq 100 after explosive 204% growth Palantir and Anduril have already initiated integration projects to enhance their offerings. For instance, the Palantir "AI Platform," known for its data processing capabilities, has been integrated with Anduril's autonomous software, "Lattice," to bolster national security applications. Additionally, Anduril is collaborating with OpenAI to fortify its counter-drone systems by leveraging advanced AI models for countering aerial threats. Both companies released a joint statement, indicating their aim to ensure the U.S. Department of Defense and intelligence community access advanced AI-driven technologies. The consortium comes at a time when defense tech startups have attracted substantial investment, fueled by expectations of increased federal spending under the incoming government. As a co-leader of President-elect Trump's government efficiency drive, Elon Musk has emphasized a focus on Pentagon spending, specifically criticizing costly projects like the F-35 fighter jet, which is manufactured by Lockheed Martin. With pressure to innovate and respond rapidly to evolving military needs, the new consortium seeks to provide smaller, more efficient, and cost-effective autonomous weapons solutions. The traditional giants in the defense sector are known for projects that take years to design and produce, often resulting in escalating costs and delays. The movements of this consortium could signal a transformative shift in U.S. defense procurement. By bringing together a diverse array of technological expertise, it aims to disrupt an industry long governed by a handful of established companies. Described as a collaborative effort to "execute technical priorities," the consortium's formation raises questions about the future of defense contracting. By leveraging its AI expertise and teaming up with heavyweights like Anduril and OpenAI, Palantir is positioning itself as a game-changer in the defense space. If they can pull this off, we're likely looking at a major boost in investor confidence -- and stock price. Disclaimer: The content of this article is for informational purposes only and should not be construed as investment advice. We do not endorse any specific investment strategies or make recommendations regarding the purchase or sale of any securities.

Palantir, Anduril join forces with tech groups to bid for Pentagon contracts, FT reports

(Reuters) - Data analytics firm Palantir Technologies and defense tech company Anduril Industries are in talks with about a dozen competitors to form a consortium that will jointly bid for U.S. government work, the Financial Times reported on Sunday. The consortium, which could announce agreements with other tech groups as early as January, is expected to include SpaceX, OpenAI, autonomous shipbuilder Saronic and artificial intelligence data group Scale AI, the newspaper said, citing several people with knowledge of the matter. "We are working together to provide a new generation of defence contractors," a person involved in developing the group told the newspaper. The consortium will bring together the heft of some of Silicon Valley's most valuable companies and will leverage their products to provide a more efficient way of supplying the U.S. government with cutting-edge defence and weapons capabilities, the newspaper added. Palantir, Anduril, OpenAI, Scale AI and Saronic did not immediately respond to a Reuters request for comment. SpaceX could not be immediately reached for a comment. Reuters reported earlier this month that President-elect Donald Trump's planned U.S. government efficiency drive involving Elon Musk could lead to more joint projects between big defense contractors and smaller tech firms in areas such as artificial intelligence, drones and uncrewed submarines. Musk, who was named as a co-leader of a government efficiency initiative in the incoming government, has indicated that Pentagon spending and priorities will be a target of the efficiency push, spreading anxiety at defense heavyweights such as Boeing , Northrop Grumman , Lockheed Martin and General Dynamics . Musk and many small defense tech firms have been aligned in criticizing legacy defense programs like Lockheed Martin's F-35 fighter jet while calling for mass production of cheaper AI-powered drones, missiles and submarines. Such views have given major defense contractors more incentive to partner with emerging defense technology players in these areas. (Reporting by Rishabh Jaiswal, Pretish M J and Nilutpal Timsina in Bengaluru; Editing by Lisa Shumaker and Mark Porter)

Palantir, Anduril join forces with tech groups to bid for Pentagon contracts, FT reports

Dec 22 (Reuters) - Data analytics firm Palantir Technologies (PLTR.O), opens new tab and defense tech company Anduril Industries are in talks with about a dozen competitors to form a consortium that will jointly bid for U.S. government work, the Financial Times reported on Sunday. The consortium, which could announce agreements with other tech groups as early as January, is expected to include SpaceX, OpenAI, autonomous shipbuilder Saronic and artificial intelligence data group Scale AI, the newspaper said, citing several people with knowledge of the matter. "We are working together to provide a new generation of defence contractors," a person involved in developing the group told the newspaper. The consortium will bring together the heft of some of Silicon Valley's most valuable companies and will leverage their products to provide a more efficient way of supplying the U.S. government with cutting-edge defence and weapons capabilities, the newspaper added. Palantir, Anduril, OpenAI, Scale AI and Saronic did not immediately respond to a Reuters request for comment. SpaceX could not be immediately reached for a comment. Reuters reported earlier this month that President-elect Donald Trump's planned U.S. government efficiency drive involving Elon Musk could lead to more joint projects between big defense contractors and smaller tech firms in areas such as artificial intelligence, drones and uncrewed submarines. Musk, who was named as a co-leader of a government efficiency initiative in the incoming government, has indicated that Pentagon spending and priorities will be a target of the efficiency push, spreading anxiety at defense heavyweights such as Boeing (BA.N), opens new tab, Northrop Grumman (NOC.N), opens new tab, Lockheed Martin (LMT.N), opens new tab and General Dynamics (GD.N), opens new tab. Musk and many small defense tech firms have been aligned in criticizing legacy defense programs like Lockheed Martin's F-35 fighter jet while calling for mass production of cheaper AI-powered drones, missiles and submarines. Such views have given major defense contractors more incentive to partner with emerging defense technology players in these areas. Reporting by Rishabh Jaiswal, Pretish M J and Nilutpal Timsina in Bengaluru; Editing by Lisa Shumaker and Mark Porter Our Standards: The Thomson Reuters Trust Principles., opens new tab Suggested Topics:Deals

Palantir and Anduril join forces with tech groups to bid for Pentagon contracts

Palantir and Anduril, two of the largest US defence technology companies, are in talks with about a dozen competitors to form a consortium that will jointly bid for US government work in an effort to disrupt the country's oligopoly of "prime" contractors. The consortium is planning to announce as early as January that it has reached agreements with a number of tech groups. Companies in talks to join include Elon Musk's SpaceX, ChatGPT maker OpenAI, autonomous shipbuilder Saronic, and artificial intelligence data group Scale AI, according to several people with knowledge of the matter. "We are working together to provide a new generation of defence contractors," said one person involved in developing the group. The move comes as tech companies seek to grab a bigger slice of the US government's huge $850bn defence budget from traditional prime contractors such as Lockheed Martin, Raytheon and Boeing. The consortium will bring together the heft of some of Silicon Valley's most valuable companies and will leverage their products to provide a more efficient way of supplying the US government with cutting-edge defence and weapons capabilities, according to a second person involved. It comes as defence tech start-ups have attracted record amounts of funding this year, as investors bet they will be among the winners of higher federal spending on national security, immigration and space exploration under Donald Trump's incoming government. Wars in Ukraine and the Middle East and geopolitical tensions between the US and China have heightened the government's reliance on tech companies developing advanced AI products that can be used for military purposes, and encouraged investors to the sector. Palantir's share price has skyrocketed by 300 per cent in the past year, giving the company a market capitalisation of $169bn -- larger than Lockheed Martin. The data intelligence group was co-founded by tech investor Peter Thiel, who also provided the initial backing for Anduril, which launched in 2017 and was this year valued at $14bn. Meanwhile, SpaceX was valued at $350bn this month, making it the world's largest private start-up, and OpenAI has soared to a valuation of $157bn since it was founded in 2015. Each of the companies has attempted to grab a slice of the government's defence budget. While SpaceX and Palantir have won large public contracts going back two decades, some are newer to government procurement. OpenAI updated its terms of service this year to no longer explicitly prohibit the use of its AI tools for military purposes. US defence procurement has long been criticised as slow and anti-competitive, favouring a small number of decades-old primes, such as Lockheed Martin, Raytheon and Boeing. These vast conglomerates typically produce ships, tanks and aircraft that are costly and take years to design and manufacture. Silicon Valley's burgeoning defence industry has prioritised producing smaller, cheaper, autonomous weapons that they claim will better protect the US and its allies in a modern conflict. One person involved in developing the consortium described it as "aligning industry" in order to "execute the technical priorities of the Department of Defense" and "solve critical software capability problems". Some tie-ups between the tech groups expected to be in the consortium have already been agreed and integration work will begin immediately. Palantir's "AI Platform", which delivers cloud-based data processing, was this month integrated with Anduril's autonomous software, "Lattice", to deliver AI for national security purposes. Similarly, Anduril combined its counter-drone defence systems with OpenAI's advanced AI models to jointly work on US government contracts related to "aerial threats". A joint statement from Anduril and OpenAI about that partnership said it "aims to ensure that the US Department of Defense and intelligence community have access to the most advanced, effective, and safe AI-driven technologies available in the world". Anduril, OpenAI and Scale AI declined to comment on the development of the consortium. Palantir, SpaceX and Saronic did not respond to requests for comment.

Palantir and Anduril reportedly building a tech consortium to bid on defense contracts

Two big defense tech players, Palantir and Anduril, are talking to tech companies including SpaceX, OpenAI, Saronic, and Scale AI about forming a consortium to bid on Pentagon contracts, according to a report in the Financial Times. The goal, the FT says, is to challenge the dominance of "prime" defense contractors like Lockheed Martin, Raytheon, and Boeing. One unnamed participant described this as an effort to "provide a new generation of defense contractors," while another said this will be a more efficient way to sell the government cutting-edge weapons and other tech. Initial partnerships could be announced as soon as January, according to the report. Palantir and Anduril (both named after magical items in J.R.R. Tolkien's "Lord of the Rings") hinted that something like this was in the works earlier this month, with an integration announcement between Palantir's AI Platform and Anduril's Lattice software. At the time, the companies said they were "launching a new consortium to ensure that the U.S. government leads the world in artificial intelligence."

Palantir And Anduril Reportedly Lead Consortium, Partner With SpaceX And OpenAI To Compete Against Traditional Defense Contractors In $850 Billion US Military Market - Lockheed Martin (NYSE:LMT), Boeing (NYSE:BA)

Palantir Technologies Inc. PLTR and Anduril Industries, a defense technology company are spearheading a new consortium of technology companies to compete for U.S. Department of Defense contracts, challenging traditional defense contractors' dominance over the $850 billion defense budget. What Happened: The group, expected to announce formal agreements in January, is in discussions with Elon Musk's SpaceX, OpenAI, Saronic, and Scale AI, reported the Financial Times on Sunday, citing people with knowledge of the matter. This initiative comes as Palantir's market capitalization has surged to $169 billion, surpassing traditional defense contractor Lockheed Martin Corp. LMT. Palantir's stock has risen over 300% in the past year, though it recently faced headwinds after UBS initiated coverage with a neutral rating, citing valuation concerns. The consortium aims to modernize defense procurement by offering smaller, autonomous weapons systems and AI-powered solutions. Recent collaborations already show promise, with Palantir's AI Platform being integrated with Anduril's Lattice autonomous software for national security applications. Palantir and Anduril did not immediately respond to Benzinga's request for comment. See Also: LinkedIn Cofounder Reid Hoffman Says Musk's Baseless Jeffrey Epstein Claims Forced Him To Hire Security: 'Elon's Defamation Makes Me Angry' Why It Matters: The timing aligns with increased defense spending driven by conflicts in Ukraine and the Middle East, plus rising U.S.-China tensions. Palantir recently secured a $400.7 million contract extension with the U.S. Army, which could potentially reach $618.9 million over four years. Traditional defense procurement has faced criticism for favoring established contractors like Raytheon Technologies Corp. RTX and The Boeing Company BA, often resulting in costly, time-consuming projects. This new tech consortium aims to provide more efficient, cutting-edge solutions to meet modern military challenges. Palantir stock closed at $80.55 on Friday, up 8.54% for the day, and rose 0.19% in after-hours trading. Year to date, the stock has surged 385%, according to data from Benzinga Pro. The consensus price target is $35.58, with the highest target of $80, and the lowest of $7.50. Recent ratings from UBS, Mizuho, and Baird average $64.67, implying a 19.87% downside. Read Next: Google Announces Major Layoffs As Pichai Stresses Efficiency Image Via Shutterstock Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors. BABoeing Co$178.250.68%WatchlistOverviewLMTLockheed Martin Corp$489.502.05%PLTRPalantir Technologies Inc$80.708.75%RTXRTX Corp$116.831.19%Market News and Data brought to you by Benzinga APIs

Report: Palantir and Anduril join forces to try to secure US government defense contracts - SiliconANGLE

Report: Palantir and Anduril join forces to try to secure US government defense contracts The data analytics company Palantir Technologies Inc. is said to be holding talks with the defense industry tech startup Anduril Industries Inc. over the creation of an alliance that will work together to win more work from the U.S. government. According to the Financial Times, Palantir and Anduril's consortium may also include companies such as SpaceX Corp. and OpenAI, as well as the artificial intelligence data startup Scale AI Inc. and the autonomous shipbuilding company Saronic Technologies Inc. The idea is that they'll jointly bid for U.S. government contracts. The Financial Times cited people with knowledge of the matter as saying the consortium could be announced as soon as next month. They are working together to "provide a new generation of defense contractors", one of the sources said. They intend to pitch their joint products and services as a "more efficient way of supplying the U.S. government with cutting-edge defense and weapons capabilities," the paper added. The consortium's goal is to upend the dominance of legacy defense contractors by creating a "more efficient way to sell the government cutting-edge weapons and other tech." Palantir is a U.S. software company that specializes in big data analytics, helping organizations, including law enforcement agencies, to integrate and analyze large datasets. Meanwhile, Anduril develops equipment for the defense sector. Its product portfolio includes aircraft, a truck equipped with hardware for processing sensor data, a jeep-like vehicle and a range of other systems. Several of Anduril's machines are designed to operate autonomously. They're said to be creating the consortium in an effort to appeal to incoming U.S. President Donald Trump, who has turned to the entrepreneur Elon Musk to lead a planned government efficiency drive that will trim billions of dollars from its technology budgets. The initiative is expected to result in more joint projects being awarded to smaller tech companies that specialize in areas such as AI, drones and uncrewed submarines, Reuters reported earlier this month. Musk has previously said that Pentagon spending and priorities is one target of the efficiency push. His comments have caused considerable anxiety for traditional defense contractors, such as the Boeing Company, Northrop Grumman Corp., Lockheed Martin Corp. and General Dynamics Corp. Along with many smaller defense technology firms, Musk has been heavily critical of legacy defense programs such as Lockheed Martin's F-35 fighter jet, which is set to cost the U.S. government an estimated $1.7 trillion over its lifetime. As an alternative, he has called for the mass production of cheaper AI-powered drones, missiles and submarines. This talk has reportedly incentivized traditional defense contractors to consider partnering with emerging technology firms to try and trim costs. Earlier this month, Palantir and Anduril, which are both named after magical items in J.R.R. Tolkien's "Lord of the Rings" trilogy, announced a partnership earlier this month. They intend to integrate Palantir's AI platform with Anduril's Lattice software in order to "transform America's world-leading AI advancements into next-generation military and national security capabilities."