Working with the U.S. military used to be taboo for the tech sector. Employees at companies like Google agonized over working with the U.S. national security establishment, going as far as to launch protests against management.
Times have changed: Now, U.S. tech companies, large and small, are happily partnering with U.S. government agencies. Both U.S. Big Tech and AI developers are signing deals with the Department of Defense (or the rechristened Department of War) and other national security agencies, and investors are piling into defense tech companies like Palantir.
“Silicon Valley has really changed,” Megan Milam, senior vice president of government relations at Anduril Industries, said Wednesday at the Fortune Brainstorm Tech conference in Park City, Utah. “We’ve gone from Anduril being the most controversial company in tech six years ago, to a lot of enthusiasm and excitement around what we’re doing right now.”
Speakers pointed to the rise in global conflict, perhaps best exemplified by Russia’s ongoing war in Ukraine, as a cause for this shift. “In the past 10 years, we’ve gone from the Global War on Terror to near-peer competition with China,” Milam said.
“There’s a ton of money being poured into defense from venture capitalists right now,” said Steve Simoni, founder of Allen Control Systems, which designs robotic weaponry. “Conflict is rising, and as a venture investor, it seems like you better put some chips down or you’re going to miss out.”
A global rise in arms spending
Arms spending is surging worldwide, spurred by conflicts like the war in Ukraine. Global military spending hit a record $2.7 trillion in 2024, according to the Stockholm International Peace Research Institute. The U.S. has the greatest share of world military spending at 37%.
China, consistently cited by Wednesday’s speakers as a threat and a motivating factor behind the interest in defense tech, is a distant second at 12%, though Beijing still spends more on defense than most other countries.
The surge in military spending is good for businesses too. Palantir shares are up around 120% this year. It’s not just in the U.S.: Germany’s Rheinmetall and South Korea’s Hanwha Aerospace are up 210% and 180%, respectively for the year.
Chinese aviation and defense stocks jumped earlier this year after Pakistan used the country’s J-10C jets to shoot down India’s planes.
Still controversial
Still, defense work remains controversial for U.S. tech companies. Last year, Google fired several employees for protesting the tech company’s work with the Israeli military amid the latter’s invasion of Gaza.
More recently, users blasted Oura on social media after the wearable tech company announced an expanded partnership with the U.S. Department of Defense, including a new U.S.-based factory in Texas, as well as a new tie-up with Palantir to measure “population-level analysis of risk and readiness.” Oura users expressed concerns that their health data might eventually make its way into U.S. government hands.
At Brainstorm Tech on Monday, Oura CEO Tom Hale called the rumors “totally overblown.”
“We will never sell your data to anyone, ever,” he said.