Holding Hostage the American Defense Industry

It's a high-stakes game where national security interests may well become secondary to the whims of Silicon Valley

Holding Hostage the American Defense Industry

Silicon Valley's incursion into the defense industry isn't just innovation—it's an aggressive takeover. Startups like Palantir and Anduril, armed with venture capital clout, are waging a silent war to dethrone the American military-industrial complex. They're not just offering alternatives or technological advancements; they're lobbying to render traditional defense giants obsolete and force the Pentagon into a tech-dependent stranglehold.[1]

The shift reflects a broader trend where the entire economy, including consumer and enterprise products, intersects with national security interests and technological supremacy. Look at the example of the Huawei equipment sales ban. Although it was a foreign company, this case highlights the dependency of first world nations on technological improvements, and how those needs – whether it's civilian consumers or military contractors – are being met with subversion.

The pivot to defense technologies is somewhat of a return to Silicon Valley's origins. There's a realignment towards cultural acceptance of the information-technology companies working on government contracts, spurred by geopolitical concerns such as the rise of China​​. This shift also comes at a time when startups and the Pentagon are both facing challenges from rapid technological advancements and new forms of threats that traditional defense systems may not adequately address​.

Palantir, founded with investments from the CIA's venture capital arm, In-Q-Tel, and Peter Thiel's Founder Fund, has become a key player in this transition. Its strategy, steered by investment capital, is to entrench itself in the very sinews of national security. Palantir's $1.2 billion federal haul was the result of tripling lobbying expenditures and manipulating defense legislation to tip the scales in their favor.[2]

Palantir's assertive tactics, which include challenging the Pentagon's procurement rules and pushing for legislative changes, aim to disrupt the entrenched procurement system and create a more favorable environment for their own products and services. These efforts have led to significant political support, enabling them to compete for and win major defense contracts, such as a $3 billion program for a new battlefield intelligence network​​​​​​. The legislative actions, such as those led by Senators McCain and Cotton, have facilitated conditions that potentially limit competition in favor of commercial software alternatives like Palantir's, further embedding their technology in the defense infrastructure​​​​.[3]

This aggressive push into the defense sector and the fostering of dependencies on their Software as a Service (SaaS) platforms have raised concerns. Such dependencies would establish a parasitic relationship akin to a protection racket, where the defense system becomes reliant on these technologies, likely at the expense of fair competition​​. Palantir's lawsuit against the Army[4], aiming to alter the procurement process in their favor, underscores the contentious nature of this transition and the lengths Silicon Valley firms are willing to go to secure their foothold in the defense sector.

Members of the "PayPal Mafia" pose for Fortune Magazine

The lawsuits, the backroom lobbying—it's a blatant power play by the same investors and founders behind companies like Tesla, Square, and BioFire. You've likely heard of the PayPal Mafia, the infamous group of former PayPal employees whose members include Elon Musk, David Sacks, and the aforementioned Peter Thiel. Many of the PayPal alumni have used their success and influence to sway government regulation in their favor, blurring the line between the private and public sectors.

There's no clearer example of regulatory capture of consumer services than that of Uber. According to the leaked Uber Files, the ride sharing company formed an alliance with Emmanuel Macron, then France's Minister for the Economy, to help rewrite laws governing its services. Macron, seeing Uber as a vehicle for job creation and economic growth, became a proponent for the company within the government, eventually leading to a relaxation of the requirements for licensing Uber drivers​​. This was part of Uber’s larger strategy, as internal emails revealed staff referring to the company’s status as "other than legal" in multiple countries, and yet it continued to operate despite knowing it was breaking the law.[5]

Uber’s aggressive approach involved heavy lobbying, leveraging political connections, and continuing operations even when faced with legal and regulatory challenges. This financialization of the economy ensures that there's a price for everything, not just in America. It seems apocalyptic to rely on capital as the primary incentive driving interests at home and abroad.

As these tech startups carve their niche in the defense industry, they're not just selling software—they're selling the future of warfare, and they're ensuring that future is inextricably linked to their bottom line. It's a high-stakes game where national security interests may well become secondary to the whims of Silicon Valley's unscrupulous tech moguls.

[[1]] Josh Wolfe, "The rise of defense tech is bringing Silicon Valley back to its roots"
[[2]] Ellen Mitchell, "How Silicon Valley’s Palantir wired Washington"
[[3]] Department Of Defense Authorization For Appropriations For Fiscal Year 2016 and the Future Years Defense Program (S. hrg. 114-214, Pt. 4), U.S. Senate, 114th Cong. (2016). In-text: (Department Of Defense Authorization For Appropriations and the Future Years Defense Program, 2016)
[[4]] Ali Breland, "Palantir wins lawsuit over US Army data system"
[[5]] Rebecca Bellan, "Leaked Uber Files reveal history of lawbreaking, lobbying and exploiting violence against drivers"