AI Library
Books for Reading AI
Choose a book, then read it in order from the table of contents.
[AI Library] Chapter 6. Pentagon Reform and the Future of Defense
PALANTIR: War, Surveillance, Artificial Intelligence
Part 3: AI on the Battlefield, Software-Defined Warfare
Chapter 6. Pentagon Reform and the Future of Defense
Attorney Kyungjin Kim
A. The War with Legacy Prime Contractors
(1) Winning the Lawsuit Against the U.S. Army (2016) and Opening the Door to Commercial Software
In the spring of 2012, soldiers of the 82nd Airborne Division were dying on the outskirts of Kandahar, Afghanistan. In two weeks, six soldiers lost their lives to improvised explosive devices (IEDs). Intelligence analysts struggled to identify enemy patterns, but the Army-supplied software DCGS-A did not work. One analyst recalled that it took a day and a half to create a map of IED placement patterns. The unit commander requested different software from higher command , a product from a Silicon Valley company called Palantir. The request was denied. He asked again. Denied again. A third request met the same fate. The unit returned home with 200 casualties.
In Washington, no one wanted to hear this story.
The Army had already poured 15 years and more than $3 billion into DCGS-A. If there were problems, they could be fixed. It could not be handed over to a startup from Silicon Valley. There was an ecosystem built by giant defense contractors like Lockheed Martin, Raytheon, and Northrop Grumman. They had worked with the Pentagon for decades and employed thousands of lobbyists and retired generals. There was no room for a company like Palantir.
At a 2013 congressional hearing, Republican Representative Duncan Hunter of California clashed with Army Chief of Staff General Ray Odierno. Hunter presented survey results showing 96% of field soldiers preferred Palantir. Odierno grew angry. The scene, beginning around the two-hour mark on YouTube, can still be viewed today. It is a rare spectacle of a general shouting at a congressman.
Palantir waited. Then on June 30, 2016, it filed an 81-page complaint in the U.S. Court of Federal Claims.
The core of the lawsuit was the Federal Acquisition Streamlining Act (FASA), enacted in 1994. This law mandated that government agencies first investigate whether commercial products exist on the market before purchasing. The intent was to avoid wasting taxpayer money redeveloping something that already exists. Palantir's lawyers argued that the Army had violated this law. The Army had not conducted proper market research and had not even reviewed whether Palantir's Gotham platform could meet DCGS-A's requirements.
The complaint contained one sentence: "Palantir has developed technology that already solves the problems DCGS seeks to address. This technology has been successfully used by Army units and numerous military and intelligence agencies. Field commanders have repeatedly requested this product. Yet the Army issued a solicitation that made it impossible for Palantir to compete. This is unreasonable. And it is a violation of law."
Four months later, on October 31, 2016, Judge Marian Blank Horn of the Court of Federal Claims ruled in Palantir's favor.
The ruling was clear. The Army had violated FASA. It had not adequately investigated whether commercial products existed on the market and had failed to reasonably explain why commercial products could not meet its requirements. The court issued a permanent injunction prohibiting the Army from awarding DCGS-A contracts until it complied with the law. In 2018, the Federal Circuit Court of Appeals upheld the ruling. The appeals court noted that the Army's market research was "a conclusions-only assessment" and that it had not "reasonably used" its research findings.
This ruling became a turning point in the history of U.S. defense procurement.
The Army had to change its approach. In March 2018, it selected two companies , Raytheon and Palantir , and began a competitive evaluation. Soldiers personally used both systems and evaluated them. The Army wanted a system that could run on commercial laptops, be learned in eight hours, and operate in low-bandwidth or disconnected environments. Raytheon submitted a product called FoXTEN. Palantir submitted its Gotham platform.
In March 2019, Palantir was selected as the final winner. The contract was worth more than $800 million.
Doug Philippone, Palantir's head of defense business, assessed that this lawsuit brought transformative change to defense procurement methods. He called it a "try, buy, decide approach" , first test commercial products, then buy them if they work. It was different from the old method of spending more than a decade writing requirements, only to find that requirements had changed while the technology was being developed, yet being unable to stop.
Joe Kasper, chief of staff for Representative Duncan Hunter, said: "It was more than a simple contract dispute. Soldiers in combat were repeatedly requesting a commercial alternative that they claimed saved lives. One division commander said it was a matter of lives and limbs. The fact that this technology was repeatedly denied and actively disparaged is the worst kind of bureaucracy."
Palantir's victory opened a path for Silicon Valley companies. It showed that FASA was a legal weapon. It proved that if commercial products exist and the government ignores them to develop from scratch, one can go to court. This was not just one company's victory. It was the moment the first crack appeared in the fortress walls of the legacy defense cartel.
(2) Breaking the Cost-Plus Contract Practice and Fixed-Price Innovation
In 1917, during World War I, the U.S. government faced a problem.
War materiel was urgently needed, but nobody knew how much it would cost. Tanks, airplanes, warships , these were things being built for the first time. The government could not tell companies "build it at this price." So the government offered a compromise: "Just build it. We'll pay whatever it costs. And we'll add a profit margin on top." This was the beginning of the cost-plus contract.
A century has passed. That stopgap measure became the standard of the American defense industry.
The logic of cost-plus contracts is simple. When developing a new weapons system, uncertainty is large. If companies are forced to accept a fixed price, they either cannot bear the risk and nobody bids, or they set the price absurdly high. So it benefits everyone for the government to reimburse costs and guarantee a reasonable profit.
The problem was the incentive structure this system created.
The more it costs, the bigger the profit. Finishing quickly is a loss. Reducing costs is a loss. Dragging out the project and inflating costs becomes the rational choice. Defense contractors became masters of this game. Projects running over schedule and over budget became not the exception but the rule. Boeing's KC-46 aerial refueling tanker generated more than $7 billion in cost overruns on a $4.6 billion contract. This is not an extreme case. This is the standard.
In 2009, President Barack Obama declared that "the days of giving defense contractors a blank check are over." He issued a policy memo favoring Firm Fixed-Price contracts. Ashton Carter, then the Pentagon's top weapons buyer, also supported expanding fixed-price contracts. Congress passed the Weapon Systems Acquisition Reform Act (WSARA) to promote competition and reduce cost-plus abuses.
But resistance from existing defense contractors was fierce.
In January 2024, Lockheed Martin CEO Jim Taiclet declared at an earnings call: "There are no more must-win programs for us." He meant that the risk of fixed-price development contracts was too great. Northrop Grumman CEO Kathy Warden said something similar. The company had pulled back from fixed-price development contracts after the 2015 B-21 bomber contract. The L3Harris CEO was more direct: "If it's fixed-price development, we won't bid. We don't want to take losses."
This is the worldview of traditional defense contractors. For them, cost-plus is an old friend guaranteeing safe returns. Margins are low but so are risks. Fixed-price contracts are a gamble. If costs exceed projections, the loss falls entirely on the company.
But emerging defense tech companies like Palantir and Anduril operate on a different logic.
In September 2024, the Army released new software procurement guidelines. These included language stating "use cost-plus contracts to the maximum extent." Non-traditional defense companies pushed back. One defense tech executive, speaking anonymously, said: "Cost-plus favors large traditional defense contractors. They have government-approved cost accounting systems. For smaller companies like ours, building that infrastructure takes enormous time and money."
The tide is turning. Space Force acquisition chief Frank Calvelli has been pushing to expand fixed-price contracts since taking office in 2022. His vision is to purchase small systems using existing technology at fixed prices and deploy them within three years of contract award. He acknowledges exceptions: "I never said to build the next-generation Battlestar Galactica at a fixed price."
The key is balance. For genuine innovation , R&D pioneering unknown territory , cost-plus may be appropriate. But insisting on cost-plus for applying existing commercial technology to the military is a waste of taxpayer money.
Palantir's 2016 lawsuit victory left a decisive precedent in this debate. If a commercial product exists, the government must consider it. Bureaucratic inertia toward developing from scratch can be legally challenged. This was a ruling that shook the foundations of the cost-plus regime. It cracked the "development-first" privilege that traditional defense contractors had enjoyed.
The Trump administration in 2025 is accelerating this trend. Defense Secretary Pete Hegseth released a memo demanding reform of software procurement practices shortly after taking office. The Department of Government Efficiency (DOGE) is targeting wasteful contracting practices. Army Chief Information Officer Leo Garciga said the goal is "to maximize buying power by using enterprise-level discounts."
A wartime stopgap from a century ago became a permanent institution, and that institution became a protective shield for interest groups. Now a new generation of companies is trying to tear down those walls. The fight is not yet over. But Palantir won the first battle.
B. The Shift of Power from Hardware to Software
(1) The Rise of Defense Tech Companies: Anduril, SpaceX, and Others
In June 2014, a young man attended a party on Sonora Island in British Columbia, Canada. It was twenty-one-year-old Palmer Luckey. Two years earlier, he had become a billionaire by selling Oculus, a virtual reality headset company he built in his parents' garage, to Facebook for $2.7 billion. The party was hosted by Peter Thiel's Founders Fund. There, Luckey met thirty-year-old Trae Stephens. Stephens was an investor who had just left Palantir and joined Founders Fund.
The two discovered an unusual commonality. They both thought it was absurd that Silicon Valley venture companies were not working with the Department of Defense. For Stephens, it was incomprehensible that nobody was interested when there was a customer spending tens of billions of dollars. At the time, the only companies receiving venture investment and working closely with the government were Palantir and SpaceX. Stephens was looking for a third company to join that duo.
Three years later, in 2017, Luckey was fired from Facebook. A political donation controversy was the cause. He could have been disheartened, but instead he co-founded a new company with Stephens: Anduril Industries. Named after Aragorn's sword in The Lord of the Rings, it means "Flame of the West" in Quenya.
Anduril's strategy was the exact opposite of traditional defense contractors.
Traditional defense contractors wait for the Pentagon to publish requirements. When requirements come out, they write proposals. If they win the contract, they begin development. If costs overrun, the government bears them. Completion can take 10 or 15 years. Anduril was different. It built products first, using its own funding for R&D. Then it went to the Pentagon and said: "It already exists. It works. We'll give it to you at a fixed price."
This was applying the Silicon Valley startup playbook to the defense sector.
In 2024, Anduril's revenue roughly doubled year-over-year to approximately $1 billion. New contract value exceeded $1.5 billion. In June 2025, the company raised $2.5 billion in a Series G round led by Peter Thiel's Founders Fund. Founders Fund invested $1 billion in this round , the largest check in the fund's history. The company was valued at $30.5 billion, more than doubling from $14 billion eight months prior.
These numbers are significant. Anduril has now entered the territory of traditional defense giants.
The contract list reveals the scale. In February 2025, Anduril acquired the Army's Integrated Visual Augmentation System (IVAS) program from Microsoft , a contract worth up to $22 billion to supply 120,000 augmented reality headsets to the military. It is participating in an autonomous unmanned aircraft program worth up to $9 billion in partnership with General Atomics. It signed a 10-year, $642.2 million anti-drone system contract with the Marine Corps.
In Ohio, a factory called Arsenal-1 is under construction. About $1 billion is being invested in this approximately 5-million-square-foot facility, which is scheduled to begin production in July 2026. More than 4,000 jobs will be created. Luckey calls this factory a "mega-scale autonomous weapons manufacturing facility." Plans call for producing tens of thousands of drones and autonomous systems annually.
Anduril's secret weapon is a software called Lattice. It is a command and control system that collects and analyzes data from various hardware platforms to provide real-time battlefield situational awareness. Drones, sentry towers, and sensor networks are connected through Lattice. When a sentry tower detects a suspicious vehicle, it automatically dispatches a Ghost drone to investigate while simultaneously sending an alert to ground forces.
SpaceX traced a similar trajectory.
Founded by Elon Musk in 2002, the company was initially the subject of ridicule. Rocket manufacturing was Boeing and Lockheed Martin's domain. But SpaceX dramatically lowered launch costs through the innovation of reusable rockets. It is now a major launch contractor for the U.S. Air Force and Space Force. The Starlink satellite network became critical infrastructure for military communications during the Ukraine war. In 2024, the Pentagon signed a contract with SpaceX to develop a military version called Starshield.
These companies share a common thread: all place software at their core.
Anduril's drones are hardware, but their value lies in the Lattice software. SpaceX's rockets are machines, but what enables reuse is precision control software. Palantir was a pure software company from the start. Together, they prove that power in the defense industry is shifting from hardware to software.
Traditional defense contractors feel this shift too. Northrop Grumman, L3Harris, and Raytheon participate as partners in Palantir's TITAN project. Palantir holds the software leadership. They are in the role of supplying hardware components. A role reversal unimaginable ten years ago.
Luckey said in a CNBC interview: "The idea that we should have the best military in the world is a truly bipartisan one." He stated that Anduril "will certainly become a public company." To win trillion-dollar defense contracts, it needs to be a public entity.
The relationship between Silicon Valley and the Pentagon was once frosty. In 2018, Google employees launched a mass signature campaign protesting participation in Project Maven, and Google abandoned the contract. But now things are different. In December 2024, Anduril announced a partnership with OpenAI , a collaboration to integrate AI into systems that track and neutralize enemy drones. In 2025, it announced joint development of augmented reality headsets with Meta. It was a reconciliation between Luckey and Meta.
The power shift is underway. Anduril, SpaceX, Palantir. What this triad proves is clear: in 21st-century warfare, the winner is not the side with the biggest tank. It is the side with the best software.
(2) Palantir's Role in Building JADC2 (Joint All-Domain Command and Control)
One day in May 2024, a contract was signed in a conference room at the Pentagon.
$480 million. Five years. Maven Smart System. These three terms were the core of the contract. Palantir was tasked with spreading the Department of Defense's AI backbone system to combatant commands worldwide. Central Command, European Command, Indo-Pacific Command, Northern Command/NORAD, Transportation Command. Five combatant commands were the first targets.
Maven's history goes back to 2017.
At the time, the Pentagon faced a problem. Drones captured thousands of hours of footage daily, but there were not enough personnel to analyze it. Human analysts were buried under an endless pile of video. The solution was AI. Project Maven aimed to develop a system that automatically identifies and tracks objects in drone footage using AI and machine learning.
Google participated as the initial contractor but withdrew due to employee backlash. Palantir filled that void. In 2023, the Maven program was transferred to the National Geospatial-Intelligence Agency (NGA) and elevated to an official program of record. Palantir's Maven Smart System became the program's core software platform.
JADC2 , Joint All-Domain Command and Control. What does this acronym mean?
Traditionally, each military branch operated its own command and control system. The Army had its own, the Navy had its own, the Air Force had its own. Intelligence was separate; communications were separate. In joint operations, this became a problem. Even if an Air Force reconnaissance aircraft spotted an enemy tank, it took time for that information to reach Army artillery. Even if a Navy ship detected an enemy missile launch, it was not immediately relayed to Air Force interceptors.
JADC2 is an attempt to break down these barriers. Army, Navy, Air Force, Space Force, Cyber Command , connecting sensors, weapons, and commanders across all domains into a single network. A system where anyone can obtain needed information in real time and respond as quickly as possible with the most suitable weapon.
Palantir's role is to build the software layer of this vision.
Doug Philippone, Palantir's head of defense business, explained: "Our platform is like an operating system for JADC2." More than 2,000 engineers deploy hundreds of updates weekly. The Maven Smart System integrates data from satellites, drones, ground sensors, and human intelligence sources. AI analyzes patterns and identifies threats. Commanders view complex data on visualized screens.
In May 2025, the Department of Defense increased the contract ceiling by $795 million to nearly $1.3 billion. The reason: "increased demand." Vice Admiral Carl Thomas, Vice Chief of Naval Operations, said at the Navy Summit in August 2025: "The number of people using Maven as a data fabric and Foundry for operations centers is growing. Now everyone is using Maven."
TITAN is another key element of JADC2 implementation.
In March 2024, Palantir was awarded a $178.4 million TITAN contract by the Army. TITAN stands for Tactical Intelligence Targeting Access Node. It is a mobile ground station that receives data from space and high-altitude sensors and provides targeting information to ground forces. AI analyzes vast amounts of data to assist human commanders in decision-making.
TITAN comes in two versions. The advanced version is mounted on a large truck and connects directly to space sensors. The basic version is installed on a Joint Light Tactical Vehicle (JLTV) and is more mobile. In March 2025, Palantir delivered the first two TITAN prototypes on schedule. In April 2025, an Army report assessed TITAN as one of the top-performing programs, alongside the Next Generation Squad Weapon and Future Long-Range Assault Aircraft.
In December 2025, another groundbreaking contract was announced: ShipOS.
Secretary of the Navy John Phelan and Palantir CEO Alex Karp made a joint announcement in Washington. This $448 million contract applies AI to shipbuilding optimization. The goal is to surge nuclear submarine production. Palantir's predictive maintenance concepts are applied to the manufacturing floor to reduce costs and increase speed. The contract includes a "shared savings" mechanism tied to performance metrics , meaning if cost savings are realized, both parties share them.
The Pentagon is planning to establish a new program office to unify JADC2 efforts, fusing multiple Department of Defense elements that emerged since the late 2010s: the Air Force's Advanced Battle Management System (ABMS), the Army's Project Convergence, and the Navy's Project Overmatch. The aim is to bind all of these together to realize true joint all-domain command and control.
Palantir is at the center of all these puzzle pieces.
What they are building is not mere software. It is the nervous system of future warfare. The goal is to dramatically shorten the time from sensor to shooter, from detection to strike. The possibility was already proven in the Ukraine war. Now it is being scaled to the entire U.S. military.
Akash Jain, Palantir's President of USG, said when announcing the Maven contract expansion: "The rapid fielding and adoption of key technologies, including the agile, effective, and responsible deployment of AI/ML, is essential for the United States to maintain its competitive advantage."
At the center of that competitive advantage stands Palantir.
C. The Significance of the U.S. Army's $10 Billion Contract in 2025
(1) Consolidation of 75 Individual Software Contracts
On July 31, 2025, the U.S. Army released a brief press statement.
The title read: "Enterprise Agreement Awarded to improve Military Readiness and Operational Efficiency." But the numbers within were not simple. $10 billion. 10 years. Consolidation of 75 contracts. That day, Palantir officially entered the uppermost tier of the American defense industry.
What makes this contract special is not just the dollar amount. The form is new.
Called an Enterprise Agreement (EA), this contract is a type of blanket purchase agreement. It is a system where the Army can buy Palantir products and services as needed, in the quantities needed. No individual bids, individual contracts, or individual approval processes are required. It is similar to an enterprise license agreement that a large corporation signs with a software company.
Why was such a contract needed?
The Army had no fewer than 75 individual contracts with Palantir. Fifteen were contracts where Palantir was the prime contractor, and 60 were contracts where Palantir participated as a subcontractor. The problem was clear: the same software from the same company was being purchased at different prices, under different terms, through different contracts. Intermediary fees were being added. Administrative costs were wasted. Nobody could see the full picture.
Daniel Moyer, Executive Director of the Army Contracting Command-Aberdeen Proving Ground, explained: "If you have more than one contract with the same vendor, you need to check whether you bought the same thing twice, in a different way or at a different price. This effort is to make sure we're getting the best discount."
This is common sense, but in the Pentagon, it is revolutionary.
Traditionally, defense procurement was decentralized. Each department, each program, each command purchased on its own. There was no coordination. Buying the same product ten times without negotiating volume discounts. Suppliers profited from this inefficiency.
Leo Garciga, Army Chief Information Officer, explained the significance of the enterprise agreement: "This enterprise agreement is a pivotal step in strengthening the Army's modernization capabilities while being fiscally responsible. By streamlining procurement processes and using enterprise-level discounts, we are not only enhancing operational effectiveness but also maximizing our purchasing power."
Examining the contract structure makes the change even clearer.
Most existing contracts were "capability package" based. If the Army said "we want this function," the vendor proposed a complete solution, and the Army purchased the entire package , including features it didn't need. The new enterprise agreement is different. In Moyer's words, it is "an a la carte menu, not an all-you-can-eat buffet." Prices are separated by product and service. The Army selects and purchases only what it needs.
The $10 billion figure also needs clarification.
This is not a commitment by the Army to pay Palantir $10 billion. It is the maximum ceiling that can be purchased through this contract over 10 years. Actual spending could be significantly less. There is a minimum purchase obligation, but it has not been disclosed. The Army can stop purchasing through this contract at any time if a better alternative appears.
Moyer also emphasized competition: "Competition will continue for future programs. If Palantir bids on a program or weapon system and is selected, they would of course use this agreement to get volume discounts and economies of scale. But if Palantir loses a bid, that business goes to another vendor."
This contract is the beginning of a larger trend.
Garciga revealed that the Army is negotiating 10 to 15 additional enterprise agreements. "We're not just focusing on the Palantir contract. This is our big initiative. Essentially, we're looking across the Army at how many times we've purchased the same commercial software and whether it makes sense to consolidate them for maximum discounts."
The implication is clear. Palantir has become the precedent. Other software companies can also sign similar contracts , Microsoft, AWS, Oracle. Anyone willing to offer volume discounts using the Army's scale can sit at the negotiating table.
This aligns with the Trump administration's policy direction. Defense Secretary Pete Hegseth released a memo demanding software procurement practice reform shortly after taking office. The Department of Government Efficiency (DOGE) is targeting wasteful contracting practices. President Trump himself mentioned at a July AI summit that "we buy a lot from Palantir."
Boeing, Northrop Grumman, Lockheed Martin , traditional defense giants doing business with the Pentagon through enterprise agreements is nothing new. But a software company like Palantir joining this club is different. It is a signal that the status of software in the defense industry has fundamentally changed.
The Register commented: "There are no formal criteria for top-tier membership of the U.S. military-industrial complex, but a $10 billion deal that consolidates dozens of contracts into one blanket purchase agreement certainly shows Palantir has earned its place."
From 75 fragments to one massive block. That is what happened on July 31, 2025.
(2) The Trump Administration and the AI-Centric Defense Strategy
On January 20, 2025, Donald Trump began his second term.
His administration declared AI a national priority. The executive orders signed immediately after inauguration had AI development acceleration and deregulation at their core. The defense sector was no exception. Defense Secretary Pete Hegseth released a software procurement reform memo in his first month. The message was clear: faster, more efficiently, with AI at the center.
Palantir is one of the biggest beneficiaries of this policy direction.
CEO Alex Karp's relationship with the Trump administration is close. Karp did not publicly endorse Trump during the 2024 campaign, but his worldview resonates with the administration's "peace through strength" doctrine. Karp has been preaching for years the importance of technological superiority to defend Western democracy. The Trump administration is funding that vision.
The numbers speak.
Just listing the major defense contracts Palantir received in 2025 alone makes a long list. March: first TITAN delivery. May: Maven Smart System contract increased to $1.3 billion. July: Army $10 billion enterprise agreement. December: Navy ShipOS $448 million contract. This is not coincidence. It is the result of policy will.
The Department of Government Efficiency (DOGE) has a role too.
Led by Elon Musk and Vivek Ramaswamy, this organization aims to eliminate federal government inefficiency. Their gaze fell on Department of Defense procurement , duplicate contracts, intermediary fees, administrative waste. The enterprise agreement with Palantir was presented as a model for solving these problems. Consolidating 75 contracts into one, securing volume discounts, eliminating middlemen margins. A story DOGE would like.
But this is not just a cost-cutting issue. It is a matter of geopolitical competition.
China is rapidly expanding its AI capabilities under its Civil-Military Fusion strategy. U.S. intelligence agencies see 2027 or 2028 as a potential crisis point for the Taiwan Strait. Before then, the U.S. military must secure overwhelming superiority in AI capability. JADC2 implementation, kill chain acceleration, autonomous weapons system deployment , everything is a race against time.
Palantir's role is central to this competition.
Axios analyzed the $10 billion contract and wrote: "The deal illustrates three things: Palantir's rise in Washington and especially at the Pentagon. Changes in the way the military tests and buys products, especially software. And a maturing Washington-Silicon Valley relationship."
Wendy Anderson, former Palantir executive and chief of staff to the late Defense Secretary Ashton Carter, commented: "This agreement reflects a broader shift in recognizing software not as a support function but as core to operational readiness. It sets a precedent for how government and industry can partner to deliver real capabilities at speed and scale."
Palantir's stock rose more than 110% in 2025. Market capitalization at one point exceeded $300 billion, surpassing traditional defense giants. Of course, there are bubble concerns. The price-to-earnings ratio runs in the hundreds. But investors are looking at the future , what it means to become the data backbone of the U.S. military.
There is criticism too.
Some analysts worry about excessive dependence on a single company. If Palantir controls the U.S. military's core systems, switching to another vendor later becomes difficult , the so-called "lock-in" effect. The military emphasizes that competition will continue, that if Palantir loses a bid, another vendor gets the business. But realistically, in an enterprise agreement system that consolidated 75 contracts, it will not be easy for competitors to break in.
The Trump administration's AI-centric defense strategy is a bet. A bet that software superiority can overcome hardware disadvantages. Even if China produces more ships and missiles, the logic goes, America can win if it decides and strikes faster with better AI.
Palantir is the key chip in that bet. The $10 billion contract shows the size of that chip.
In 2016, Palantir had to go to court just to earn the right to bid. In 2019, it won an $800 million contract. In 2025, it signed a $10 billion enterprise agreement. From outsider to the center of the military-industrial complex in nine years. That is the speed of the defense industry in the software age.
Kim Kyung-jin
Attorney · Former Member of the National Assembly · AI Policy Researcher
© 2026 Kim Kyung-jin. All rights reserved.