4 May 2024

How Big Tech and Silicon Valley are Transforming the Military-Industrial Complex

Roberto J. González
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Over the past decade, the center of America’s military-industrial complex has been slowly shifting from the Capital Beltway to Silicon Valley. Although much of the Pentagon’s $886 billion budget is spent on conventional weapon systems, and goes to well-established defense giants such as Lockheed Martin, RTX, Northrop Grumman, General Dynamics, Boeing, and BAE Systems, a new political economy is emerging, driven by the imperatives of big tech companies, venture capital, and private equity firms.2 As Defense Department officials have sought to adopt AI-enabled systems and secure cloud computing services, they have awarded large multi-billion dollar contracts to Microsoft, Amazon, Google, and Oracle. At the same time, the Pentagon has increased funding for smaller defense tech startups seeking to “disrupt” existing markets and “move fast and break things.”3 This report examines how the priorities of the tech industry, the peculiarities of venture capital (VC) funding structures, and Silicon Valley’s startup model are likely to lead to costly, hightech products that are ineffective, unpredictable, and unsafe when deployed in real world conditions.

Booming demand for AI-enabled military technologies and cloud computing services is being driven by several developments. Perhaps most importantly, the easy availability of massive amounts of digital data collected from satellites, drones, surveillance cameras, smartphones, social media posts, email messages, and other sources has motivated Pentagon planners to find new ways of analyzing the information. This, coupled with years of “AI hype” generated by tech leaders, venture capitalists, and business reporters among others, has played a crucial role in sparking the interest of military leaders who have come to view Silicon Valley’s newest innovations as indispensable warfighting tools. The United States military’s shift towards AI and “data driven” warfare is connected with broader changes affecting a wide range of government agencies and industries.

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