The Rundown - Deep Dive: The Reunion of Silicon Valley and the U.S. Military

Episode Date: June 7, 2025

Before Silicon Valley built social networks, it built weapons. This episode unpacks the forgotten alliance between the U.S. military and Big Tech — from DARPA’s Cold War breakthroughs to today’s AI-powered battlefield. We explore why companies like Meta and Palantir are reuniting with the Pentagon, and how China’s lead in drone technology is reshaping modern warfare. The tech-military partnership is back, and the future of national security may depend on it.This video is for informational purposes only and reflects the views of the host and guest, not Public Holdings or its subsidiaries. Mentions of assets are not recommendations. Investing involves risk, including loss. Past performance does not guarantee future results. For full disclosures, visit ⁠⁠⁠⁠Public.com/disclosures⁠⁠⁠⁠.

Welcome back to the rundown for another weekend deep dive. Today, we are talking about a surprising reunion between Silicon Valley and the U.S. military. See, before Silicon Valley became synonymous with social networks and AI chat box and VC. Bros, the Bay Area was basically an R&D playground for the U.S. military. Back in the 50s and 60s, the U.S. military made huge investments in new technology that turned Silicon Valley into the tech hub that we know today. But instead of B2B SaaS applications, tech companies back in the day built spy planes and advanced weapons systems. But over time, tech's relationship with the U.S. military got complicated.

In fact, many big tech giants turned down contracts from the Defense Department. But now, all of that seems to be changing. See, war these days is not just about missiles and tanks, but it's about drones, data, and AI. And the Pentagon knows they need tech's brightest minds if they want to dominate the future of warfare. And big tech seems to be ready to jump in. So in this episode, we're diving into why Silicon Valley is cozying back up to the Pentagon, what's at stake, and why this reunion could define the next era of geopolitics and corporate dominance. We got a great one for you today.

Let's dive in. Now, before we dive into the episode, I want to give you guys a quick heads up that the vibe and energy you're about to hear is a bit different than our normal episodes. See, we had a chance to film this episode at the NASDAQ, studios in Times Square, which was a really cool experience. Shout out to them for having us. But it was also like a new recording environment for me, so my delivery and energy and the audio

was just a bit different than our normal episode. I think once you start listening, you'll know what I mean. If you are someone that normally listens to the audio only version, I recommend checking out the video for this one and you'll see the studio that I'm talking about. All right, let's get into the episode. Silicon Valley and the US military's collaboration has been tempered over the past couple of decades,

Despite some efforts, employees and others have pushed back, voicing concerns about the ethics tied to using technology that they were building for war. We saw it with Google's Project Maven. This project helped the Pentagon identify and track potential drone targets using artificial intelligence. But internal backlash at Google caused the company to decide not to renew its partnership with the government when it expired in 2019. More than 3,000 Google employees signed a letter to the CEO, Sundar Pichai, saying the company should not be in the business of war. We also saw it with Microsoft in 2019 after it won a $480 million contract with the Army to supply prototypes of augmented reality headsets. And a group of employees protested saying they do not want to be war profiteers. But it wasn't always a tense relationship.

The reality is without the government's help, there likely would be no Silicon Valley today. The roots of Silicon Valley weren't social. They were strategic. It's evident in the creation of DARPA in response to the Soviet Union's launch of Sputnik in 1957, In the 1950s and 60s, the Bay Area exploded with government money. DARPA, which is the Pentagon's R&D wing, funneled billions of dollars into projects with Stanford, SRI, and local defense firms. DARPA had its hands in the creation of the Internet and GPS, and more recently, MRI vaccine development, and even self-driving cars. Tech and defense were part of the same machine.

Nowhere was it clearer than the Manhattan Project in the 1940s. We've all seen Oppenheimer. It was a secret government initiative that involved. researchers, scientists, and corporations like General Electric and DuPont that led to the creation of the atomic bomb. Now Palantir CEO Alex Karp says the atomic age is closing and the software century has arrived. And he's calling for a new Manhattan project centered around arming the military with AI. Signs are showing that tech giants are warming up to the idea. In early February, Google reversed its ban on using AI technology for weapons and surveillance. Meta has historically kept its distance

for military work until this year when the company shifted its policy in November of 2024 and said its Lama AI models would be available to federal agencies and contractors working on national security. And now META, best known for likes and Instagram filters, is co-developing a battlefield headset with weapons maker and DURL. It's called Eagle Eye, which is also a great movie. It's a mixed reality headset designed to give soldiers real-time drone alerts, target identifications, and AI-assisted combat navigation. Meanwhile, Palantir is expanding its military footprint with AI-powered battlefield systems. Its new Titan project aims to put autonomous targeting into Army vehicles, and it netted Palantir $178 million. Plus, Palantir released a game-changing product in 2023 called AIP, that lets customers build and deploy AI agents that automate workflows and help with a range of goals like targeting enemies.

And Open AI, long silent on defense, is quietly working on secure LLM deployments for the pennies. And now all the big tech giants, Amazon, Google, Microsoft, and Oracle are all part of the Pentagon's $9 billion joint warfighting cloud capacity program. Now, I've mentioned this in previous deep dives, but AI use in the military is still in the early innings. The U.S. Department of Defense requested a total of $1.8 billion to fund AI capabilities in 2024, which is just 0.2% of the country's proposed national defense budget. The way wars are being fought is rapidly changing due to the rise of artificial intelligence. drones and other emerging technologies. If you want to preview what future conflicts looks like, just look at Ukraine and the recent drone strikes from the Ukraine that took out an estimated 41 Russian military aircrafts dubbed spiderweb. Part of what's notable here is the warplanes cost

$100 million or more and were destroyed by drones that cost as low as $600 bucks. Air superiority isn't just about fighter jets anymore. It's about software, sensors, and swarms. Now there's concerns the U.S. is falling behind in the tech to China, drones and AI specifically. China's drone capabilities are especially advanced. They're already demonstrating drone swarms, low-cost UAVs, and autonomous reconnaissance tools that they're doing at scale. And you guys might be familiar with DGI, the world's biggest commercial drone maker. It's also based in China. So the military implications here could be massive. And that's why the U.S. is moving to potentially ban Chinese-made commercial drones in the U.S. through an executive order by President Trump.

The U.S. is now trying to play catch up with homegrown drone companies like Red Cat and Universal Machines, but it'll likely take some time to level the playing field. The next generation of warfare will be defined by drones, sensors, and AI. It'll be fast, autonomous, and data-driven. And that means the U.S. needs Silicon Valley. That could mean big contracts for tech companies. We're entering a new era. There's less Lockheed Barton and more Pallantier.

There's less Cold War and more Code War. And for better or worse, the companies that once built up, our apps could be stepping up to help build our military arsenal. Well, all right, guys, that's it for today's weekend, deep dive. Hope you guys enjoyed that episode. Like I said in the intro, a bit of a different vibe and pace than our usual episode. Hopefully the next time we film at the NASDAQ, it'll be a lot more comfortable. If you guys have any ideas and recommendations on what we should film at the NASDAQ

the next time we're there, let us know in the comments. Hope you enjoyed the show. If you did and you have like eight extra seconds, consider giving us a five-star rating on Apple, Spotify, or wherever you listen to your podcast. And let us know in the comments on Spotify or YouTube on what topics you want us to cover next. Thank you guys so much for listening. Shout out to Mike and Connor for all the help behind the scenes. And we'll see you guys back here on Monday.