Silicon Valley Forges Cannons
A Panorama of the New AI Arms Forces in the US and Europe

In 2018, Google participated in the Pentagon's "Project Maven," using AI to analyze drone surveillance footage to assist target identification. Hundreds of employees signed a protest letter, and the company was forced to abandon the contract and pledge not to use AI for weapons. Eight years later, history has almost entirely reversed: in 2026, Google allowed Gemini to access military classified networks for "any lawful purpose." Nearly 600 employees protested, but management did not back down this time — having already quietly removed the weapons ban from its public AI principles in February 2025.

In January 2024, OpenAI quietly revised its usage policy, removing clauses that explicitly prohibited "weapons development" and "military and warfare" applications. OpenAI VP of Global Affairs Anna Makanju explained: "Because we had previously had a blanket ban on military uses, many people mistakenly thought that would prohibit some use cases that are actually very much in line with the world we want to see."

a16z's "American Dynamism": Investing in Arms as "American Kinetics"

One of the most important capital drivers of this wave is the "American Dynamism" investment thesis established by a16z in 2022, led by partner Katherine Boyle. The annual "American Dynamism 50" list released in March 2025 notably used a "Taiwan Strait conflict" scenario as its narrative framework, featuring Anduril, Castelion, Epirus, Saronic, Shield AI, and other defense companies. a16z's framing is direct: "These 50 companies aren't just enhancing America's ability to deter conflict — they're also re-industrializing America in the process. That's the bigger win."

In 2023, a16z collaborated with Palmer Luckey on a podcast episode titled "Rebooting the Arsenal of Democracy" — borrowing the WWII historical metaphor of Roosevelt mobilizing American industry to aid allies. Anduril, Palantir, Saronic, and similar companies are dubbed "neoprimes" (new arms merchants), largely bypassing the cumbersome procurement processes of the traditional military-industrial complex of Lockheed Martin, Boeing, and Raytheon through simplified acquisition mechanisms.

Anduril was co-founded in June 2017 by Oculus founder Palmer Luckey, Trae Stephens, Brian Schimpf (current CEO), and others, backed by early capital from Peter Thiel's Founders Fund.

Valuation Curve

Core Product Lines

Major Contracts

• February 2025: Took over Microsoft's Army IVAS headset project (renamed EagleEye)
• March 2026: Signed a up-to $20B, 10-year enterprise-level agreement with the US Army
• September 2025: Signed an $1.1B "Ghost Shark" unmanned submersible contract with the Royal Australian Navy
• December 2025: Bloomberg reported it was pursuing a major UK drone contract

The Founder's Philosophy of War

Founder Ethan Thornton grew up in a military family in the small Texas town of Boerne; in high school he built a hydrogen gun prototype using "deer feeder batteries and electrolysis cells." He dropped out of MIT at 19 to start the company, and is a Forbes "30 under 30" honoree and Thiel Fellow. In 2023, a self-funded prototype test exploded, injuring a team member with shrapnel, and the company stalled until Sequoia's seed round closed — the first defense tech investment in Sequoia's history.

The company initially bet on hydrogen-powered weapons, but pivoted entirely in early 2024 due to economic viability issues, focusing on turbojet-powered single-use strike drones like Viper (claimed cost 300x lower than traditional drones, ~180-mile range), along with glide munition Glide, stratospheric platform Stratos, mass-production munition Pike, and the anti-swarm interceptor Dart announced in January 2026.

If Anduril sells hardware and Mach Industries sells speed, Shield AI sells something more abstract — the "brain" that lets aircraft fly and fight on their own.

Founders Brandon Tseng (President) and Ryan Tseng (current President & Chief Strategy Officer) are brothers, sons of a Taiwanese immigrant. Brandon's childhood dream was to become a Navy SEAL; after graduating from the US Naval Academy, he achieved that goal. During two Afghanistan deployments, he witnessed soldiers pushing through doors into buildings with zero information, clearing IEDs and engaging entrenched gunmen, paying the blood price — this experience became the starting point for all of the company's later products. Ryan previously founded wireless charging company WiPower and sold it to Qualcomm. When the two co-founded the company with technical co-founder Andrew Reiter in 2015, they were rejected by 29 out of 30 Silicon Valley investors, scraping together $100K from friends and family to build the first prototype, finally landing a $2.1M seed round led by Homebrew and Bloomberg Beta in 2016. Along the way, they even turned down an investor who demanded the company abandon its focus on "protecting soldiers and civilians" to chase a larger market.

The core product is Hivemind — an AI pilot software system that enables aircraft to make autonomous decisions without relying on continuous remote human control. In 2018, the Nova quadcopter drone equipped with Hivemind became the first AI-piloted drone deployed in combat, used by US Special Operations Command for reconnaissance and mine-clearing before building entries. The real battlefield validation came from Ukraine: V-BAT drones completed over 130 sorties and identified 200+ Russian targets in the Ukraine theater, currently the only long-endurance drone platform that can simultaneously penetrate both Ukrainian and Russian electronic warfare environments while completing reconnaissance and strike missions.

The relationship with Anduril is more nuanced than it appears: In March 2026, Shield AI's Hivemind was selected by the US Air Force to provide autonomous navigation for the "Collaborative Combat Aircraft" (CCA) program — and the platform it actually serves is Anduril's YFQ-44A "Fury" loyal wingman. Among this cohort of Silicon Valley's new arms merchants, the relationship is less pure competition and more like a supply chain: Anduril builds the airframe, Shield AI installs the "brain."

Part of this funding was used to acquire flight simulation training company Aechelon Technology (founded 1998, specializing in geo-specific flight simulators and physics-based sensor AI training); the deal closed in June 2026, with Steele stating it would "accelerate Hivemind's capabilities on the simulation training side, especially for the DoD JSE program."

Worth noting: a16z is an investor in Saronic, but there's no evidence that a16z or Founders Fund invested in Mach Industries — even in this highly overlapping circle, different capital camps' betting logic is not entirely aligned.

The Russia-Ukraine war has completely rewritten Europe's understanding of "strategic autonomy." The EU launched the approximately €800 billion "ReArm Europe" plan; global military spending reached a record $2.9 trillion in 2025 (SIPRI data). A NATO Innovation Fund and Dealroom report shows European defense, security, and resilience startups raised a record $8.7 billion in 2025, up 55% YoY.

Helsing was founded in Munich in March 2021 by computational biologist Torsten Reil, former McKinsey consultant Gundbert Scherf, and machine learning engineer Niklas Köhler, self-positioning as "a new type of defense company" that only sells to democracies.

Core Products

By early 2025, 4,000 HF-1 loitering munitions had been delivered to Ukraine; in February 2025, an additional order for 6,000 HX-2s was placed. Helsing stated: "This new order puts us among the world's largest attack drone manufacturers."

What's telling is that none of these companies' shareholder lists feature a16z or "American Dynamism" — the real bridges connecting US capital to European defense tech are General Catalyst, Sequoia Capital, Founders Fund, Blackstone/Advent, General Atlantic, and transatlantic institutional investors like the NATO Innovation Fund.

OpenAI: Three Red Lines

In June 2025, OpenAI launched "OpenAI for Government," securing a $200M prototype development contract from the Pentagon's CDAO. The company says it is bound by three red lines: no mass surveillance of US citizens; no independent command of autonomous weapons (in scenarios requiring human control); no use for high-risk fully automated decision-making. In March 2026, Sam Altman acknowledged the contract "looks a bit opportunistic and hasty," and the company declined to disclose the contract's specific terms.

Anthropic: The Most Intense Episode in This Contest

In July 2025, Anthropic secured a two-year, $200M Department of Defense contract, with clear baselines: Claude must not be used for "fully autonomous weapons" or "mass domestic surveillance targeting Americans."

Google: The Protest Letter Couldn't Stop Gemini's March to the Battlefield

In 2026, Google allowed Gemini to access military classified networks for "any lawful purpose." Nearly 600 employees signed a protest letter, but the company did not yield as it had during the 2018 Maven incident — in February 2025, Google had already quietly deleted the weapons ban clause from its public AI principles.

Discussions under the UN CCW framework on lethal autonomous weapons systems (LAWS) have continued for over a decade, frequently stymied by the "consensus" rule exploited by major military powers. In May 2025, the UN General Assembly held a dedicated session on the topic for the first time, with 96 countries participating; in December 2024, the General Assembly passed a relevant resolution with 166 votes in favor, 3 against (only Belarus, North Korea, and Russia opposed); over 120 countries supported negotiating a treaty. The core concept of this debate is "meaningful human control" — target selection decisions must always remain under human control.

The "Campaign to Stop Killer Robots," a coalition of 250+ organizations, has been lobbying since 2014. In 2017, Berkeley AI professor Stuart Russell helped produce the short film "Slaughterbots," released during the UN CCW conference, warning at the end: "The technology described in this film already exists; the window for action is closing rapidly."

The Industry Is Not Monolithic

The phrase "Arsenal of Democracy," originating from WWII, has been widely borrowed in 2025-2026 defense tech discourse — the Hoover Institution published a monograph and the Texas National Security Review ran a long-form article. But there are counter-voices too: Foreign Affairs published "The Empty Arsenal," questioning whether the Silicon Valley narrative alone can solve the structural problems of insufficient capacity in the US defense industrial base.