THE SET-UP: President Biden used his farewell address issue an Ike-like warning about the growing power of the Tech-Industrial Complex. As today’s dense offering shows, he may someday look equally as prescient … in no small part because the Tech-Industrial Complex is the Military-Industrial Complex’s Frankenstein-style monster. - jp
TITLE: The Evolution of the Militarized Data Broker
https://unlimitedhangout.com/2025/01/investigative-reports/the-evolution-of-the-militarized-data-broker/
EXCERPTS: The emergence of Silicon Valley out of the academic circuit in Northern California was no accident, and in fact was directly influenced by an unclassified program known as the Massive Digital Data Systems (MDDS) project. The MDDS was created with direct participation from the CIA, NSA, and DARPA itself within the computer science programs at Stanford and CalTech, alongside MIT, Harvard and Carnegie Mellon. According to reporting from Quartz, this research, with clear national security implications, would be largely “funded and managed by unclassified science agencies like NSF (the National Science Foundation) allowing “the architecture to be scaled up in the private sector” in an attempt “to achieve what the intelligence community hoped for.” The MDDS white paper was released in 1993, and over a few years, more than a dozen grants of several million dollars each were distributed via the NSF in order to capture the most promising efforts, ensuring that those efforts would become intellectual property controlled by the United States regulatory regime.
PayPal was launched in December 1998 as Confinity Inc. by founders Peter Thiel and Max Levchin, alongside Luke Nosek and Ken Howery. The company sought to provide financial institutions with the technological ability to make mobile and online economic transactions secure using cryptography – technology at the time heavily regulated by the United States. Thiel had graduated from Stanford Law School in 1992, and then had a brief stint at the Wall Street law firm Sullivan & Cromwell – a legal practice long known for its ties to the U.S. intelligence apparatus. Early on, Confinity Inc. operated out of 165 University Avenue in Palo Alto, CA at, a building that had previously housed Google during their “formative years,” after previously sharing an office with Elon Musk’s X.com.
It was also during these formative years that the PayPal team worked closely with the intelligence community. Levchin later stated in an interview with Charlie Rose that: “I think the government working with a private sector is a great thing. When we were working on security and anti-fraud measures at PayPal, we collaborated with every imaginable three and four-letter agency and those were some of the best, most productive relationships I’ve had as a business person…I think if the private sector can help them, we should.” Due to an unprecedented viral growth of their user base, PayPal engineers spent much of the formation period of the company building software to help identify fraudulent transactions to mitigate the growing costs of rampant fraud in the ecosystem, eventually developing an adaptive algorithm named “Igor” after a Russian criminal that would frequently taunt PayPal’s fraud department.
In 2003, a year after PayPal was sold to eBay, Thiel approached Alex Karp, a fellow alumnus of Stanford with a new venture concept: “Why not use Igor to track terrorist networks through their financial transactions?” Thiel took funds from the PayPal sale to seed the company, and after a few years of pitching investors, the newly-formed Palantir received an estimated $2 million investment from the CIA’s venture capital firm, In-Q-Tel. Palantir’s co-founders consulted with John Poindexter during his tenure as head of DARPA’s then-embattled Total Information Awareness in efforts to privatize the controversial surveillance program. In 2020, Intelligencer spoke with a former intelligence official who was involved in the investment who claimed the CIA had hoped that “tapping the tech expertise of Silicon Valley” would allow it to “integrate widely disparate sources of data regardless of format.”
As of 2013, Palantir’s client list included “the CIA, the FBI, the NSA, the Centre for Disease Control, the Marine Corps, the Air Force, Special Operations Command, West Point and the IRS” with around “50% of its business” coming from public sector contracts. Palantir is closely connected to the U.S. government, but its financial spin-off, Palantir Metropolis, is focused on providing “analytical tools” for “hedge funds, banks and financial services firms” to outsmart each other. As The Guardian reports: “Palantir does not just provide the Pentagon with a machine for global surveillance and the data-efficient fighting of war, it runs Wall Street, too.”
Facebook, not unlike Palantir, was one of the vehicles used to privatize controversial U.S. military surveillance projects after 9/11, having also been birthed out of one of the MDDS partners, Harvard University. PayPal and Palantir co-founder Peter Thiel became Facebook’s first significant investor at the behest of file-sharing pioneer Sean Parker, whose first contact with the CIA took place at age 16. What Facebook became after the involvement of Thiel and Parker bore such an uncanny resemblance to another shuttered DARPA project of the same era, known as LifeLog, that LifeLog’s architect and project manager at DARPA has even noted the direct parallels. One of these parallels, though left unmentioned by former DARPA project managers, is the fact that Facebook launched the very same day that LifeLog was shut down. Facebook’s long-standing ties to the military and intelligence communities go far beyond its origins, including revelations about its collaboration with spy agencies as part of the Snowden leaks and its role in influence operations – some have even directly involved Google and Palantir.
An unspoken outcome of the global proliferation of Facebook was the sly, roundabout creation of the first digital ID system – a necessity for the coming digital economy. Users would set up their profiles by feeding the social network with a plethora of personal information, with Facebook being able to use this data to generate large webs of connectivity between otherwise unknown social groups. There is even evidence that Facebook generated placeholder accounts for individuals that appeared in user data but did not have a profile of their own. Both Google and PayPal would also use similar digital identification methods to allow users to sign into other websites, creating interoperable identification systems that could permeate the internet.
A similar evolution is occurring in the financial sector, as data broker social networks – including Facebook and Musk’s X (formerly Twitter) – are posturing themselves as the future of financial service companies. This idea makes more sense when you consider that money itself is a communication technology, and can easily be built into existing communication platforms – especially ones driven by user data and identity systems. We are simultaneously seeing financial services, such as the largest dollar stablecoin issuer Tether – with excessive ties to PayPal – spending millions on investments in next generation data broker technology. Tether has recently funded the Earth observation/Satellite-as-a-service company Satellogic, the brain chip company Blackrock Neurotech, AI-computation firm Northern Data, and even Rumble, a Thiel-funded competitor to Google’s YouTube.
As outlined above, it is clear that the public sector’s intelligence community used the veil of the private sector to establish financial incentives and commercial applications to build out the modern data economy. A simple glance at the seven largest stocks in the American economy demonstrate this concept, with Meta (Facebook), Alphabet (Google), and Amazon – with founder Jeff Bezos being the grandson of ARPA founder Lawrence Preston Gise – leading the software side, and Microsoft, Apple, NVIDIA and Tesla leading the hardware component. While many of these companies have egregious ties to the intelligence community and the public sector during their incubation, now these private sector companies are driving the globalization and national security interests of the public sector.
The future of the American data economy is firmly situated between two pillars – artificial intelligence and blockchain technology. With the incoming Trump administration’s close advisory ties to PayPal, Tether, Facebook, Palantir, Tesla and SpaceX, it is clear that the data brokers have returned to roost at Pennsylvania Avenue.
TITLE: Silicon Valley Venture Capital Blowing Up The US Defense Industry
https://asiatimes.com/2025/01/silicon-valley-venture-capital-blowing-up-the-us-defense-industry/
EXCERPTS: I’m a propagandist, I’ll twist the truth, I’ll put forward only my version of it if I think that’s going to propagandize people to believe what I need them to believe.
This is not a soundbite from a particularly ebullient moment in the hit television show Mad Men. These words were uttered by Palmer Luckey, the CEO of Silicon Valley’s hottest military technology startup.
Luckey’s company, Anduril Industries, specializes in artificial intelligence-enabled systems, including autonomous weapon systems. With a valuation of US$14 billion, Anduril is one of the darlings of the defense startup scene and its newly emerging venture capital (VC) ecosystem where big promises, big bets and a tendency toward propaganda are a staple necessary for success.
Founded only in 2017, Anduril has already been awarded multiple multi-million dollar contracts by the US Department of Defense (DoD), as well as the UK Ministry of Defense (MoD). Against the background of the ongoing Russia-Ukraine war, the war in Gaza and rising global tension, this may not seem a surprising development.
The military AI industry and global defense spending are both booming. At current estimates, the global military AI market was worth $13.3 billion in 2024, with a projected growth to $35 billion in the next seven years.
A 2024 Brookings Institute Report found that defense contracts for AI-related technologies increased in value by nearly 1,200% in the 12 months from August 2022 to August 2023.
It is unsurprising, then, that in the past five years, venture capital investment in defense technologies has surged. From 2019 to 2022, US venture capital funding for military technology startups has doubled, and since 2021, the defense technology sector has seen an injection of $130 billion in VC money.
Venture capital spending is also at an all-time high for the European defense sector; private VC investments are projected to reach a record $1 billion, driven mostly by US venture firms. There is a palpable buzz in the air about the possibilities for VC-backed endeavors and the possibility to reshape the defense landscape.
Venture capital has always been connected to the military sector in some way. In fact, the current boom in venture capital defense investing could be seen as a return to its early days.
The origins of venture capital are typically traced back to the American Research and Development Corporations (ARDC) founded in 1946, just after the Second World War, in which the US was buoyed by a victory achieved, at least in part, by cutting-edge technologies.
ARDC was one of the first companies to systematically raise capital from institutional investors to finance start-up type companies with high potential but which were too risky for bank loans.
With this approach, ARDC was the first venture capital outfit to create investment portfolios that often relied on one or two extraordinary successes in order to offset the majority of companies that only made very modest returns or, indeed, losses. In this way, ARDC was the first so-called “unicorn” company.
Many Silicon Valley firms remained entangled with the military sector over the decades and, as the anthropologist Roberto Gonzales has written, almost “all of today’s tech giants carry some DNA from the defense industry, and have a long history of cooperating with the Pentagon.” So, venture capital’s DNA is folded into this relationship.
Propped up by vast amounts of venture capital, unicorn companies are proliferating in the defense space, including new military technology unicorns like Anduril Industries, Shield AI, Skydio, Scale AI and Palantir (Palantir is technically no longer a startup since it went public in 2020, but it is still part of a cohort of new military technologies).
In the defense context, the promises of new military technology revolve around selling powerful deterrence, of protecting democracy, of being able to have comprehensive, accurate, real-time knowledge, of a fully transparent globe, and, first and foremost of a clean, swift and decisive victory with smooth and effortless connectivity.
These narratives are often underwritten by a general hype that a future with AI is inevitable. This makes for a powerful storyline which mythologizes and valorizes a technology that may never deliver what is promised. It is a potent mix that often resists more sober voices that urge caution.
The claims made by defense unicorns may often seem plausible, but they are usually unverifiable because they address the future. And often that future reflects a vision shaped by fiction and science-fiction, which is always some degrees removed from the social and political challenges of reality.
This temptation of overpromising and the mythologizing of possible technology is shaping programs that work toward realizing global transparency and global reach at speed. The Joint-All-Domain Command and Control (JADC2) program is one such effort initiated by the Pentagon. It aims at connecting all domains – land, air, sea, space and cyber – into a single network for “predictive analysis” and “high-speed battle.”
To make the program palatable to Congress, JADC2 is often likened to the ride-sharing platform Uber, promising seamless interaction between systems and platforms for speedy interventions.
This refocuses attention on AI as an infrastructural necessity for all military assets and platforms. Without expanding military AI, this vision will be impossible. It is here where the opportunity for military startups resides.
Two prominent military tech companies are contractors for JADC2 – Anduril and Palantir. Both companies make little secret of their ambitions to disrupt the defense sector, unseat the current primes and carve out a monopoly slice of the market in order to secure increasing gains.
Palantir has set its eyes on “becoming the central operating system for all US defense programs”; Anduril has declared that it will be going “after everything that’s on the [Defense Department’s] list” in order to dominate in the sector. For both companies, this is the battle – the battle for growth.
As Anduril’s Luckey says: “you have to fight and win across multiple areas”. (He means that in terms of corporate strategy, not actual battlefields). Similarly, CEO and co-founder of Palantir, Alex Karp, acknowledged that, in order to break defense as a market wide open, he is proud to “have dragged and kicked and cajoled and humiliated” various lawmakers, policymakers and government to help further this goal. Move fast and break things.
Making a unicorn requires a concerted effort and an aggressive posture on the part of those who stand to gain the most financially in this domain. This is best done in alliance with like-minded others. In the current defense venture capital landscape, there is a close entanglement of founders and funders.
Peter Thiel, for example, is co-founder of Palantir, he also runs the Founders Fund VC outfit which has investments in Space X, Anduril and Scale AI, among others. The VC company Andreessen Horowitz also funds SpaceX, Anduril, Shield AI and Skydio.
The managers of these VC companies have long-standing ties with one another. Similarly, there is interlacing between companies. Anduril, for example, was started by former Palantir employees who took their experience from Palantir and applied it at Anduril. Palmer Luckey, formerly of Oculus Rift, was installed as its charismatic and outspoken CEO.
Peter Thiel and Eric Schmidt (formerly CEO of Google and Chair of the US National Security Commission on Artificial Intelligence) are investing in the America’s Frontier Fund, and … at a recent panel giving evidence to the US Armed Services Committee were representatives of five military startup companies. Every single one of the five was either funded by the VC firm Andreessen Horowitz or otherwise affiliated with the firm.
At the US Armed Services Committee hearing, Palantir’s Chief Technology Officer, Shyam Sankar, gave evidence advocating for “more crazy” and for “letting chaos reign” in the military acquisition and procurement process, so that the necessary incentives can be fostered for innovation through inter-departmental competition.
The current crop of military startup technologies, like AI-enabled drones and AI decision support systems, are being tested and improved live and during ongoing conflicts, such as in the Russia-Ukraine war, but also in Gaza. This is a form of prototyping which is becoming increasingly prominent and which needs an active battlefield for effective testing, iteration and optimizing of the technologies.
This also means that it is possible that technologies will be fielded that are not fit for purpose, only to test them and improve as you go along. It normalizes, if not promotes, the launch and sale of flawed and possibly inadequate AI products, which will inevitably cause harm to innocent civilians caught in the crosshairs of conflict.
We can observe this right now with the push by technology companies to sell their large language models to military organizations. Scale AI, for example, has teamed up with Meta to sell an LLM product, Defense Llama, for defense purposes. The company says that human involvement is “absolutely necessary” for the system.
But given the well-known fact that LLMs are prone to what are known as hallucinations, the chances that such technologies will work exactly as advertised are slim for a context so complex and dynamic as warfare. This could cause harm to those caught in the middle of this experimentation, fine-tuning and live testing.
In Silicon Valley, the “move fast and break things” motto implies that problems that arise in the rollout of the tech can always be addressed and solved later. In the world of defense and war, the harm produced by this kind of risk-taking cannot so easily be undone.
TITLE: Anduril’s Ohio Defense Plant: Everything You Need To Know
https://www.bizjournals.com/columbus/news/2025/01/24/anduril-central-ohio-plant-jobs-timeline.html
EXCERPTS: Central Ohio will soon become a mass producer of autonomous aircraft and weapons systems designed to augment military systems.
Anduril Industries Inc. plans to grow to 5 million square feet in a mega manufacturing complex called Arsenal-1 – and has pledged the most jobs by a single project in state history.
Anduril's products include autonomous air and underwater vehicles, rocket motors, anti-drone defense systems and a software platform for command and control of the devices.
The company has won hundreds of millions of dollars in military contracts to augment the U.S. arsenal with mass-produced unmanned aircraft and weapons systems. That money goes only toward products, not facilities.
For example, the U.S. Department of Defense awarded Anduril a $250 million contract in October for air defense systems against drone attacks, according to a press release. The U.S. Marine Corps awarded a $200 million contract in November for another counter-drone system.
Anduril first announced plans for the factory that would become Arsenal-1 in August, when it raised $1.5 billion in venture capital to finance the project.
The Series F round, which valued the startup at $14 billion, was led by PayPal founder Peter Thiel’s Founders Fund, which was a founding investor.
Anduril also operates a plant in Mississippi making rocket motors and a facility in Rhode Island making drones. Its other factories are in California, Georgia and Australia.
Anduril’s Arsenal-1 complex will be located in northern Pickaway County south of Rickenbacker International Airport.
Arsenal-1 will at first focus on three products for awarded military contracts, Chris Brose, Anduril chief strategy officer, said, including autonomous aircraft akin to a cruise missile and two anti-drone defense systems.
“We believe that the next arsenal of democracy will be made in Ohio and it will consist of thousands and thousands of high-tech autonomous systems and weapons," Brose said.
Incentives for Anduril include a Job Creation Tax Credit, expected to appear before the Ohio Tax Credit Authority on Jan. 27, according to a statement from JobsOhio.
The private statewide economic development organization is negotiating the final agreement for a separate grant and job training assistance.
Pickaway County has requested $70 million in state grants for roadwork and utilities.
The state legislature also could approve incentives such as exemption for sales tax on construction and equipment.
Over the coming decades, Anduril could spend up to $1 billion expanding its Arsenal-1 complex, Brose said.
SEE ALSO:
'Death machines' will be built in Ohio. Blood money no reason to celebrate. | Letters
https://www.dispatch.com/story/opinion/letters/2025/01/22/anduril-drones-in-ohio/77861898007/
Criticism of Anduril's military drones wrong. This isn't about blood money |Letters
https://www.dispatch.com/story/opinion/letters/2025/01/24/drones-death-machines-ohio-anduril/77915637007/
US Army Deploys Anduril Ghost X Drone Showcasing Increased Use of Unmanned Aerial Systems in Combat Operations.
https://armyrecognition.com/news/army-news/2025/us-army-deploys-anduril-ghost-x-drone-showcasing-increased-use-of-unmanned-aerial-systems-in-combat-operations