As noted by investor Elad Gill, tech innovations born out of the defense industry are many.
Think semiconductors, GPS and — the most important invention since Dr. James Naismith put a ball through a peach basket — the internet.
In recent years, though, the marriage of Big Tech and defense has hit the rocks. Case in point: Google famously dropped an AI surveillance program (Project Maven) after employee uproar.
Now, more defense-related startups are getting in on the action
Perhaps most notably, Palantir — the Peter Thiel-backed firm that only recently left startup-dom — took on the abandoned Project Maven contract.
This may be creating a narrative that the biggest tech firms are shying away from government contracts, leaving a void for startups.
Don’t be fooled, though, says Gill.
Megacap tech firms are still happily taking that government cheddar
According to Gill, the list is extensive:
- Amazon and Microsoft are fighting over the $10B JEDI contract
- Intel, IBM, and Oracle have secured long-term gov commitments
- Salesforce has the No. 1 enterprise solution for the government (AKA “Government Cloud”)
- “Tons of SaaS companies”… although with much smaller contracts
When you consider that the US budget for defense spending is somewhere between ~$700B and $1T (give or take a few hundred billy), it’s not hard to see why tech companies of all sizes keep coming back to the well.
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