From guns to GPUs

The Pentagon is assembling an AI dream team as it pushes to modernize the military, lining up partnerships with tech giants SpaceX, OpenAI, Nvidia, Google, Amazon, Microsoft, and Oracle, as well as startup Reflection AI, which focuses on open-weight models.

Today’s deals give the Defense Department broad leeway to deploy cutting-edge AI across operations, including classified uses like identifying targets, and helping “accelerate the transformation toward establishing the United States military as an AI-first fighting force,” according to the press release.

A different playbook

The push comes after a messy fallout with Anthropic, which pushed to restrict the use of its AI from things like mass domestic surveillance and fully autonomous weapons—limits defense officials weren’t willing to accept. The company was ultimately blacklisted after being deemed a supply chain risk.

This time, the rules are looser. Companies like Nvidia have agreed not to impose usage restrictions beyond US law, giving the Defense Department more flexibility in how it deploys advanced AI. By lining up multiple partners, officials are also reducing reliance on any single provider, building redundancy into what’s becoming core military infrastructure.

The odd one out

Among all the major AI players listed above, the odd man out is Reflection. While the company hasn’t released an AI model yet, it already counts Nvidia as an investor and is reportedly in talks to raise a $25 billion valuation.

Meanwhile, Meta Platforms—fresh off a disappointing quarter that sent shares tumbling—is notably absent, despite positioning itself as an AI leader. Every other Mag 7 name that is investing heavily in AI made the list.

As for the market’s reaction, today’s news didn’t move stocks much. But it signals something more important: AI demand is no longer just coming from Big Tech—it’s now backed by government budgets, which tend to be bigger, stickier, and less cyclical, adding a more durable layer of demand beneath the massive spending spree already underway.—SY