Technological Overhaul Ahead:
Piper Sandler Commentary:
Alex Karp In Ukraine:
Technological Overhaul Ahead:
Interesting news has released within recent times in which points towards a major overhaul of military spending & technologies, specifically within the US.
Alex Karp has reiterated within previous interviews that the race towards the best technologies within the military is not linear. Instead, this is exponential. Karp was hinting towards the importance of the US & West investing within the best technologies for modern warfare. The nations that get the best technologies first, are likely to experience exponential growth curves when it comes to the utility of data & innovative technologies.
The future of warfare is going to encapsulate artificial intelligence, robotics and other advanced technologies, according to Army General Milley.
The nation’s top military officer said during a trip to Europe this week that he’s working on recommendations that could lead to a high-level reorganization. After launching Army Futures Command in 2018 to drive modernization when he was that service’s chief of staff, Milley said he’s mulling a similar effort for the joint force.
The director of the Defense Intelligence Agency described the sharing of information and intelligence between the United States and the Ukrainians as “revolutionary in terms of what we can do”. Army Gen. Paul Nakasone, who heads both Cyber Command and the National Security Agency, said that “in my 35 years” he has never seen a better sharing of accurate, timely and actionable intelligence than what has transpired with Ukraine.
Nakasone added the “secret sauce” for NSA’s success has been its ability to work outside the country, seeing “what our adversary is doing” and how that can affect the United States. He said the nation needs platforms as established as Air Force KC-135s, space satellites and sensors and on-the-ground collection to be effective.
Nakasone said having the command and agency under a single control provides a “unity of effort” and agility to respond to everything from problems with Iran to ransomware attacks and Russian aggression in Ukraine.
“We’re going to have to really think hard about fundamental shifts to our military,” Milley said in London. “The country that maximizes development of these technologies with their doctrines and organizations, in the time we have available, could be decisive in the next conflict … I would suggest, in 10 to 15 years, you have to do these fundamental changes.”
The Pentagon has been trumpeting its stepped up investments in emerging technologies and last week made its latest tech-focused organizational move. An Emerging Capabilities Policy Office will help integrate autonomous systems, hypersonic tech, directed-energy weapons, and other innovations into the department strategy, planning guidance and budget processes.
The principal military advisor to the president and the secretary of defense, Milley said he is also thinking through the implications of emerging technologies, following the lead of Defense Secretary Lloyd Austin. The military is examining options for operational design and structure of the force ― its brigades, divisions and fleets ― but also its institutions.
Milley said that the existing technology behind Fitbits and iPhones allow soldiers to sense their environment like never before while accurate, long-range precision munitions let them destroy targets like never before.
Coupled with AI’s potential to speed battlefield decision-making and the robotics and the autonomous technologies that are transforming the character of labor, militaries and warfare could be entirely transformed. Trucking, which is already adapting to driverless vehicles, and other industries that lend themselves to robotics will fundamentally change, Milley said.
“With respect to the military, that’s no less true. We have a wide variety of tasks that can be and probably will be conducted by some form of robot,” he said. “The unmanned aerial vehicle is an example, but you could see in the future, pilotless air forces ― manned/unmanned teaming where you have one aircraft that’s got a human in it and the rest of the squadron are robots.
“I believe we that we are in a fundamental change in the character of war, and by that I mean how you fight, where you fight, the doctrine, the equipment, the tactics, techniques and procedures, and so on,” Milley said. “We’re in the middle of a real, unbelievable fundamental change, which is probably the biggest fundamental change in the history of warfare.”
The US Space Force plans to add three more new intelligence squadrons in the next two years, said Gen Stephen Whiting, a commander of the service’s Space Operations Command. Furthermore, these additions would double the number of squadrons in Space Delta 7, whom are currently working on missile warnings and defence, electronic warfare, and research and development.
A reason as to why, innovative software company Palantir will majorly benefit from this increased emphasis on the Space Force is due to their data-centric work the Space Force currently work on. To describe, Whiting said, “think of missions like space domain awareness, electromagnetic warfare, missile warning, operational-level command and control, defensive cyber capabilities, intelligence, surveillance, and reconnaissance, satellite communications, precision, navigation, and timing, orbital warfare—and then we also run the bases from which we operate.”
This shows the importance of adding more intelligence activities, in which would contribute to the command’s priority of being cyber security, said Whiting.
As stated within previous reports the West & the US specifically has a major disadvantage within the context of cyber-security, and cyber-attacks.
Piper Sandler Commentary:
Piper Sandler says, “Palantir should continue to see growth in its U.S. government business as it broadens its footprint across agencies and as its largest customer (Defense) is expected to grow further”. The investment firm state how, Palantir has gained more traction with agencies beyond defence, such as VA and DOE, which will provide ongoing upside.
It can be logically stated that in consideration of Palantir’s ingrained work with Governments, and their supernatural product capabilities, Palantir is likely to experience more spending within the context of the US Government. This is because, as the requested discretionary budgets for the Department of Defense are expected to increase 5% in FY2022 and another 4% in FY2023, on-top of this is the emphasis on Space expansion via the US Space Force.
Sandler estimate that of the 44% of revenue Palantir gains from the US Government, it is estimated that at least half of this is generated from the DOD. “It also demonstrated the effectiveness of its data platforms to agencies such as the FDA, NIH, and Air Force in 2020, which could provide it opportunities to grow in future years as it maintains these platforms and expands its partnerships with them.”
Piper Sandler also believe that, the on-going war currently could be a major catalyst for the DOD to improve technologies for the future. Interestingly, Piper examined the budgets in depth and found that, there is a heavy emphasis on AI, LM, IT and software programs. Piper Sandler believe that, the amounts for these requested items will continue to increase in FY22 (+27% y/y), and FY2023 (+12% y/y). Piper proclaimed that, new requests in FY2022 that weren’t included in FY2021 include ~$212M for AI and ML research and ~$83M for the Tactical Intel Targeting Access Node (TITAN) program, which PLTR has been selected to compete for.
The interesting nature of Palantir’s business model & product solution means that often over time their contract sizes grow substantially during a set period. It is likely that Palantir could experience exponential growth curves within the context of contract sizes for the inception phased Space Force. An example of this occurring previously was with the Air Force.
To explain, there was previously a small contract with the Air Force from 2010-2013, which consisted of four contracts worth $226K each. However, this scaled majorly within the past few years. The data shows that in April 2020, Palantir signed a contract to license Gotham platform to the Air Force for six months, costing over $2M. Following the pilot program Palantir signed two contracts with the Air Force worth nearly $20M to provide the agency with COVID systems. “By 2021, the partnership grew to a two-year, $91.5M contract in which PLTR was to provide a data platform for the Air Force to manage resources for its COVID-19 response and coordinate decisions for joint all-domain operations.”
When looking at the Space Force, President Biden’s $773B budget request for the Defence Department for fiscal year 2023 includes $24.5B for the US Space Force, and Space Developmental Agency – around $5B more than what Congress first enacted within 2022.
“Space is vital to U.S. national security and integral to modern warfare,” the White House said in a budget summary document. “The budget maintains America’s advantage by improving the resilience of U.S. space architectures to bolster deterrence and increase survivability during hostilities.”
Palantir, as part of the company philosophy to focus on the hardest issues within society, have recently ventured into Space more aggressively in partnership with Stellogic.
“Palantir and Satellogic launched our first Edge AI-enabled satellite into space as part of the SpaceX Transporter 4 mission. Incorporating Palantir’s Edge AI technology onboard Satellogic’s NewSat will allow us to begin processing imagery data on orbit, separating signal from noise in high-scale data to make the best use of limited bandwidth and enabling more opportunities for customers to gain near real-time data at scale” said Palantir within a recent blog.
There is a major incentive for Palantir & the West to gain a lead in space not only from a Governmental point of view, however also within the context of a commercial client expansion:
The reasons are due to, Western Defences in the case of war escalation, the use of Edge AI innovations, and the overall explosion of commercial interest within space.
Alex Karp In Ukraine:
Palantir, co-founded by Peter Thiel, will “continue to use its technology to support Ukraine.”
Wendy R. Anderson said:
One of the many reasons I am so proud to work for Palantir Technologies. Alex Karp, my boss and our CEO, is the first CEO to visit #Kyiv after the start of the full-scale war. We’ve agreed to continue investing in #Ukraine by supporting the Army and opening an office, etc. This is what leadership looks like, full stop.
This comes after CEO Alex Karp attended a meeting in Ukraine with President Volodymyr Zelenskyy.
Overall this highlights the fact that Palantir likely played a major role when it comes to the conflict within Ukraine.
“I believe we that we are in a fundamental change in the character of war, and by that I mean how you fight, where you fight, the doctrine, the equipment, the tactics, techniques and procedures, and so on,” Milley said. “We’re in the middle of a real, unbelievable fundamental change, which is probably the biggest fundamental change in the history of warfare.”
It is likely Palantir will play an increasingly vital role within Governments & the future of warfare.
