For a long time, Silicon Valley didn’t want much to do with the defense world. The tech scene was focused on consumer markets, social networks, and software that scaled fast and made money even faster. The military, by contrast, moved slowly. Contracts could take years. The bureaucracy was thick. And culturally, it just wasn’t a fit. But things are shifting fast.
Today, defense tech is becoming one of the most talked-about sectors in the Valley. Investors who once backed food delivery apps and ride-sharing companies are now throwing money into drone companies and battlefield AI. Startup founders are building not just for everyday users but for governments, soldiers, and surveillance teams. The Pentagon, for its part, is opening its doors wider to private tech. And what was once a niche corner of the industry is now drawing headlines, big contracts, and some tough ethical questions.
From code to combat
Silicon Valley has always been a behind-the-scenes player in national security. It built the infrastructure. GPS, the internet, and semiconductors all had military roots, and much of it was eventually commercialized. But those connections were indirect. Tech companies rarely built directly for defense.
That’s changed in the last decade. A new class of startups is building products specifically for defense and intelligence. And they’re doing it with the speed and mindset of the consumer tech world. Take Anduril Industries, started by Palmer Luckey after he sold Oculus to Facebook. The company develops surveillance towers, autonomous drones, and battlefield AI systems. It has already won contracts with the U.S. Department of Homeland Security and the Department of Defense. Anduril doesn’t wait around for government specs. It builds what it thinks the military needs and sells it like a SaaS company would pitch enterprise software.
Other companies like Shield AI, Vannevar Labs, BigBear AI, and Helsing (in Europe) are doing the same. Their focus isn’t on making a faster social feed or ad-matching engine. It’s building autonomous aircraft, intelligence platforms, and software that can make sense of satellite or drone data in real time. These aren’t defense contractors in the traditional sense. They’re venture-backed startups, moving fast, operating lean, and thinking globally.
Why now?
Part of the shift is geopolitical. The war in Ukraine reminded the world that conflict is still very real. Taiwan remains a flashpoint. Tensions with China are simmering. The U.S. and its allies are reassessing their supply chains, their technological dependencies, and their battlefield readiness. In this environment, national security has become a top priority again.
Another reason is fear of falling behind. China has been investing heavily in AI, drones, quantum computing, and surveillance. It’s not just spending more, it’s moving faster. American military leaders know this, and they’ve started looking beyond the traditional defense giants like Lockheed Martin and Raytheon. They want to bring in the agility and creativity of the private tech sector. That’s where startups come in.
And then there’s the money. Defense may not offer the explosive upside of a viral consumer app, but it offers stability. Defense budgets are large and relatively predictable. There’s a single buyer (the government) with a big wallet. And once a product is adopted, the contracts can last for years. For investors burned by crypto or bored by SaaS, defense looks appealing.
The rise of dual-use tech
A lot of what’s being built is dual-use. It works in both civilian and military settings. This is part of what makes defense tech more viable for startups. A drone that maps farmland can also scout enemy terrain. AI software that flags insurance fraud can also monitor troop movement. Satellite companies like Planet Labs sell imagery to hedge funds and disaster response teams, but the same data can also help the military identify targets.
This overlap creates some tension. Who gets access first during a conflict? What if commercial customers don’t want to share a platform with military users? And what happens when something built for agriculture ends up being used in warfare?
There are no easy answers. Companies often walk a fine line. Some lean in, branding themselves explicitly as defense-first. Others keep their messaging broad, emphasizing “mission-critical intelligence” or “national infrastructure.” The same tools used for humanitarian aid might also end up being used in war zones.
Pentagon meets product market fit
One of the biggest changes on the government side has been how the Pentagon engages with startups. It used to be a black hole—years of paperwork, delayed funding, and unclear timelines. That’s still true in many places, but new programs have started to change the equation.
The Department of Defense has launched innovation offices like DIU (Defense Innovation Unit), AFWERX (for the Air Force), and SOFWERX (for Special Ops). These groups are designed to cut through the red tape. They offer faster pathways to pilot projects, prototype testing, and eventual procurement. They also help startups get in the door without needing a long history of defense contracts. It’s working. In 2023, the Pentagon awarded more contracts to new, non-traditional vendors than ever before. Some were for niche technologies. Others were for mission-critical systems. What’s notable is how many came from companies less than five years old.
Cultural tension inside tech
Not everyone in tech wants to build for the military. This has always been a point of friction. In 2018, Google employees protested against the company’s involvement in Project Maven, a military AI initiative focused on drone imagery. Thousands of employees signed petitions. Some quit. Google eventually withdrew from the contract.
That sentiment still exists. Some engineers draw a hard line, they don’t want their code used in warfare. Others are open to it, especially if the goal is defense rather than aggression. Some simply want clarity and transparency. They don’t want to wake up one day and find out the analytics tool they helped build is now integrated into a targeting system.
Big Tech in the background
While startups are making a lot of noise, Big Tech is already deeply embedded in defense, just not as loudly. Microsoft, Amazon, and Google all have major government cloud contracts. The Pentagon’s Joint Warfighting Cloud Capability (JWCC) program includes all three. These aren’t flashy drone projects, but they’re essential. Data storage, real-time processing, and secure communication all rely on this infrastructure.
What happens next?
Expect more deals. Expect more startups. And expect more friction. This isn’t a short-term boom. It’s a structural shift in how the U.S. military sources technology. There’s also a growing international angle. U.S. allies want in. NATO countries are looking to Silicon Valley for innovation. Israeli startups, European AI firms, and Australian drone manufacturers are all part of this expanding ecosystem. The defense-tech map is getting wider.
