For the better part of the century, traditional defence powerhouses – the likes of Lockheed Martin, Northrop Grumman and Raytheon Technologies – had been at the forefront of receiving billions of dollars in defence contracts. Today, they are no longer the exclusive recipients in this arena, as the changing character of conflicts, relying heavily on technological innovations, has led to a whole new class of beneficiaries – tech titans and corporations.
To illustrate this better, one may note that the top five contracts awarded by the US military and intelligence agencies to major tech firms from 2019 to 2022 had contract ceilings totaling at least USD 53 billion. Out of this, Microsoft received a contract in 2021 worth USD 22 billion – more than the value of contract funds awarded by the U.S. Department of Defense in fiscal year 2021 to traditional defence and aerospace companies individually, except Lockheed Martin and just around the value of the contract funds awarded to Boeing in that year. In fact, this may be the tip of the iceberg, as not all contracts with tech companies are disclosed or made directly rather are done through a subcontractor, such as a ‘passthrough’ company.
Just as defence industries have profited from wars, today’s conflicts also benefit tech firms supplying products to war zones – often expanding their influence, even if not directly fuelling violence. The wars in Ukraine and Palestine, which are dubbed as the first AI wars or commercial space wars, have contributed to an increase in demand for the products and services of the Western tech industry. For instance, Palantir Technologies, which specialises in big data analytics, has provided data analytics and intelligence support to Ukraine and Israel, while ClearView AI provided its facial recognition services. Tech titans, such as Google, Amazon, and Microsoft, have all worked to provide cloud migration services for the Israeli and Ukrainian governments and defence establishments. Planet Labs, Maxar Technologies, and BlackSky technology have offered Ukraine Earth data analytics and satellite imagery services. Moreover, Palantir Technologies and even smaller European and American companies, most of which are focused on autonomous drones, have formally expanded their setups in Kyiv amid the war.
Details of the defence revenues of tech companies or the valuations of their wartime service contracts have not been made public, but correlative patterns suggest wartime gains. The most prominent example is Palantir Technologies. In June 2022, the company announced a deal with the Ukrainian government to provide its data analytics services. By early 2023, its CEO stated that the company was responsible for much of the support in identifying targets in Ukraine’s war efforts. Three months after the initial announcement, the company’s stock surged by 75%, and by the end of 2023, its stock price had risen by 167%, significantly outperforming the S&P 500 Index’s SPX gain of 25%.As of this writing, the Palantir’s stock remains strong. Additionally, the war in Gaza since early October 2023 also contributed to an increase in the demand for Palantir’s services. While other factors, such as the firm’s release of a new AI platform in 2023, may have also played a role in these gains, the potential impact of its wartime deals cannot be underestimated.
Beyond that, much like wars throughout history have been catalysts for experimental advancements, the battlegrounds in Ukraine, Gaza, and Lebanon are likely to yield long-term benefits for Western tech corporations. By securing contracts in these regions, these companies gain opportunities to refine and enhance their technologies and systems in real-world conditions. In the words of one expert, ‘Ukraine is a living laboratory in which some of these AI-enabled systems can reach maturity through live experiments and constant, quick reiteration.’
The present wars are not only enabling Western tech corporations to expand their roles within the defence sector ecosystem as profit-driven actors but also positioning them to further embed themselves in political processes, aiming to create a heightened demand for their conflict-related products. As long as wars persist, so too will this elevated demand. Reports suggest that Big Tech is already investing heavily in lobbying efforts to sway government decisions in their favour.
More than ever, the world urgently needs those who actively cultivate and sustain peace. For tech corporations, this presents a profound moral responsibility: to resist the allure of profiting from conflict, to ensure that all wartime projects are geared toward promoting stability and addressing humanitarian needs, and to channel their innovations toward preventing future conflicts and fostering lasting peace.
Zahra Niazi is a Research Assistant at the Centre for Aerospace & Security Studies (CASS), Islamabad, Pakistan. She can be reached at cass.thinkers@casstt.com.
