Military specialist prof. Michael Klare suggests that in the coming years "significant political turbulence" should be expected in the United States due to the formation of a fresh military-industrial complex. This would yet challenge the old conglomerate, which includes 3 major concerns: Boeing, Lockheed Martin and Northrop, which dominated the American market, but not only. This will bring fierce political competition besides inside the Republican camp.
Michael T. Klare is simply a permanent associate of ‘TomDispatch’, a retired prof. of 5 colleges dealing with planet peace and safety studies at Hampshire College, and a elder academic at the Arms Control Association. In his articles on "The Nation" and on the inkstickmedia.com website, he writes about the birth and secret conflict of various factions at the Pentagon. Their conflict has the possible to yet divide Trump's "universe".
The emerging fresh military-industrial complex may have "totally different goals and recipients of profits than the current one," he points out.
Analyst points to the April 2024 U.S. Air Force tender, about which the media had virtually not reported, which afraid the selection of “two tiny known drone producers: Anduril Industries from Costa Mesa, California and General Atomics from San Diego. It was about building prototype versions of the proposed Collaborative Combat Aircraft (CCA) – a future unmanned aircraft to accompany piloted aircraft in high-risk combat missions.”
Klare points out that "no relation was surprising, given that the Air Force expects to get at least a 1000 copies of CCA in the next decade after about $30 million each, making this task 1 of the most costly fresh Pentagon projects". As a substance of fact, it was not noted that the colossal contract acquired 2 fresh forms from Silicon Valley. They defeated "the 3 largest and most powerful arms contractors in the country: Boeing, Lockheed Martin and Northrop Grumman, posing a serious threat to the continued dominance of the existing military-industrial complex, or MIC".
Over the years these 3 companies have practically dominated the Pentagon arms procurement market. They produce immense amounts of aircraft, ships and missiles, bringing immense profits to their owners.
The fresh MIC is to have ‘totally different objectives and recipients of profits than existing’. At this stage, it is besides hard to foretell how the rivalry between “young” and “old” will take place, but certainly, as the prof. says, it will bring powerful political turbulence in the coming years.
The author recalls the very thought of a "military-industrial complex", comprising a network of giant arms contractors with influential figures in legislature and the military. On 17 January 1961, president Dwight D. Eisenhower in a congressional farewell speech lamented that, at the time of the Cold War, the Americans "were forced to make a permanent weapons manufacture of tremendous size." However, he warned against the "unwarned influence", "wanted or not" of this complex, pointing to the "potential of catastrophic growth of improperly located power".
The military complex shook American politics for years. The wars waged by the United States in Vietnam, Cambodia, Laos, Iraq, Afghanistan and another regions of the planet were seen as a consequence of its "unauthorised influence" on policy-making.
The MIC became unpunished due to incitement to wars. The Pentagon has consistently increased the budget for the acquisition of weapons. This year it is as much as a evidence of around $850 billion, of which $143.2 billion was allocated to investigation and development, 167.5 billion – for the acquisition of weapons. A full of $311 billion, which will go to arms companies, is expected to exceed the full amount spent in defence by any another country in the world.
Over the years many entities have been eliminated from competition for defence Department contracts. The marketplace has divided respective corporations.
"In 2024, an analyst writes only 5 companies: Lockheed Martin (with defence revenues of US$64.7 billion), RTX (formerly Raytheon, with gross of US$40.6 billion), Northrop Grumman (US$35.2 billion), General Dynamics (US$33.7 billion) and Boeing (US$32.7 billion), claimed the majority of Pentagon contracts (Anduril and General Atomics were not even included in the list of 100 largest customers of contracts)".
These major companies are besides the "major" contractors of weapons systems, which the Pentagon buys year after year. For example, Lockheed Martin supplies stealth F-35 fighters (which frequently proved to be clearly disappointing in action); Northrop Grumman builds a stealth B-21 bomber; and Boeing produces an F-15EX combat fighter. General Dynamics manufactures L.A. class submarines for the Navy. All specified equipment is purchased in large quantities for many years, ensuring constant profits for their producers.
Concers, fearing the possible conclusion of contracts, are to install lobbyists in the legislature to convince the chosen people to finance fresh projects.
The influence of giants can now reduce the startup from Silicon Valley. They fought for the marketplace for lucrative government contracts.
Until recently, Anduril Industries was to be "one of the 2 underrated companies that left behind 3 MIC giants last April, winning a contract for the construction of a prototype Collaborative Combat Aircraft combat aircraft".
Anduril, whose name is derived from the sword worn by Aragorn in the fresh “Lord of the Rings” by J.R.R. Tolkien, was founded in 2017 by Palmer Luckey. This designer of headsets for virtual reality wanted to incorporate alleged artificial intelligence into fresh weapons systems. The entrepreneurs' aspirations were financially supported by Silicon Valley investors, including Peter Thiel of the Founders Fund and the head of another defense-oriented startup – Palantir (the name besides comes from the ‘Lord of the Rings’).
Luckey and others, smaller startups were excluded from large Pentagon contracts. They did not have “orders of lawyers” or the ability to decision through national bureaucracy. The Palantir win, which in 2016 sued the U.S. Army for refusing to consider its offer in the event of a large contract for data processing, opened the Pentagon door for smaller contractors.
Palantir and Anduril bet on an aggressive advertising run and a legal offensive, criticizing investments in old-type weapons, alternatively than focusing on advanced technologies that are needed to defeat China and Russia in any future conflict.
"The largest defence contractors employment patriots who inactive have no software expertise or business model to build the technology we need," said Luckey and his best colleagues in the 2022 document. They pointed out that old companies have an oversized structure, are bureaucratic, unflexible and practically non-innovation. They praised their squad by saying that "the best engineers [software] like to work fast", and "the talent of software engineering that can build faster than our opponents is in the commercial sector alternatively than in large defence companies."
Luckey demanded to loosen contract rules and facilitate startpom defence and access software companies to the Pentagon.
Soon, Anduril received support from Thiel and tiny contracts from the military and the Department of Homeland Security. In 2019 they received a tiny Marine Corps contract to install peripheral surveillance systems with AI support at bases in Japan and the United States. A year later, they had already won a five-year contract worth $25 million to build reflection towers on the American-Mexico border for Customs and Border Protection (CBP). In September 2020, they noted another $36 million CBP order.
In February 2023 the Department of defence purchased Altius-600 surveillance drones to deliver it to the Ukrainian military. In September 2024, the army announced that it would buy a Ghost-X drone for field surveillance operations.
Anduril is presently 1 of 4 companies selected by the Air Force to make prototypes of the proposed Enterprise Test Vehicle, a medium-sized drone designed to launch volleys of smaller reflection and assault drones.
With these contracts, the company's capitalisation increased, attracting investors looking for opportunities to profit from expected growth startups Defense-oriented. In July 2021, following investments by Thiel and Andreessen Horowitz, the company's valuation increased to nearly $2 billion, and is presently around $4.5 billion.
The company besides convinced many high-ranking Pentagon officials of the request to improvement the contract strategy in order to focus more on technology companies. On 28 August 2023, the Deputy Secretary of defence Kathleen Hicks, then the second highest-ranking authoritative of the department, announced the inauguration of the Replicator initiative to accelerate the supply of advanced weapons to the armed forces.
The plan envisages reducing bureaucratic constraints and speeding up the decision-making process and eliminating unnecessary intermediaries.
The first tranche of the fresh contracts of May 2024 included orders for the AeroVironment Switchblade 600 kamikaze drones. Anduril was a triple winner in the second tranche, announced on 13 November 2024. According to the Department of Defense, this contract tranche included backing the acquisition of Ghost-X reflection drones by the army, the acquisition of Altius-600 kamikaze drones by the Marine Corps, and the improvement of the Enterprise Test Vehicle Air Force in which Anduril is 1 of 4 participating suppliers.
Kathleen Hicks resigned as Deputy Secretary of defence on 20 January erstwhile Donald Trump took over. Although it is not rather clear what the contract policy of the fresh squad will look like, prof. Klare points out that many people from Trump's ellipse – including Elon Musk and Vice president JD Vance – have strong ties to Silicon Valley. "Probably they will advocate a policy akin to the Replicator," we read.
Although defence Secretary Pete Hegseth has no experience in these cases, his deputy is billionaire-investor Stephen A. Feinberg, who as investment manager Cerberus Capital Management acquired startup Military Stratolaunch. He may besides like contracts for the fresh complex.
If Trump and the Republicans proceed to press for an increase in the defence budget, military contracts will benefit from conventional major performers and start-ups from Silicon Valley. "However, while defence spending, as suggested by the analyst, will be maintained at the current level, in order to finance taxation cuts and another costly measures preferred by Trump and Republicans, fierce competition between 2 versions of the military-industrial complex can easy return. This in turn can origin divisions in the interior ellipse of Trump, putting loyalists against the old MIC against supporters of the fresh MIC," the analyst forecasts.
Most Republican politicians are to be tied to an old arms complex that funds their election campaigns. 2 key advisors to Trump, JD Vance and Elon Musk, may push the president in the other direction. The prof. recalls that “Vance, a erstwhile Silicon Valley officer who, according to reports, became Trump's vice president candidate only after intense lobbying of Peter Thiel and another tech billionaires, will most likely be encouraged by his erstwhile allies to direct more Pentagon contracts to Anduril, Palantir and associated companies. And it wouldn't be amazing due to the fact that Vance's private investment fund, Narya Capital (yes, another name coming from Lords of the Rings!), invested in Anduril and another military/space projects".
Elon Musk besides fought the Department of defence for contracts for 1 of his companies, SpaceX. He has besides repeatedly criticised the “traditional way the Pentagon operates”, an expensive, “genuinely poorly functioning F-35 fighter from Lockheed at a time erstwhile drones controlled by artificial intelligence are becoming more efficient”. He wrote on X that "some idiots proceed to build manned fighters specified as F-35" and "manned fighters are already obsolete in the drone era".
Analyst wonders how the old MIC will cope with the competition of fast-growing and increasing fresh MIC.
Sources: thenation.com, inkstickmedia.com
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