Last year Palantir consolidated 75 Army contracts into a single $10 billion channel. This week Palantir doubled it with a $20 billion enterprise agreement wrapping hardware, software, and live counter-drone missions into one vendor pipeline, called Anduril. Fortune calls it a turning point. It is, for corruption. Palantir and Anduril literally are the same people. Three of Anduril’s five co-founders (Trae Stephens, Matt Grimm, and Brian Schimpf) came directly from Palantir. Stephens was personally recruited from Palantir by Peter Thiel. Founders Fund, Thiel’s venture firm, incubated both companies and recently wrote Anduril a $1 billion check, the largest in the fund’s history. The two companies have formed a consortium to jointly bid on government contracts. As I wrote when this war started, Palantir assessed the threat, justified the war, targeted the strikes, and profits from the continuation. Anduril, also known as the defense lemon whose VR headset made people nauseous and whose Thiel-backed drones failed every military test in Britain and Germany, now closes the kill chain by owning the weapons end of the same pipeline, under the same investor, inside the same procurement structure built to bypass the competitive oversight Palantir once sued to enforce when it served their entry.
Fortune doesn’t get it. They want to celebrate Silicon Valley greed disrupting Pentagon procurement. It isn’t. It’s just a vertically integrated weapons conglomerate assembled through venture capital instead of mergers, run by a man who promoted Carl Schmitt’s Nazi legal theory at Stanford, told the world in 2009 that freedom and democracy are incompatible, and built a surveillance infrastructure that the Army’s own officials have called garbage while billing billions for vendor lock-in they engineered. Is he a Nazi? I’m just asking questions here.
The fixed-price contracts Fortune celebrates as “risk transfer” are a dumb trap: Boeing ate $7 billion on the KC-46 tanker under the same structure, which Fortune mentions in the same article without connecting it to what they’re celebrating. The honeymoon pricing locks the Army in. The reliability problems surface later. By then, training is hooked to the interface, logistics chains are optimized for the components, and the “solution” is more Anduril.
This just proves there is no defense lemon law.
Palantir’s stock rose 15% the week the Iran war started. Karp went on CNBC to carp about how many people his product helped kill. Anduril’s $20 billion deal was announced while American bombs are still falling on Iranian children. This is not an actual defense company story. The guy who grew up a Nazi has built a war economy that needs war, and now it’s wired into the Pentagon under enterprise agreements designed to make removal take much longer than the endless wars it starts.