The Donald Trump administration in the U.S. shows signs of halting its role as the 'world police,' and as security threats rise everywhere, an arms race is unfolding globally. Advanced defense industry technologies armed with artificial intelligence (AI) have changed the dynamics of the battlefield. This piece examines the rapidly changing landscape of the global defense industry. [Editor’s note]
The wars in Russia and Ukraine, as well as Israel and Hamas, have showcased the power of advanced defense industry technologies armed with artificial intelligence (AI). The world has witnessed AI-based weapon systems and software changing the battlefield dynamics. Amid the rise of AI military technology corporations, the market capitalization of U.S. Palantir Technologies has surpassed that of Lockheed Martin, the world's largest defense revenue company, by more than double.
Palantir operates software platforms across various fields that analyze big data through AI, supporting government agencies and corporations in strategy formulation and problem-solving. During the war in Ukraine, which can be described as the first conflict with large-scale deployment of AI and drones, Palantir analyzed data—videos, images, and intercepted communications collected by drones, as well as satellite images—using its AI platform to propose tactics and operations.
Ukraine, which was expected to be at a significant disadvantage during Russia's invasion, turned the tide of battle using AI drones and Palantir's software.
Until now, Palantir's main customers have been the U.S. Department of Defense and intelligence agencies, but it is diversifying its revenue sources to include private corporations and international markets. Last year, 33% of its annual revenue of $2.87 billion came from regions outside the U.S. In March, the North Atlantic Treaty Organization (NATO) purchased Palantir's AI operational platform 'Maven Smart System' to enhance modern combat capabilities.
Recently, the U.S. Army received three tactical intelligence targeting access nodes (TITAN) combat AI trucks developed and produced in collaboration with Anduril Industries, Northrop Grumman, and L3Harris Technologies. TITAN is a vehicle that collects and analyzes battlefield environments and data through various sensors across land, sea, and air, providing real-time support for target recognition and long-range precision strikes.
Palantir surprised the defense industry last year by winning a contract to produce ten TITANs, defeating the traditional defense corporation RTX. It was seen as a signal that the nature of warfare has shifted from hardware to software.
Anduril, which co-developed TITAN, is a startup that simultaneously engages in both software and hardware defense production. Its flagship products include drones, unmanned submarines, and AI software. It is pushing to build a drone production facility in Ohio the size of 87 football fields. It has partnered with OpenAI, the developer of generative AI ChatGPT, for drone development.
In South Korea, Anduril collaborates with HD Hyundai Heavy Industries, LIG Nex1, and Korean Air. The unlisted company attracted $2.5 billion in investment last February, valuing it at $28 billion (about 40 trillion won).
Investments are pouring into defense technology startups specializing in AI, unmanned systems, and robotics. According to a report released by consulting firm McKinsey in February, global venture capital investments in defense-related corporations last year amounted to $31 billion (about 44 trillion won), a 33% increase compared to the previous year.