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As Bombs Drop, Weapons Industry Stocks Take Off
One wonders how the executives of these companies feel about their products being used for mass slaughter in Gaza and dangerous escalation in Lebanon.
Oct 04, 2024
It’s a sad but familiar spectacle — as people die at the hands of U.S. weapons in a faraway war zone, the stock prices of arms makers like Raytheon and Lockheed Martin soar. A piece posted yesterday at Forbes tells the tale: “Defense Stocks Hit All-Time Highs Amidst Mideast Escalation.”
One wonders how the executives of these companies feel about their products being used for mass slaughter in Gaza and dangerous escalation in Lebanon. For the most part they’re not talking, although they are glad to occasionally inform their investors that “turbulence” and “instability” means their products will be needed in significant quantities by our “allies.”
And, not unlike the Biden administration, they tend to couch their rhetoric in terms of a “right to self-defense.” They act as if Israel’s killing of 40,000 people and displacing millions more — the vast majority of whom have absolutely nothing to do with Hamas, nor any way to influence their behavior — can somehow be white washed by calling it a defensive operation.
No one who steps outside the bankrupt world of official Washington to look at the impacts on actual human beings in Gaza, the West Bank, and Lebanon can take the notion that U.S. weapons are being used for defense in the current Middle East war seriously.
Peter Thiel and his colleagues at Palantir are an exception to the closed mouthed approach of executives at the larger weapons companies. When asked how he felt about his company’s technology to pick targets in Gaza, he said “I'm not on top of all the details of what's going on in Israel, because my bias is to defer to Israel. It's not for us to second-guess every, everything.” And Palantir CEO Alex Karp flew the entire company board to Israel earlier this year to show solidarity with Israel’s war effort in Gaza.
At least Palantir’s leaders are honest and open about where they stand. Leaders of firms like Lockheed Martin, Raytheon, General Dynamics, and Boeing that supply the weapons that have laid waste to Gaza and are now pounding Lebanon prefer to hide behind euphemisms about promoting defense, deterrence, and stability, and assisting allies.
But what about when those allies are engaged in widespread war crimes that prompted the International Court of Justice to say that Israel’s war on Gaza could plausibly be considered a genocide? Is it morally acceptable to just cash the checks and avert one’s eyes, or do the companies profiting from this grotesque humanitarian disaster have a moral responsibility for how their products are being used?
A few years ago, during the height of Saudi Arabia’s brutal invasion of Yemen — enabled by billions of dollars of U.S.- and European-origin weapons — Amnesty International probed this very point. In a report entitled “Outsourcing Responsibility,”the group provided the findings of a survey it had done of 22 arms companies, asking them “to explain how they meet their responsibilities to respect human rights under internationally recognized standards.”
Amnesty noted that "many of the companies investigated supply arms to countries accused of committing war crimes and serious human rights violations, such as Saudi Arabia and the UAE.” None of the companies queried provided evidence that they were doing any sort of due diligence to ensure that their weapons weren’t being used to commit war crimes or human rights abuses. Fourteen companies failed to respond at all, and of the eight that did answer Amnesty’s questions gave variations on the theme of “we just do what the government allows.”
This casts influential arms makers as innocent bystanders who await government edicts before marketing their wares. In fact, weapons manufacturers spend millions year in and year out pressing for weaker human rights strictures and quicker decisionmaking on the sale of arms to foreign clients.
The weapons merchants are right about one thing. It is going to take changes in government policy to stop the obscene trafficking of weapons of war into the world’s killing zones. That will mean breaking the web of influence that ties government policy makers, corporate executives, and many members of Congress to the continued production of weapons on a mass scale. We can’t expect a profit making entity like Lockheed Martin to regulate itself when there are billions to be made fueling conflicts large and small.
Which means the responsibility for ending the killing and the war profiteering it enables falls to the rest of us, from students calling for a ban on arming Israel to union members looking to reduce their dependency on jobs in the weapons sector to anyone who wants a foreign policy driven by what makes us safe, not what makes Palantir and Lockheed Martin rich.
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Palantir’s Latest Hire Is a Particularly Egregious Turn of the Revolving Door
China hawk and former Rep. Mike Gallagher (R-Wis.) is now the company’s head of defense business; if he had his way, odds of an unnecessary and devastating conflict with China could increase considerably.
Aug 29, 2024
Former Republican Rep. Mike Gallagher of Wisconsin has embraced his new role as head of defense business at the controversial Silicon Valley tech firm Palantir with relish, promising to use his connections in government to make it easier for emerging military tech firms to thrive, in large part by securing more of your tax dollars.
Senior government officials passing through the revolving door to cash in on lucrative jobs in the arms industry is not a new phenomenon. In a study I did last fall, we found that 80% of the three and four star generals who left government service in the past five years went to work in the arms sector in one way or another. And a 2023 report by the office of Sen. Elizabeth Warren (D-Mass.) found that at least 700 former senior Pentagon and other government officials now work for one of the top 20 weapons contractors.
At the time of the report’s release, Warren argued that “[w]hen government officials cash in on their public service by lobbying, advising, or serving as board members and executives for the companies they used to regulate, it undermines public officials’ integrity and casts doubt on the fairness of government contracting. This problem is especially concerning and pronounced in the U.S. Department of Defense (DOD) and the United States’ defense industry.”
The prospect of automated warfare fueled by Palantir’s products could lead to a world in which our ability to curb conflict and prevent large-scale slaughter is even more difficult than it is now.
Powerful members of Congress also regularly go through the revolving door, including most notably former House Armed Services Committee Chair Buck McKeon, whose lobbying shop has represented both arms contractors like Lockheed Martin and arms buyers like Saudi Arabia.
But Gallagher’s case is particularly egregious, given the central role he will play in his new firm’s business and lobbying strategies. Palantir’s ambitions go well beyond the kind of favor seeking in government weapons buying that Sen. Warren has described. Its goal is to shape the overarching U.S. national security policy that may determine what military technology the U.S. invests in for the next generation. The Gallagher hire fits perfectly with that plan.
Judging from his record as the preeminent China hawk on Capitol Hill during his tenure in Congress, and as chair of the China-bashing House Select Committee on Strategic Competition Between the United States and the Chinese Communist Party, Gallagher’s views are remarkably close to those of his new employers.
For example, Palantir CEO Alex Karp has said the United States will “likely” go to war with China and that the best policy is to “scare the crap out of your enemy”—no doubt in part by wielding systems built by Palantir.
Palantir’s bread and butter is the supply of advanced computing and data management, which it has employed to help the Army share data across the service, from bases in the U.S. to commanders on the battlefield. The firm also does research for the Army on future uses of AI, and on targeting, in a project known as Tactical Intelligence Target Access Node (TITAN).
Palantir’s products are also front and center in the two most prominent conflicts of the moment. The company’s Artificial Intelligence Platform, described by Bloomberg as "an intelligence and decision-making system that can analyze enemy targets and propose battle plans," is currently in use in Ukraine. And in January of this year, Karp and Peter Thiel, co-founder of Palantir, traveled to Israel where they forged an agreement with the Israeli government “to harness Palantir’s advanced technology in support of war-related missions.” This reportedly includes using Palantir’s AI-based systems to select targets in Gaza.
Karp’s views about how to intimidate adversaries like China may be good for his company’s bottom line, but they are an extremely reckless guide to U.S. policy toward China. The most likely result of his counsel would be a staggeringly costly arms race which would make a U.S.-China war more likely. And even if such a war did not escalate to the nuclear level, it would be a strategic, economic, and humanitarian disaster for all concerned. The point is to prevent a war with China, not predict and profit from it.
Karp and Gallagher are virtually brothers in arms with respect to their views on China. Gallagher co-authored a recent article in Foreign Affairs entitled “No Substitute for Victory: America’s Competition With China Must Be Won, Not Managed.” In it, Gallagher and his co-author Matthew Pottinger assert that the United States needs to “put in place a better policy: one that rearms the U.S. military, reduces China’s economic leverage, and recruits a broader coalition to confront China.”
In service of this goal, they advocate ratcheting up Pentagon spending to as much as 5% of the U.S. Gross Domestic Product, which would push the Pentagon’s base budget to over $1.2 trillion. Gallagher and Pottinger give no clue as to how this enormous sum would be spent, or why a rapid military buildup would somehow bring Beijing to heel rather than stimulating an equally furious buildup by China. They wrongly analogize the current situation between the U.S. and China to the one facing former U.S. President Ronald Reagan vis-a-vis the Soviet Union at the end of the Cold War. But China has a much more vibrant, technologically sophisticated society and a much larger place in the global economy than the USSR did at the end of its reign.
China isn’t going anywhere, and the idea that arms racing and trade wars will change that basic reality is wildly unrealistic.
While Washington and Beijing don’t need to be best friends, they do need to set parameters around their relationship to prevent a catastrophic war. They also need to find ways to cooperate, despite their differences, on addressing existential global challenges like climate change and pandemics. And while it is important to help Taiwan build up its defenses, it is even more important to engage in diplomacy and reassurance to avoid a U.S.-China military confrontation over the island.
The path advocated by Gallagher and Pottinger would destroy any possibility of reaching such common ground, and would likely lead to a dangerous state of permanent antagonism.
Gallagher is just the latest addition to Palantir’s growing web of influence. As the world now knows, Thiel was both a mentor and a donor to Republican vice presidential candidate JD Vance. In 2017, before Vance entered politics, Thiel hired him to work at his global investment firm, and then donated $15 million to Vance’s 2022 run for the Senate.
Meanwhile, Palantir CEO Alex Karp has reached out to the other side of the aisle, albeit on a smaller scale, tellingThe New York Times that he gave $360,000 to Biden’s campaign before the president announced that he would not be running for reelection.
It would be one thing if Palantir were the nimble, cost effective producer of indispensable next generation technology it purports to be, but its bulked up political machine and hawkish rhetoric suggest that it is far more than that.
And as for its technological prowess, it remains to be seen whether all the emerging technologies championed by Thiel and his cohorts will work as advertised, and if so whether they will make future conflicts more or less likely. But one thing is clear: If operatives like Gallagher and Karp have their way, the odds of an unnecessary and devastating conflict with China could increase considerably.
Last but certainly not least, the prospect of automated warfare fueled by Palantir’s products could lead to a world in which our ability to curb conflict and prevent large-scale slaughter is even more difficult than it is now. All the more reason to take their claims to be new age patriots, poised to restore American global dominance through the wonders of technology, with an enormous grain of salt.
Regardless of who wins in November, the last thing we need is a Palantir-inspired foreign policy.
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It’s Time to Take On the New Cold Warriors of Silicon Valley
We can’t afford to let the people and companies that will profit most from AI’s unbridled military application have the upper hand in making the rules for how it should be used.
Jun 28, 2024
Venture capital and military startup firms in Silicon Valley have begun aggressively selling a version of automated warfare that will deeply incorporate artificial intelligence. Those companies and their CEOs are now pressing full speed ahead with that emerging technology, largely dismissing the risk of malfunctions that could lead to the future slaughter of civilians, not to speak of the possibility of dangerous scenarios of escalation between major military powers. The reasons for this headlong rush include a misplaced faith in “miracle weapons,” but above all else, this surge of support for emerging military technologies is driven by the ultimate rationale of the military-industrial complex: vast sums of money to be made.
The New Techno-Enthusiasts
While some in the military and the Pentagon are indeed concerned about the future risk of AI weaponry, the leadership of the Defense Department is on board fully. Its energetic commitment to emerging technology was first broadcast to the world in an August 2023 speech delivered by Deputy Secretary of Defense Kathleen Hicks to the National Defense Industrial Association, the largest arms industry trade group in the country. She used the occasion to announce what she termed “the Replicator Initiative,” an umbrella effort to help create “a new state of the art—just as America has before—leveraging attritable, autonomous systems in all domains—which are less expensive, put fewer people in the line of fire, and can be changed, updated, or improved with substantially shorter lead times.”
Hicks was anything but shy about pointing to the primary rationale for such a rush toward robotic warfare: outpacing and intimidating China. “We must,” she said, “ensure the PRC [People’s Republic of China] leadership wakes up every day, considers the risks of aggression, and concludes, ‘Today is not the day’—and not just today, but every day, between now and 2027, now and 2035, now and 2049, and beyond.”
Hick’s supreme confidence in the ability of the Pentagon and American arms makers to wage future techno-wars has been reinforced by a group of new-age militarists in Silicon Valley and beyond, spearheaded by corporate leaders like Peter Thiel of Palantir, Palmer Luckey of Anduril, and venture capitalists like Marc Andreessen of Andreessen Horowitz.
Patriots or Profiteers?
These corporate promoters of a new way of war also view themselves as a new breed of patriots, ready and able to successfully confront the military challenges of the future.
A case in point is “Rebooting the Arsenal of Democracy,” a lengthy manifesto on Anduril’s blog. It touts the superiority of Silicon Valley startups over old-school military-industrial behemoths like Lockheed Martin in supplying the technology needed to win the wars of the future:
The largest defense contractors are staffed with patriots who, nevertheless, do not have the software expertise or business model to build the technology we need… These companies built the tools that kept us safe in the past, but they are not the future of defense.
In contrast to the industrial-age approach it critiques, Luckey and his compatriots at Anduril seek an entirely new way of developing and selling weapons:
Software will change how war is waged. The battlefield of the future will teem with artificially intelligent, unmanned systems, which fight, gather reconnaissance data, and communicate at breathtaking speeds.
At first glance, Luckey seems a distinctly unlikely candidate to have risen so far in the ranks of arms industry executives. He made his initial fortune by creating the Oculus virtual reality device, a novelty item that users can strap to their heads to experience a variety of 3-D scenes (with the sensation that they’re embedded in them). His sartorial tastes run toward sandals and Hawaiian shirts, but he has now fully shifted into military work. In 2017, he founded Anduril, in part with support from Peter Thiel and his investment firm, Founders Fund. Anduril currently makes autonomous drones, automated command and control systems, and other devices meant to accelerate the speed at which military personnel can identify and destroy targets.
Thiel, a mentor to Palmer Luckey, offers an example of how the leaders of the new weapons startup firms differ from the titans of the Cold War era. As a start, he’s all in for Donald Trump. Once upon a time, the heads of major weapons makers like Lockheed Martin tried to keep good ties with both Democrats and Republicans, making substantial campaign contributions to both parties and their candidates and hiring lobbyists with connections on both sides of the aisle. The logic for doing so couldn’t have seemed clearer then. They wanted to cement a bipartisan consensus for spending ever more on the Pentagon, one of the few things most key members of both parties agreed upon. And they also wanted to have particularly good relations with whichever party controlled the White House and/or the Congress at any moment.
The Silicon Valley upstarts and their representatives are also much more vocal in their criticisms of China. They are the coldest (or do I mean hottest?) of the new cold warriors in Washington, employing harsher rhetoric than either the Pentagon or the big contractors. By contrast, the big contractors generally launder their critiques of China and support for wars around the world that have helped pad their bottom lines through think tanks, which they’ve funded to the tune of tens of millions of dollars annually.
The approach advocated by Brose and his acolytes is going to make war more likely as technological hubris instills a belief that the United States can indeed “beat” a rival nuclear-armed power like China in a conflict, if only we invest in a nimble new high-tech force.
Thiel’s main company, Palantir, has also been criticized for providing systems that have enabled harsh border crackdowns by U.S. Immigration and Customs Enforcement (ICE) as well as “predictive policing.” That (you won’t be surprised to learn) involves the collection of vast amounts of personal data without a warrant, relying on algorithms with built-in racial biases that lead to the systematic unfair targeting and treatment of people of color.
To fully grasp how the Silicon Valley militarists view next-generation warfare, you need to check out the work of Christian Brose, Palantir’s chief strategy officer. He was a long-time military reformer and former aide to the late Sen. John McCain (R-Ariz.). His book Kill Chainserves as a bible of sorts for advocates of automated warfare. Its key observation: that the winner in combat is the side that can most effectively shorten the “kill chain” (the time between when a target is identified and destroyed). His book assumes that the most likely adversary in the next tech war will indeed be China, and he proceeds to exaggerate Beijing’s military capabilities, while overstating its military ambitions and insisting that outpacing that country in developing emerging military technologies is the only path to future victory.
And mind you, Brose’s vision of shortening that kill chain poses immense risks. As the time to decide what actions to take diminishes, the temptation to take humans “out of the loop” will only grow, leaving life-and-death decisions to machines with no moral compass and vulnerable to catastrophic malfunctions of a sort inherent in any complex software system.
Much of Brose’s critique of the current military-industrial complex rings true. A few big firms are getting rich making ever more vulnerable huge weapons platforms like aircraft carriers and tanks, while the Pentagon spends billions on a vast, costly global basing network that could be replaced with a far smaller, more dispersed military footprint. Sadly, though, his alternative vision poses more problems than it solves.
First, there’s no guarantee that the software-driven systems promoted by Silicon Valley will work as advertised. After all, there’s a long history of “miracle weapons” that failed, from the electronic battlefield in Vietnam to President Ronald Reagan’s disastrous Star Wars missile shield. Even when the ability to find and destroy targets more quickly did indeed improve, wars like those in Iraq and Afghanistan, fought using those very technologies, were dismal failures.
A recent Wall Street Journalinvestigation suggests that the new generation of military tech is being oversold as well. The Journal found that small top-of-the-line new U.S. drones supplied to Ukraine for its defensive war against Russia have proved far too “glitchy and expensive,” so much so that, irony of ironies, the Ukrainians have opted to buy cheaper, more reliable Chinese drones instead.
Finally, the approach advocated by Brose and his acolytes is going to make war more likely as technological hubris instills a belief that the United States can indeed “beat” a rival nuclear-armed power like China in a conflict, if only we invest in a nimble new high-tech force.
The result, as my colleague Michael Brenes and I pointed out recently, is the untold billions of dollars of private money now pouring into firms seeking to expand the frontiers of techno-war. Estimates range from $6 billion to $33 billion annually and, according to The New York Times, $125 billion over the past four years. Whatever the numbers, the tech sector and its financial backers sense that there are massive amounts of money to be made in next-generation weaponry and aren’t about to let anyone stand in their way.
Meanwhile, an investigation by Eric Lipton of The New York Times found that venture capitalists and startup firms already pushing the pace on AI-driven warfare are also busily hiring ex-military and Pentagon officials to do their bidding. High on that list is former Trump Secretary of Defense Mark Esper. Such connections may be driven by patriotic fervor, but a more likely motivation is simply the desire to get rich. As Ellen Lord, former head of acquisition at the Pentagon, noted, “There’s panache now with the ties between the defense community and private equity. But they are also hoping they can cash in big-time and make a ton of money.”
The Philosopher King
Another central figure in the move toward building a high-tech war machine is former Google CEO Eric Schmidt. His interests go far beyond the military sphere. He’s become a virtual philosopher king when it comes to how new technology will reshape society and, indeed, what it means to be human. He’s been thinking about such issues for some time and laid out his views in a 2021 book modestly entitled The Age of AI and Our Human Future, coauthored with none other than the late Henry Kissinger. Schmidt is aware of the potential perils of AI, but he’s also at the center of efforts to promote its military applications. Though he forgoes the messianic approach of some up-and-coming Silicon Valley figures, whether his seemingly more thoughtful approach will contribute to the development of a safer, more sensible world of AI weaponry is open to debate.
Let’s start with the most basic thing of all: the degree to which Schmidt thinks that AI will change life as we know it is extraordinary. In that book of his and Kissinger’s, they asserted that it would spark “the alteration of human identity and the human experience at levels not seen since the dawn of the modern age,” arguing that AI’s “functioning portends progress toward the essence of things, progress that philosophers, theologians, and scientists have sought, with partial success, for millennia.”
On the other hand, the government panel on artificial intelligence on which Schmidt served fully acknowledged the risks posed by the military uses of AI. The question remains: Will he, at least, support strong safeguards against its misuse? During his tenure as head of the Pentagon’s Defense Innovation Board from 2017 to 2020, he did help set the stage for Pentagon guidelines on the use of AI that promised humans would always “be in the loop” in launching next-gen weapons. But as a tech industry critic noted, once the rhetoric is stripped away, the guidelines “don’t really prevent you from doing anything.”
In fact, Sen. Elizabeth Warren (D-Mass.) and other good government advocates questioned whether Schmidt’s role as head of the Defense Innovation Unit didn’t represent a potential conflict of interest. After all, while he was helping shape its guidelines on the military applications of AI, he was also investing in firms that stood to profit from its development and use. His investment entity, America’s Frontier Fund, regularly puts money in military tech startups, and a nonprofit he founded, the Special Competitive Studies Project, describes its mission as to “strengthen America’s long-term competitiveness as artificial intelligence (AI) [reshapes] our national security, economy, and society.” The group is connected to a who’s who of leaders in the military and the tech industry and is pushing, among other things, for less regulation over military-tech development. In 2023, Schmidt even founded a military drone company, White Stork, which, according to Forbes, has been secretly testing its systems in the Silicon Valley suburb of Menlo Park.
The question now is whether Schmidt can be persuaded to use his considerable influence to rein in the most dangerous uses of AI. Unfortunately, his enthusiasm for using it to enhance warfighting capabilities suggests otherwise:
Every once in a while, a new weapon, a new technology comes along that changes things. Einstein wrote a letter to Roosevelt in the 1930s saying that there is this new technology—nuclear weapons—that could change war, which it clearly did. I would argue that [AI-powered] autonomy and decentralized, distributed systems are that powerful.
Given the risks already cited, comparing militarized AI to the development of nuclear weapons shouldn’t exactly be reassuring. The combination of the two—nuclear weapons controlled by automatic systems with no human intervention—has so far been ruled out, but don’t count on that lasting. It’s still a possibility, absent strong, enforceable safeguards on when and how AI can be used.
AI is coming, and its impact on our lives, whether in war or peace, is likely to stagger the imagination. In that context, one thing is clear: We can’t afford to let the people and companies that will profit most from its unbridled application have the upper hand in making the rules for how it should be used.
Isn’t it time to take on the new-age warriors?
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