# Defense Tech as Asset Class The emergence of defense technology as a distinct venture capital category, driven by the success of [[Palantir]] and [[Anduril]] and accelerated by geopolitical instability (Ukraine, Taiwan tensions, Middle East). ## The Thesis Traditional defense contractors ([[Lockheed Martin]], Raytheon, [[Northrop Grumman]]) are slow, expensive, and optimized for cost-plus contracts. Silicon Valley startups can build faster, cheaper, and more capable systems by applying software-first thinking to military hardware. [[Trae Stephens]] was called "the investor who called defense tech's big moment." ## The Numbers Tell the Story - [[Anduril]]: $60B valuation (March 2026), $20B Army contract, $2B revenue - [[Palantir]]: ~$250B market cap, $10B Army contract - [[Shield AI]]: $5.6B valuation, targeting $1B revenue - [[Scale AI]]: $14B valuation, Thunderforge prime contractor - Forbes 2025: 20 of 25 "next $1B startups" are AI-focused, many with military applications ## Key VC Firms in Defense Tech - **[[Founders Fund]]** — [[Peter Thiel]]'s firm. Largest defense tech investor. $1B into Anduril alone. - **[[Andreessen Horowitz]] (a16z)** — Co-leading Anduril's $60B round. Invested in Shield AI. - **[[Lux Capital]]** — Early defense tech believers. - **[[In-Q-Tel]]** — CIA's venture arm. 32 companies on NatSec 100. - **8VC** — [[Joe Lonsdale]]'s fund. ## See Also - [[Founders Fund]] - [[In-Q-Tel]] - [[PayPal Mafia to Pentagon Pipeline]]