"Palantir Calls For 'Software-First Approach' As Pentagon Spends Under 1% On Modern Warfare"

In the ever-evolving landscape of modern warfare, the Pentagon finds itself at a critical juncture. With less than 1% of its budget allocated to software acquisition, the Department of Defense (DOD) is lagging behind in the data-driven battlefield. Palantir Technologies Inc., a leading software company, has stepped forward with a bold proposal: a 'software-first approach' to revolutionize defense technology. This call to action comes at a time when the military-industrial complex is undergoing a seismic shift, driven by the rapid advancement of artificial intelligence (AI) and big data analytics.

Palantir's advocacy for a 'software-first approach' is not just a business pitch; it's a clarion call for the Pentagon to embrace the future of warfare. The company's software platforms, Gotham and Foundry, are designed to process, sort, and analyze vast amounts of data, making them integral to the modern battlefield. As the military produces increasing amounts of data generated by sensors built-in military hardware, passing through networked devices, and stored on different databases, the defense tech sector finds its competitive edge by developing software platforms for processing, sorting, and analyzing all this data.



The disparity between the Pentagon's software spending and that of major tech companies is staggering. While the DOD allocates approximately $5 billion to software acquisition, major tech companies collectively spent $227 billion on R&D in 2023. This forty-five-fold difference highlights the need for the Pentagon to adopt commercial software solutions to remain agile and responsive. Palantir's senior counselor Samantha Clark argues that "Software offers perhaps the most compelling way to close current and future gaps between the United States and its adversaries."

Palantir's chief technology officer, Shyam Sankar, further elaborates on these advantages. He criticizes the Pentagon's traditional approach, describing it as a "sclerotic monopsony" with a "communist approach to acquisition." Sankar argues that the Pentagon's preference for in-house development and intellectual property control hampers innovation and creates inefficiencies. He suggests that by shifting to a commercial software-first approach, the DOD can ensure that it remains agile, responsive, and prepared to meet the evolving challenges of the modern battlefield. This approach would allow the Pentagon to leverage the competitive edge of commercial software platforms, which are designed to process, sort, and analyze large amounts of data generated by military hardware and operations.

Sankar also highlights the need for competition, whether it’s companies vying for Pentagon contracts or customers in the Defense Department looking for solutions. He criticizes a system whose major suppliers sell only to the Pentagon and other militaries, arguing that the Pentagon should vastly accelerate its purchases from largely commercial companies. This would not only drive efficiencies but also ensure that the Pentagon remains at the forefront of technological innovation. For example, Sankar points out that Chinese primes only earn 30-40% of their revenue from the PLA; the remainder is commercial. This commercial revenue subsidizes their military capabilities, much like how American consumer purchases during the Cold War subsidized America’s lethality against its enemies.

In contrast, traditional defense contracting methods often rely on a few large, expensive, heavily staffed military platforms. This central planning model is seen as insufficient and in need of disruption by free market competition between contractors providing smaller, cheaper, autonomous systems. Palantir's 'software-first approach' aims to replace this traditional model with a more agile and competitive approach to technological innovation, which would likely lead to new monopolies and dependencies. However, the potential benefits of increased efficiency, agility, and responsiveness make it a compelling proposition for the Pentagon.

The Pentagon's current allocation of less than 1% of its budget to software acquisition significantly impacts its ability to compete in a data-driven battlefield. This limited investment in software contrasts sharply with the $227 billion spent by major tech companies on R&D in 2023, highlighting a critical disparity in technological advancement. This disparity is further exacerbated by the Pentagon's preference for in-house development and intellectual property control, which hampers innovation and creates inefficiencies. As noted by Palantir's Senior Counselor Samantha Clark, "Software offers perhaps the most compelling way to close current and future gaps between the United States and its adversaries." The limited software spending threatens the Pentagon's national security posture, as it risks lagging behind global adversaries who are rapidly adopting commercial software solutions.

To address this disparity, the Pentagon could shift to a commercial software-first approach. This would involve increasing software acquisition budgets and leveraging commercial software solutions that are already proven in the market. As Clark and her co-authors argue, "By shifting to a commercial software-first approach, the DOD can ensure that it remains agile, responsive, and prepared to meet the evolving challenges of the modern battlefield." This approach would allow the Pentagon to benefit from the rapid innovation and cost efficiencies of the commercial sector, thereby enhancing its competitive edge in a data-driven battlefield. Additionally, the Pentagon could adopt the Software Acquisition Pathway as the preferred method for all software development components, as directed by Defense Secretary Pete Hegseth's memo. This policy shift acknowledges that "software-defined warfare is not a future construct, but the reality we find ourselves operating in today," and emphasizes the need for a more agile and responsive approach to software acquisition.



In conclusion, Palantir's call for a 'software-first approach' is a wake-up call for the Pentagon. The current allocation of less than 1% of its budget to software acquisition is a recipe for disaster in a data-driven battlefield. By embracing commercial software solutions and increasing software acquisition budgets, the Pentagon can ensure that it remains agile, responsive, and prepared to meet the evolving challenges of modern warfare. The time for action is now, and the Pentagon must heed Palantir's call to stay ahead in the race for technological supremacy.