Department of Defense Tests AI Models from Microsoft, OpenAI to Ease Transition from Palantir, Lockheed Martin

The US Department of Defense is testing AI models from Microsoft and OpenAI to reduce its dependence on vendors like Palantir Technologies and Lockheed Martin. The goal is to potentially free customers from vendor lock-in situations and transition to competing analytics platforms. This comes amid growing interest in AI technologies and scrutiny of Microsoft's China-based tech support for Pentagon projects. Palantir shares dipped 0.58% on Monday but gained 0.39% in premarket trading on Tuesday.

The U.S. Department of Defense (DoD) has been testing AI models from Microsoft (NASDAQ:MSFT) and OpenAI to reduce its reliance on contractors like Palantir (NASDAQ:PLTR) and Lockheed Martin (NYSE:LMT). The initiative aims to potentially free customers from vendor lock-in situations and transition to competing analytics platforms.

The Pentagon and other federal agencies are evaluating AI models developed by Microsoft and OpenAI, designed to extract data from analytics applications managed by contractors such as Palantir and Lockheed Martin. These models are intended to simplify platform transitions for customers by writing code to transfer corporate data between applications or convert older programs into newer formats [2].

Major tech companies, including Amazon (NASDAQ:AMZN), Microsoft, and Salesforce (NYSE:CRM), are developing AI tools to achieve this goal. The DoD views these tools as potential leverage in contract negotiations with current providers, as they could threaten to migrate agency data to competing analytics platforms such as Microsoft’s Power BI [2].

This development comes amid growing interest in AI technologies. Just earlier this month, tech analyst Dan Ives of Wedbush Securities raised his price target for Palantir, citing the company’s AI strategy as a key factor [2].

Microsoft has been under scrutiny for its China-based tech support for Pentagon projects. The company’s decision to discontinue this support could have influenced the DoD’s decision to explore alternative AI models [3]. Defense Secretary Pete Hegseth ordered a two-week review to ensure other contractors were not employing similar practices [3].

Palantir shares dipped 0.58% on Monday to close at $157.88, but gained 0.39% in premarket trading on Tuesday, according to Benzinga Pro data [2].

References:
[1] https://finance.yahoo.com/news/dod-tests-ai-models-easy-175103401.html
[2] https://www.benzinga.com/markets/tech/25/07/46681403/department-of-defense-tests-ai-models-by-microsoft-openai-to-ease-transition-from-palantir-lockheed-martin
[3] https://m.economictimes.com/tech/technology/us-lawmaker-presses-for-details-of-pentagon-use-of-chinese-engineers-under-microsoft-deal/articleshow/122878294.cms