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Fortune
Fortune
David Meyer

Microsoft's new alliance and a startup's $14 billion valuation show defense tech is heating up

Alex Karp, chief executive officer of Palantir Technologies Inc., walks to the morning session at the Allen & Co. Media and Technology Conference in Sun Valley, Idaho, US, on Wednesday, July 10, 2024. (Credit: David Paul Morris—Bloomberg/Getty Images)

It’s been a big couple days in the increasingly active defense tech sector.

Today, Microsoft and Palantir announced they will bundle their AI services for U.S. military and intelligence, with Microsoft contributing GPT-4 and other OpenAI models, and Palantir throwing in its targeting, data-analysis, and action-proposing tools. This is the first partnership around deploying Microsoft Azure OpenAI Service in classified environments, Palantir CTO Shyam Sankar noted in a statement—though Microsoft, on its own, did deploy GPT-4 to its Azure Government Top Secret environment in May. And of course, the relevant government agencies still need to bite.

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