BLUF: The Shake-Up at DoD

It’s no secret that the DoD is poised for a shake-up. From nontraditional appointments such as now Secretary of Defense Pete Hegseth to the foreboding shadow of Elon Musk’s Department of Government Efficiency, the Trump Administration is making good on its promise to reevaluate the status quo.

The upheaval comes at an interesting time for defense, which is already in the throes of a changing tide, this one from industry. For decades, economies of scale, strong lobbying, and lack of risk-tolerant investors have made the military industrial base almost impossible to break into, leading to a situation which routinely rewards those companies capable of managing and scaling multi-billion dollar contracts.

Enter Silicon Valley’s “move fast and break things” ideology. Over the past few years, smaller defense firms have begun to prove that innovation is more valuable than consistency, and government is taking notice. Small venture capital-backed defense tech companies like Anduril, Palantir, and Scale AI have quickly risen to prominence in the defense industry, chipping away at contracts which may have otherwise gone to the “Big Five” defense contractors; Lockheed Martin, Boeing, General Dynamics, Northrup Grumman, and RTX (formerly Raytheon).

Anduril and Palantir are seen by many as prime examples of defense contracting ‘distruptors’— to borrow a popular Silicon Valley moniker—the latter having been one of the best performing stocks over the past year, jumping a staggering 370% and boasting a market cap of over $250 billion.

Competition is a very good indicator for the future of our defense industry and therefore U.S. national security. More players mean lower costs and increased innovation. And although there is a shake-up on the horizon, something tells us the disruptor ideology in defense innovation is here to stay.

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