Published by Watson Institute for International and Public Affairs

America’s military-industrial complex has been rapidly expanding from the Capital Beltway to Silicon Valley. Although much of the Pentagon’s budget is spent on conventional weapons systems, the Defense Department has increasingly sought to adopt AI-enabled systems. Big tech companies, venture capital, and private equity firms benefit from multi-billion dollar Defense contracts, and smaller defense tech startups that “move fast and break things” also receive increased Defense funding. This report illustrates how a growing portion of the Defense Department’s spending is going to large, well-known tech firms, including some of the most highly valued corporations in the world.

Given the often-classified nature of large defense and intelligence contracts, a lack of transparency makes it difficult to discern the true amount of U.S. spending diverted to Big Tech. Yet, research reveals that the amount is substantial, and growing. According to the nonprofit research organization Tech Inquiry, three of the world’s biggest tech corporations were awarded approximately $28 billion from 2018 to 2022, including Microsoft ($13.5 billion), Amazon ($10.2 billion), and Alphabet, which is Google’s parent company ($4.3 billion). This paper found that the top five contracts to major tech firms between 2019 and 2022 had contract ceilings totaling at least $53 billion combined.

From 2021 through 2023, venture capital firms reportedly pumped nearly $100 billion into defense tech startup companies — an amount 40 percent higher than the previous seven years combined. This report examines how Silicon Valley startups, big tech, and venture capital who benefit from classified Defense contracts will create costly, high-tech defense products that are ineffective, unpredictable, and unsafe – all on the American taxpayer’s dime.