Investment in defense technology is on the rise amid growing global tensions
With Andreessen Horowitz At the recent American Dynamism summit, Hadrian’s founder and CEO Chris Power painted a picture of the country in danger. “I’m here to talk to you about an existential risk to the future of the Republic and how Hadrian is trying to solve it.” he started.
His words — a mix of rationalism and Marcus Aurelius — were not out of place at the event, which brought together a mix of Washington investors, founders, policymakers and other officials to discuss issues facing the country. A notable number of calls related to defense and national security, in line with the American Dynamism team’s investment portfolio, which includes bets on defense tech startups like Hadrian, Anduril, and Shield AI.
Just a few years ago, many investors thought lowering a check for a “defense-first” startup was a proposition that just didn’t make sense. The tide has clearly turned: a16z is one of many companies that have shown more interest in defense and national security. PitchBook data supports this warming for defense technology. From January to October last year, venture-backed companies injected $7 billion into aerospace and defense companies, a massive growth that contrasts sharply with the relative sluggishness in other industries. Some deals in recent months include Anduril’s $1.4 billion Series E; Shield AI’s $225 Million Series E; and Vannevar Labs’ $75 million Series B.
There are many reasons for this surge in interest in defense technology, but all of them are driven by a new realist vision that is being spread among some technologists and venture capitalists. It sees global contradictions that threaten the stability of the world Pax Americana; it sees the United States rotting from the inside out from bloating and lethargy. As a result, the Silicon Valley mindset has returned to its defense roots, embracing the role venture-funded startups can play in maintaining America’s military dominance and technological supremacy around the world.
“If you believe in democracy, democracy requires a sword,” a16z general partner David Ulevitch said in a recent interview with gotechbusiness.com. And Silicon Valley will be where it is forged.