Silicon Valley’s new defense tech ‘neoprimes’ are pulling billions in funding to challenge legacy giants

Published

2 months ago

October 3, 2025

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Guvendemir | E+ | Getty Images

A wave of defense tech startups in Silicon Valley is drawing billions in funding and reshaping America’s national security.

Anduril Industries, recently valued at $30.5 billion following its latest funding round, is among the so-called “neoprimes” — companies challenging the dominance of legacy contractors, dubbed “primes,” such as Lockheed Martin, Northrop Grumman, Boeing, General Dynamics, and RTX (formerly Raytheon).

“There’s more money than ever going to what we call the ‘neoprimes'” Jameson Darby, co-founder and director of autonomy at investment syndicate MilVet Angels, or MVA, told CNBC. “It’s still a fraction of the overall budget, but the trend is all positive.”

Other examples of defense tech startups challenging the incumbents include SpaceX and Palantir Technologies, said Darby, who is also a founding member of the U.S. Department of Defense’s Defense Innovation Unit.

Unlike the primes, these startups are faster, leaner and software-first — with many of them building things that can help close “critical technology gaps that are really important to national security,” said Ernestine Fu Mak, co-founder of MVA and founder of Brave Capital, a venture capital firm.

Venture funding for U.S.-based defense tech startups totaled about $38 billion through the first half of 2025, and could exceed its 2021 peak if the pace remains constant for the rest of the year, according to JPMorgan.

‘The battlefield is changing’

As the global war landscape changed over the past decades, the U.S. Department of Defense has identified several technologies that are critical to national security, including hypersonics, energy resilience, space technology, integrated sensing and cyber.

“In a post-9/11 world, the entire Department of Defense effectively focused on … the global war on terrorism. It was our military versus insurgents, guerrillas, asymmetric warfare, relatively low-tech fighters in most cases,” said Darby.

But war today is more focused on “great power competition,” said Mak.

The battlefield is changing and new technologies are needed … warfare no longer being limited to land, sea, air. There’s also cyber and space domains that have become contested.

Ernestine Fu Mak

Co-founder, MilVet Angels

“The focus is more on deterring and competing with [adversaries] in these very high-tech, multi-domain conflicts,” Mak added. “The battlefield is changing and new technologies are needed… warfare no longer being limited to land, sea, air. There’s also cyber and space domains that have become contested.”

Today, some of these Silicon Valley “neoprimes” are developing not just weapons, but also dual-use technologies that can be applied both commercially and by militaries.

“So things like artificial intelligence and autonomy have broad, sweeping commercial applications, but they’re also clearly a force multiplier in a military context,” said Darby. “[The] Department of War is rapidly assessing and adopting these dual-use technologies … they’re sending signals to the investment world, to the defense industrial base, that the U.S. government needs these things.”

That direction from the government has, in turn, provided a clear and strategic roadmap for both investors and entrepreneurs, said Mak.

The ‘new guard’

On Sept. 17, MVA came out of stealth mode after quietly backing some leading defense tech startups since 2021.

Today, Mak says the syndicate’s roughly 250 members include tech founders, Wall Street financiers, company executives, intelligence officials, former military leaders and Navy SEALs. Together, they’ve invested in companies like Anduril Industries, Shield AI, Hermeus, Ursa Major and Aetherflux.

“Overall, we believe that ‘neoprimes’ cannot exist in the abstract. They require people — individuals who bring technical expertise, who carry a deep sense of mission, and who contribute complementary voices and talents. Together, this coalition forms what we are convening and calling the ‘new guard,'” said Mak.

She added that modern national security requires both the “warrior’s insight on the battlefield” and the “builder’s drive for innovation”.

“Working together with engaged, informed patriots whose participation strengthens our defense ecosystem and reinforces the very fabric of national security,” Mak said.

Mak and Darby both agree that as new technologies develop and make their way onto battlefields globally, it’s changing the way militaries fight, which can also pose new threats.

“You’re seeing these technologists, these builders … building defense tech, and the reason why they’re doing so, is not to initiate conflict, but rather to create a credible deterrent that discourages aggression,” said Mak.

“No one in defense tech is looking to wage war, rather, it’s looking to deter it and wanting adversaries to think twice before threatening peace and stability,” Mak added.

Technology

How black boxes became key to solving airplane crashes

Published

11 hours ago

November 30, 2025

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How black boxes became key to solving airplane crashes

After the search for survivors and recovery of victims in tragic aviation accidents — like that of a UPS cargo plane shortly after takeoff from Louisville Muhammad Ali International Airport in Kentucky last month — comes the search for flight data and a cockpit voice recorder often called the “black box.”

Every commercial plane has them. Aerospace giants GE Aerospace and Honeywell are among a few companies that design them to be nearly indestructible so they can help investigators understand the cause of a crash.

“They’re very crucial because it’s one of the few sources of information that tells us what happened leading up to the accident,” said Chris Babcock, branch chief of the vehicle recorder division at the National Transportation Safety Board. “We can get a lot of information from parts and from the airplane.”

Commercial aircraft have become very complex. A Boeing 787 Dreamliner records thousands of different pieces of information. In the case of the Air India crash in June, data revealed both engine fuel switches were put into a cutoff position within one second of each other. A voice recording from inside the cockpit captured the pilots discussing the cutoffs.

“All of those parameters today can have a very huge impact on the investigation,” said former NTSB member John Goglia. “It’s our goal to to provide information back to our investigators who are on scene as quick as we can to help move the investigation forward.”

This crucial data can also help prevent future accidents. A crash can cost airlines or plane manufacturers hundreds of millions of dollars and leave victims’ families with a lifetime of grief.

But in some circumstances black boxes were destroyed or never found. Experts say further developments such as cockpit video recorders and real-time data streaming are needed.

“The technology is there. Crash worthy cockpit video recorders are already being installed in a lot of helicopters and other types of airplanes, but they’re not required,” said Jeff Guzzetti, aviation analyst and former accident investigator for the Federal Aviation Administration and NTSB. “There’s privacy and cost issues involving cockpit video recorders but the NTSB has been recommending that the FAA require them for years now.”

Watch the video to learn more.

— CNBC’s Leslie Josephs contributed to this report.

Technology

Stocks end November with mixed results despite a strong Thanksgiving week rally

Published

2 days ago

November 28, 2025

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Stocks end November with mixed results despite a strong Thanksgiving week rally

Technology

Palantir has worst month in two years as AI stocks sell off

Published

2 days ago

November 28, 2025

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Palantir has worst month in two years as AI stocks sell off

CEO of Palantir Technologies Alex Karp attends the Pennsylvania Energy and Innovation Summit, at Carnegie Mellon University in Pittsburgh, Pennsylvania, U.S., July 15, 2025.

Nathan Howard | Reuters

It’s been a tough November for Palantir.

Shares of the software analytics provider dropped 16% for their worst month since August 2023 as investors dumped AI stocks due to valuation fears. Meanwhile, famed investor Michael Burry doubled down on the artificial intelligence trade and bet against the company.

Palantir started November off on a high note.

The Denver-based company topped Wall Street’s third-quarter earnings and revenue expectations. Palantir also posted its second-straight $1 billion revenue quarter, but high valuation concerns contributed to a post-print selloff.

In a note to clients, Jefferies analysts called Palantir’s valuation “extreme” and argued investors would find better risk-reward in AI names such as Microsoft and Snowflake. Analysts at RBC Capital Markets raised concerns about the company’s “increasingly concentrated growth profile,” while Deutsche Bank called the valuation “very difficult to wrap our heads around.”

Adding fuel to the post-earnings selloff was the revelation that Burry is betting against Palantir and AI chipmaker Nvidia. Burry, who is widely known for predicting the housing crisis that occurred in 2008 and the portrayal of him in the film “The Big Short,” later accused hyperscalers of artificially boosting earnings.

Palantir CEO Alex Karp vocally hit the front lines, appearing twice in one week on CNBC, where he accused Burry of “market manipulation” and called the investor’s actions “egregious.”

“The idea that chips and ontology is what you want to short is bats— crazy,” Karp told CNBC’s “Squawk Box.”

Despite the vicious selloff, Palantir has notched some deal wins this month. That included a multiyear contract with consulting firm PwC to speed up AI adoption in the U.K. and a deal with aircraft engine maintenance company FTAI.

But those announcements did little to shake off valuation worries that have haunted all AI-tied companies in November.

Across the board, investors have viciously ditched the high-priced group, citing fears of stretched valuations and a bubble.

In November, Nvidia pulled back more than 12%, while Microsoft and Amazon dropped about 5% each. Quantum computing names such as Rigetti Computing and D-Wave Quantum have shed more than a third of their value.

Apple and Alphabet were the only Magnificent 7 stocks to end the month with gains.

Sill, questions linger over Palantir’s valuation, and those worries aren’t a new concern.

Even after its steep price drop, the company’s stock trades at 233 times forward earnings. By comparison, Nvidia and Alphabet traded at about 38 times and 30 times, respectively, at Friday’s close.

Karp, who has long defended the company, didn’t miss an opportunity to clap back at his critics, arguing in a letter to shareholders that the company is making it feasible for everyday investors to attain rates of return once “limited to the most successful venture capitalists in Palo Alto.”

“Please turn on the conventional television and see how unhappy those that didn’t invest in us are,” Karp said during an earnings call. “Enjoy, get some popcorn. They’re crying. We are every day making this company better, and we’re doing it for this nation, for allied countries.”

Palantir declined to comment for this story.

WATCH: Palantir CEO Alex Karp: We’ve printed venture results for the average American