Why Alphabet, Amazon, Microsoft Are Eyeing This $715B Sector

  • Tech industry leaders are pushing the U.S. government to adopt commercially developed technologies via public-private partnerships to counter China's growing power, the Wall Street Journal reports.
  • The private sector commands more talent, research budgets and capabilities in artificial intelligence and cloud computing versus the Pentagon, and these elements are critical to the military and the defense as per the National Security Commission on AI.
  • Congress created the panel in 2018, chaired by former Alphabet Inc GOOG GOOGL Google CEO Eric Schmidt. Other members included Amazon.com Inc AMZN CEO Andy Jassy, Oracle Corp ORCL CEO Safra Catz, and top Microsoft Corp MSFT and Google scientists.
  • The commission charted out a road map for the Pentagon to acquire commercially designed software and hardware to be at par with China's tech investment ramp.
  • In 2018, Google exited from an AI-driven software project with the Pentagon when employees revolted.
  • Microsoft, Google and others are eyeing the Pentagon's billions of dollars spent in a market dominated by Lockheed Martin Corp LMT.
  • In March, Microsoft scooped a $21.9-billion contract to supply the Army with HoloLens.
  • However, the tech critics wary of the tech companies' growing influence see additional risks from the initiative.
  • LMT Price Action: LMT shares were down 1.69% at $350.05 Tuesday afternoon.
  • Editor's note: The title has been amended to correct the sector value to $715 billion
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