Palantir Calls For 'Software-First Approach' As Pentagon Spends Under 1% On Modern Warfare

Palantir Technologies Inc. PLTR Senior Counselor Samantha Clark has urged the Pentagon to embrace commercial software solutions or risk lagging behind global adversaries in an increasingly data-driven battlefield.

What Happened: Clark, a former Deputy Staff Director for the U.S. Senate Armed Services Committee, co-authored a recent policy paper on National Interest with American Enterprise Institute Senior Fellow William Greenwalt and Palantir senior counselor Greg Little, arguing that the Department of Defense’s limited software spending threatens national security posture.

“Software offers perhaps the most compelling way to close current and future gaps between the United States and its adversaries,” the authors stated, highlighting that the DOD allocates less than 1% of its budget—approximately $5 billion—to software acquisition.

The paper comes just days after Defense Secretary Pete Hegseth‘s Mar. 6 memo directing the adoption of the Software Acquisition Pathway as the preferred method for all software development components, acknowledging that “software-defined warfare is not a future construct, but the reality we find ourselves operating in today.”

This policy shift aligns with concerns raised by Palantir’s Head of Defense Mike Gallagher, who warned at the National Security Innovation Base Summit that “China is preparing for war with America, and we’re not taking it seriously.”

Why It Matters: The authors describe a critical disparity between commercial and defense technology adoption, noting that major tech companies collectively spent $227 billion on R&D in 2023—forty-five times the Pentagon’s software investment. They argue that the Pentagon’s preference for in-house development and intellectual property control hampers innovation and creates inefficiencies.

“By shifting to a commercial software-first approach, the DOD can ensure that it remains agile, responsive, and prepared to meet the evolving challenges of the modern battlefield,” the authors concluded.

Palantir, which reported a 45% year-over-year increase in U.S. government revenue to $343 million in the fourth quarter, has seen its stock surge to $78.05, with analysts setting an average price target of $70.30. Wedbush Securities recently compared investing in PLTR to buying Tesla Inc. TSLA stock in 2015.

Palantir demonstrates strong momentum, according to Benzinga Edge ranking with a sustained long-term uptrend, though its low-value score suggests potential overvaluation while growth remains moderate.