Lockheed Boosts Investment in Early-Stage Tech Companies
Silicon Valley isn’t closing itself off to military money, just because Google is.
A week after Google said it would not renew its contract with the Defense Department on Project Maven, one of the world’s largest defense contractors says it’s dramatically increasing its investments in Silicon Valley.
Lockheed Martin will increase the amount of money it will invest in early-stage technology companies by about $100 million (on top of nearly $100 million it invests currently) reaching more than $200 million in th coming year in key areas, said Chris Moran, the general manager of Lockheed Martin Ventures, the company’s venture capital arm. Those areas include companies doing work in artificial intelligence (particularly as focused on machine vision — think self-driving cars) but also in autonomy, cyber, sensors and space-based tech.
The company was more able to make the investments because of the Trump tax cuts, he said.
Silicon Valley’s bigger, more commercial-minded VC firms are also throwing money at those areas so there’s a lot of overlap, particularly in self-driving-car tech such as radar and light detecting and ranging, or lidar, sensors, said Moran. But Lockheed wants both to generate new products for the military and to use machine learning and other, more complex forms of artificial intelligence to improve the weapons and vehicles it already makes.
“The things that Lockheed Martin does, they’re essentially data-generating platforms,” said Moran. One example is the F-35 Joint Strike Fighter, which defense officials tout as a massive sensor and intelligence fusion engine. “That’s where data analytics and, by extension, artificial intelligence comes in,” he said. “I don’t see any let up on that.”
Lockheed will be looking to AI to better manage space assets, in particular, as well as to optimize performance on more platforms. But there’s also an interest in further seeding AI across the battlefield, and for that, the company needs Silicon Valley’s help. Moran pointed to company’s investment in AI-chip maker Mythic, which specializes in neural nets, as emblematic of the Defense Department’s need to push AI to “the edge” — that is, combat.
Moran concedes tat there are bigger VC players in the Valley, but says Lockheed brings assets that few others do. One is access to the company’s wide range of technical experts. That’s particularly important in areas like lidar and radar. “When you pass muster with us, and we invest in you, people know you’ve overcome that hurdle,” he said.
Compared to a typical Silicon Valley venture capital firm, which seeks a financial return in fairly short order, Lockheed has a longer-term view. For Lockheed, the point of any early-stage investment is technology access down the road, rather than a quick financial turn-around, said Moran. That potentially gives engineers and developers at startups more time to bring their products to the next level without pressure to commercialize too soon.
“Our interests are not in the current version of the products but in the third version of the product that’s going to come down because all of these companies, lidar and radar, it’s all [intelligence, surveillance, and reconnaissance]. It’s all autonomy and sensors. As the range gets longer, the resolution gets better, the power consumption gets lower then it becomes interesting to what we’re working on,” he said.
But getting into bed with a big defense contractor can have its downsides as well. For instance, it can make it harder to attract foreign investment. Lockheed Martin selects companies that haven’t raised a lot of capital from other countries, particularly China. “It is an issue, I’ll be blunt on that,” said Moran. Chinese investments in Silicon Valley, particularly in early-stage AI startups, has become a big worry for national security observers and could potentially be curtailed under proposed changes to how the Committee on Foreign Investment in the United States operates.
Lockheed Martin isn’t the only defense contractor looking to expand its access to Silicon Valley’s new rising stars. Moran pointed to the venture arms of Boeing and Airbus as key competitors. “We can’t not bump into each other, sometimes in the lobby of companies that we’re talking to.”
While a growing number of technologists at Google, if not elsewhere, are opposed to doing business with the Pentagon, that reluctance isn’t widespread, said Moran. “Most of the companies embrace what we’re trying to do,” he said. “Engineers love problems. We have great problems. Challenging problems...I haven’t been refused meetings. The relationship is good.”