Artificial Intelligence Start-up Shield AI to Nearly Double Valuation to $5bn
Raising $200mn from Defence and Aerospace Companies
Artificial intelligence start-up Shield AI will nearly double its valuation to $5bn in a new fundraising round, as investors rush to fund defence technology groups producing cutting-edge military systems.
Investors Line Up
The San Diego-based group, which makes AI-powered software for autonomous aircraft and drones, is raising about $200mn from defence and aerospace companies, including Palantir, Airbus, and L3 Harris, according to people close to the deal. Venture capitalists, including Andreessen Horowitz, Point72, and Riot Ventures, are also expected to participate.
Rationale for Investment
"Companies invest in competitors when there’s a strong strategic rationale to do so," said one of the people close to the matter. "The investments are a sign of the serious commitment to use our autonomy backbone in their programmes."
Growing Demand for AI in Defence
The fundraising comes as tech groups seek to grab a bigger slice of the US government’s $850bn defence budget from traditional prime contractors such as Lockheed Martin, Raytheon, and Boeing. Wars in Ukraine and the Middle East and geopolitical tensions between the US and China have heightened Washington’s reliance on tech companies developing advanced AI products for military purposes.
Shield’s Autonomous Technology
Shield’s core "Hivemind" software enables drones and aircraft to operate without GPS, communications, or a human pilot. Its autonomous technology is being used by a number of rival companies, including legacy defence prime contractors that can incorporate its software into their aircraft.
Conclusion
The surge in investment in Shield AI and other defence technology companies reflects the growing importance of AI in military applications. As the US government continues to increase its spending on national security, it is likely that we will see even more investment in this space in the coming years.
FAQs
Q: What is Shield AI’s core technology?
A: Shield’s core "Hivemind" software enables drones and aircraft to operate without GPS, communications, or a human pilot.
Q: Who is investing in Shield AI?
A: Palantir, Airbus, L3 Harris, Andreessen Horowitz, Point72, and Riot Ventures are among the companies investing in Shield AI.
Q: Why are investors interested in Shield AI?
A: Investors are interested in Shield AI because of its potential to provide cutting-edge military systems and its ability to integrate with other defence companies.
