# Defense Buyers Prioritize Scalable Startups

The Tech reports that defense buyers are increasingly interested in dual-use startups, AI, autonomous systems, and companies able to scale or adapt production quickly. The procurement signals also include Anduril’s 2026 U.S. Navy contract to expand the submarine industrial base, as well as AI agreements involving Google and Microsoft for classified networks and an expanded Palantir role in Pentagon targeting automation. The article identifies no open solicitation, so the opportunity for contractors is strategic positioning rather than responding to a current competition.

- Companies pursuing defense work should be prepared to demonstrate validated performance, adaptable manufacturing capacity, and readiness to serve both commercial and mission customers.
- The Navy’s **$6.6 billion** submarine industrial-base contract underscores the procurement relevance of production capacity alongside technology capability.
- AI and autonomy firms can use the cited classified-network and targeting applications to understand areas of government interest, while recognizing that the article does not identify a specific solicitation or bid deadline.

**Jurisdictions:** federal
**Industries:** Defense & Military, Information Technology
**Topics:** Artificial Intelligence
**Published:** November 12, 2026

### Government Entities
- U.S. Department of Defense (DoD)
- U.S. Navy

### Vendors
- Anduril Industries (Awardee under a U.S. Navy contract to expand the submarine industrial base)
- Google (Participant in an agreement to integrate AI into classified networks)
- Microsoft (Participant in an agreement to integrate AI into classified networks)
- Palantir (Defense contractor that expanded its role in Pentagon targeting automation)

### Key Quotes
> Fundamentally, the shift is going towards manufacturing capacity and adaptation capacity rather than system capacity.
> — Gene Keselman, Executive Director of Mission Innovation X

> At the end of the day, the government, as a customer, ultimately gets to decide how technology is used.
> — Fiona Murray, William Porter Professor of Entrepreneurship

### Sources
- [What’s next for defense startups? | The Tech](https://thetech.com/2026/11/12/valley-of-death-book) - The Tech