Emil Michael

Emil Michael reveals that Palantir is the "prime contractor" for the Pentagon's AI infrastructure and that Anthropic was merely a "sub" whose model sat inside Palantir's GovCloud instance. With Anthropic blacklisted for refusing "lawful use" clauses, the DoD must rely even more heavily on the prime (Palantir) to swap in compliant models (like Google's Gemini or Meta's Llama). Palantir's role as the "control plane" is validated as mission-critical; they are the gatekeeper of the AI supply chain for the military. Long PLTR as the indispensable operating system of the war effort, benefiting from the churn of underlying models. If the DoD decides to build its own internal control plane to reduce vendor lock-in with Palantir.

"OpenAI got the same terms on combatant commands, got the same terms on the rest of the Department of War. And we were just trying to finish up the intelligence agencies there." OpenAI successfully navigated the DoD's strict requirements, winning massive government contracts that Anthropic lost due to ideological and policy disagreements. Because OpenAI relies exclusively on Microsoft's Azure cloud infrastructure and Microsoft is its primary financial backer, Microsoft directly monetizes OpenAI's expansion into the highly lucrative defense and intelligence sectors. LONG MSFT as a high-conviction proxy for OpenAI capturing a dominant share of US defense and intelligence AI contracts. Regulatory scrutiny over the Microsoft-OpenAI partnership, or competitors like Google (Gemini) undercutting them to win future intelligence agency contracts.

The DoD is running a "drone dominance program" focused on "Lucas low-cost unmanned combat attack systems" (one-way attack drones) and "collaborative aircraft" that fly alongside jets. The shift is away from $20B aircraft carriers toward "mass tradable, low-cost" autonomous systems. AeroVironment (AVAV) and Kratos (KTOS) are the pure-play leaders in loitering munitions and unmanned wingmen, fitting the exact description of the hardware the Under Secretary is demanding. Long US drone manufacturers as the DoD rushes to "plus up" munitions and autonomous arsenals. Supply chain bottlenecks for batteries and chips (which are currently China-dependent).

The DoD is running a "drone dominance program" focused on "Lucas low-cost unmanned combat attack systems" (one-way attack drones) and "collaborative aircraft" that fly alongside jets. The shift is away from $20B aircraft carriers toward "mass tradable, low-cost" autonomous systems. AeroVironment (AVAV) and Kratos (KTOS) are the pure-play leaders in loitering munitions and unmanned wingmen, fitting the exact description of the hardware the Under Secretary is demanding. Long US drone manufacturers as the DoD rushes to "plus up" munitions and autonomous arsenals. Supply chain bottlenecks for batteries and chips (which are currently China-dependent).

The DoD is actively using the "Office of Strategic Capital" ($200B lending authority) to domesticate critical minerals and batteries, which are currently "totally outsourced to China." As the conflict with China (via Iran proxy) escalates, the US government will aggressively fund domestic rare earth mining and processing to secure the defense industrial base. MP Materials is the primary US-listed beneficiary of this reshoring effort. Long MP as a recipient of government capex and strategic protection. Environmental regulation slowing down domestic mining expansion.