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By Nick Mottern / Truthout
What does it mean for humanity if cutting-edge AI weapons development for the Pentagon is being significantly funded by venture capitalists who are also profiting from the Israeli genocide against the Palestinian people?
Consider, for example, the X-BAT.
On October 21, 2025, in a theatrical unveiling involving a darkened auditorium, a smoke machine, and a black silken shroud that was whisked away, the war industry start-up Shield AI revealed a sleek, black, full-sized model of its proposed X-BAT drone jet fighter.
“When you see it,” teased Shield AI president Brandon Tseng, before the unveiling, “you’ll probably think to yourself: ‘Holy shit, that thing is fucking cool.’”
Shield AI says that the X-BAT will be vertically launched to enable it to operate without runways and from a variety of ships, not just aircraft carriers. The drone will have the AI power to select its own targets and launch weapons without human control, although there may be provision for some degree of human involvement.
Pitching Shield AI’s achievements, Tseng said that its NOVA scout drone was used by Israel in Gaza “to help rescue hostages.” He said another one of its products, the V-BAT surveillance drone, is being used by Ukrainian troops and by the U.S. Coast Guard and Navy “to interdict and destroy billions of dollars’ worth of drugs that were headed for the United States of America.”
The real X-BAT has yet to be created, and whether it will perform as advertised may be known in the fall of 2026 when, the company says, flight tests will begin.
What is clear, however, is that the X-BAT is a poster child for a class of AI-guided weapons being built by military start-ups supported by highly speculative venture capital (VC) funds often built around Silicon Valley AI software. These funds amount to high-stakes gambling by extremely wealthy people, who know that they have perhaps a 10 percent chance of striking it rich should the start-up on which they are betting eventually tap into the nearly $1 trillion Pentagon budget and international military funding.
“We are in the midst of a military AI bonanza”, said Professor Elke Schwarz, a Queen Mary University of London ethicist and analyst, in an article published by Cambridge University Press on the impact of VC investments on U.S. and European militaries and the war industry.
“Between 2022 and 2023,” Professor Schwarz reported, U.S. federal contracts for military AI “nearly tripled, with a potential increase in the value of these contracts by 1,200 percent.”
According to J.P. Morgan, VC investment in military and aerospace companies amounted to $48 billion in 2024, and “Through the first half of 2025, venture investments into U.S.-based defense tech startups totaledroughly $38 billion and could very well exceed the 2021 peak ($55 billion) should the pace of investing remain constant through the end of the year.”
Profiting From Israel’s Genocide
Many of the largest VCs that are funding cutting edge AI weapons development for the Pentagon — such as Founders Fund, Andreessen Horowitz, Lux Capital, General Catalyst, Hercules Capital, Shield Capital, and Sequoia Capital — are also investing in Israeli high-tech firms, thus profiting from Israel’s genocide in Gaza.
These investments are being made in spite of pleas by Francesca Albanese, UN special rapporteur on the situation in the occupied Palestinian territories, that all governments and corporations “completely abstain from, or end, their relationship with this [Israeli] economy of the occupation, especially as it has transformed into an economy of genocide.”
The American Friends Service Committee (AFSC) lists Shield AI as a corporation profiting from genocide, noting that Israel has been using Shield AI’s Nova 2 drone for “close-quarters indoor combat” in Gaza.
Andreessen Horowitz, a primary backer of Shield AI, invests in Israeli high-tech firms. According to CTech, Andreessen Horowitz officials visited Israel in August 2025 for “a series of closed-door events aimed at recruiting top entrepreneurial talent from Israel’s elite military units” for firms in which Andreessen Horowitz invests.
L3Harris Technologies, the sixth largest U.S. weapons maker, is also an investor in Shield AI and is listed by AFSC as a genocide profiteer. Other VCs investing in Shield AI and Israeli tech include Hercules Capital and the South Korean firm Hanwha, which has partnerships with Israeli war corporations Elbit Systems and Israel Aerospace Industries.
Schwarz noted in an August 2025 interview for the Carnegie Council for Ethics in International Affairs that the entry of “really very financially strong venture capital companies” into the war industry has “amplified and accelerated” lobbying on Capitol Hill by VC weapons funders.
In 2024, according to OpenSecrets, Andreessen Horowitz oversaw distribution of $89 million to PACs, parties, and individual politicians. By comparison, Lockheed Martin, the world’s largest military contractor, contributed $5.6 million.
Schwarz also pointed out in the same interview that the introduction of AI into weapons has given VCs and AI tech firms a new level of dominance over politicians and Pentagon officials; many of them are not technically knowledgeable enough to make appraisals of the true value of the AI-powered weapons being sold to them.
The VC pressure for quick development and profitability of AI weapons, Schwarz writes in her Cambridge Press article, runs the risk of “making the Pentagon function like a start-up, and rapidly adopt technology innovation (which usually is software), and away from other initiatives that might have more oversight, utility, or effectiveness in the context of defense operations.”
“But perhaps most alarming,” Schwarz continues, “is the logical consequence of what has most utility to the VC sector and its mandate for hypergrowth: To get the military industrial sector to grow fast, perhaps the best catalyst is war, or at least the embrace of that possibility.”
So what are the war implications of VC funding of weapons development in Israel as well as the U.S.?
The U.S. is continuing to supply weapons to Israel to enable the genocide against the Palestinian people, and to support Israeli air attacks throughout the Middle East and possibly beyond. Silicon Valley billionaires, who largely support both the Republican and Democratic Parties, stand to gain mightily from continuing Israeli deployment of the weapons in which they are investing, and the use of Middle East killing grounds to test and improve those weapons.
The U.S. and Israel have adopted a strategy of endless assassination and bombing in the Middle East, seeking to achieve dominance by terrorizing target nations, destroying their key infrastructure, and killing their government officials. This strategy has been enabled by rapid advances in surveillance and targeting technology, in which weapons start-ups play an essential role.
The X-BAT, if built, and other mini-fighter jet drones, like the Kratos Valkyrie, could enable the U.S. and Israel to sustain and expand their massively destructive campaign at reduced cost, launching weapons similar to those launched by larger, more expensive, manned aircraft, like the F-35.
Shield AI announced that X-BAT would carry long range attack missiles, such as the Red Wolf missile produced by L3Harris Technologies. This missile would be a longer range, more destructive version of the Hellfire missile that has been responsible for countless civilian deaths and widespread trauma over the last 20-plus years of U.S. drone warfare.
The X-Bat will also carry the JSOW-C-1, a class of weapons that includes guided 500-pound bombs such as those that have killed tens of thousands of Palestinians and turned Gaza to rubble.
The use of these drones makes constant bombing less politically costly by enabling pilots controlling these strikes to stay far away from the zone of attack.
AI drone bombings will likely be touted for “precise” targeting ostensibly meant to spare civilians, but the speed of the X-BAT and similar “force multiplier” drones may severely limit the discernment of targeting gear.
Truthout reached out to Shield AI for comment on the X-BAT’s AI-targeting capability and human involvement in the aircraft’s launch decisions; there has been no response.
Destroying Sudan
Massive refugee populations and starvation will likely become even more common in the Middle East and Africa, and possibly elsewhere, as the U.S. and Israel use drones directly and indirectly in proxy resource wars.
In Sudan, the International Rescue Committee said on December 19, 2025, the two-year-old civil war has displaced more than 11 million people and 33.7 million need humanitarian aid. In spite of this, the United Arab Emirates (U.A.E.), an ally of the U.S. and Israel, has been supplying weapons to the breakaway Sudanese Rapid Support Forces (RSF), including Chinese-made drones that have been used to assassinate Sudanese people and destroy life-supporting Sudanese infrastructure. The Sudanese central government’s military (SAF) is using drones as well, provided, primarily, by Turkey.
Drones empower relatively weak military forces to greatly harm opponents by launching attacks into areas beyond where they can send troops and prolonging attacks longer than could be endured by ground forces. As The Soufan Center reported in October 2025: “Drone technology … has reshaped the dynamic of the civil war as both the SAF and RSF are pivoting from static, ground-based engagements toward more sophisticated aerial operations … Drone technology has also intensified the RSF’s 18-month siege of El-Fasher, the capital of the North Darfur state, with multiple attacks on civilians in recent weeks.”
Israel appears to be becoming directly involved in supplying weapons, including drones, to the U.A.E. Forbesreported in August 2025 that the U.A.E. was making a deal with Israel’s Elbit Systems to buy Hermes 900 drones, and that the U.A.E. wanted the licensing and technology to build its own version of the Hermes. In November, Elbit disclosed it would be selling $2.3 billion in weapons to the U.A.E., but it did not reveal the full list of weapons being purchased. Meanwhile, the U.S. has its own stake in Sudan’s civil war because of its interest in Sudanese oil and gold, and its desire to block Chinese economic influence in Africa.
The foregoing, of course, should raise serious ethical questions for “defense” venture capitalists.
Shield AI’s CEO, Gary Steele, apparently wants to avoid such questions. Fortune reported in December 2025:
“Shield AI’s new CEO talks in circles about whether he feels a heightened sense of responsibility running a defense tech business and seems uncomfortable to be asked about it at all. When asked about increasing disagreement regarding U.S. involvement in Ukraine or the controversy around the Coast Guard carrying out the Trump Administration’s agenda for Venezuela, he said: “We literally spend no time talking about the politics of particular missions.” While Steele acknowledged Shield AI has different protocols and processes because there is “human life involved,” he repeatedly stated that Shield AI isn’t much different from other tech companies. His focus is on the “mission,” he says, and how to “deliver the customer outcomes.”
There are about 3,000 billionaires in the world, with an accumulated wealth of $16 trillion, who are demonstrating their power over the world’s governments and businesses in preventing the sanctions against Israel called for by Palestinian civil society, Francesa Albanese, and hundreds of millions around the world who are outraged the U.S. and Israel’s continuing genocide.
These billionaires, as a group, are becoming increasingly dependent on AI-powered surveillance and killing machines to maintain their increasing, extraordinary wealth and political power by capturing and exploiting earth’s resources at gunpoint.
They, in turn, are dependent on the ingenuity of those who create AI-driven surveillance and killing machines.
In her 2018 book Death Machines: The Ethics of Violent Technologies, Schwarz asks these creators, and all of us, “What are we doing?”
Her question raises another question: What will each of us do to stop the X-BAT and its species from being used to further control and destroy our lives and the lives of others?
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