Tech groups team up to bid for Pentagon contracts

Today’s agenda: Russian nuclear plants overseas; Syria’s Isis detainee camps; central banks and uncertainty; injuries at Amazon UK; and Guy Hands allegations

Good morning. We begin with an exclusive story on Palantir and Anduril, which are in talks with rivals to form a consortium that will jointly bid for US government work in an effort to disrupt the country’s oligopoly of “prime” contractors.

Who’s taking part? Palantir and Anduril, two of the largest US defence technology companies, have approached tech rivals such as Elon Musk’s SpaceX, ChatGPT maker OpenAI, autonomous-ship builder Saronic and artificial intelligence data group Scale AI to become part of the consortium, according to several people with knowledge of the matter.

The consortium will bring together the heft of some of Silicon Valley’s most valuable companies and will leverage their products to provide a more efficient way of supplying the US government with cutting-edge defence and weapons capabilities, according to a person involved with the talks.

What’s driving the move? More tech companies are seeking to grab a bigger slice of the US government’s huge $850bn defence budget from traditional prime contractors such as Lockheed Martin, Raytheon and Boeing.

Defence tech start-ups have attracted record amounts of funding this year, as investors bet they will be among the winners of higher federal spending on national security from the incoming Trump administration.

Wars in Ukraine and the Middle East and geopolitical tensions between the US and China have heightened the government’s reliance on tech companies developing advanced AI products that can be used for military purposes, and encouraged investors to the sector. Read the full report.

Here’s what else we’re keeping tabs on today:

• Economic data: The UK and Spain release third-quarter GDP figures.

• Mozambique: The country’s top court is set to give a verdict on the country’s disputed election in October.

• Albania: Opposition parties demanding Prime Minister Edi Rama’s resignation are set to block roads in protest.

Five more top stories

1. Russia is building more than 10 nuclear units abroad as it looks to tap into rising energy demand driven by artificial intelligence and developing markets, according to an envoy of President Vladimir Putin. The plans come as Moscow seeks to boost its global influence by expanding its nuclear fleet. Here are the countries where Russia is constructing new plants.

2. Syria’s interim government is ready to take control of Isis detainee camps being run by US-backed Kurdish militants, said Turkey’s top diplomat Hakan Fidan, the first foreign minister to meet Hayat Tahrir al-Sham leader Abu Mohammad al-Jolani. Fidan during his visit to Damascus also said he believed US president-elect Donald Trump would back Turkey over Kurdish forces.

3. Ireland’s top central banker has said rate-setters are facing more uncertainty now than during the early stages of the coronavirus pandemic as the agenda and actions of Donald Trump are all but impossible to read. Read the full interview with Gabriel Makhlouf.

• Fed flip-flops: The US Federal Reserve’s highly reactive policy approach of recent years has amplified financial volatility, writes Mohamed El-Erian.

• The Economics Show🎧: European Central Bank president Christine Lagarde tells Martin Wolf what Europe needs to do to close the gap with the US.

4. Dozens of Amazon workers in the UK have suffered serious injuries over recent years, including being blinded or requiring amputations, according to new data that is leading to renewed calls on the ecommerce giant to improve the treatment of vulnerable staff. The tech group reported 119 serious injuries from work-related accidents between 2019 and 2024.

• UK employment: More younger people are neither working nor looking for a job, opting out of the labour market completely.

5. Exclusive: Deloitte wants to slash spending on staff travel and expenses in the UK by more than 50 per cent as it seeks to maintain partner profits under what it called “challenging market conditions”. The cost cutting is a sign of the UK consulting sector’s continued struggles as a prolonged slowdown in mergers and acquisitions activity hits demand for advisory work.

The Big Read

In the Italian city of Trieste, a community-based approach to mental illness has pro­duced startling res­ults at a relatively low cost. The model contrasts starkly with others that make much greater use of psychiatric institutionalisation. The final instalment of the FT’s series on mental health takes a look at the decades-long debate about the best way to care for people liv­ing with mental ill­ness.

We’re also reading . . . 

• FT Investigation: Terra Firma founder Guy Hands has been accused of raging at staff and making sexually inappropriate comments.

• Luxury scale-back: A softening in the market is a harbinger of things to come in equities and the real economy, writes Rana Foroohar.

• Disinformation storm: Companies need new playbooks for dealing with online falsehoods as AI intensifies the risks, writes Anjli Raval.

Chart of the day

At the level of rhetoric, the UK’s Labour government is emphasising the priority of economic growth. It is right to do so. But it needs to understand that growth depends on the confidence of business in that growth, writes Martin Wolf.

Take a break from the news

As the first public steam railway celebrates its bicentenary next year, author Simon Bradley has put together an enjoyable and highly readable survey of 200 years of British train history.