Watchtower Labs raises $35 million to build military AI decision software

Moving from stealth to defense

Watchtower Labs has officially entered the market after securing a significant amount of early-stage capital. The startup intends to build software that helps military leaders think through different ways to handle complex operations. By using artificial intelligence, the company wants to help planners see what might happen next before they actually make a move.

The funding round was led by Shield Capital and Conviction, with Founders Fund also joining the investment. This money is earmarked for growing the company's staff and building out more features on top of their primary platform. They also plan to continue testing the software with actual military users to ensure it works in real-world environments.

Solving the logistics puzzle

The company is starting its work by focusing on logistics and sustainment. In military terms, this means managing the essential supplies needed to keep a mission running. This includes tracking things like spare parts, fuel, munitions, and the specific routes and timing required to move them from one place to another.

Watchtower Labs uses a combination of artificial intelligence, simulation, and optimization. These tools allow the software to model hundreds of different possible futures. It looks at these scenarios while keeping real-world limitations in mind, such as how much fuel is actually available or how fast a certain route can be traveled. The system then presents the user with executable options, showing the specific trade-offs and assumptions behind each choice.

Human-led AI interaction

A key feature of the platform is how people interact with it. Instead of needing to write complex code or use complicated interfaces, planners can ask the system questions in plain language. This allows for a more natural way to explore different possibilities during high-pressure situations where time is a factor.

Despite the heavy use of AI, the software is designed to keep humans in the loop. The final decisions are always made by human leaders, not the machine. The goal is to provide better information to those in charge, rather than replacing their judgment. The company believes this is necessary for environments where conditions change rapidly and plans must be updated constantly as new information arrives.

Team and government backing

The company was born out of an incubator at Shield Capital. Its founding team combines military experience with high-level engineering expertise. Co-founder Akhil Iyer previously served as a Marine special operations officer, while the other co-founders come from leadership roles at Microsoft, where they built large-scale distributed systems.

The company has already begun working with the Naval Postgraduate School to refine its technology. They are using operations research and data from actual defense practitioners to make the tool more effective. This work led to a major milestone in January 2026, when the Defense Innovation Unit selected Watchtower Labs for the Joint Sustainment Decision Tool program. This program is meant to give joint commands better tools for making difficult decisions across different branches of the military.

The future of military planning

While the company is starting with logistics, it plans to expand its reach. The software is being positioned for a wide variety of operational planning tasks beyond just moving supplies. The ultimate goal is to create a decision environment that can handle the most challenging geopolitical situations of the modern era.

As Raj Shah, a founder of Shield Capital, noted, the ability to simulate capabilities and options is currently inadequate. By using AI to accelerate the pace and quality of communication, Watchtower Labs aims to move military planning out of what some describe as the 'Stone Age' and into a more modern, data-driven era.

The path forward

The next phase for Watchtower Labs involves increasing the number of operational users who can test the platform. They want to see how the software performs in diverse settings where resources are tight and the situation is fluid. By building more applications around their core decision environment, they hope to become a standard tool for military planners.

The company is betting that AI will be decisive in the realm of national security. By providing a way to visualize hundreds of outcomes simultaneously, they hope to give leaders a clearer picture of the risks and rewards associated with every move they make on the battlefield.