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Palantir and Anduril, two of the largest US defense technology companies, are in talks with about a dozen competitors to form a consortium that will jointly bid for US government work in an effort to disrupt the country’s oligopoly of “prime” contractors.

The consortium plans to announce as early as January that it has reached agreements with several technology groups. Companies in talks to join include Elon Musk’s SpaceX, ChatGPT maker OpenAI, autonomous shipbuilder Saronic, and artificial intelligence data group Scale AI, according to multiple people with knowledge of the matter.

“We are working together to provide a new generation of defense contractors,” said a person involved in the group’s development.

The move comes as tech companies seek to get a bigger slice of the US government’s massive $850bn defense budget from traditional prime contractors such as Lockheed Martin, Raytheon and Boeing.

The consortium will combine the weight of some of the most valuable companies in Silicon Valley and use their products to provide a more efficient way to supply the US government with defense capabilities and weapons, according to a second person involved.

It comes as defense technology startups attracted a record amount of funding this year, as investors bet they will be among the winners of higher federal spending on national security, immigration and space exploration under the incoming administration of Donald Trump.

The wars in Ukraine and the Middle East and geopolitical tensions between the US and China have increased the government’s reliance on tech companies developing advanced AI products that can be used for military purposes, and encouraged those sector investor.

Palantir’s share price has risen 300 per cent in the past year, giving the company a market capitalization of $169bn – bigger than Lockheed Martin. The data intelligence group was co-founded by tech investor Peter Thiel, who also provided initial support for Anduril, which was launched in 2017 and this year is valued at $14bn.

Meanwhile, SpaceX was valued at $350bn this month, making it the world’s largest private startup, and OpenAI has soared to a value of $157bn since it was founded in 2015.

Each of the companies tried to grab a chunk of the government’s defense budget. While SpaceX and Palantir have won several public contracts in the past two decades, others are newer to government procurement. OpenAI updated its terms of service this year to no longer explicitly prohibit the use of AI tools for military purposes.

US defense procurement has long been criticized as slow and anti-competitive, favoring a small number of decades-old primes, such as Lockheed Martin, Raytheon and Boeing. These large conglomerates often produce ships, tanks and aircraft that are expensive and take years to design and manufacture.

Silicon Valley’s burgeoning defense industry is focused on developing smaller, cheaper, autonomous weapons that they claim will better protect the US and its allies in modern conflict.

A person involved in developing the consortium described it as “industry alignment” to “implement the Defense Department’s technical priorities” and “solve critical software capability problems”.

Some tie-ups between the tech groups expected to be in the consortium have been agreed upon and the integration work will begin soon.

Palantir’s “AI Platform”, which delivers cloud-based data processing, was combined this month with Anduril’s autonomous software, “Lattice”, to provide AI for national security purposes.

Similarly, Anduril has combined its anti-drone defense systems with OpenAI’s advanced AI models to work together on US government contracts related to “air threats”.

A joint statement from Anduril and OpenAI about that partnership said it “aims to ensure that the US Department of Defense and the intelligence community have access to the most advanced, effective, and secure AI-driven technologies that available to the world”.

Anduril, OpenAI and Scale AI declined to comment on the development of the consortium. Palantir, SpaceX and Saronic did not respond to requests for comment.