Elon Musk broke the FAA — Palantir is picking up the pieces

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Elon Musk broke the FAA — Palantir is picking up the pieces

Musk’s DOGE was supposed to rebuild the nation’s air traffic control system, but it ended up paving the way for Peter Thiel’s company to take over.

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Image: Cath Virginia / The Verge, Getty Images

On August 6th, the Minneapolis Air Route Traffic Control Center lost radar and communications for around two hours. The outage disrupted more than 1,100 flights across the center’s 330,000 square mile, nine-state airspace sector.

Two days earlier, on August 4th, President Donald Trump departed the White House inside his Marine One military helicopter. As Federal Aviation Administration (FAA) protocol requires, the pilots tried to contact Reagan National Airport to tell them to halt commercial traffic during the flight. But the air traffic controllers never heard the transmission and cleared a different airplane for takeoff — which came closer than the minimum safe distance allowed. (When this story first broke in The Wall Street Journal, the White House dismissed it, noting that Trump was never in “harm’s way.”)

The outages were surprising, given the administration’s stated ambitions to rebuild the nation’s air traffic control system. Last February, Transportation Secretary Sean Duffy invited major Trump donor Elon Musk and his Department of Government Efficiency (DOGE) to overhaul the FAA. On X, Musk promised “rapid safety upgrades to the air traffic control system.”

But Musk ended up as more wrecking ball than problem solver. His agency did not help the FAA buy or implement any major system upgrades. He wrongly accused Verizon of running the FAA’s communications system, while also failing to turn Starlink into the agency’s telecom provider of choice. Its signature achievement was the termination of 400 FAA employees, including maintenance technicians at 18 different air traffic control centers.

Musk ended up as more wrecking ball than problem solver.

Meanwhile, the “rapid safety upgrades” Musk promised never materialized. The last few years have seen equipment failures in Dallas, Denver, and Houston. Unexplained fumes in Atlanta, Newark, and the Potomac air traffic control center. Chronic staffing shortages in Boston, New York, Los Angeles, Orlando, and Philadelphia.

The nation’s unstable air traffic control system made 2025 the worst year for flight delays in over a decade, according to the US Public Interest Research Group. One in four flights was delayed, diverted, or canceled for a total of almost 1.7 million disruptions. Tarmac delays, where airplanes are held on the ground but passengers must stay on board, were up 64 percent compared to 2024. And an estimated 2.4 million checked bags were lost or damaged on domestic flights alone.

In July 2025, the One Big Beautiful Bill Act authorized $12.5 billion in supplemental funding for a complete overhaul of the FAA’s air traffic control system. Of that total, roughly $5 billion is dedicated for software upgrades. And since Elon Musk’s DOGE fell short of its promises, the administration has invited Peter Thiel, another Republican megadonor, to step in at the FAA. His company Palantir is deeply integrated with the FAA’s systems, making it a prime contender for many of those contracts, despite no significant prior experience with air traffic control.

According to air traffic controllers — several of whom spoke to The Verge on condition of anonymity so as not to jeopardize their jobs — these moves will do little to alleviate the issues on the ground (and in the air). They say that the FAA’s most urgent needs remain on the personnel side.

None of the $12.5 billion in new FAA funding authorized by the One Big Beautiful Bill goes toward personnel. Instead, it seems destined for Palantir’s pockets.

In Trump’s second term, Palantir, the analytics company that Thiel cofounded and currently chairs, has rapidly extended itself across the entire federal government like a giant, data-sucking squid.

It has operated as a fringe government contractor since 2008, beginning by building databases for the Department of Defense and the FBI and spending the next decade and a half building up its defense business. It surpassed $1 billion in federal contracts for the first time in 2025. In 2026 it will surpass $1.5 billion. Palantir is now one of the 100 largest government contractors in the US.

You’ve probably heard about some of its projects. It built the Maven AI-powered targeting system that made its wartime debut earlier this year in Iran. It designed a mapping system that can generate targets for ICE agents in real time. It developed a search engine for the Department of Health and Human Services that allowed DOGE employees to identify and cancel more than $780 million worth of grants linked to DEI initiatives. It is even working on a “mega-database” of US citizens and their financial information for the IRS.

Legislators and watchdog groups have raised concerns around data privacy, poor accuracy, and/or the legality of every program mentioned above. But Palantir’s reach keeps growing.

The FAA started using Palantir’s Foundry, a data integration and analytics system, in 2024 during the Biden administration. All of the agency’s data and much of its tech stack now runs through Palantir systems.

In 2025 it won a no-bid contract to make an AI-powered runway collision avoidance tool. And another no-bid contract to add AI to the FAA’s grants system, which pays for up to 95 percent of air traffic control improvements at small airports. This year the FAA opened bidding for “an ontology-driven Foundry Operating System” to drive AI integration across the agency. The Ontology data integration schema and the Foundry operating system are proprietary Palantir technologies. Of course the company won that contract too.

All of the agency’s data and much of its tech stack now runs through Palantir systems

Palantir was even selected as one of three finalists to bid on the FAA’s $875 million SMART national airspace system contract. SMART is an AI-powered tool that will help controllers manage traffic flows and predict disruptions before they disrupt operations. Once again, Palantir’s integration with FAA systems was considered to be far more important than experience in the industry.

Palantir ultimately lost the competition to a Boston-based startup called Air Space Intelligence, whose executive team includes four Palantir alumni: VP of operations Dan Rickert, head of US operations Steph Starsia, growth lead Connor Ryan, and chief of staff Tate Krasner.

(Air Space Intelligence responded to The Verge’s request for comment by referring us to the FAA’s media relations team.)

Meanwhile, real-time concerns are piling up — and FAA leaders have rushed to blame the agency’s ongoing problems on its personnel. On August 7th, thunderstorms in the Northeast caused around 9,000 flight delays and 2,000 cancellations. In a post on X, Duffy implied that the main reason for delays was “controllers calling out sick.”

His post outraged air traffic controllers around the country. “These facilities have been understaffed for decades,” said one. “If two controllers can’t make it to work for some reason, that’s 40-60 percent less staff. These crazy numbers make it seem like so much more than it is.”

As we reported in February 2025, the nation’s air traffic control system was already unstable even before Musk’s intervention. Almost 90 percent of the nation’s air traffic control centers were chronically understaffed, and the overwhelming majority of technology in those centers was classified as “unsustainable” or “potentially unsustainable” by the FAA. But while the tech is set for an upgrade, staffing remains a huge — and underfunded — issue. The FAA finished 2025 with 14,832 controllers on staff but expects to