Max Baucus, a Democrat, served as a U.S senator from Montana from 1978 to 2014, and as ambassador to China from 2014 to 2017.
I have spent much of my life working at the intersection of American power and American purpose, in the Senate and as ambassador to China. Those experiences left me with a deep appreciation for both America’s strengths and the scale of the challenge we now face from Beijing. They also left me convinced that members of my own party are making a serious mistake.
China’s leaders are patient, disciplined and strategic. Increasingly, they understand something many Americans still underestimate: The next great-power competition will not be decided by firepower. It will be decided by software.
That reality has not fully sunk in across Washington. Recent conflicts have demonstrated that military superiority no longer depends simply on possessing the most ships, missiles or aircraft. Most dramatically, Ukraine’s cheap drones have provided decisive advantage in many battles against Russia’s larger conventionally armed forces, turning sensors and data into a battlefield nervous system. Several years earlier, Azerbaijan defeated Armenia’s Russia-supplied conventional arsenal with similar methods. The critical military advantage belongs to the side that can gather data from countless sources, integrate it at speed and turn it into action faster than an adversary can react. A fighter jet without real-time data integration is vulnerable. A navy without interoperable command systems is fragmented. The next conflict could be won or lost in cyberspace and command-and-control systems before a single exchange at sea.
China understands this clearly. During my service in Beijing, I watched China accelerate its military modernization at an extraordinary pace, which has only increased in the decade since. Its naval buildup is historic. Its nuclear arsenal continues to expand. But the most consequential investments may be those that are less visible: artificial intelligence, large language models, hypersonics, biotechnology and advanced cyber capabilities integrated directly into military doctrine.
The challenge this presents to the United States is unlike any we encountered during the Cold War. We cannot direct our private sector the way China can. Nor should we want to. But if America is to maintain its edge, we will need companies willing to place their most advanced technologies in service of democratic institutions and national defense.
America has not yet developed a coherent political consensus around that requirement. Traditional defense contractors — Lockheed Martin, Raytheon, General Dynamics — have long operated with bipartisan support, even as they build weapons systems of enormous destructive potential. Yet a new generation of defense-technology companies faces political resistance that its hardware-focused predecessors never did. Much of this resistance comes from my own side of the aisle, and the inconsistency is worth examining honestly.
The objections raised by many Democrats are not frivolous. Critics are rightfully concerned about data collection for immigration enforcement, about surveillance tools that could be turned inward and about how much killing we are prepared to delegate to autonomous systems. These are real questions, and a democracy should ask them of every single defense supplier.
But even legitimate criticisms can have unintended consequences. Miami-based Palantir offers the clearest example. While the company’s work for the federal government has grown under President Donald Trump, including a 2025 U.S. Army contract worth up to $10 billion, it has provided software tools to administrations of both parties for nearly two decades. Its recent government contracts have included supporting modernizing Agriculture Departmentservices for American farmers in this administration and helping the Centers for Disease Control and Prevention manage disease-surveillance and outbreak-response efforts under President Joe Biden.
The objections some Democrats express today, including by returning Palantir campaign contributions, are not really about the company, but about this administration’s misguided priorities. Yet punishing a company simply because elected officials use its products for controversial policies is a mistake. The consequences extend far beyond Palantir itself. Today’s technology founders, investors and engineers are watching this debate and drawing conclusions about whether building technologies for national defense and public service is worth the political risk. China’s defense establishment operates with no such constraints.
As both senator and ambassador, I came to believe deeply that America’s greatest strategic advantage is something China cannot replicate: our network of allies and partners. Beijing may command scale, but the United States has for decades led a coalition of democratic nations across Europe and the Indo-Pacific. That coalition is our decisive asymmetric advantage, but only if its members not only remain allies, but can operate together effectively.
Software is what makes alliances operational. Common platforms that allow militaries to share intelligence, coordinate operations and respond rapidly across borders will matter as much as aircraft carriers or missile defense systems. The alliances of the future will not merely be diplomatic arrangements; they will be digitally integrated systems. Interoperability is no longer a bureaucratic aspiration. It is a military necessity.
That is why deterrence today depends not only on military spending, but on visible technological superiority. Deterrence succeeds when an adversary concludes the cost of aggression is too high and the likelihood of success too low. A software-enabled allied force sends precisely that signal.
The stronger and more integrated America and its allies become, the less likely China’s leadership will be to test the system through aggression or coercion. Activating the full power of American innovation is therefore not an act of escalation. It is an act of war prevention.
Throughout American history, our country has succeeded when public institutions, private enterprise and democratic values moved together with purpose. America needs more companies willing to contribute to national security, not fewer. And our political system should be careful not to undermine those companies through partisan reflex or discomfort with the realities of modern defense.
That caution applies across the aisle — but it applies with particular urgency to my own party. Democrats can keep treating the companies that build America’s deterrent as political liabilities, or they can see them for the strategic assets they are. The first choice forfeits the national security debate at home, and Beijing is counting on us to make it. The future may depend on our decision.
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