The Federal Aviation Administration has selected Palantir Technologies, Thales, and Silicon Valley startup Air Space Intelligence to compete on an AI system that would reshape how America manages its skies.

The tool, called Strategic Management of Airspace Routing Trajectories, is designed to predict flight conflicts up to two hours in advance. Current systems detect conflicts roughly 15 minutes out. Why it matters: the gap between 15 minutes and two hours is the difference between reactive scrambling and planned rerouting, affecting delays, fuel costs, and safety for millions of passengers daily.

The competitors

Palantir’s Foundry platform already runs several FAA data workflows, giving it an integration advantage. Thales, the European aerospace giant, has supplied air traffic management systems to the FAA and the Department of Defence for more than 85 years.

Air Space Intelligence built Flyways AI, which Alaska Airlines has used since 2021 to optimise routes and reduce fuel burn. The startup brings a commercial track record but lacks the scale of its rivals.

The bigger picture

The SMART competition is one piece of a $32.5 billion modernisation effort that Transportation Secretary Sean Duffy has branded BNATCS, the Brand New Air Traffic Control System. Congress released $12.5 billion last year, leaving roughly $20 billion more to fund.

Since that funding arrived, the FAA has replaced approximately 50 percent of all copper wires in the air traffic control system with fibre optic cables, converted around 270 radio sites, and started 17 towers on electronic flight strips.

The agency is also replacing 612 outdated radar systems and migrating its Notice to Air Missions platform to a cloud-based system. It has hired nearly 1,200 new controllers in fiscal 2026 to address chronic staffing shortages.

What happens next

The three companies will develop competing prototypes, with the FAA aiming to have an operational system later this year. The full modernisation project is scheduled for completion by the end of President Trump’s term in 2028, spanning 10 million labour hours across 4,600 locations with 50 vendors.