Navy veterans raise $2.3M to build AI for submarine warfare

Spear AI, a startup founded by U.S. Navy veterans, has raised $2.3 million in its first round of outside funding to develop AI tools for analyzing submarine acoustic data. The Washington-based company specializes in processing passive acoustic data from underwater listening devices, aiming to help submarine operators distinguish between threats like enemy vessels and benign objects such as whales or weather patterns.

What you should know: Spear AI addresses a critical gap in military AI capabilities by focusing on underwater acoustic data, which is fundamentally different from the labeled text and image datasets that train most existing AI systems.

• The company was founded in 2021 by Michael Hunter, a former U.S. Navy SEAL analyst who serves as CEO, and John McGunnigle, a former nuclear submarine commander.
• Spear AI has grown to about 40 employees while operating as a self-funded company until this funding round.

The big picture: The U.S. military faces unique challenges in applying AI to specialized data types that lack the extensive labeling and organization found in commercial AI training datasets.

• Companies like Scale AI, a data preparation firm, have built billion-dollar businesses organizing conventional data for AI training, recently signing a $14.8 billion deal with Meta Platforms.
• Acoustic sensor data from submarines requires specialized hardware and software platforms to prepare it for AI algorithms.

How it works: Spear AI has developed both hardware sensors and software tools to make underwater acoustic data AI-ready.

• The company sells sensors that can be attached to buoys or vessels to collect acoustic information.
• Their software tool helps label and sort the gathered data, making it suitable for input into AI systems.
• The long-term goal is enabling AI to identify objects underwater, determine their location, and track their movement speed.

Key contract wins: The U.S. Navy awarded Spear AI a $6 million contract this month for its data-labeling tool, validating the company’s approach to solving military AI challenges.

Growth plans: The funding from AI-focused venture firm Cortical Ventures and private equity firm Scare the Bear will support significant expansion.

• Hunter said the company plans to double its workforce to support both government contracts and commercial opportunities.
• Commercial applications include monitoring underwater pipelines and cables for infrastructure protection.
• Spear AI aims to adopt a consulting services model similar to defense tech firm Palantir.

What they’re saying: Hunter emphasized the importance of developing proven products before securing major contracts.

• “We wanted to build the product and actually get it out the door before the contract came in to get it,” Hunter told Reuters.
• “The only way you can do that is with private capital.”