The Pulse
Watchtower Labs Raises $35 Million for Military Logistics AI
Seattle-based Watchtower Labs emerged from stealth on October 21, 2026, with $35 million in seed financing led by Shield Capital and Conviction. The company is developing AI and simulation software to help military planners test logistics o
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Watchtower Labs emerged from stealth on October 21 with $35 million in seed financing to build AI-based planning software for military operations, starting with logistics. Shield Capital and Conviction led the round; Founders Fund also participated. The Seattle company says its tools combine AI, simulation and optimization to help planners compare possible courses of action before changing conditions close off their options.
Logistics is Watchtower’s first test
The company is focusing first on sustainment planning: coordinating transport, spare parts, fuel, munitions, routes and time. Those constraints can determine whether a mission can be carried out, Watchtower says. Its system models hundreds of possible futures against operational constraints, generates options it describes as executable, and shows the assumptions and tradeoffs behind them.
Planners can ask questions in plain language, according to the company’s announcement, while decision makers retain control over what happens next. Watchtower’s co-founder and chief executive, Akhil Iyer, described the pressure on planning staffs: “These conditions can change faster than traditional planning processes can keep pace, forcing staff to continually reassess plans under increasing time pressure.”
A prototype award gives the software a military test
The financing follows work with the Naval Postgraduate School in 2025, which Watchtower says informed the system’s development through operations research, operationally relevant data and collaboration with defense practitioners. The school’s 2025 annual report says an NPS-Watchtower agreement supported a prototype decision-sustainment tool that was demonstrated during Pacific Sentry in March 2025.
In January 2026, the Defense Innovation Unit awarded prototype contracts to Watchtower Labs and Air Space Intelligence under its Joint Sustainment Decision Tool program. DIU says the effort is intended to help military organizations forecast needs for munitions, fuel, medical supplies and spare parts, and plan for disrupted logistics. It names U.S. Indo-Pacific Command as the program’s lead mission partner. The public announcement does not state the value of Watchtower’s prototype contract.
Investors back expansion beyond sustainment
Watchtower was incubated within Shield Capital. Iyer co-founded it with Souren Aghajanyan and John Morman, whom the company describes as experienced Microsoft engineering leaders. Shield founder and managing partner Raj Shah is also Watchtower’s chairman, according to the release.
Conviction founder Sarah Guo framed the investment around a gap in military planning. “Logistics is the backbone of our military’s power, and yet we’re stuck in the Stone Age,” she said. Her assessment is an investor’s case for the company, not evidence that its software has already changed military operations.
Watchtower says the new capital will fund hiring, additional applications built on its platform, and continued testing and deployment. The company plans to extend its tools beyond sustainment into broader operational planning. Its disclosed government work so far includes the DIU prototype effort, where the stated task is to help commands anticipate supply requirements and evaluate logistics options.