In short: The FAA is developing a SMART (Strategic Management of Airspace Routing Trajectories) system that could extend air traffic conflict prediction from 15 minutes to two hours, competing for a contract with Palantir, Thales and Air Space Intelligence. The project follows the LaGuardia crash that exposed controller overload and outdated systems, and is part of a $32.5 billion modernization program as the agency replaces 612 aging radar systems and hires 1,200 new controllers by fiscal year 2026.
The Federal Aviation Administration is building an artificial intelligence system called SMART that will allow air traffic controllers to predict and resolve flight conflicts two hours before they happen, replacing the current scheduling window of just 15 minutes. Three companies are competing for the contract: Palantir, Thales and Air Space Intelligence. Transportation Secretary Sean Duffy approved the project and three bidders on April 17, with a press event scheduled for April 21 to provide more details.
SMART, which stands for Strategic Management of Airspace Routing Trajectories, uses high-precision 4D modeling to plan for bottlenecks and conflicts before planes take off. The system will move air traffic management from reactive to predictive, addressing a key challenge where existing infrastructure is designed for lower flight volumes and relies on controllers making real-time decisions with limited forward visibility. The FAA said the system could be operational in some form later this year.
Three suitors
Palantir Technologies brings the deepest government connection of the three. The company’s revenue guidance for 2026 is approximately $7.2 billion, a 61% increase, with a $10 billion cap-value contract signed in July 2025 and expanding partnerships with GE Aerospace and Airbus. In the 4th quarter of 2025, its state revenue increased by 70% year-on-year. Palantir’s aviation AI offering is an extension of its core business: taking massive amounts of operational data and presenting it in decision-support interfaces that government users can act on without needing to understand the underlying models.
Thales, a European aerospace and defense firm, has been providing air traffic control systems to the FAA and the Department of Defense for more than 85 years. More than 99% of hardware landing systems at US airports use Thales equipment. The company’s TopSky platform is already installed aviation infrastructure That SMART will have to integrate with the advantage that the other two contenders lack.
Air Space Intelligence, a Boston-based startup backed by Andreessen Horowitz, is the smallest competitor, but arguably the most relevant. Its Flyways AI platform already handles more than 40% of all US air traffic through partnerships with major airlines, using the same type of 4D modeling and optimization required by SMART. A partnership with ASI was recently announced Joby Aviation integrating electric air taxis into national airspace, positioning the company at the intersection of current air traffic management and next-generation aviation.
Why is this important now?
The relevance behind SMART is not abstract. On March 22, Air Canada Express Flight 8646 collided with a fire engine on the runway at LaGuardia Airport. The investigation found that the air traffic controller involved was serving as a tower controller and clearance delivery controller at the same time, and that the automated runway safety system failed to alert when the vehicles were merging near the runway. The incident crystallized a problem the aviation industry has warned about for years: controllers are overworked, the technology they rely on is outdated and the margin for error shrinks as traffic volumes increase.
The FAA received $12.5 billion from Congress to modernize air traffic control and estimates an additional $20 billion is needed to complete the overhaul. The agency is replacing 612 aging radar systems, migrating its NOTAM system to a cloud-based platform and hiring controllers at an accelerated pace, hiring nearly 1,200 new controllers so far in fiscal year 2026, nearly half of the annual goal. Approved by Congress and sworn in last July, FAA Administrator Bryan Bedford has made SMART a central pillar of his modernization program.
DOGE, Elon Musk’s Department of Government Efficiency, has also inserted itself into FAA operations. DOGE personnel visited air traffic control facilities to assess operations, and Musk said the initiative would make “rapid safety improvements” to air traffic control systems. A separate initiative called Project Lift directs FAA funds to improve network communications. DOGE is scheduled to end its operations on July 4, although a successor entity will continue.
Contract dynamics
The competition between Palantir, Thales and Air Space Intelligence reflects three different approaches government AI purchase. Palantir offers a platform that can be configured for any government use, supported by broad security permissions and institutional relationships. Thales offers domain expertise and an installed base that no competitor can match. ASI offers a purpose-built aviation AI platform that already handles a significant portion of the traffic the FAA is trying to manage.
The FAA’s history of technology modernization is not encouraging. The agency’s last major technology overhaul, the NextGen program, took more than a decade and cost billions more than originally projected. The air traffic control workforce is resistant to automation that threatens to change established workflows, and government aviation procurement timelines are measured in years, not months. SMART’s promise that it could go live later this year suggests either a really tight schedule or a demo version that doesn’t reach full deployment.
For Palantir, the FAA deal will expand its government portfolio into a critical civilian agency and support a revenue growth trajectory that has made it the most expensive stock in the S&P 500 at about 120 times sales. For Thales, it will modernize a relationship that has underpinned the US aviation business for decades. For Air Space Intelligence, this will validate an approach already proven in the commercial aviation sector and position the company as a central part of national aviation. airspace infrastructure.
The stakes are higher than any individual contract. The US air traffic control system manages about 45,000 flights a day in the world’s most complex airspace. The controllers that run it are flimsy, the technology they use predates the smartphone, and the safety boundaries that make commercial aviation extraordinarily safe are being tested by increased volume, understaffing and the series of failures exposed by the LaGuardia incident. SMART is a bet that artificial intelligence can bridge the gap between what a system is designed to handle and what it is required to handle. The question is whether any of the three companies vying for it can deliver on that promise quickly. FAA demands now.
