Watchtower Labs, a Seattle company that builds AI software to help military staff plan operations, came out of stealth on 21 October 2026 with $35m in seed funding.
Shield Capital and Conviction led the round, and Founders Fund also invested, according to the company's release. Defense Daily also reported the round and described Watchtower as Seattle-based. The company did not disclose a valuation.
“Logistics is the backbone of our military's power, and yet we're stuck in the Stone Age.”Sarah Guo, Founder, Conviction
What Watchtower Labs does
Watchtower's software combines simulation, optimisation and AI in what the company calls a decision environment. It models hundreds of possible ways an operation could unfold against real-world constraints, proposes courses of action that can actually be carried out and sets out the assumptions and trade-offs behind each one. Planners can put questions to the system in plain language, while commanders keep the final say.
Its first area is logistics, where the availability of transport, fuel, spare parts, munitions and routes, and the time available, decide whether a mission can go ahead. Chief executive Akhil Iyer said in the release that conditions can shift faster than traditional planning processes can follow, leaving staff to rework plans repeatedly under time pressure.
The company plans to move from sustainment into wider operational planning over time.
Contracts and founders
In January 2026 the Defense Innovation Unit, a Pentagon agency, picked Watchtower for its Joint Sustainment Decision Tool programme, which is meant to give operational and joint commands better decision-support tools. Defense Daily said the contract covers AI tools to help military logistics move from reactive to proactive decision-making. In 2025 the company worked with the Naval Postgraduate School on operations research and data to shape the system.
Watchtower was incubated inside Shield Capital. Iyer, a former Marine special operations officer, was an investor at the firm before co-founding the company with Souren Aghajanyan and John Morman, two former Microsoft engineering leaders who spent years on large distributed systems. Shield Capital founder and managing partner Raj Shah is Watchtower's chairman. The company has not said when it was founded or how many people it employs.
Who invested and why
Shield Capital invests in early-stage companies in AI, autonomy, cybersecurity and space. Shah said in the release that a generation of companies is being built on what AI can now do at a time of heightened geopolitical tension, and that his firm aims to pair advanced technology with teams that understand military missions.
Conviction, founded by Sarah Guo in 2022, is an early investor in AI companies including Cognition, Harvey and Sierra. Guo said AI's role in national security is still at an early stage, and that the tools militaries use to simulate their own capabilities, their adversaries and their options are inadequate.
Watchtower said the money will pay for a larger team, more applications built on its core platform, and further testing and deployment as it extends its technology beyond logistics.
Company website: watchtowerlabs.ai