Faa Seeks Ownership Stake In Air Traffic Ai Company

The Federal Aviation Administration is working to acquire an ownership stake in a private company that is key to its ongoing drive to modernize the nation’s air traffic control system, including by using artificial intelligence, according to an internal FAA document reviewed by POLITICO.

The FAA in June awarded Boston-based startup Air Space Intelligence a contract — worth up to $875.9 million — for an AI-powered tool to help air traffic controllers manage the nation’s skies and a related system for an FAA nerve center in northern Virginia to better handle plane congestion. The AI platform’s initial launch in the Washington area has sparked concern among Democrats in Congress who say it should be put on pause until they have a better understanding of how it’s being deployed.

But the document, seen by POLITICO, shows that the FAA is looking to go beyond simply using Air Space Intelligence as a contractor and also wants to have an ownership interest in the company, which isn’t publicly traded. It’s unclear whether any final deal is imminent.

The FAA said it couldn’t immediately provide comment. Air Space Intelligence didn’t respond to a request for comment.

The effort, which hasn’t been previously reported, is the latest example of the Trump administration’s push to acquire ownership stakes in companies. Such moves are a striking departure for the federal government, except in times of financial crisis or world war, but are a practice that has been accelerating.

The Commerce and Defense Departments have been notable adopters of this strategy, according to the Council on Foreign Relations and the Cato Institute, both of which have been tracking dozens of announced deals across the executive branch. Some Democrats are also interested in the approach.

This is the first known instance of the FAA pursuing a similar arrangement.

The FAA has what’s called a term sheet for an equity stake in Air Space Intelligence, according to the document. A term sheet serves as a roadmap for a proposed business agreement or investment deal.

The term sheet lapses at the end of the year and negotiations for what’s known as a warrant are underway, the document says. A warrant gives its holder, which in this case would be the U.S. government, the right to buy or sell a firm’s stock at a set price during a specified time frame.

The FAA’s initial rollout of the AI tool, called Strategic Management of Airspace, Routes and Trajectories, or SMART, has been met with criticism by congressional Democrats.

Over two dozen lawmakers have called on the FAA to pause its 90-day evaluation period for the platform, which began late last month in the Washington region. They say there’s been an “egregious lack of transparency.”

Others have asked the Government Accountability Office, Congress’ watchdog, to launch a review, writing that frontline aviation safety workers “apparently had little to no input into SMART’s development and have received limited training and information during the current deployment process.”

The agency plans to expand the tool’s use around the nation. Transportation Secretary Sean Duffy has said that SMART won’t replace air traffic controllers and will make the U.S. aviation system more efficient.

Air Space Intelligence was founded in 2018. Its investors include venture capital firm Andreessen Horowitz. Alaska Airlines, among other entities, uses the company’s technology.