Ex-Marine and Microsoft vets launch Watchtower Labs with $35M to bring AI to military logistics

Watchtower Labs co-founders, from left, Souren Aghajanyan, John Morman, and Akhil Iyer. (Watchtower Labs Photo) Watchtower Labs , a Bellevue, Wash.-based defense tech startup, emerged from stealth Wednesday with $35 million to build AI software that helps military planners make faster decisions about logistics and operations. Shield Capital and Conviction co-led the seed round, with participation from Founders Fund and In-Q-Tel, the investment arm that supports the U.S. intelligence community. It’s the first outside funding for Watchtower, which was incubated inside Shield. Watchtower was co-founded by CEO Akhil Iyer , a former Marine Corps infantry and special operations officer who said that like many veterans, he was frustrated that the technology on commercial iPhones wasn’t making it into the field with troops. After leaving the military, Iyer worked on counter-drone technology and later invested in defense startups at Shield Capital, where he watched senior military leaders try to figure out how to put AI to practical use. “One of those key problems is how do we best allocate scarce resources across the globe,” Iyer said. “Planning for that is really hard.” Iyer’s Watchtower co-founders are CTO Souren Aghajanyan and head of engineering John Morman , longtime Microsoft engineering leaders who worked on large distributed systems and fraud protection. Iyer said his first call after deciding to build Watchtower went to Lou Manousos , who founded security company RiskIQ, sold it to Microsoft in 2021 and later became a corporate vice president there. Aghajanyan and Morman had worked on Manousos’ team, and they were already thinking about how simulation and AI could improve planning. The company’s software lets planners ask questions in plain language, then runs simulations to map out possible scenarios and options, starting with military logistics: moving fuel, spare parts, munitions and people where they’re needed in time. Watchtower models hundreds of possible futures against real-world constraints and shows the assumptions and tradeoffs behind each option, while decision makers stay in charge of the final call. Iyer said the platform pairs agentic AI with heavy-duty math. “You can’t LLM your way to a really complicated math problem, yet at least,” he said. “It needs to be set up in the right way, and you need to do some real analysis behind it.” Many existing military tools focus on giving commanders a clear picture of what they have right now …