FAA Set to Hand Air Traffic AI Contract to Boston Startup, Snubbing Palantir and Thales

The Federal Aviation Administration (FAA) is poised to award Boston-based Air Space Intelligence (ASI) a closely watched contract for its AI-powered air traffic management tool, according to multiple people familiar with the deal. 

It would be a remarkable coup. ASI, which counted just over 150 employees as of April, is set to beat out software heavyweights Palantir and Thales, which are the only other vendors bidding for the work. The win would catapult the young company to the center of a sweeping nationwide overhaul of how America manages its skies.

The contract is for a system known as SMART, short for Strategic Management of Airspace Routing Trajectories. The FAA has described it as a central pillar of its national airspace modernization plan. The idea is ambitious: an AI platform that lets controllers spot and resolve flight conflicts up to two hours before they happen, a dramatic leap from today's planning window of roughly 15 minutes. Done right, it could anticipate bottlenecks and schedule clashes before a plane even leaves the gate.

Nothing is signed yet. "We haven't awarded anything yet, but look forward to awarding a contract soon," an FAA spokesperson told The Air Current. ASI did not respond to a request for comment.

If the agency follows through, the choice is a statement of intent. Palantir arrived with deep government ties and an existing FAA footprint through its Foundry data platform. Thales brought decades of air traffic management heritage and a vast installed base across Europe. ASI brought something neither could match: a purpose-built aviation AI tool already in the field. The company claims its Flyways system handles a meaningful share of U.S. air traffic, having found optimization opportunities across a large portion of Alaska Airlines flights and saving the carrier more than a million gallons of fuel.

The pick reflects a broader shift inside the agency. FAA Administrator Bryan Bedford, confirmed in mid-2025, has driven SMART personally and shown a willingness to break from the FAA's traditional, glacial procurement playbook. That matters. NextGen, the agency's last marquee modernization effort, was reportedly just 16 percent complete after 15 years and $7.5 billion. SMART is moving at a pace almost unheard of in federal aviation, with a first operational deployment targeted for later this year. The whole program sits within a $32.5 billion modernization drive that includes replacing more than 600 aging radar systems.

A system under strain

The urgency did not come from nowhere. On January 29, 2025, an Army Black Hawk helicopter collided in midair with American Airlines Flight 5342 over the Potomac River, just short of the runway at Ronald Reagan Washington National Airport. All 67 people aboard both aircraft were killed. It was the deadliest U.S. aviation accident in more than two decades.

The National Transportation Safety Board's (NTSB) investigation laid bare a system held together by habit and luck. Investigators pointed to a helicopter route running dangerously close to a runway approach path, an air traffic system overreliant on pilots eyeballing separation, and a control tower stretched too thin. On the night of the crash, a single controller was working both helicopter and fixed-wing traffic. The FAA, the board found, had collected reports of more than 80 serious close calls in recent years. The data, as NTSB Chair Jennifer Homendy put it, was sitting in the agency's own systems.

The tragedy crystallized a problem controllers had warned about for years: too many planes, too few people, and tools well past their prime.

Hiring at full throttle

The FAA is also racing to rebuild its workforce. Its 2026 Air Traffic Controller Workforce Plan sets a full-staffing target of 12,563 certified controllers and aims to hire 2,200 new ones this year alone, climbing to 2,400 by 2028. As of April, roughly 11,000 certified controllers were spread across more than 300 facilities, with another 4,000 in the training pipeline.

To get there, the agency has supercharged its recruitment. It trimmed an eight-step hiring process down to five, lifted starting salaries by nearly 30 percent, and rolled out a slick new recruiting website that pitches controllers as "patriots of the sky" wielding the world's most advanced technology. Advanced simulator training, the FAA says, can cut new-hire certification times by more than a quarter.

It is a sprawling, expensive bet — on people, on radar, and now on a 150-person startup from Boston. Whether the velocity matches the verification that safety-critical aviation software has historically demanded is the question that will hang over SMART long after the contract is signed.