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FAA seeks part-ownership of its AI vendor, Politico reports
The News
Politico reported October 15, 2026, the FAA is working to acquire an ownership stake in Air Space Intelligence (ASI), the startup behind SMART, an AI-supported air-traffic tool, citing an internal document. It's unclear whether any final deal is imminent, Politico said. On October 13, 23 House Democrats asked GAO to audit the FAA's deployment of SMART and a related system.
Chandni Melwani
Founder & Editor
Oct 21, 2026 · 1 MIN READ
Know More
- — Contract: up to $875.9 million, awarded in June, per Politico.
- — Letter signers: Rick Larsen and André Carson led the GAO request, joined by 21 other committee Democrats.
- — Earlier letter: on October 9, April McClain Delaney led a call to pause SMART until the FAA answers questions.
- — Responses: the FAA said it couldn't immediately comment; Air Space Intelligence didn't respond, per Politico.
Transportation Secretary Sean Duffy and FAA Administrator Bryan Bedford unveiled SMART on September 21, 2026. It pools 200 data streams, from weather to controller staffing, and its AI-supported engine shows where congestion or weather could cause trouble. The FAA began using it in limited mode around Washington that day.
The Democrats’ October 13 letter says frontline aviation safety workers “apparently had little to no input” into SMART’s development and questions its AI’s potential to interfere with experienced controllers’ decision-making or “to hallucinate safety-critical information.” It asks GAO, among other things, how the FAA plans to test and evaluate SMART and FMDS, a second ASI system, and certify both for operational use.
Semafor reported on October 16 that the stake talks raise questions about whether the FAA has clear legal authority for a deal. A person familiar with the matter said the FAA’s interest was too “premature” for specifics, with talks so far limited to a handful of internal conversations.
The Read
ASI's 12-year contract covers SMART and FMDS, the administration's planned replacement for the FAA's legacy Traffic Flow Management System; ASI said in June deployment would take 12–24 months. Legal doubts probably won't stop a stake: Semafor says the FAA's possible argument, like other agencies', would be a stretch, and the administration has negotiated stakes in dozens of other companies.
Room for Disagreement
No administration stake has gone through the FAA, Semafor reports, and the one possible basis it names covers Transportation Department financial help for state or local governments to 'acquire an interest' in some public transportation companies. ASI calls itself an aerospace and defense AI company.
Related
Frequently Asked Questions
Can SMART take control of an aircraft?
No, by the FAA's account. Its September 21 release says SMART 'cannot be used to replace the critical role air traffic controllers play or take over control of an aircraft,' that FAA staff review all of its recommendations, and that local leadership at air traffic control facilities can choose to accept or pass on its scheduling suggestions. The FAA's one-pager says air traffic controllers 'remain responsible for keeping aircraft safely separated.'
Who is Air Space Intelligence?
A company headquartered in Boston and backed by investors including Andreessen Horowitz, by its own account. Its June 22, 2026 release says its Flyways AI platform supports flight routing, air traffic management and safety across a substantial share of U.S. domestic air travel and is deployed with the U.S. Air Force and Indo-Pacific Command. Bernard Asare, its president of civil aviation, says ASI has invested nearly $100 million of its own resources in the platform.
What terms have been reported?
FLYING, citing Politico's reporting on the internal FAA document, says the agency has a term sheet for an equity stake in ASI and is negotiating to acquire a warrant that would give it the right to buy the company's stock. AeroTime says the FAA has drawn up preliminary terms for an investment, and that the preliminary terms of the offer expire at the end of 2026. Those reports describe talks further along than Semafor's account above.
Sources
- Politico, FAA seeks ownership stake in air traffic AI company, October 15, 2026. Source for the internal FAA document, the FAA working to acquire an ownership stake, the contract worth up to $875.9 million awarded in June, 'It's unclear whether any final deal is imminent,' and the FAA and Air Space Intelligence responses.
- House Transportation and Infrastructure Committee Democrats, press release, October 13, 2026. Source for Rick Larsen, André Carson and 21 Democratic committee members requesting a GAO audit of the FAA's deployment of SMART and FMDS.
- Letter from House Transportation and Infrastructure Democrats to the GAO, October 13, 2026. Source for the frontline workforce's input, the hallucination concern, the request on testing, evaluation and certification, and the administration's plan for FMDS to replace the legacy Traffic Flow Management System.
- FAA, press release, September 21, 2026. Source for the unveiling, the 200 data streams, limited-mode use around Washington, and what SMART cannot be used for.
- Air Space Intelligence, ASI Selected by FAA to Modernize the National Airspace System, June 22, 2026. Source for the 12-year contract to deploy FMDS and SMART, deployment over the next 12 to 24 months, ASI's self-description, its investors, the Flyways platform and the nearly $100 million it says it invested.
- FAA, SMART one-pager. Source for air traffic controllers remaining responsible for keeping aircraft safely separated.
- Semafor, FAA equity talks raise questions about the agency's legal authority, October 16, 2026. Source for the legal-authority question, 'premature', the handful of internal conversations, stakes in dozens of other companies but none through the FAA, and the public transportation statute.
- FLYING, Report: FAA Seeks Ownership Stake in ATC Contractor ASI, October 16, 2026. Source for the term sheet and the warrant under negotiation, as FLYING reports Politico's account.
- AeroTime, FAA seeks ownership stake in company behind AI air traffic system, October 16, 2026. Source for the preliminary terms and their expiry at the end of 2026.
- Rep. April McClain Delaney, press release, October 9, 2026. Source for the call to pause SMART until the FAA answers questions.
- Hero photo: air route traffic controllers at work at the Washington ARTCC, from faa.gov, Wikimedia Commons, public domain as a work of the US federal government
Chandni Melwani
Chandni Melwani is the founder and editor of New in AI, covering AI agents, M&A, and enterprise adoption. She holds a Master's in Management of Artificial Intelligence from Queen's University and brings a practitioner's perspective from her work in Data and AI leadership.
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