After years of trying to make inroads into the notoriously byzantine defense sector of the U.S. government, Silicon Valley is finally getting its chance.
Against the backdrop of the U.S.’s deepening geopolitical rivalry with China, the tech leaders’ entreaties for the government to take a page from its playbook found a welcome audience.
The White House is “absolutely dedicated to reforming the way we acquire technology” in order to modernize the U.S. military, Waltz said, a day before he left his role as national security adviser.
The executive orders are “going after things that always seem to cost too much, deliver too little and take too long,” Waltz told the audience during a panel titled The Arsenal Reimagined: Designing the DoD for the 21st Century Battlefield. “We can fill this auditorium with defense and acquisition reform think tank pieces, but you have a president and you have a leadership team that are all gas, no brakes, and sometimes we get to help them steer.”
At the center of the talks was the Pentagon’s inclination for long, extended bidding processes and research projects, and a risk-averse culture that made it harder for the DoD to take chances on experimental tech.
“There’s a fundamental reality that innovation is messy and chaotic,” said Palantir chief technology officer Shyam Sankar.
But even as the DoD opens up its procurement process to tech companies and startups, they will still face a difficult marketplace, according to Palantir’s Karp.
Anduril’s Schimpf suggested that the Pentagon should place large orders with defense startups. “If you buy things, capital will flow into defense,” he said. “Buy things at scale that matter, that move the needle and create opportunities to actually onboard.”
Without the guarantees of large contracts, Anduril has “just written off” developing new versions of products like air-to-air missiles it doesn’t believe will ever find a buyer, Schimpf added. “I don’t think in 20 years anyone would buy any air-to-air missile we made, because they’ve already committed” to buying from someone else, he said.
Emil Michael, Trump’s nominee for undersecretary of defense for research and engineering, believes the Pentagon could be less reliant on tailor-made defense systems and more open to existing commercial products when looking for new tech to buy. “We don’t need things that are always bespoke,” he said.
Michael, who is not yet confirmed for his role in the Pentagon, said the DoD could also benefit from looking at opportunities to save time, not just money. “Saving time is not something that’s inherent in the DoD business model, [which is] about reducing risk to its smallest possible component at the expense of moving as fast as possible.”
In discussions about developing new technologies, the conversation often turned to one of Silicon Valley’s mantras: fail fast, fail often. The idea, which is a staple of tech culture, is that the many failed iterations of a product don’t matter so long as the final version works.
“Failure doesn’t matter. It’s the magnitude of the success that matters,” said venture capitalist Vinod Khosla when asked about how to make the government more comfortable with risk-taking.
Palantir’s Sankar suggested increasing competition between Defense Department employees to create, so they would have an “incentive to beat the bureaucrat two doors down the corridor.” He considers the DoD to be a monopsony that stifled innovation by being the only buyer of defense systems in the marketplace.
Instead, Sankar proposed having multiple program managers tasked with overseeing the same project, with the contract ultimately going to the one who delivered a better outcome. “They would wake up every day like hyper-competitive Americans trying to murder each other,” he said. “There would be an incentive like ‘yeah let’s go faster. Let’s do this better.’”
Speakers at the conference said the ongoing geopolitical tensions and AI arms race with China has only added more urgency to the issue.
“And when you’re in an AI race when every innovation could lead to tens of billions, if not hundreds of billions, worth of value creation—and you think of value creation as a better defense, shield, more deterrence—every minute you’re losing is costly,” said Michael.
