Conversations with Tyler - Christopher Kirchhoff on Military Innovation and the Future of War

Episode Date: October 30, 2024

Christopher Kirchhoff is an expert in emerging technology who founded the Pentagon's Silicon Valley office. He's led teams for President Obama, the Chairman of the Joint Chiefs of Staff, and CEO of Google. He's worked in worlds as far apart as weapons development and philanthropy. His pioneering efforts to link Silicon Valley technology and startups to Washington has made him responsible for $70 billion in technology acquisition by the Department of Defense. He's penned many landmark reports, and he is the author of Unit X: How the Pentagon and Silicon Valley are Transforming the Future of War. Tyler and Christopher cover the ascendancy of drone warfare and how it will affect tactics both off and on the battlefield, the sobering prospect of hypersonic weapons and how they will shift the balance of power, EMP attacks, AI as the new arms race (and who's winning), the completely different technology ecosystem of an iPhone vs. an F-35, why we shouldn't nationalize AI labs, the problem with security clearances, why the major defense contractors lost their dynamism, how to overcome the "Valley of Death" in defense acquisition, the lack of executive authority in government, how Unit X began, the most effective type of government commission, what he'll learn next, and more. Read a full transcript enhanced with helpful links, or watch the full video. Recorded July 23rd, 2024. Other ways to connect Follow us on X and Instagram Follow Tyler on X Follow Christopher on X Sign up for our newsletter Join our Discord Email us: [e-mail] Learn more about Conversations with Tyler and other Mercatus Center podcasts here.

Conversations with Tyler is produced by the Mercatus Center at George Mason University, bridging the gap between academic ideas and real-world problems. Learn more at Mercadis.org. For a full transcript of every conversation, enhanced with helpful links, visit Conversationswithtyler.com. Hello, everyone, and welcome back to Conversations with Tyler. Today I'm here with Christopher Kirchhoff. He wrote a book that I thought was great.

It is Unit X, How the Pentagon, and Silicon Valley are transforming the future of war, and that is co-authored with Raj M. Shah. This book has a rave review from the Financial Times and on Twitter, also from Chris Blatman. To give you a full biography of Chris, he is an expert in emerging technology, he helped to create the Defense Innovation Unit, and he's also worked as an assistant to Eric Schmidt. Earlier in the Obama administration, he was the director of strategic planning for the National Security Council, and also the senior civilian advisor to the chairman. of the Joint Chiefs of Staff. Chris, welcome. Thank you, Tyler. I have many questions about your topic.

How permanent is the ascendancy of drone warfare? So it's nothing now. Is this the next 100 years, the next five years? What? It's certainly the next generation of military technology. And, you know, we've seen this coming for a while, right? DiU Defense Innovation Unit, the topic of the book, in 2017, started the military's first commercial drone unit and began experimenting with both offensive and defensive uses of drones. And now we see the full coming to the circle of the future that some people in the military saw then, which is that, you know, just last month in Ukraine, the U.S. military has to ask the Ukrainians to remove from the front all 31 of the M1-A-1's battle tanks that we gave the Ukrainians because a quarter of them had been destroyed by Russian

kamikaze drones. So not only is it the ascendancy of an era of drone warfare, but it's probably the end of man mechanized warfare as well on land. And we can also talk about similarly epic changes at sea and in the air and in space. But some of the drones already are not working that well. Like the Turkish drones, seamless powerful than a few years ago, what is one possible way that defense against drones might catch up? Well, I think right now a very open question. I think drones are primarily offensive dominant in the sense that, you know, there's right now almost 300 companies in Ukraine that have faster innovation cycles at this moment than all of the Western military companies fielding drones. And so if you go to the front lines today in Ukraine, I got a chance

to visit there in October with my co-author Rod Shaw. You will find predominantly Ukrainian drones operating. And the reason why is that they're literally able to go back to garage shops all over the country and overnight change the algorithm in the drone to respond to rapidly evolving Russian electronic warfare tactics that change. So that's a counter jamming in part. Yes. Yes. Yeah.

Can you imagine the Pentagon having a process like that? I don't mean at this moment, but if matters were somehow more dire for us. Yeah. Is there a way we could do something like that or just it would never happen? Well, you know, the Pentagon is trying. And a few months ago, they announced something called the replicator initiative led by a defense innovation unit, which is a push to develop autonomous swarming drones for in the air and on sea and undersea also. But, you know, an important caveat to that, you know, this is an

initiative that was announced more than a year after the start of the Ukraine war, which tells we were playing catch-up. And because it was announced outside the budget cycle, they've had to go around and bureaucratically pull money from other programs, which is a whole extra step. And if you add up all the money that the Pentagon is spending on a replicator, it's less than, you know, a percent of the procurement spend of the Pentagon. So, I think the question is, you know, that program is directionally right, but it certainly is not right in size or scale in comparison to the changes we're seeing, not just in Ukraine, but in the Middle East and other places around the world with autonomous weapon systems. But say our forces had greater immediate combat responsibilities than is currently the case, though there are some now, as of course you know, is it laws that would stop us from speeding up tinkering with drones or is it cultural inertia in institutions? What's the relative balance there? Oh, it's completely cultural inertia.

So there's no laws in the way. We're just not good at it. You know, there are parts of the military that are good at, like DARPA, like defense innovation unit, that have a phenomenal track record. But not like in a three to four day time window. Well, some of DARPA's cyber programs and some of the IU's work, you know, does in a month, you know, actually produce things. And, you know, you can imagine in the context of a longer conflict and ecosystem on the

USA quickly developing. But the reality is that if you look at the, you know, the Pentagon spend, even now two years into the Ukraine conflict. It's, you know, largely, to be honest, along historical trend lines. So that tells me the military really isn't changing, even as many of the military senior leaders recognize how quickly war is changing. Now, Ukraine is using drones for defense, of course. But on average, does current drone technology favor offense or defense?

What's really remarkable about the Ukrainian drone ecosystem is, you know, they're not just building simple kamikaze drones. They're building surveillance drones that will automatically go fly, surveil the battlefield return, upload images that can then be uploaded to, you know, killer drones that then go out. On top of this, you have people using open source software to build fusion systems that take sensor data from EW detection systems, live feed from drones, and put them all together on a controller that an operating unit going forward actually uses to mount a coordinated attack using multiple drone systems. So this is to say, in effect, Ukrainian startups have replicated the entire battle management system of the U.S. Air Force.

They have, you know, effectively AWACs drones, attack drones. It's quite remarkable what they've done with open source software and hardware that is pennies on the dollar compared to any system in the Western arsenal. If we think about Azerbaijan versus Armenia, right? Darkest drones helped Azerbaijan much more than anything helped Armenia. is there any kind of generalization looking forward? Oh, drones are good for Israel. Drones are good for countries willing to tolerate a lot of disruption. Drones are good for fill in the blank.

What would you say? I think drones are good for anybody looking to defeat a conventional military operating in conventional ways. I'll just list off a couple examples. So one, how was it that Hamas fighters bridged the border in Gaza, which is essentially a modern-day Maginil line with multiple lines of defenses? The key tactical maneuver they pulled off on October 7th was using quadcopters to drop small charges on the generators powering the border tower surveillance systems. So similarly, you know, the Houthis have effectively, you know, harass shipping now with a combination of loitering munitions, cruise missiles, and autonomous drones. And then in northern Israel, perhaps most strikingly, Hezbollah has depopulated the first 10 miles of northern Israel using loiteringering munitions.

and cruise missiles because the IDF can't effectively defend their northern border. And that has, that has displaced 85,000 Israeli civilians. And this is, you know, the IDF is a very modern military. Is there a forthcoming era of assassination by drown? Do we know this? Can we prepare for it? What will that look like? Presidents never step outside? You know, to be honest, it's not outside the realm of possibility. I mean, you can ask the question today, what U.S. military installation or port and government site is adequately defended against an extremely advanced, unprompted surprise drone attack. I would guess the number is very few, if not perhaps, zero.

And there are people now very actively, you know, not only at Homeland Security, but in the Department of Defense looking at how you defend against this, but it's very hard. Drones are small. We don't have early warning radars, you know, in the same way that we miss the Chinese spy balloon that are tuned to detect drones. So now people are asking questions, you know, can you use cell phone tower transmissions and use AI algorithms to process from that and detect flying small drones that we don't expect to be there? U.S. is somewhat behind in 5G compared

to some other nations. For military issues, does this matter? You know, it's a fascinating illustration of how we as a nation, as a state, have not made wise choices with our allocation of resources. And the story in a nutshell is that in the Cold War, through the end of the Cold War, the military made enormous investments in a set of military systems that took up a significant part of the best 5G spectrum. So Navy radars, some other highly classified systems and covert systems. And the expense of shifting those systems away from the frequency that turns out to be best for 5G is enormous. And yet we don't have to have. a mechanism in the government, right, that can take these sort of long-term looks at spectrum.

Spectrum is an example of where we're failing strategically. And so as a result, if you go to Beijing, 5G speeds are what, 50 times faster or 100 times faster because they're on a completely different part of the 5G spectrum. But faster for what? Why should I care? Go to South Korea. Everything's faster. But in terms of absolute time, I don't feel I save anything. Well, I mean, if you think about what's coming next and what 5G will enable, you have to be have self-driving cars, right? Self-driving cars are not going to be able to get better, along with a whole bunch of sort of connected devices without really fast 5G that penetrates

really far. I mean, you can buy a Tesla. It's great if it drives around in the city, but what if you're trying to go visit a national park out west in a place where there is very little cell connectivity? So 5G really is a national innovation emergency that we have yet to find a solution to. Now, I never understand what I read about hypersonic missiles. So I see in the media, China has launched the world's first nuclear capable hypersonic, and it goes 10x, the speed of sound. And people are worried. If mutual assured destruction is already in place, what exactly is the nature of the worry? Is it just we don't have enough response time? It's a number of things. And when you add them up, they really are quite frightening. So hypersonic weapons, because of the way

they maneuver, don't necessarily have to follow a ballistic trajectory, which means we have, you know, very sophisticated space-based systems that can detect the launch of a missile, particularly a nuclear missile. But, you know, right then you're immediately calculating where it's going to go based on its ballistic trajectory. Well, a hypersonic weapon can steer. You can turn left, it can turn right, it can dive up, it can dive down. But that's distinct from hypersonic, right? Well, ICBMs don't have the same maneuverability. So that's one factor that makes hypersonic weapons different. A second is just speed. So with an ICBM launch, you have, you know, 20 to 25 minutes or so. This is why the rule for a presidential nuclear decision conferences, you have to be able to get the president online with his national security advisors and I think like five or seven minutes.

So the whole system is time to defeat adversary threats. The whole continuity of government system is upend. by the timeline of hypersonic weapons. And, oh, by the way, there's no way to defend against them. So forget the fact that they're nuclear capable. If you want to take out an aircraft carrier or a service combatant or assassinate a world leader, a hypersonic weapon is a fantastic way to do it. And watch them very carefully because more than anything else, they will shift the balance of military power in the next five years.

And do you think they shift the power to China in particular or to larger nations or nations willing to take big chances at the conceptual level? What's the nature of the shift above and beyond whoever has them? Well, right now they're incredibly hard to produce. So, you know, right now they're essentially in a research and development phase. The first nation that figures out how to make titanium just a little bit more heat resistant to make the guidance systems just a little bit better, you know, enables manufacturing its scale. So not just five or seven weapons that are test fired every year, but 25.

or 50 or 75 or 100, that really would change the balance of power in a remarkable number of military scenarios. So how much China has them now? Are you at liberty to address that? They just have one or two that are not really that useful or they're on the verge of having 300 or... So what's in the media and what's been discussed quite a bit publicly is that China has more successful R&D test of hypersonic weapons. Hypersonatic weapons are very difficult to make fly for long periods. They tend to self-destruct at some point. during flight. And China has demonstrated a much fuller flight cycle of what looks to be an almost operational weapon. And where is Russia in this space? Russia is also trying. Russia is developing penulte of sort of Dr. Evil weapons. The most, the latest one to emerge in public is this idea of putting a nuclear payload on a satellite that would effectively stop modern

life as we know it by ending GPS and satellite communications. You know, that's really somebody sitting in a Dr. Evil layer stroking their cat coming up with ideas that are game changing. But they've come up with a number of other weapons that are quite striking. So super cavitating torpedoes that could take out an entire aircraft carrier group. Advanced states are now coming up with incredibly potent weapons. How bad would an EMP attack be? Let's just say set off once, put over an inhabited area. Pick a smallish country, maybe an island it happens.

What's next? Cooking stoves. How many people die? Let's say there's a million people on the island. How many do you? Advanced economy. Yeah, well, that's a thing. I mean, with neutron weapons, you're just frying electronics. So the electricity grid will probably go down in whole or in part. If you're in the center of astronomy and you imp blast, a lot of microelectronics will stop working. This means that your computer is a brick, your car is a brick. Gas station pumps are a brick. So EMPs are,

you know, another weapon from the Cold War, right, that were tested in very sophisticated ways in the 1950s, and thankfully have not been used by a major power. And do you think of it as a greater threat against armed forces in the field or something you would use against a place with civilians? I mean, we can only hope, you know, in the laws of war, that most violence in war, if we have to have an armed conflict in the first place, would be constrained to the battlefield. But as we're seeing more and more, as homelands become more reachable through cyber attacks, through sabotage, through terrorism. I mean, just think about the mayhem, the D.C. sniper caused in this city years ago, right? One person essentially effectively shut down a city.

So it's hard to imagine a large-scale conflict playing out without large elements of domestic upheaval and sabotage. The current potential for an AI arms race at a philosophical level, Do you think we have any choice other than just to try to win it? Is there some other path we could think about taking? Or just it's another arms race. We tried to win the ones before. We've got to win this one too.

Maybe it's more important than usual. Or is there something else that can be done? Well, you know, the human rights community has that a number of junctions try to propose alternate pathways. And I'm very attuned to the arguments they're making as I think there are arguments that should be listened to. And by the way, when I was a Pentagon employee through the, I think it's called the combined federal campaign. We could donate a portion of our salary to a number of nonprofit charities.

And one of the charities they donated to was Human Rights Watch, which is sort of wonderfully subversive for a Pentagon employee because they actually produce incredibly great research about what's happening on the ground in conflict areas around the world that every national security official, I think, should be reading. And out of Human Rights Watch, and another community of computer scientists led in part by Stuart Russell, there is this movement called Stop Killer Robots that emerged about 10 years ago. foreseeing the shift in AI, foreseeing the shift in the rise of smart micro drones, and asking us not to go down that path. And I actually got to sit in a couple meetings with Stewart at the White

House, and it was interesting to watch him make his argument. And, you know, although I respect him incredibly as a technologist, what was interested in me about the way he made the argument, it was without any sense of the literature on strategic stability. So, you know, out of the Cold War, we have this fascinating part of political science that has studied what is the consequence of the spread of nuclear weapons among states. And to the best that you can study this question in the world, the consensus in the literature is nuclear weapons have actually lessened great power conflict in the modern world. Because there's a frequency versus intensity issue, right? Oh, sure. And you wouldn't want, you know, I mean, you wouldn't want everybody in the world to have access to a nuclear weapon.

But it shows you that sometimes technological parity can have a stabilizing effect in international relations. And so the question about killer robots is, I think, very similar. If we were to, for instance, unilaterally disarm in a field of technology where you really can't have verification that the other side is also a disarming. And you can do this with nuclear weapons because of the specialized technology that goes into them. You can do it a little bit with chemical and biological weapons. you certainly cannot do it with software. It's just too difficult. And so I think had that group of people been successful in, for instance, pausing military development using AI, I think we would be even more imperiled in Ukraine today. And that's because of the difficulty of monitoring

software compared to Saudi nuclear weapons. That would be one factor. I think that autonomous weapons are here to stay. This is how wars are likely going to be fought. And if you decide not to pursuit on as weapons, you're going to lose. Right now the U.S. has a lead in at least many forms of generative AI. To the extent that lead is sticky, do you think that comes from chips, from talent, from data, from something else, we have a better private sector? What's the source of that lead? Well, it's really remarkable. I got a chance to serve on the National Security Commission for artificial intelligence, which studied this issue, particularly the AI competition between China and the U.S. quite rigorously.

And, you know, China as a state, of course, is making enormous investments in AI through the doctrine of civil military fusion that G announced. He has essentially directed any technology and company in China to ensure it's open, its technology is open and available for use for the people's liberation and army. So you have a lot of things happening in China that are a deliberate strategy to make them the most competitive nation that can be on technology on a variety of fronts. And yet, today, particularly with generative AI, the United States does seem to have a breakout advantage. And my best guess for that is, you know, in the end, we have structural advantages in a far freer market, far more freedoms, and none of the suppression, right, that G has exerted over the tech industry, you know, at arguably his political peril the last few years in his quest to suppress dissent China-wide. My view is that they're quite afraid of AI, that they understand it will disrupt a lot of social relations.

American leaders, in a sense, are too asleep to even see that. So we just let things happen, and that's for the better in the long run. But they throw their CEOs in jail, and they're afraid it will take away power of the CCP, and they're just not going to catch us. Well, but that's certainly true for the population face in AI. So, you know, the stories that we've all read this past week about generative language models in China being held up to make sure that 60,000 censored matters wouldn't come up, right? Right. Right.

Right. It was delaying their deployment. But that is a system of enforcement and censorship that is focused on the civilian population. There are also large institutions in China that are focused in solving military problems and advancing AI in the military that are not operating under those constraints. And so it's important to split off what we see happening with the Chinese government's, attempt to control its own populace and what they're doing to try and make the PLA a fighting force that can meet the military objectives that G is set for them. But as you well know, there's a lot of research by accident, so to speak, that from Transformers

have come a lot of advances that have military relevance. And if you try to split them off and say, we're only going to get AI that's relevant for the military, that over time you'll just be much weaker for AI in general. Well, this is a, you know, similar to a conundrum that we face ourselves. And so, you know, on the cover of Unit X, we have two images. One is of the iPhone, the other is of the F-35 fighter, you know, the most advanced fifth-generation stealth fighter in the world. And what most people in America don't realize is that these technologies are produced from completely separate technology ecosystems. And they work very differently under very different incentives. So the design of the F-35 was actually frozen in 2001 when the Pentagon

awarded the production contract to Lockheed Martin. It didn't become operational. until 2016. That's a long time in technology years. Look at the iPhone. Its processor is changed every year. So now we're in a situation where a $2 trillion program of record is producing jets whose processors are slower than what we're all carrying around in our pockets. And this matters because if it turns out that 2027 AI is going to beat 2026 AI on the battlefield, then you you had better be getting your AI from the commercial system of production, not from the bespoke military, industrial complex system of production. Some people argue the major AI labs are not secure enough against, say, hostile foreign powers stealing American AI developments.

Are there changes we could make or should make? That would address this, but without killing the goose that's laying the golden eggs. I think we have to be very careful. And, you know, I've seen, I'll bring up one historical parallel and then take a shot at one argument that I hear circulating. So the historical parallel is actually with cybersecurity, where we ended up in the 2000 aughts and 2010s with this extraordinary situation of realizing how vulnerable or critical infrastructure was to cyber attacks. And, you know, this was hard for the national security establishment to wrap its head around because this infrastructure is owned and operated by the private sector, and yet it's so critical to our security. And, you know, guess what? Initially,

none of the operators of that infrastructure and none of the CEOs and CTOs of those cybersecurity companies even had security clearances. They couldn't talk to the parts of our intelligence community who knew about the kind of exploits that our adversaries were fashioning to go after our infrastructure.

Now, eventually we solved that through, among other things, a really extraordinarily public-private cooperation mechanism called the Enduring Security Framework, where we got everybody clearances, and we met, and information was exchanged. And there's one example that's been to classify that's extraordinary that I'd be happy to talk about that made safe U.S.

computers from an attack and adversary head ready. The argument I would take a shot at, though, is there is this sense that the AI models that are being produced today by the frontier labs are so important that somehow the government should sort of nationalize them. Or maybe, you know, there have been some arguments made in the last couple weeks by people that have, you know, been employed at places like Open AI that perhaps the national labs should step in and take a role. And, you know, I think that's a mistake. You know, our national labs do somethings very well. On the other hand, they're a place where good science goes to die. You know, if you want to see the difference between the tech sector and the national labs drive from Lawrence Livermore to the campus of Google and see

what's going on, they are very different ecosystems. One is ruled by the Civil Service Act. The other is rolled by the free market. And I think we have to be very careful exerting government control over breakout technology. But that doesn't mean that the law enforcement agencies like the FBI and our intelligence agencies can't cooperate very closely to help protect certain private firms from the nation-state threats they are most certainly facing. Would you reform our system of security clearances? Is it not flexible enough or too bureaucratic or is it just right? I'll tell you a story. So I'm going up for my TSSEI clearance for the first time. And tell us what that is?

This is top secret specialized compartment information. It's the James Bond clearance you get before they let you see the spies, that like pictures and all that. And you basically need it to go into any meeting on the E-Ring in the Pentagon where I'd just been appointed a young aide in the Obama administration. And the security manager and the Secretary of Defense's office where I was managing got all flustered because my partner at the time, first of all, we were a gay couple, so that was, you know, one issue for him. And then the second, my partner at the time was an Indian economist.

And he did not like the fact that I was cohabitating, as the security clearance forum calls it with a foreign national. And so he decided that I should have a polygraph test, which is very unusual, a counterintelligence polygraph, which, by the way, don't work, right? Polygraphs are demonstrative, you know, you can't put them in court. So my chief of staff gets upset. And, you know, it says, why are you polygraphing my political appointee just because he's in a same-sex relationship with a foreign national? And so she calls the head of the Defense Intelligence Agency responsible for granting our security clearances. And he ruffles around a bunch of papers and looks my file up and says, well, his girlfriend is a dual citizen. And Sandy said, excuse me, boyfriend, right?

So, no, I mean, our security clearances will pick up very obvious irregularities. if you have extreme debt issues, if you have mental health issues, I mean, the system will pick that up. But it probably won't pick up much else. Over the next 10 years, most countries in our world won't be able to build their own decent AI systems. But they might need to use AI, even just to run ordinary governmental operations and perhaps parts of their military. How are they going to cope with this? Are they going to trust the U.S. or trust China or what does that equilibrium look like? Does the U.S. have a lot more power because we can withhold the AI or we'll know everything they do?

That is certainly a part of the world that we're heading in. But I think an even more fundamentally tricky part of that world is just the dual-use nature of powerful AI. So, you know, a model that's really powerful for figuring out military solutions might well also be able to cure cancer. And so we're causing these dilemmas, which are common actually with technology of, is it better? is the net assessment of technology, encryption is one of these, to just let it out there because we know on the whole

it makes the world a better place, even though we know with encryption, there are going to be moments when terra cells or nation states are going to take advantage of it to successfully prosecute a small attack. So this is the dilemma that we face with AI on a grand scale.

And what do you think we should do? If you sit in the Pentagon and it's your profession as a national security professional to prevent 9-11, to prevent wars from happening, you are very security-minded and you are very biased towards restricting technology because that does, in the end, help the security equation. But unless you have an argument about what to do with a particular technology with economists

and trade experts and the rest of the government, you're not going to reach consensus that is going to be best for the nation. So these arguments are going to have to be fought out in the situation room with a variety of expertise. And having sat in both places on the National Security Council and in the Pentagon, I am firmly in favor of dual use to the absolute extent we can because I think the net assessment of that is for the best. As the Cold War ended, it seems in the defense sector, we saw a lot of consolidation, much smaller number of very big suppliers. Was it a mistake to let that happen? You know, Bill Perry, who had his famous last supper and asked for that consolidation at the time did it because he was terribly concerned that

the so-called peace dividend, the lower end of the military budgets, it was not going to be able to sustain the larger defense industrial base that we had in place at the end of the Cold War. So in his seat at the time, that was the call he made. It's turned out to be a disaster for the nation. It's essentially created five large companies that are so burdened by the system of requirements and the auditing and accounting requirements that go on with them to produce modern weapon systems, that the way to think about large defense primes

is more akin to a utility company than it is a private sector company. And the result of that, of course, has been very slow innovation, a culture of cost overruns, even as some phenomenal technology is produced. And you have now, and what's really important,

is a rise, thanks, to Ash Carter starting a defense innovation unit and starting off a whole new cycle of venture capitalism. You have companies like Anderol and Shield AI and other defense startups that are joining Palantir and SpaceX that are becoming a new breed of product-oriented defense companies that are not burdened by the system of requirements that have turned our defense primes into electric utility companies, to be honest. And I think the real strategic question now before the nation is how quickly can we swing more of the weapons systems we build to this new generation of product companies that are better at it, are faster, and are far less expensive

for the taxpayer. What do we need to do to keep DARPA dynamic? Well, you know, DARPA has always been very dynamic. But institutions atrophy, right? You see this almost everything in the world, and often the better it is, the bigger your later problem is because it becomes self-congratulatory. Well, one of my great frustrations as a Yanate in the Pentagon was, I got a chance both working for the Deputy Secretary of Defense and then for the chairman of the

Joint Chiefs of Staff to be their Leahs onto DARPA. So I got to be read into DARPA's entire set of programs. And they were doing incredibly impressive work. What was maddening is they were so far ahead of the military services, the Air Force, the Navy, the Army, and seeing the future battlefield. And over the years, at least since I've dealt with them, starting in 2009, they've been right way more than they've been wrong. But very few of their vision, of operational concepts and the technology that backed them have moved to the center of the systems that the services have adopted. So there's a giant adoption program going on. And this has to do with the fact that DARPA is a separate institution for the Pentagon. And its focus is on

creating new technology. And there has been a leadership failure going on for years along the E-Ring that that has prevented more of the technology DARPA and other of the leading labs have produced into the mainstream of the military. How do we overcome what is sometimes called our Valley of Death problem? There's some intermediate stage where an idea gets started, but no one is picking up the ball and running with it. There's not yet a product that you can sell. How do we fix that?

Well, there's a couple ways to do it. You know, Congress took a great step earlier this year by not only codifying defense innovation unit in law, but also granting it for the first time a really significant budget of just under a billion dollars a year. and there's a really big difference about what you can do in the defense innovation ecosystem with a billion dollars versus $100 million. So for a billion dollars, you can seed programs for long enough to not only demonstrate their success, but to ensure a high likelihood that they will successfully transitions in one of

the services. You can, in other words, create a springboard. So to spend more money, in essence, is the solution. No, no, no. I think we need to be spending way less money on legacy systems that are demonstrably defeatable today. So, you know, anybody that's been watching Ukraine in the last two months should decide that tanks are not a great investment for a modern military. Similarly, anybody that's read even news articles about hypersonic weapons should decide that buying more aircraft carriers is not a good thing.

But we do need some of that, some of those resources shifted to this new defense ecosystem that's very experimental, that's building, swarming weapons. And, you know, the Air Force is very commendable under the leadership of Secretary Frank Kendall. They now have what's called the combat collaborative aircraft. So this is a 10,000 aircraft buy of supersonic stealth drones who will fly alongside manned fighters in the largest change of Air Force doctrine, since really the right military flyer. And oh, by the way, guess who the two finalists are for the production contract for this massive program? Their Anderol, on the one hand, and another non-traditional defense contractor, General Atomics. The traditional primes lost to those two companies for this

revolutionary contract. How is our system of Inspector General's holding up? You know, Tyler, thinking back now that I've been in the private sector for a number of years to my my tenure in government service, it's remarkable how little executive authority in government anyone has anymore. And I'll just give you a couple examples. One, for me to go out to a think tank, to come to the Mercatus Center for a lunch and listen to a lunch talk. When I was on the National Security Council, So I would actually have to file a waiver with the lawyers to declare that I wasn't, you know, going to a lunch that I, where I would accept an unethical gift, right? And that's because we're feeding you or because you walk in the door? It's because you're feeding me.

And I have to make sure that you're feeding me less than, I think, $22 or there's some amount that changes every year, right? No sushi, yeah. No sushi, exactly. But here's a couple more pernicious examples. So one of my first jobs for the chairman of the joint she's a staff general, Marty Dempsey, when he took over in 2012, a year of incredible change, technological change. changes. He wanted to go visit Silicon Valley, meet with venture capitalists, go to Google, meet with startups, and see the kind of commercial technology that people were telling it would make a difference in the battlefield. So we organized a phenomenal trip for him to Silicon

Valley that really shaped how he, as he was taken over the chairmanship, shaped his agenda as chairman. And, you know, we get back from that trip, and I get a phone call from General Dempsey's EA, is his top officer. And it says, you know, Chris, can you write me a couple pages of justification for the Silicon Valley trip we just took. And I thought, oh my gosh, sure enough, somebody had filed a complaint with the Inspector General that we had spent government dollars to take, you know, a boondogle to California, and IG was deciding whether or not to investigate. So here's a much more serious example. Mike Brown, the second director of Defense Innovation Unit, the former CEO of Symantec, the largest cybersecurity in the world, somebody who really understands software,

which is now the most important element of any military weapon systems, was an a remarkable act of leadership and foresight nominated by President Biden to become the Undersecretary of Defense for Acquisition and Sustainment. So the lead weapons buyer in the Pentagon, somebody who are responsible for driving how nearly $300 billion of the Pentagon's budget is spent on weapons. And just days before his confirmation hearing was scheduled, in the news, bubbled up this whistleblower complaint that had been filed at Defense Innovation Unit weeks or months earlier, maybe even years earlier, alleging that he missed use hiring authorities to try and pay engineers in Silicon Valley close to market rates that could come to work for the government, which, by the way, was the mission of

Defense Innovation Unit, right, was to bring technologists into the government. It also alleged, among other irregularities that the office snack fund called Snacko had an insufficient basis of cash accounting. The person writing the complaint was a former comptroller employee. So, you know, receiving this complaint that their director had potentially violated Department of Defense Policy. The Defense Innovation Unit General Counsel undertook an exhaustive investigation, published an 82-page report, found no substance to any of the allegations that had been met. So you would think case closed. So at that time, the Inspector General decided not to investigate the Pentagon's general counsels had fine. You've looked into it. You know, there are complaints all over the place. Case closed.

So on the eve of his nomination, this services again, the whistleblower goes to the media again, the services in a couple articles, and he had to end up withdrawing. He had done nothing wrong, but somebody weaponized the inspector general system against him. So we're in the situation where good-minded public servants who are doing the right thing, who have done nothing wrong, are caught in this just bizarre sort of process of persecution that runs at its own sort of civil servant speed. and I think that's one of many factors, including, frankly, the Solar Service Act that is making the talent base of the U.S. government erode. I mean, why is it that governments like Sinepour are so much further ahead of the United States in terms of the talent they're able to bring to their governments? And not just salaries, although that's a big part of it. It's part of the burden that you undergo by becoming a public servant. So more formally, if you're given the chance to restructure the status of whistleblowers, what would you change to make it better?

Well, look, whistleblowing is an important function, and there are cases of egregious behavior, and they need to be called out and stopped. But at the same time, leaders in government, particularly those who have to work against the grain of their institutions, are going to ruffle a lot of feathers. And my co-author, Raj and I found out that, you know, firsthand in trying to start up Defense Innovation Unit on our first flight to Washington, our government credit cards got shut off out of spite because somebody wanted to slow us down. down, so we had to rebook our hotel reservations and pay out of her pocket. I was just one of many small examples of much larger political attempts to stop DIU. So I think anybody who is working against the grain institution to build something new should be given a lot of authority to prosecute that mission, to make that mission to success and held accountable if they don't. And getting wrapped up in IG investigations that end seven years after the fact is not going to make our system

of public administration any more effective. Now, the title of your book again, it is Unit X, How the Pentagon and Silicon Valley are transforming the future of war. Just tell us, what's Unit X? So Unit X is Defense Innovation Unit Experimental. And it was started in 2015, the year that Ash Carter became Secretary of Defense. And it was started off an insight that Ash Carter had when he was just Professor Ash Carter in 2001, when he wrote an article keeping the technological edge that was quite impression about strategic trends. So he noted at the end of the Cold War that federal research and development was essentially flatlighting at the exact moment that the technology economy

was taken off on a rocket-like trajectory straight up. And so by the time he arrived into office, and he forecast this in his 2001 article, the market capitalization of all the major tech companies, Apple, Microsoft, Google, Amazon, were each themselves individually bigger than the entire defense industry combined. So what does that tell you that tells you that the locus of innovation has shifted away from military labs, away from DARPA, which used to be generations ahead in technology, to the commercial technology ecosystem? The problem is that the entire defense procurement system and the Pentagon's line of vision are tuned in to the military R&D labs and to the defense primes. But if they're no longer the ones coming up with the leading edge technology, the Pentagon is not structured to become,

in Ash's words, a fast follower of the commercial market. So Defense Innovation Unit, the Pentagon's first ever Silicon Valley office, started by Ash, the first Secretary of Defense to visit Silicon Valley in over 20 years, was an attempt to pivot the entire U.S. military to be able to more quickly adopt commercial technology, which was clearly starting to outpace the technology being built by the defense primes. And just to clarify, your role in all of this has been... You know, as an aide at the Pentagon, worked on a lot of technology issues. So I was asked by Secretary Carter to run the working group that created the concept for a defensive aviation unit that he then launched. And just a few months after launching it, he asked Rod Shaw and myself to come take it over. He in fact ordered me that

I would be moving from my then present position on the National Security Council to California, which I promptly did. I had to buy more pairs of jeans. I had one pair of jeans and five pairs of I went out and bought five more pairs of jeans and was ready for Silicon Valley. And starting in 2016, began a really exciting couple of years at the helm of Defense Activation Unit, where we, among other things, pioneered a new way to buy technology that was much faster and proved through a number of very successful pilots that you could actually use technology on the battlefield in decisive ways. And is there some reason in the incentives to think Unit X won't ossify? Or is your view simply, for now, newness is enough? It may well.

But then we'll create a new structure yet again. Well, there is this, you know, Hegelian dialectic, right, in the history of defense agencies. And so DARPA was created originally to solve a crisis in base flight because the Air Force wasn't up to snuff. It actually spent some years in the wilderness before becoming the dynamic institution that we know it today. So far, the trajectory of Unit X has been very successful. Part of the reason for that is, you know, we have people that come there kind of like DARPA for a few years. at a time on rotation. And they, you know, our project managers are, they're very focused on getting things done. And, and oh, by the way, we've pioneered a way to buy technology at Silicon Valley

speed. So, you know, if you want to go buy a fighter jet or an aircraft carrier or a military radio, you're looking at using the federal acquisition rules, this sort of Old Testament-like system of regulations, negotiating a contract typically takes 18 to 24 months. If you're a startup, you know, that simply doesn't work, right? Because you have to show profit. ability before your next round of venture investment, which you're going to raise inside of that timeline, which is why when we arrived in the Valley in 2016, venture capitalist would actively pull funding from startups that tried to go after government contracts because they knew in the end it wouldn't be profitable. So, D.I.U had to figure out a way to break through that,

and we did it through the ingenuity of a single person. And this is a story, a heroic story of how one person can really affect change in the Department of Defense, a three million personal organization. And her name was Lauren Daly. We met her when she was 29 years old. She's an acquisition specialist, stays up all night reading the newly released National Defense Authorization Act, another dictionary-sized tome of law. And our fourth day on the job, she comes to Raj and I and says, hey, I found this sentence in Section 815. And I think it's a giant loophole we can use to create a whole new system of contracting. And so Raj and us, I say, you know, this sounds fantastic. This is the biggest problem we have to come up with a bigger system of contracting.

If we can't do that, a DUU will fail. And Lauren says, well, great, well, here's the 20-page white paper that I wrote about it. So quite literally the next day, Lauren and I got on a flight to Washington, and we met in rapid order with the head of acquisition policy for the department, with the head acquisition lawyer for the department and with the Department of Defense General Counsel. And they all agreed, and Secretary Carter blessed a whole new regime of using other transactions, actions authorities, this Apollo-era little-use contractual mechanism, to let contracts in between 30 and 60 days.

And so in two weeks, we got the department to declare DUU could use this new method. And in the eight years since Lauren had that idea, $70 billion of technology has been acquired by the Department of Defense using the method that she pioneered. Does China have something at all like Unit X? China has something different. So in their system, they don't have one unit. that is specifically focused on acquire and advanced technology from the best startups and technology firms in China.

They have, again, this doctrine announced in about 2015 of civil-military fusion that mandates that if you were producing technology that might be dual use, that might have a military application, that you have to notify the People's Liberation Army. And perhaps a PLA officer will come and join your board to watch that technology advance. And if they see a use case, they might decide to pull that technology. into the military. So in the sense of their command economy, that is how they are deciding to adjust technology. How well do they do procurement, in your opinion? You look at it, you think, wow, that's impressive, or you think, they're doing well for other reasons, but their procurement

is screwed up like ours. Well, you know, I think any large public institution or a large government institution, whether you're communist or capitalist is going to have inefficiencies in it. I think the Chinese have plenty of inefficiencies. But I think what's different is, you know, they have observed our military very carefully, really ever since the first Gulf War, when the precision strike complex, as it's called, really became debuted on the global stage. And the whole world saw us on CNN dropping bombs down chimneys, right? So today, similarly, the entire complex of Chinese universities that study national security and military institutes are looking at. very closely at Ukraine. By the time the book was published, I think we had caught something like 120 papers, academic papers being published in the Chinese literature about the Ukraine War,

very clearly seeing the decisive use of Starlink, calling for a Chinese version of Starlink, calling for Chinese kinetic and non-canetic means of jamming low-earth orbit space technology. So what's different about their procurement system is, however good or bad it is, it's geared at producing the exact kind of technology that will find the chinks in our own armor and could, if we have to go to war in a Taiwan scenario and another scenario, proved to be a potentially catastrophic awakening to the U.S. military. Is Unit X a dog-friendly office? Highly important question.

You know, I arrived out in California with my golden retriever, and I was jealous of Secretary Leon Panetta, who both as CIA director and as a CIA director and as Secretary of Defense brought Bravo, his golden retriever to the office. Bravo, he's proud to say, was one of two canines cleared into the bin Laden operation, the other one being the German Shepherd that flew on the helicopters into Abbottabad. So I thought, here we are in, you know, we're in Silicon Valley. We're supposed to come up with an office with a different culture. Let's make her office dog friendly.

And we did, but we had to go to war to do it. So we were in a National Guard building, and there was some colonel there in charge of, you know, He's kind of our landlord. And even though there's no regulation against having a dog-friendly office in the Department of Defense, and we had published our dog policy, he threatened to evict us unless we ended our policy. His last name started with F, so we referred to him as Colonel Fear. And he's against the dogs. He's against the dogs.

He's against the A.U. He's an old-school colonel. He doesn't like any of this. So how do we not get evicted? Well, we figure out he's retiring in six months. So what we do is we tell him, oh, you know, we don't actually have a dog-friendly policy. We have a service dog policy, and we're unable, based on the reasons our Air Force physician has declared for each individual to have the three dogs in the office that we had through HIPAA reasons to tell you why. But we can assure you that HIPA-compliant paperwork has been filed declaring these service dogs.

So we got our dog-friendly office and Colonel Fier went off to retire and not be heard from again. What's the biggest problem with the dog-friendly office? You know, there are some people that are allergic to dogs, and so that's why many major tech companies that are dog-friendly will have dog-free areas. But in my view, you know, especially now at a moment when offices are empty in most of the country, why not make them more fun? And boy, it was fun to watch Secretary Mattis come in, who himself loves dogs and be greeted by my golden retriever. And Boy was it even more fun to see crusty three and four star generals that were very skeptical that Silicon Valley had anything offered to first see my golden retriever and then see the woman who briefed our software demos whose hair was blue. By the end of the day, nonetheless, be really impressed by the technology we were putting in front of them. You wrote a political science dissertation at Cambridge on governmental commissions, right?

Yes. What is it you learned from that dissertation that helped you do Unit X, military procurements? more innovation? I'm really grateful I got the chance to go do a PhD and in particular to do it in the British system rather than the American system. Why? It's shorter. That's always nicer, three years rather than five, but rather than spend all my time studying for qualifying exams, I actually got to read the classic tomes of political science and sociology and understand them. And I'm so grateful for that chance. And I ended up studying breakdowns in the national security state. So what do you do after a catastrophic breakdown that,

political system, the regular political system can't contain. And I ended up studying government commissions, in part because I had had the chance early in my career to serve around a couple after-action reports and investigations. My first job out of college in 2003 was for the spatial Columbia accident investigation, a look at NASA's safety culture, not only what was the physical cause of the Columbia disaster, but what was the organizational cause behind the physical cause. My second job was a chance to go to Iraq and work on a team of historians that was writing an official history of the reconstruction. Another major breakdown in American foreign policy. In fact, I've gone on to specialize in disaster in a few other areas.

I wrote the Obama administration's After Action Report of Ebola. I used to joke that, you know, if I should have been your office, you were really having a bad day. But what I learned is that, you know, expertise is often wrong and settled. notions of how business should be done is also often wrong. And those settled notions often kill people. And especially when they kill people, that's a strong signal at its time to go back and take a fresh look at everything. And to always be curious, always be skeptical, and always be as rigorous as you can. Because established ways of thinking don't often evolve in ways fast enough to accommodate changing circumstances. What is it we need a commission for today?

where it might maybe plausibly succeed. Well, the political science literature divides commissions into three types. The type that you don't want to be on is a disaster management commission. So this is where, oh, there's a giant political problem. We're going to name a Blue Ribbon Commission that will never be heard from again to take the blame off politicians. The hardest kind of commission to be on is an agenda commission. So an agenda commission like the National Security Commission on Artificial Intelligence wasn't created after a 9-11 or a catastrophic breakdown. nevertheless, is a body that is going to have the bipartisan insights and support and the

expertise to tackle AI, a really complex issue that spans government, that at least when the AI commission was created, the government wasn't in a position to itself take on in a really rigorous way. The most effective commissions are what are called crisis commissions. The 9-11 commission is a classic example. They happen in the aftermath of a giant political rupture when everybody knows there's been a huge breakdown where there's more openness to look freshly. And that commission went pretty well. A very high percentage of its recommendations were adopted. And more than that, it forcefully brought

into the public light information that never otherwise would have made it out about who knew what and when. So I'm a strong believer in commissions as a form of government. You know, the British government has them much more frequently than we do. They don't always work. I mean, an interesting. historical anecdote. The first commission in the U.S. was actually the Whiskey Rebellion Commission. It didn't work. George Washington had to get on his horse and ride west before the rebellion in Pennsylvania broke up. But as a form of gathering concentrated expertise for a short problem to dive deep on a topic, I think they're very powerful instruments. And final question. What is it you want to learn about next? Anything.

You know, I got a chance this brain to work at Anthropic and a policy residency working both on AI safety and AI and national security. It was a short-term residency. I was only there for a few months, but I am incredibly enchanted by generative AI. And I cannot believe, based on my time inside a frontier model lab, what is just around the corner. So I want to learn everything I possibly can about how to steer, democratize, and make safe this incredibly powerful new wave of technology that's about to crash down upon us. And how would you describe what you think is around this corner? On the national security front, you know, there's been a heck of a lot of conversations about,

you know, is AI sort of as dangerous as the next nuclear bomb? And, you know, everybody at Frontier Labs, you know, went out last summer and watched Oppenheimer. And it's interesting just, you know, culturally coming from the national security community where it was my day job to look at really awful stuff, right? to get up every morning and before the chairman came into the office or on that security council, read the morning intelligence brief about all the things, all the awful things going on in the world every day. So I look at AI as a technology that is not at all like nuclear. I never think it's going to achieve this sort of zero to one point technology, as we would call it, that nuclear it is today,

where you either have a bomber or you don't. It's going to be much more diffused. It's going to be much more a part of the commercial economy. It's going to be much more a question of, do you have an iPhone 15 versus an iPhone 12? You know, do you have the most advanced AI versus AI that's a little bit older, maybe from an open source model? And because of that, as an international, you know, relations theorist, and as the literature would suggest, it's not going to be like nuclear weapons. It's not going to create sudden disequilibria in the international system. It's going to be much more shades of gray, I think, in gradations. And that's good because it means that we will have time among nations to find new equilibria without hopefully finding ourselves in sudden disequilibria

that could create an incentive for one nation to start a war against another. Again, the new book is Unit X, How the Pentagon and Silicon Valley Are Transforming the Future of War by Raj M. Shah and Christopher Kierkov. Chris, thank you very much. Thank you, Tyler. Thanks for listening to Conversations with Tyler. You can subscribe to the show on Apple Podcasts, Spotify, or your favorite podcast app. If you like this podcast, please consider giving us a rating and leaving a review. This helps other listeners find the show.

On Twitter, I'm at Tyler Cowen, and the show is at Cowan Convows. Until next time, please keep listening and learning.