No Priors: Artificial Intelligence | Technology | Startups - AI and the Future of Warfare with US Under Secretary of War Emil Michael

Episode Date: January 15, 2026

Today’s arms race looks a little different from those of the past. Under the Trump administration, the US Department of War (DoW) is deploying generative AI to millions of employees in order to maintain a strategic edge over our global adversaries. Sarah Guo and Elad Gil sit down with Emil Michael, the Under Secretary of War for Research and Engineering of the United States, to discuss the radical technological transformation of the US military. Emil outlines the architecture and launch of GenAI.mil, a DoW internal AI platform powered by Gemini and Grok that reached over one million unique users in its first 30 days. He also highlights critical technology priorities for national security, including hypersonics, direct energy, and autonomous drone swarms. Together, they also explore the urgent need to rebuild the American defense industrial base and end dependency on foreign supply chains for critical materials, as well as how Emil is recruiting the next generation of “fixer-builder” workers to serve their country in government.  Sign up for new podcasts every week. Email feedback to [e-mail] Follow us on Twitter: @NoPriorsPod | @Saranormous | @EladGil | @USWREMichael | @DoWCTO Chapters: 00:00 – Cold Open 00:00 – Emil Michael Introduction 00:58 – Emil’s Role at the Department of War 05:22 – Innovation Priorities for the DoW 08:27 – Shift Toward Autonomous Defense Technologies 10:41 – Identifying Common Needs Across the DoW 12:02 – Architecting GenAI.mil 13:48 – Applied AI Initiatives at the DoW 15:57 – The Future of Warfare 17:55 – Recruiting for DoW 19:33 – Arsenal of Freedom Tour 22:25 – Opportunities for Entrepreneurs at DoW 25:49 – Speeding Up and Scaling DoW Initiatives 28:37 – Innovation in Defense Tech 30:00 – Change Management in Government 32:09 – Rebuilding the Defense Industrial Base 37:27 – Initiatives and Opportunities at the Office of Strategic Capital 41:41 – Lessons from Emil’s Government Experience 44:30 – Conclusion

The military buildup in China is the biggest military buildup in world history. And so there's a real urgency on our side to ensure that we are ahead, but we stay ahead. And that's going to take a different level of investment and different type of thinking that we've had in the last 20 years. In the 80s, there were 50 defense contractors. And they got merged, so they're only about five. There's a lot of room for new entrants. It's crazy to me that SpaceX and Andral and Palantir all had to sue the Department of War for their first contract. So the idea is, you don't have to sue anymore.

Come through the front door because people are not going to fight you. We're now excited about lower cost, faster, more sophisticated options. Hi, listeners. Welcome back to No Pryors. We're here today with Emil Michael, the former chief business officer of Uber, White House Fellow, and currently CTO of the Department of War. Hey, Mel, thanks for joining us. Welcome to New Pryors.

Good to see you guys. It's been a long time. Congratulations on the new role. Very exciting news. Could you describe a little bit more about what? what that role is and what's changed at the Department of War to sort of create this new role, this new momentum, new initiatives that you all are focused on? Yeah. So for a long time at the Department of War, there was one organization called Acquisition Technology

and Logistics. It was all bunched up into one thing. And then about eight years ago, they said, well, tech is moving faster on new kinds of weaponry and, defense systems, then on the old system. So we're going to split out acquisition from research and engineering, they call it. So I'm not a undersecrette for research and engineering, which is cool, right, because I get to work on the stuff that I used to work on where I was in Silicon Valley, like with work with entrepreneurs, work with new companies. I'm now responsible for DARPA, which is obviously super cool because it's some of the most advanced research that happens in the country, if not the world. In the last few months, I took over as the chief AI, the chief AI, the chief

AI office in the Department of War, which were 3 million employees, the biggest organization with the biggest budget in the world, you know, is not a small thing to think about how to do AI right for. And then the Defense Innovation Unit, which is actually Basin Mountain View, and it's supposed to be the link between defense industry and, you know, the startup community that's building commercial products and may have dual use. And then last is this strategic capability office, which takes kind of existing systems and tries to modify them in strategic ways or supplement them to get, you know, for strategic surprise, they call it. So all that, all has technology underneath it and the idea is to unify that across the

department because we spend, you know, $150 billion a year on tech in one way or another. So you want to avoid duplication. You want to bring things to market faster. So that was a big announcement yesterday by the secretary at, uh, you know, a star base. You mentioned DUUs been involved with providing early funding to a variety of promising new defense tech and hardware companies. Could you tell us a little bit more about what they've done and how you've approached that so far? Yeah, DUUs had some good success with CERONIC and a bunch of other companies. And now it's, you know, now it's time to do more of it. So it's more of a focus. And yeah,

DARPA is just, you know, they invented the internet. You go to their gift shop and they have like a napkin that where someone drew out the internet sort of architecture, and they sell that in a gift shop in case you guys come to D.C. We can get you some of those. This is like a, I mean, it's an amazing unification of like a bunch of stuff that's clearly important to America and to, you know, global security. It's a very different environment than a lot and I have seen you in the past, right? You've worked with technology companies.

And, you know, even within them as a leader had this reputation for being, you know, high speed, aggressive deal maker, if I'm allowed to say that. How does that work with the Department of War, which like amazing impact importance and scale, not the strongest reputation in previous decades in administrations for speed? Yeah. Well, I mean, hopefully part of the reason I got chosen for the job and certainly the reason I took it is to inject some of that urgency speed, you know, being a little bit impervious to barriers and trying to run them over as opposed to being stopped by them.

And it works. Leadership in organizations is not, is somewhat transferable, right? If you can show that kind of urgency and leadership and create a culture and a company, you could certainly make some progress in a bureaucracy or a government agency. It might not be as fast. But I also have way more resources, right? And I have a way more, you know, in some ways, is important mission to humanity. So those two things are different in some ways, sort of give me the same abilities to try to drive fast. And people respond. I mean, I'm getting a lot of people who want to join my team or other teams at DOW and across the government. And yeah, it's harder. But in some ways, is more impactful, so I'm just as motivated. Yeah, it's been interesting to watch all the entrepreneurs

kind of gathering in D.C. in a way that, you know, I really haven't seen in a while. So it's, it's been impressive in terms of the types of talent that you all have been able to recruit. One thing that I think is related to moving fast is prioritization. And I think in another interview in the past, you said something like 14 priorities mean no priorities at all, and you've kind of really honed down into a handful of key areas. Do you mind walking through sort of those key areas from an overall broader innovation focus? And then maybe we can touch on one or two of them. we go. Yeah. I mean, so just to analogize to Uber and any company that we worked on together, imagine you went to a management team and you're like, what's your, how many product, you know,

how's your product line going? You're a series B company. You're like, well, I've got 14 product clients. You'd say, well, wait a bit. Sort of uninvestable, right? So when I got here, there were 14 critical technology areas. So critical, critical to national security. So I looked at them. I said, well, number one, if there's that many, they can't be critical. But number two, hard for people to hold in their head that many priorities and wake up every morning knowing that they have to get up and execute against those priorities and make progress because you get distracted. You get too much separation and therefore not enough resource to anyone things. So I cut them down to six after studying them and I made it more action oriented. So we put sprints behind them like you win in the engineering team.

So, you know, off the top of my head, the number one is applied AI because we're not building a foundation model at the DOW because there's being hundreds of billions of dollars being spent by the private sector on this. So how do I adapt or use what's being developed in the private sector and apply it to the Department of War use cases? So that's number one. Number two is, I don't know if you've heard of hypersonic missiles, but there's sort of the newest variation of, We used to have nuclear weapons and ballistic missiles. Now these hypersonics, Elon talks about this all the time that could go five times to speed of sound, the minimum Mach 5. And so they pose somewhat of a unique threat and they're maneuverable. And so it's the new sort of threat environment weapon that's entered the picture.

Few countries can build them. They're Chinese, Russia, U.S. but my critical technology area is to do that at scale and at a reasonable price because they're all very expensive now. They're exquisite. So how do you make them in the way Andrewl thinks about them much more producible, much less exquisite, much cheaper, more mass? So I call the scaled hypersonics.

Another one is scaled directed energy. So directed energy is high power microwave or lasers to take down missiles like Iron Beam, if you think about what the Israelis did. And now with all the drone warfare, you see, it's much cheaper to take out drones with an energy zap than it is to send a missile at another at a drone, right? A $5 million missile at a $50,000 on a drone or something. So directed energy, again, is the technology exists, but how I do that at scale. I'm a little bit curious. On the, on the drone area in particular, one of the things that I think a lot of people believe is that we're going move from sort of big iron giant systems into more distributed fleets of autonomous drones or

vehicles. And how do you think about that in the context of some of the programs or purchasing behavior of the Department of War? You know, we're still buying aircraft carriers. We're still buying very big sort of systems and there's all sorts of uses and needs for those. But what do you view is the shift to autonomy and the shift to drones that's going to happen over time? And what proportion of hardware do you think goes there? I think that starting with the Russia-Ukraine war, you've got this sort of renaissance in drones or robots, thinking about as robots as the new front line, right? It's a territorial battle.

If you're fighting over land, you know, less costly in human life if you have robots fighting first and then before humans come in. Without the drone warfare in that area of the world, you've part of view has seen way more human casualties. It's already devastating. It would have been way more devastating. So I think for territorial battles, you'll see that happen real fast where the shift, the shift mix toward robots or drones will happen much faster. When you talk about carriers and sea, there's still projection of power. There's still protecting sea lanes.

There's still all those things which will continue for some time. But the mix shift for is still also going to move to autonomous, whether it's autonomous submarines, autonomous boats, autonomous, sort of big drones, essentially autonomous air. airplanes, that mix will happen, that shift mix will happen over time. And you'll see every defense budget year over year, more and more will be allocated to those kinds of things as AI gets more prominent and being able to control these things and sense the environment around them and create autonomous action. So, you know, in 10 years, it wouldn't surprise me if 20, 30 percent of the budget is spent on those kinds of systems, which are also cheaper. So for 20, 20, 30 percent of the budget, you get way more firepower than you would for the other systems that are not designed

to be, you know, for that case, without humans and them, with humans on them. Given the scope of the different services, right, and the scope of the organization, like, what does the prioritization exercise look like for you operationally? You know, you go talk to the different services, you have all the people reporting to you. Like, how do you decide if it is these hypersonic missiles or it's electronic warfare or space? or something else that is a priority for like, you know, urgent Undersecretary this year versus next. If you're at the Pentagon and you're working for the Secretary of War, then your job or my job is to, you know, as a representative for him in the technology area, is to look across the services, Army, Navy, Air Force, Space Force, and say, what are the common needs, the enablers, or the tech enablers, if you will, or the enablers that are useful in a broad, way. If it's just useful for one service and one use case, that's probably something that service

can handle on their own. Because they have their own labs and research and development dollars and ability to procure and so on. So I'm looking for commonalities where you get economies of scale where there's things that could be useful for all of them. And so that's why it took me a couple months to get through these 14 technology areas. So to go get a sense of what's really important to scale them down to six that have some common thread to them that could be more useful. useful across the enterprise. So genaI.mill, I think, was like a surprise and how quickly it happened. Can you tell us the story of that and what the, like, the goal is? So genaI.comil, because if you're on a Department of War network, you know, even the unclassified

networks are secure, right? And different levels of security as you go up. So you still have to figure out how to architect using AI into those networks. It's not as simple as going to chatGBT.com and signing up because those things are sort of generally prohibited because you have to have restrictions and how you use them. So we had to figure out what are the policies, how do you architect it in the network? So nothing goes back into the pool of data that chat GPT or Claude or any of these companies have because we certainly don't want, no one in this country wants our data getting out into the general public, right, into these models. So you have to architected different data flow. So but we may.

moved really fast. I had some like data bricks engineers, former data bricks engineers, former meta engineers, former AWS people, Tiger team, 60 days, good, great collaboration from Gemini, from Google's Gemini, who already works at Department of Wars had some familiarity with our architecture and our systems and got that launch to three million people. We've had over a million people, Uniques, use it in the last 30 days, which is kind of awesome. We've got one third of the enterprise on one model that's 2.5, not 3.0, 3.0 is coming in a couple weeks. Then we're going to do GROC with XAI and we'll see where we get to with the other two. And then we do it across classification level. So it's going to, it is going to fundamentally change the way we

work here. And we're able to do it fast because we got fast people. It's amazing. Could you talk about more broadly what are the set of applied AI initiatives that you all are focused on? I know it's a major thrust and it's one of the key areas that you talked about. So, yeah, so instead of white papers and theories and committees, we said, okay, how are we going to deploy AI? So we simplified it and say, well, there's three sort of broad categories we're going to deploy it on. One is enterprise use cases like any company would use it for efficiencies, right? The second is intelligence. We get a lot of intelligence from satellites, from all the things the United States does across the enterprise that previously used human analysts for. And so if you could

could improve the leverage of the human analyst by getting up to them, here's 10 things we saw that you should look at. Man, you're going to make that analyst way more efficient, right? And then, well, if I could take this type of intelligence and fuse it with this type of intelligence, I'll make that analyst really capable because usually one type of analyst looks at one type of intelligence. So the more data I can aggregate from all these sources, the more intelligence we can use, which is a great deterrent because we have the best intelligence collection in the world. And then third for warfighting. So war fighting is a complex sort of thing. You're doing war gaming. You're doing planning. You know, there's a lot of formalities and how

you execute orders, how you simulate what might happen if you do different scenarios. So across those three areas, enterprise intelligence, we're gaming, we'll have a few pace setting projects within each of them, which are designed to sort of both break down barriers to make sure we get their data in the system, but to show people in the department, holy cow, you realize this is what AI could do. So we picked them purposefully so that they could be both demonstrations or pathfinders, we call them, in our bureaucraties or and across these dimensions. So we hit all parts of the Department of War. And we think that's a way to get people thinking about AI for every use case possible and then deciding not to when only when it's like clearly not useful.

One question that we've asked people from some of the major labs, you know, researchers working on the technology and others, and they often don't want to answer the question because it's hard to project. So if you feel the same, feel free to demure. But if you think I had five to ten years and you ask, what are the big areas where AI is going to most transform how the Department of War works, how you think about autonomous systems, how you think about warfare in general and defense in general, what do you think are the big shifts that are going to happen?

or what does that future world look like? I mean, I think that, you know, autonomous systems is the clearest thing because we're already thinking about that with drones. And then now you take that to other things like seronics building or aneurles building or whatever. And you apply AI to them and more sophisticated AI over time

that could do sensing and change how it behaves. Those are absolutely going to be some things that happen in the next few years that AI will have a driven dramatic impact on, which is why Boston Dynamics didn't make as much progress as optimists did. And the AI, you know, the things that started later on robotics just worked better because they were more AI infused. So I think we're actually in a good moment for Department of War to sort of taking advantage of those things.

And that's where we see some big improvements. And then the enterprise piece, people, you know, you're like, it's sort of boring for Silicon Valley people. You're like, okay, of course. But you guys, you guys are immersed in. that you're living in like the frontier of AI use cases in the enterprise. We're just starting over here in D.C. So I think people are going to go, holy cow, you don't have to write 20-page PowerPoints, 100-page congressional reports, you know, in the same way that you did with all the manpower

you did. And that'll be more exciting for people to work at too, right? It's because you're not doing this much drudgery. So you'll attract better talent as a result. So I think those are two clear areas in the next few years. you'll see a lot of a lot of advancement. You mentioned that one thing you have to have to get these changes to happen is like some talent from Silicon Malley or just talent that is excited about this pace.

Like who are you recruiting? Who do you want to be part of the Department of War? One of the big untold stories about Doge, which is, yeah, did some aggressive actions in the beginning that were controversial and all that. But the talent they brought in to every department, could then be deployed on other projects like the AI Action Plan that we did with Gen AI. So because they were already technically, like Elon chose technically sophisticated people. There weren't all engineers.

Some were lawyers. Some were from, but they all had a mentality of a fixer, builder mentality. So I borrowed a lot of those people. And then they attract more people on the way in. And then we have this U.S. tech force that Scott Kapoor from Inresen-Horowitz is deployed. and we were hoping get thousands of people out of college for a two-year stint, sort of make it, you know, this is your service to the country as a technologist

rather than as a soldier. So now we want both. And we're going to try to, you know, try to make, try to make that a badge of honor so that you go back in the industry with some credit, you know, so additional credibility and be proud of your service here. So those are the ways I'm attracting talent and I'm dialing for dollars. I call everyone who's, he just left a job. And I'm like, hey, you have a year to spare doing the cool.

stuff you could possibly imagine recruiting Tuesdays, I call them. And I call my friends like you guys and say, do you have anyone who's on the bench right now? And we have so much interesting stuff to do that I'm picking a few people off every month. You and Secretary Hexeth had been on this arsenal of freedom tour. Can you tell us about it or anything you learned or that the American people should hear about? It's been amazing. And I'll tell you why. So the Secretary's first reform or transformation, if you want to call it, was restoring the world. warrior ethos. It was bringing objective, gender neutral, race neutral standards to military service members, right? These are fighting units. This isn't, you know, this isn't ping pong. This is,

you know, this is war fighters have to be capable to do certain things. And he was intent on restoring those things. So that's sort of a fitness standard if you, if you want to think about it that way. Like, what does a fitness mean for our military? And then there's the fitness of the industrial base. And what you give the warfighter to execute. what tasks they're given. That's weapons, this defense, defense systems, it's cyber effects and so on. We noted in this conversation, defense industrial base sort of wasn't ready to provide what's necessary for the threat environment. And if you think about threat environment, what we've done in Iran, what we've done in Venezuela, what we've done with the Houthis, just in one year,

not to mention what might come in the years ahead, you think about where we postured for that with the defense industrial base. And the answer was, we weren't as posture as we wanted to be. So he said, okay, my next fitness standard is to go to industry and tell them that we want them and need them to produce. We have their backs. We're going to bring all the resources to bear. We're going to cut out the bureaucracy.

We're going to make it an open wide front door for new entrants to come in and help us solve problems. We're going to change the way we buy, the way we do RFPs even. Like, for an RFP, it used to be, here's a. a 300-page requirement document, please fill it out and we'll decide if you win or lost. Now we say, well, here's our problem. We're trying to achieve this. Why don't you come back to us with a solution and you allow them to come in with different ideas about how to solve the problem? And there's novel concepts out there. So it's a different. So the primes will excel at filling out a

300-page questionnaire. A startup won't. So if you change it into here's the problem I'm trying to solve. Well, startup might say, oh, I have ways of solving this. So that arsenal Freedom Tour is about giving them permission and promoting and making sure they understand that we're serious about the fitness and the expansion and health of the defense industrial base. So that's the Orchinole Freedom Tour. So it's been a lot of fun. We've been, gosh, six days on the road in the last two weeks and visited about 20 companies. And it's been awesome. Both the workers and the tech together, you know, again, these combined hardware software systems.

It's really been inspiring to see the motivation. in Southern California, in Texas, in North Carolina, and a lot of the places we've gone. Amazing. The other audience that I think is going to be inspired by the leadership that they recognize or just pace of doing business is entrepreneurs, right? And you have talked about the need for more new primes and like people to solve some of the problems that you're looking at and are important to American dominance and competitiveness. What should entrepreneurs, I think like it's wonderful that, you know, you've been so early in this and a lot as well, investing in defense technologies. That has now become much more mainstream in terms of, and then like that sounds ridiculous to say, but it is acceptable and exciting to work on American defense now.

What should people look at in terms of opportunities and what should entrepreneurs know about doing business with the Department of War now? I would say that, so a few things. So number one, we're more open for business than ever before because there's a recognition that our adversaries who started from a cleaner sheet of paper in the last 10, 15 years, like the buildup, the military buildup in China is the biggest military buildup in world history. And so there's a real urgency on our side to ensure that we are ahead, but we stay ahead. And that's going to take a different level of investment and different type of thinking that we've had. in the last 20 years.

In the 80s, there were 50 defense contractors, and they got merged, so they're only about five now. So there's a lot of room for new entrants, and it's crazy to me that SpaceX and Aderall and Pallenture all had to sue the Department of War for their first contract. So the idea is you don't have to sue anymore. Come through the front door because people are not going to fight you. We're now excited about lower cost, faster,

more technically sophisticated options. The caution I give entrepreneurs is it's still not like selling to another business. So don't have illusions that, you know, this is sort of a deal with, Uber deal with MX or something. This is still a government. And we have to make sure stuff works because lives are at stake, right? This is not just a money game. I love that Uber, MX is your example of like the easy stuff, man.

You know, a lot of entrepreneurs out there are like, I'm going to sell to my buddy in YC today. So we're several tiers. up in the hierarchy of pain. Yeah, okay. Fair enough. Fair enough. So yes, I consider that it was easy, at least in my day. And then another thing is when you're selling it combined hardware software product,

you also have to manufacture it. And that's not something that goes back to the hardware is hard in Silicon Valley. Well, hardware is hard also in the defense industry. And so producing things at scale that are flawless, this means you have to have a different type of capability. Elon's mastered it with satellites and all that, but there's not a lot of startups that have mastered it. So mastering the production,

the skilled manufacturing piece of it, is the thing that startups who are sewn to the Defense Department have to also prove, hire for, demonstrate competence in, and so on. And that's the one thing I'm learning in my first eight months here is that's the piece that I'm encouraging them. Like, hey, if you come with it, tech pitch and a prototype, that's great.

What's the plan to get me 10,000 of these? And so that's sort of the advice I'd give to the community. How do you think about flexibility of budget? So one of the things that often happens is, you know, there's a lot of line items in the congressional budget that basically establish certain programs that are then the ones that are implemented and sort of paid for or procured. And, you know, that's somewhat different from how you think about innovation

in terms of something new comes up. You want to rapidly be able to iterate to launch. to deploy it. And so how do you think about either flexible budget spend or reallocation of budget over time? And how does that relate to the legislative process? And how does that impact entrepreneurs ultimately? Yeah. It's been it's been a problem, such a problem that they've given like an awful name to it called the Valley of Death, which I, which every you'll hear, it was to Sunday here. And the ways, you know, we've come at it and I've come at it is we have this defense innovation unit. which is rapid contracting has a billion dollars,

has like a reasonable amount of money to do things really fast to get startups off the ground and get them through. We have several other programs that have that same capability, one called AFIT that takes companies that have developed a product, but now need to scale their manufacturing. So there's a different line in the, you know, different point in the process. I have the Office of Strategic Capital,

which has $200 billion in lending authority, low-cost loans, and that both sends a demand signal to these companies that other private capital crowds around it, equity capital often. And it's low-cost loans, right? It's Treasury's plus 100 bibs. And in the last, I don't know, four or five months, we've done five critical minerals deals, like really fast because that's a target area. And we'll have other target areas. So if you're a company that's in one of the super critical areas, we have this huge lending. authority there too. So I'm trying to collapse the Valley of Death by crowd and capital around in different parts of the capital cycle. And then also we're reserving a bit of the budget every year so that we can make in-year budget decisions. Because the real problem is that Congress doesn't pass funding bills until halfway into the next year for the year of execution. And so if you're

not planning a year and half ahead, you're not, you're going to miss. So all these funding mechanisms are a way to get at that valley of death. And I think we've got, we're really close to sort of pinching, pinching that into being very minimal if it exists at all. And by the way, helps that you guys are investing in defense tech also, you and other your peers, because equity capital has a lot of, has a lot of value here too. When you see promising companies and we see promising companies, you're going to say, well, it's a promising company. They've got their DUU deal.

I'm happy to fund them now. And that, you know, that helps solve it too. You've also, I think, advocated for dual-use companies. They're doing things for defense as well as the broader world. Are there any specific areas that you most wish a company existed today for where, you know, you think it's a sparse landscape or other areas that if they're founders watching this, you think they should really focus from an innovation perspective. Yeah. Yeah. I mean, there's, you know, this hypersonic weapons thing is kind of a big deal.

There is a startup or a very small number of startups that are innovating here. but former SpaceX people who are running around who understand the physics of that kind of thing. So I wish there are more. I think there's going to be when you think about drones, not just the small drones, as you get the bigger and bigger drones that really look like long-range missiles, if you will, to be innovation there. There's innovation in the technology that goes into a drone that seeks things in a GPS-denied environment. You know, it makes them more precise.

For Golden Dome, which you've heard about, we're looking about how to take things out from space, which is a compelling, really complex, but interesting proposition. So those are kind of some areas. And then from an AI standpoint, you know, I feel like we're generally okay with the investment. I mean, there's so much money going in there that that's like a well-funded area, both the foundation models and the derivatives that are trying to do specific apps, you know, on those models. So, you know, that's some direction for folks. When you think about the pace of, technology adopt. I'm just thinking about you as like the

CTO of a 3 million person organization, you know, whether or not those people are warfighters, right? And, you know, selling, if you have portfolio companies that sell to very large organizations, you see a large span of adoption of those tools. Over time is amazing that

jenai.i.mill has gone a million users recently. How do you think about like the workforce, right? You said it's the biggest single organization in the world that's consuming this technology. but you have to do a bunch of change management. Is that something that you think through? Yeah, I mean, I try not to think through it so hard

so that I'm like, oh, my gosh, is going to be too hard to do. Sort of the, again, the Uber entrepreneur mentality, it's like, let's like to move and see how far we can get things into the enterprise until someone says stop. So it's a different way of thinking about it. Just make forward progress as fast as you can. That's a good strategy too. It's, you know, it tends to work.

Does it work as fast as in private industry? No, but it still works. There's still human desire to do better in every case. And I do think bureaucrats get a bad rap where bureaucracies get deserved a bad rap, right? It's the collection of rules, regulations, people, culture that end up being hard to change, whereas any one individual person, they want to thrive, especially if you're a Department of War, You don't come to Department of War if you're not mission oriented. You don't have sort of an ethic that something you're working for something bigger than yourself.

You're certainly not coming here sort of to make a buck, right? You're coming here because you care about the outcome. And that gives us a lot of really good motivation from people. And if I could just get some tools in their hands and talk to them and give them some leadership and some, you're surprising how receptive you'd find even in this large of a department. In a different direction, because you mentioned, like, I was just thinking about some of the hardest problems that you have to go work on. One is, like, rebuild the defense industrial base, right?

And how do you, like, reignite that ecosystem when a lot of people have given up on American manufacturing in different domains? What do you think are, like, the necessary, missing components if you know, you're saying the demand is there. Because I think a lot of the arguments has just been like, it's too expensive. We no longer have the capability or the knowledge in the United States. Like, how do you, how do you think about that? I mean, I think in some cases, it's a matter of national survival, right? And so far as like, I'm as free market a person as as anyone. But I think if you look back on the last 20 years and say, should we have outsourced

all our pharmaceuticals, all our critical minerals, all our semiconductors, all of it, all of our nuclear power plant building capabilities so that the vice, like if there's a scenario where the adversary has control of those things, you don't have control of your own destiny. You would say that, well, it's worth the cost to bring it back. And bringing it back's not a snap your fingers thing. But with American ingenuity and entrepreneurship and capital markets, I think we can do it and we have to do it and we are doing it and we'll do it. So you pick, you know, it's a little bit of a Maslow's hierarchy of needs. Like, what are the most important things we have to give back? Well, this deal with China says that in a year we have to,

you know, the critical minerals, export control thing, you know, if assuming that stays there. So we're like operating like, we have to be self-sufficient in a year. And then you go down the list of things and you try to tackle them. And the good news is the enthusiasm about doing it is, again, widespread. And it's some, it's, I attributed to President Trump. I attributed secretary, secretary Heggseth. I attributed to just smart people looking at the playing field and saying, ah, you know, we have to be proficient in some of these things and we have to do it ourselves. You know, there's 200 pharmaceuticals on the critical shortage list because we're dependent on other countries. So that's not, that's not a viable thing. We don't want that for our children,

right? So whatever it takes, we have to do it. And I'm relying on folks like you and the people you invest in to help on that. And I think we're going to, we just have to create the market conditions where it's viable. My optimism here amounts to in certain areas, there is demand. And that was not actually recognized before, right? Like, we need to make it here. And we need to have the ability to make it. And like, if there's a massive regrowth of American manufacturing, it will not be in exactly the form it was like 40 years ago.

Right. It will be because it is driven by automation, better processes, AI, like being able to make things other people are incapable of making versus competing in necessarily a global marketplace for cost. But I think that's totally doable. That's exciting. But the one thing I'd add there is like, who's going to dig and weld and electrify all the data centers are building? There's going to be people to a large degree. There'll be robots doing some of this, but there'll be people and who's going to build all the new housing we need in these cities because of the housing shortage. So there's going to be work.

It may not be in an auto plant to the degree we had workers in an auto plant as a percentage of sort of the workforce. But there's going to be other big jobs. I mean, the welding's jobs, we're trying to build ships here. I can't find enough. And it's a job that pays more than six figures in areas that are not high cost to live in. So it's like, how do you point people with the right capital trade, do the right training and so on. So I think there's a lot of opportunity for all. categories of workers. But yes, you're right. In some cases, you know, on farms, or you're going to

have robots, pick strawberry, you're going to use robots and automation to fill holes that are, that we can't otherwise fill. Like, yes, and we're best positioned to do it. And I was really also thinking in the like effective productivity sense, right? Like American workers with better automation and better lines and all of that can produce things that are best in class and cost effective. The cost-effective thing, too, is sometimes a little bit overstated in terms of there are subsidies, for example, for our earth minerals by some of our adversaries, et cetera. And so I don't think these have acted as free markets. I think in many cases, it has been very smart strategic action by China and others to ensure the market isn't a free market so that there isn't competition. Yeah, that's a great point, Eilat, because if it was a true free market, it wouldn't be as, it wouldn't have disrupt them, but there was a lot of dumping going on in certain areas to crush the. the other industries. I'm somewhat familiar with this from the Uber Lyft days, but there's a lot of how do you inject capital into in a certain way that gives you an unfair advantage. And some,

you know, people could debate the tariffs, but some of the tariff notion is to balance that dumping capability. So if you could, in theory, have a free market price for something. Well, if we're, if we can't control one side of it, we have at least some levers on the other side of it to try to create some balance. So, you know, I guess related to that, you all did some really interesting deals around rare earth minerals through the Office of Strategic Capital. Can you talk about some of other initiatives that you have going on there right now? Yeah. So those are targeted at what part of the defense industrial base has a brittle supply chain where the technology exists. There's actually probably a company that actually does it here, but we need them to produce 10 times more than they're

producing now. And so we've identified, we went through, like, exhaustively these supply chains or what are the things that go into this? Like, who knew Germanium was a thing three years ago? The American public wasn't thinking about it. So what we're trying to get ahead of it is what are the 10, 20 things that are components, whether it's a brushless motor, a brushless motor goes into a drone. We're dependent on China for brushless motors. So, you know, what kind of semiconductors besides TSM go into sort of a data center? What are the other things we have to make sure we domesticate? And how do I ensure that I'm taking the companies that exist and making sure they have the capacity to serve the whole nation's needs? And that's pretty exciting, too, because that's

another way of getting at the supply chain fragility and our adversary dependency. So you kind can solve potentially. But we used to have a very robust defense industrial base and an industrial based period. Now you're down in some cases one supplier of a nozzle that goes in 20 different systems. And I want that one nozzle maker to succeed, but I also maybe want two or three so that we're innovating while we're doing that. And that's part of the mission of the Office of Strategic Capital. And we have a lot of money to do it. I think one of the things that's really cool about studying some of this stuff on the supply chain side is actually like how distributed it is. Obviously, you know, you spent a long time in Silicon Valley.

A lot of innovation is going to happen in, you know, in Southern California and Silicon Valley. But I remember, like, as you said, I didn't know what Germanium was. I remember looking it up when there was this Department of War investment in lattice materials. And I was like, it's in Bozeman, Montana, right? That's where we are making, you know, germanium and silicon crystal, right? And we need it for defense optics. And so I do think that even just like showing people how much demand there is for, like, the entire supply chain across different communities,

is really important. Yeah, I think that's right. I mean, you know, fiber optic cable. We don't make fiber optic cables in this country. Fiber optic, you know, basic fiber, which they're using in the Ukraine-Russia war to do drones because they're jamming and all that. And we use for telecom and all that.

So, yeah, it's creating that list, communicating it broadly, trying to ensure the market conditions are such that we're not subject to the dumping sort of practices that could, you know, really kill an industry very early on. So it's a complex. set of things, which is why a research and engineering organization would have a strategic capital arm, right? That's why those two things go together, which is not apparent from the outside,

is because both things go together a bit? Is there a list published anywhere where founders who are listening in can go and see what they should be building or areas where there's more demand than either people understand or is anticipated or where the DOW is willing to help provide capital or other things to accelerate it? So the DIU for a defensive issue and has like four or five categories of things that they look at. So that's sort of a published and public thing.

The Office of Strategic Capital is a little more proactive. They're going to say, we have this whole, I'm going to go find companies that already exist that do this. So it's not for startups because it's a lending facility, if you will. So they're looking for companies that already exist and how do I expand their production.

But it's a good point. At some point I was talking to a secretary about this the other day. It's like we should have some forum for for talking about the things that we need more proactively. So investors and entrepreneurs can think about them. Because if you're expanding capacity through loans, you could also expand capacity through new companies doing the same thing. And so that's why I'm wondering. That's a good point. We're just looking for a to-do list. Yeah, yeah. Yeah, exactly. To be clear. Yeah. I just have a last question for you. You're, you know, couple, couple months.

and guns of blazing in terms of impact already. What most surprised you or is like a thing you've changed about how you operate or something, you know, you learned? And this is your second stand in government, by the way, right? And so it'd be really interesting in a contrast first and versus second instant through that lens in terms of what's shifted or what's different this time around. Yeah. So I was a White House fellow called a glorified intern in 2009 to 2010.

and we're in the middle of the global war on terror. And so what we're fighting at that time was, you know, a bunch of insurgents who had sort of crude weapons like improvised explosive devices and so on. Now we have a near-peer adversary that has space capabilities, you know, long-range strike capabilities, drones, AI. So the battlefield has shifted so, dramatically toward being tech superior than it was back then.

Back then, it was more like we had the superior tech, but then we were just vulnerable by adversaries who had nothing to lose, that suicide. I mean, it was a totally different kind of adversary. So that's been a dramatic change. And I didn't, you know, I guess I did realize that, and the part of why I took this job is that I saw that change and I wanted to be part of sort of the solution there.

But I think what surprised me is that the recognition, broadly speaking, that this Arab, this near-peer adversary had been doing so much and so little time in a concentrated way didn't really hit me until I got in and started getting, you know, really understanding what had happened to some of our markets. Like, again, the Germanian example, the fiery glass example, the brushless voters example, importance of Taiwan, these things. you know, when you're in the outside, you understand them theoretically, but now I understand them viscerally. Well, amazing. Thank you so much for everything you're working towards today. I think obviously you're one of the people that's been motivated by showing up and trying to have a big impact for the country. So, you know, it's exciting to watch what's happening and changing. Yeah. Thanks for both of your support. And I will come back to you with the to-do list. We're ready for it. All right. Thank you so much.

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