AI and the Future of Warfare with US Under Secretary of War Emil Michael

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 than we've had in the last 20 years.

In the 80s, there were 50 defense contractors and they got merged. So there are only about five. There's a lot of room for new entrance. It's crazy to me that SpaceX and Androl and Palanteer 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 Priors. 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. Emil, thanks for joining us. Welcome to New Prior.

Good to see you guys. It's been a long time. Congratulations on the new role.

Could you describe a little bit more about what that role is and what's changed at the Department of War to sort of create this new war 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 and it was all bunched up into one thing and then about 8 years ago they said well tech is moving faster on new kinds of weaponry and defense systems than on the old system. So we're going to split out acquisition from research and engineering they call it.

So I'm the under secretary for research and engineering which is cool because I get to work on the stuff that I used to work on when 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 most some of the most advanced research that happens in the country if not the world. In the last few months I took over as chief AI the chief AI office in the department of war which would 3 million employees the biggest organization with the biggest budget in the world is not a small thing to think about how to do AI right for.

And then the defense innovation unit which is actually based in Mountain View and it's supposedly the it's supposed to be the link between defense industry and you know the startup community that's building commercial products 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 the other. So you want to avoid duplication, you want to bring things to market faster. That that was a big announcement yesterday by by the secretary at Starbase.

You mentioned DIU has 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, DIU's had some good success with Seronic and and a bunch of other companies and now it's you know we have 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 a napkin that where someone drew out the internet uh sort of architecture and they sell that in the gift shop. In case you guys come to DC, we can get you 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 dealmaker uh if 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 and administrations for speed?

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 kind it works with leadership in in organizations is not is somewhat transferable, right? If you can show that kind of urgency and leadership and create a culture in 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 a way more, you know, in some way is important mission to humanity.

So those two things are different in some ways sort of give me the same abilities to sort of drive fast and people respond. I mean, I'm getting a lot of people who want to join my team or other teams at DO and across the government and yeah, it's harder, but uh in some ways it's more impactful. So, I'm just as motivated.

Yeah, it's been interesting to watch all the entrepreneurs kind of gathering in DC 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 as we go.

Yeah, I mean so just to analogize to Uber or any company that you you know 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. and you're like, "Well, I've got 14 product lines." You say, "Well, wait a minute. Sort of uninvestable, right?"

So, um, when I got here, there were 14 critical technology areas. So, critical critical to our national security. So, I I looked at them. I said, "Well, number one, that if 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.

Did you get too much uh disperate you know uh separation and therefore not enough resource to any one thing. So I I cut them down to six a after studying them and I made it more actionoriented. So we put sprints behind them like you would in an engineering team.

So uh you know off the top of my head the the number one is applied AI because we're not building a foundation model at the DO 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 in the private sector and apply it to the Department of War use cases? So, that's number one.

Um, number two is I don't know if you've heard of hypersonic missiles, but they're sort of the newest variation of um we used to have nuclear weapons and ballistic missiles. Now, these hypersonics, Elon talks about this all the time, that could go five times the speed of sound, the minimum Mach five. And so they pose somewhat of a unique threat and they're maneuverable and so they're you know it's the new sort of threat environment um weapon that's entered the picture.

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

Another one is scaled directed energy. So directed energy um is you know high powered 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 drone or something. So directed energy again is is the technology exists, but how do I do that at scale?

I I'm a little bit curious uh on the on the drone area in particular. One of the um things that I think a lot of people believe is that we're going to 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 in the context of some of the uh 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 as the shift to autonomy and the shift to drones that's going to happen over time? I mean, what 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. Think of it as robots as the new front line, right? Say in 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 in that area of the world, you probably would have seen way more human casualties. It would 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 uh 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 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 and create autonomous action.

So you know in 10 years it wouldn't surprise me if 20 30% of the budget is is is spent on those kinds of systems which are also cheaper. So for 20 10 20 30% of the budget you get way more firepower than you would for the other systems that uh that are not designed to be you know for that case without humans in them with humans in them.

Given the scope of the uh 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 is a priority for like, you know, urgent under secretary 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 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, uh, the enablers, 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 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 across the enterprise.

So genai.mill I think was like a surprise and how quickly um it happened. Uh uh can you tell us the story of that and what the like the goal is?

So, ji.m mill because if you're on a on a department of war network, you you know it's a even the unclassified networks are secure, right? And and different levels of security as you go up. So, you still have to figure out how to architect using AI in into those networks. It's not simple as going to chatbt.com and and signing up because those things are sort of generally prohibited because you have to have restrictions on how to use them.

So we had to figure out what are the 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 architect a different uh data flow.

So but we moved really fast. I had some like data bricks engineers former data bricks engineers former meta engineers former AWS people tiger team 60 days uh good great collaboration from Gemini from Google's Gemini to who already works at department of war has some familiarity with our architecture and our systems and got that launched to three million people we've had over a million people uniques use it in the last 30 days which is kind of awesome you got onethird 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 Grock uh 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 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 and and committees, we 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 uh previously used human analysts for.

And so if you could uh improve the the leverage of the human analyst by geing 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'm 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 war fighting. So war fighting is a complex sort of thing. You're doing war gaming, you're doing um 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 wargaming, 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 we could they could be both demonstrations or pathfinders we call them in in our bureaucraties or and and across these dimensions so we hit all parts of 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.

Yeah. One question that we've asked people from some of the major labs uh 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 de mirror but if you think ahead 5 to 10 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 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 ceronics building or uh animals building or whatever and 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 uh in the next few years that AI will have a dramatic impact on which is why Boston Dynamics didn't make as much progress as Optimus did and the AI you know the things that started later on robotics just work better because they were more AI infused.

So I think um we're actually in a good moment for for department of war to start taking advantage of those things and that's where we see some 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 but you guys, you guys are immersed in that because you you're living in like the frontier of AI use cases in the enterprise. We're just starting over here in DC.

So I think people are going to go, "Holy cow, you don't have to write 20 page powerpoints, 100page congressional reports, you know, in the same way that you did with all the manpower you did." And that'll that'll be more exciting for people to work at too, right? It's because you're not doing as much drudgery. So you'll attract better talent uh as a result. So I think those are two clear areas in the next few years. You'll see a lot of uh a lot of advancement.

You mentioned that one thing you have to have uh to get these changes to happen is like some talent from Silicon Valley 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, it did some some aggressive actions in the beginning that were um controversial and all that, but the talent they brought into every department um could then be deployed on other projects like the AI action plan uh that we did with Gen AI. So because they were already techn like Elon chose technically sophisticated people. They weren't all engineers, some were lawyers, some were had from different but they all had a mentality of 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 US tech force that that Scott Kapoor from Andre and Horowitz is deployed and we're hoping to get thousands of people out of college for a two-year stint sort of make it um you know this is your service to the country as a technologist rather than as a soldier.

Um so now we want both and we're going to sort of you know make try to make that a badge of honor so that you go back into industry with some cred you know 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 had just left a job and I'm like, "Hey, you have a year to spare doing the coolest 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 Hexf have been on this Arsenal of Freedom tour. Can you tell us about it or um anything you learned or that the American people should hear about?

It's been amazing and I I'll tell you why. So the secretary's first reform or transform or transformation if you want to call it was restoring the warrior ethos. It was bringing objective um genderneutral 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 are 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 is a what does a fitness mean for military and then there's the fitness of def the industrial base and what you give the war fighter to execute what tasks they're given that's weapons it's defense defense systems it's cyber 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, uh what we've done with the Houthis, like all just in one year, right? Not to mention what might come in the years ahead. You think about were we postured for that with with the defense industrial base. And the answer was we weren't as postured 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 entrance to come in and help us solve problems. We're going to change the way we buy the way we uh do RFPs. Even like we for an RFP, it used to be here's a 300page requirement document. Please fill it out and we'll decide if you win or loss. 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 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 300page questionnaire. A startup won't. So if you change it into here's the problem I'm trying to solve. Well, startup may say, "Oh, I have 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 Arsenal Freedom Tour. Um, so it's been a lot of fun. and been we've been gosh six days on the road in the last two weeks and visited about 20 companies and and it's been awesome both the workers and the tech together you know again these combined hardware software systems um it's really been inspiring to see the motivation um in in Southern California in Texas in North Carolina and a lot of the places we've gone amazing.

The other audience uh that um I think is going to be inspired by the you know leadership that they recognize or just pace of doing business like um 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. um what should entrepreneurs I I think like it's it's wonderful that um 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 like it 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 1015 years like the buildup the military buildup in China is the biggest military buildup in in world history and so there's a real uh 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 than we've had in the last 20 years in the in 80s there were 50 defense contractors and they were got merged so they're only about five now. So there's a lot of room for new entrance and and it's crazy to me that SpaceX and Andreal and Palanteer 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 techly 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 uh just money.

Uber MX is your example of like the easy stuff, man. Yeah, you know, a lot of entrepreneurs out there are like, I'm going to sell to my buddy NYC today. Um, so we're we're several tears up in the hierarchy of pain, but yeah.

Okay, fair enough. Fair enough. That So, yes, I consider that was it was easy at least in my day. And then the other thing is when you're selling a combined hardware software product, um, you also have you 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 u means you have to have a different type type of capability. Elon's mastered it with satellites and and all that, but there's not a lot of startups that have mastered it.

So mastering the production, the scaled manufacturing piece of it is a thing that startups who are selling 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 my first eight months here is that's the piece that I'm encouraging them like, hey, if you come come with a tech pitch and a prototype, that's great. What's the plan to get me 10,000 of these? Right? And so that's sort of the the advice I'd give to the community.

How do you think about flexibility um of budget? So, one of the things that often happens is, you know, there there's a lot of line items in the congressional budget that basically establish certain programs that are then the ones that are uh 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 it, to deploy it. And so, if 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 Evo you'll hear eight ways 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's called AFIT that takes companies that have developed a product but now need to scale their manufacturing. So it's a different line in the pro you know different point in the process. I have the office of uh strategic capital which has $200 billion in lending authority um lowcost loans and that both sends a demand signal to these companies that other private capital crowds around it equity capital often and it it's lowcost loans right it's treasuries plus 100 bips 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 that's a target area and we'll have other target area. So if you're a company that's in one of the the super critical areas, um we have this huge lending authority there, too.

So I'm trying to collapse the value of death by crowding capital around in different parts of the capital cycle. Um and then also we're reserving a bit of the budget every year so that we can make in-ear budget decisions because what what what 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 a half ahead, you're not you're going to miss. So all these funding cycle 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 to being very minimal if if it exists at all.

And and by the way, helps that you guys are investing in defense tech also, you and other your your peers, because um equity capital has a lot of has a lot of uh value here too. when you see promising companies and we see promising companies, you're going to say, "Oh, this is a promising company. They've got their DIU deal. I'm happy to fund them now and that, you know, to help 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 there are founders watching this, you think they should really focus from an innovation perspective?

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

For Golden Dome, which you've heard about, we're looking at how to take things out from space, which is a compelling, really complex but interesting proposition. So, there's 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 uh on those models. So, you know, that's some direction for folks.

When you think about the pace of uh technology adop. I'm just thinking about you as like the CTO of a 3 million person organization, you know, whether or not those people are war fighters, right? Um and 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 genai.mill has gone a million users recently. Um, how do you think about like the 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 you think through?

I mean, I try not to think through it so hard so that I'm like, "Oh my gosh, this is going to be too hard to do." Um, sort of the again the Uber entrepreneur mentality. It's like let's like move and see how far we can get things into the enterprise until someone says stop. Um 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 as in private industry? No. But it still works. There's still human desire to do better in in every case. And I do think uh bureaucrats get a bad rap where bureaucracies get deserve the 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 kind of you don't you don't come to Department of War if you're not missionoriented. You don't have sort of an ethic that something you're working for something bigger than yourself. You're certainly not coming here to make a buck, right? 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 uh you stuff, you 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. Um one is like rebuild the defense industrial base, right? Uh and how do you like reignite that ecosystem when um a lot of people have given up on American manufacturing in different domains? What do you think are like the 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