From Silicon Valley to the Pentagon: The Future of Defense Innovation

37 snips

Mar 7, 2024

Guest

Brandon Tseng

Guest

Brian Schimpf

Brian Schimpf, co-founder and CEO of Anduril, and Brandon Tseng, co-founder of Shield AI, dive into the evolution of defense technology. They discuss how startups are reshaping the landscape traditionally dominated by large defense primes. Key topics include the Defense Innovation Unit's role in fostering collaboration between the military and tech firms, the implications of drone warfare on U.S. strategies, and the urgent need for modernizing military procurement practices. The conversation highlights the balance of innovation and risk in ensuring national security.

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ANECDOTE

DIU's Evolution

Doug Beck recounts the history of DIU, highlighting its evolution from bridging Silicon Valley and the Pentagon.
Initial focus was on rapid prototyping with commercial tech, now scaling for strategic impact.

INSIGHT

Shifting Acquisition Models

Brian Schimpf discusses how the DoD's planned approach to tech acquisition clashes with the fast-paced commercial sector.
SpaceX exemplifies how commercial R&D can achieve what was previously thought impossible.

INSIGHT

Cost-Plus vs. Firm-Fixed-Price

Brian Schimpf explains the pitfalls of Cost-Plus contracts, which incentivize higher costs and longer project timelines.
He advocates for firm-fixed-price contracts to encourage risk-taking and cost efficiency.

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The last few decades have been a period of transition for defense. An increasing number of startups have begun to rival large defense primes, the industry has gradually become a calculus of both hardware and software, and exponential technologies have forced the DoD to rethink how it has traditionally done business.

These changing conditions were some of the inputs to resulting in the DIU – Defense Innovation Unit – starting in 2015 within the Department of Defense, focused on accelerating the adoption of technology.

In this episode recorded at a16z’s American Dynamism Summit in January, a16z General Partner Katherine Boyle is joined by the Director of the DIU, Doug Beck, plus two critical founders ushering in this new era of defense: Brian Schimpf, cofounder and CEO of Anduril and Brandon Tseng, cofounder of Shield AI.

So what does the next wave of defense innovation really look like? Let’s find out.

00:00 - The Future of Defense Innovation

03:30 - The Defense Innovation Unit (DIU)

05:45 - Adoption of Startup tech by the DoD

07:42 - Acquisition, Budgeting, and Contracting

13:17 - Traditional Primes vs Startups

14:25 - Cost-Plus Fixed Fee Contracts

20:11 - The Replicator Program

22:26 - The New Threat Environment

27:11 - Scale and Readiness for Modern Warfare

32:15 - Procurement Reform and Feasibility

39:30 - Success Metrics for Defense

Resources:

Learn more about AD Summit 2024: www.a16z.com/adsummit

Watch Brian’s stage talk at AD Summit 2024: https://a16z.com/securing-americas-future-how-technology-companies-and-washington-are-building-a-safer-world/

Watch all of the stage talks at AD Summit 2024: https://www.youtube.com/playlist?list=PLM4u6XbiXf5pAKmk1AeZ9964KGScf4lHM

Find Katherine on Twitter: https://twitter.com/KTmBoyle

Find Brandon and Shield AI on Twitter: https://twitter.com/shieldaitech

Find Brian on Twitter: https://twitter.com/schimpfbrian

Find Doug and the DIU on Twitter: https://twitter.com/diu_x

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Please note that the content here is for informational purposes only; should NOT be taken as legal, business, tax, or investment advice or be used to evaluate any investment or security; and is not directed at any investors or potential investors in any a16z fund. a16z and its affiliates may maintain investments in the companies discussed. For more details please see a16z.com/disclosures.