Emil Michael: The Department of War Is Moving Faster Than Silicon Valley on AI | The a16z Show

[00:02] build-up in history. We're trending towards artificial general intelligence, a substrate, a layer, something that will touch everything. But, we're way behind in AI at the Department. >> CTO for the Department of War. How do

[00:15] are? >> When I took the role, we had 14 critical priority areas. We got them down to six, and they were the places where I thought we had the greatest opportunity for change and for growth and impact. There

[00:30] has been an incredibly public discussion about commercial AI models being used in the Pentagon. What has changed in this latest discussion? I had a holy cow moment because there were things well beyond what you've been hearing in the

[00:44] beyond what you've been hearing in the press in the last couple weeks. I know um every week is very busy for you, but it feels like this past week

[00:58] for you. So, thanks for Thanks for joining us. >> My pleasure. Good to be here. Um look, we're going to talk about uh Anthropic AI and defense, but I think we want to talk first a little bit about you, how

[01:13] you got into this seat. This is not your first uh tour of duty in government. You have decided to be a public servant uh before and for a long time. You know, for for half this room that comes from the technology side, they know you as an

[01:26] incredibly accomplished Silicon Valley executive, highly sought after, very successful. You know, let's start with, you know, what pulled you into public service? Um how did it start? And And why Why do it? And why take on this role

[01:39] now? Um Networks, we had the speech recognition software, we sold to Microsoft in '07. I applied to this uh White House fellowship program, which was super

[01:55] cool. Colin Powell had done it, uh uh Chairman of Joint Chiefs of Staff, uh It was just a cool program and it was a year non-partisan program. And I got selected, which was awesome,

[02:08] was the Secretary of Defense at the time. So, I got to spend time in Afghanistan, Iraq, Pakistan. I got a passion for And I said, "Someday I'll come back when I'm ready uh to to really go." And then

[02:23] then President Trump got elected and I was like, "Wow, this this is a moment where this you know, you have a disruptor at the top." He chose Secretary Esper as and that meant all the problems I'd seen, you know, there'd

[02:36] be a clearer way to solve them. And you could see by the pace we're moving at, the executive orders, critical minerals, new tech, uh new entrants, the pace is incredible um relative to what it was before. So, I'm excited to be there.

[02:50] Awesome. Well, why don't you talk to us uh a little bit about that? You have uh that the Department of War cannot operate at peacetime speed. founders, you can be a wartime CEO or a peacetime CEO. Uh what is what does

[03:05] peacetime speed mean? What is the problem with it? And uh and what does what does winning look like? What does what does moving with urgency look like? Well, you know, peacetime speed started after the Cold War was over at

[03:18] the Department of War. And uh I guess we we there was some there supper where the the leaders at the Pentagon said to industry, "Hey, there's not going to be a lot more buying of weapon systems or

[03:32] innovation. So, you you all should consolidate and slow down sort of your your growth basically and become dividend payers and stock backers." Um and that lasted for a long time and then the industry consolidated down to

[03:47] four or five primes. So, then we're faced with the biggest military buildup faced with the biggest military buildup in history in China starting in the mid 2000s like 2010. And we didn't catch up. So all of a

[04:03] sudden we've outsourced a lot of our key domestic production on many different Whether it's critical minerals, batteries, chain stuff and then you look up and you're like holy cow, we've got a lot of

[04:18] you're like holy cow, we've got a lot of catching up to do. So wartime speed is ensuring that we're redomesticating the critical things we need for national And we are moving out on on that. We have

[04:33] exquisite capabilities. We have a lead in so many areas, but we have to make sure that we're self-reliant in key areas and so we're we're running as hard as we can on that. You know, it was amazing to me.

[04:46] We work with a company called Skydio and they were they were sanctioned by China and you know, we usually hear stories about how companies are you know, doing business here, but it actually if you're a company that's an important

[04:59] and you can no longer buy motors or batteries or other really key things that primarily come from China, it stinks. And if those products make it into the defense procurement cycle and we can't get them anymore, it's a huge

[05:12] huge problem. So you know, we we've learned in in our practice that it's not just the defense industrial base, but also all those pre-cursors. So talk to us a little bit about as you stepped into the role, you are a CTO for

[05:25] the Department of War. How do you how do you prioritize? How do you take stock of figure out? I mean, you know, if you read the news, it feels like there's an endless list of things that we need to catch up on.

[05:37] Well, I I when I took the role in May, I was sworn in. but did the inventory like any new leader would do and we had 14 critical leader would do and we had 14 critical priority areas in in this role. And my

[05:52] predecessors had 10, and then someone added four, so there were 14, and they hadn't changed in in nearly a decade. So, I get to look at them and say, critical?" And by the way, who can remember 14 things when you're trying to

[06:04] motivate a workforce? And what is an integrated network systems of systems? You know, they were they were sort of techno babble. So, I said, "Well, let's study and say what's really important." And

[06:18] we we got them down to six, and they were the places where I thought we had the the greatest opportunity for change and for growth and impact on our combat and for growth and impact on our combat power and for our industrial base. And

[06:30] that was a starting point. And applied AI was number one. So, then we moved the the chief digital and AI office into into my group, and we were able to run extremely fast with that, cuz we're way behind in AI at the

[06:45] department. And we know it's it's penetrating the rest of the world so dramatically, so quickly. Um and and our adversaries are also using it for for uh lots of different purposes, because they have less trust

[07:00] in their command and control, so they want to use computers to sort of eliminate human decision-making. We want to enhance human decision-making. Um so, that's been a priority, and we've kind of in 90 days,

[07:13] I think we've had 1.2 million of the 3 million people at the department use some form of AI when that was that number was 80,000 before I started. >> Yeah. Um let's talk a little bit more about why it's important to have

[07:26] advanced AI capabilities. You know, maybe some people would say, "Well, we've been really good at, you know, being being a world power without all this AI capability." Why why is it important? You know, can't we just focus

[07:38] >> [laughter] >> Um well, you know, AI can help make missiles if it help you solve physical physics problems, material science problems, aerodynamics problems, um, or opportunities. But, we split up the AI

[07:52] >> [snorts] >> efforts in the three areas, like big organization would do for efficiency purposes. And, uh, that's just normal like goodness. Everyone's happier when

[08:06] you could do mundane tasks faster. And then, intelligence purposes, which is, you know, we collect an enormous amount of intelligence. We have a a huge repositories of data at the department that's sitting there siloed unused.

[08:19] Imagine decades of satellite imagery that you could use to train a model and get insights and then use that to do anomaly detections. You could find out analyst and you increase their throughput by a thousand.

[08:34] Um, and then for warfighting, you know, warfighting they talk about is like, big part of it is logistics, how do you plan logistics and find assets and do war gaming and, um, plan operations and, uh, do simulations

[08:48] and so on. So, there's a lot of really important use cases that we could we could benefit from. Yeah, I think we we, uh, you know, we we are the their ideas all the time and because

[09:01] companies that say, "Look, we're going to really, you know, we're going to save 15% of the Pentagon's fuel budget through logistics by using AI. We're troops and the equipment and the vehicles in the most efficient way in a

[09:14] all amazing Totally. amazing incredible use cases. Um, so look, in the in the last week, there has been an incredibly public discussion about commercial AI models being used in the Pentagon, including

[09:27] Anthropic, uh, being used inside the department. What, you know, going to really be in in old software days before even SaaS, people would just buy software and then the customer would use it however they want. What What has

[09:41] changed in this latest discussion? What What has come up? What are the issues? have been following along, so we should I think it's safe just in there's a baseline understanding. Um but what what have become the key issues and why why

[09:55] did they come up now? Well, they came up now because as I started to look at the uh contracts that had been written during the last had been written during the last administration for the use of AI,

[10:09] I had a whole holy cow moment because there were things not well beyond what last couple weeks. Things like you couldn't move a satellite. You couldn't plan, you know, uh an operation. Couldn't plan

[10:23] it, not use AI to execute it if it would potentially lead to a kinetic strike or something. Do- dozens of restrictions and yet this this these AI sort of models were baked into some of the most sensitive and

[10:37] important places in the US military where we do exercise combat power. Central Command now, that's sort of uh area of responsibilities Iran or in, you know, Indo-Pacom whose area of responsibilities China or Southcom which

[10:52] s- uh Venezuela in South America, were all using this model and there was no two vendors. There was a vendor lock two vendors. There was a vendor lock situation with terms that in theory, if

[11:04] the model was designed to turn off when you violated the terms, could just stop in the middle of an operation and put lives at risk. So, that was the one moment I was like, "Okay, we have to fix this and clean this up while we're

[11:17] deploying this in the department." So, that raised all these these issues and then second, after the Maduro raid, one of the the primary vendor for this had raised the question, senior exec, about whether their

[11:30] raid, which is one of the most successful op military military operations of our lifetime. Like truly an incredible operation. And that sort OF SENDS YEAH.

[11:44] >> IT'S BEEN A BAD FEW MONTHS FOR THE ENEMIES OF AMERICA. It has been. And I got to meet the the guys who did that, the lead helicopter was a truly outstanding American. I mean, he he was shot and and kept his

[11:59] cool, didn't tell anyone he was shot so that the first landing team could land. And uh it didn't freak it out and it could have blown whole operations. So the courage was was incredible. And when when a company says to you,

[12:11] "Hey, was our software used there cuz we're not sure we'd like that." Chill goes up your spine. It's like you you're at a coffee shop and some school yesterday playing kickball." And you're like, "Who Who are you?" You

[12:24] know, "What?" Um So that set off a series of events of "Whoa, are we We single-threaded on a vendor who's concerned about how we're successful military raid and the terms of service do not comport with the

[12:39] future world. We've got to get other partners in here and we've got to move. Um and if you if you think about AI as as like what we're trending toward AGI, artificial general intelligence, a substrate, a layer, something that'll

[12:53] touched everything or the telecommunications network touched Then to tell the users of that substrate of technology, "You can't use it for legal things, things that have come through the

[13:09] democratic system, laws passed by Congress, executed by executive branch." In the military, which is the most sensitive part of the US government cuz we're our job is to be the strength department to protect Americans,

[13:22] you do have a moment of truth there like we've had, which is this this technology, if we're loose using it lawfully, the substrate, um, has to be our choice. It can't the software, the soul someone's soul of

[13:37] their model, their constitution, which is not the US Constitution, can't be dictating our command and control environment and telling generals and war fighters what to do and not do. That's right. So,

[13:51] shared a bunch of backstory and information that, found, I think, by reading the news and lot of people in this room could have could have guessed, but it's nice to

[14:04] hear that part of the impetus for this and the catalyst for this discussion was originally about making sure that you have ways to use this capability that and, you know, you mentioned that, you know, we have a constitution and they

[14:19] that a company even has a constitution. There's not that many companies, I think, that have their own >> Corporate values, yes. Constitution, no. for sure. I don't I don't know how many have a a term that they say this is our

[14:32] um, especially when there's, you know, often a revolving door of executives at companies. Like, you know, who knows what they'll think tomorrow. Um, so talk a little bit about the role of democratic oversight, elected

[14:45] leadership, uh, that that sort of guides the process that we have in this capabilities, uh, for national security, for defense. [clears throat] to um, American civil liberties, there's a

[15:00] very like, you know, robust debate like, you know, robust debate historically, especially after 9/11 and, um, Foreign Intelligence Surveillance Act, the National Security Act of 1947.

[15:13] All these acts where the government has tried to balance civil liberties, and the good news has been like robust debate on it. And and maybe those those laws and rules haven't been updated yet, maybe they should be.

[15:26] Um but if we don't trust that process and we're like, well, the laws are behind the tech, so I'm going to make a decision that impacts 3 million people in the department and then 350 million people

[15:39] you don't get to do that right if you believe in the system. If you [snorts] don't believe in the system as as as imperfect as it is, then then what do you believe in? Right? Then you're not you you're taking upon

[15:54] yourself to to kind of be God and that's not that's not something that I want even though I'm a small government free market person, you still have to have the government has to have a monopoly on violence to protect a country. America

[16:10] is just is an idea, but it's also a nation and it can only protect it to protect the people if we have the best tools um and use them lawfully and and Congress is responsible for dictating that law and we're responsible for

[16:24] writing regulations on that law. And you know, we've got 40-page internal directives that have been there for years about autonomous weaponry and seeing what's happening there. And then we're looking at the Chinese

[16:37] stealing American models, taking the guardrails off and potentially using a my arm tied behind my back against the same model that has been stolen by by the adversary? It's sort of you

[16:51] where it's hard to have anyone make sense of that question. Yeah, absolutely. I think the the point about our adversaries is debate. They're they're full steam ahead. Um how do we

[17:07] Was there anything more you want to share about where we are today in the AI where where are we today in the AI debate discussion um and we like is this long road ahead? I I think there's still there's still

[17:21] Um and it's interesting you have four companies that you could call frontier companies. And then you have the sort of Major League Baseball roster of researchers

[17:33] like a thousand who they're trading amongst themselves who if you ask the leaders of these companies are so incredibly valuable that it's a it's a very strange dynamic. Four companies a thousand sort of researchers who who

[17:47] thousand sort of researchers who who everyone feels are vital. And how do you we have enough um companies engaged with us so that I'm not never single threaded again which is a a terrible gift that the last

[18:02] administration handed us. It's we have multiple avenues who are interested in national security who are patriotic very much like the 2018 um Maven where where Google didn't want to bid on the on the contract. Now

[18:15] You know, and so I'd hope some of the newer companies would learn from what didn't want to serve the government cuz they had employee mob issues. But now best partners. We we see uh the Google Project Maven

[18:30] moment in 2018 in many ways as a galvanizing moment to actually wake up a lot of founders and builders and say hey wait a minute. I I actually do want the and best capabilities. I do want to build. I mean that you know, I would say

[18:44] if you fast forward that gave rise to the American dynamism movement. We we provided a a landing zone for a lot of those founders who said wait, I don't I don't agree with the protesters at Google. I I want first responders and uh

[18:56] our country to have the best technique technologies and capabilities. And uh me these questions I always remind them look like Project Maven was used to make sure that we didn't leave anyone behind in Afghanistan. Like that's literally

[19:10] what the technology that was used and this is public and uh like do you not did you want to leave someone behind like what how what's the alternative? Um and so I think that this will also be a galvanizing moment. I certainly hope it

[19:24] will be for a whole another set of founders that are excited to to support serve the government. Um let's talk about the Department of War structurally inside things that need to change. Uh you know, in order to make

[19:39] capabilities, best technology and you get them out in the field. You know, we about it directly because you probably can't even answer but you know, we saw like new new technology, new capabilities. But what what is changing

[19:54] culturally and structurally inside the Department of War? You know, obviously understand technology like you. Um but but what is changing to actually modernize? Uh well, Secretary Hix says we're we're

[20:10] on a unstoppable battle against the the bureaucracy. That's not the people, it's the bureaucracy that's built up over decades that prevents new companies with new

[20:23] technologies from getting their concept or their product deployed in the department. So, what I'm trying to do um with the various tools I have is trying to create normal contracting processes, normal requirements before

[20:38] requirements. So, for example, we used to do things like here's the thousand requirements in our RFP. A vendor would would sort of fill it out and say yes even if it was physically impossible, the physics didn't work. Right. Then we

[20:53] put them on a cost plus contract and they're like oh, that didn't work out and change order change order leads to another 3 years of development, another couple billion dollars. So, we're trying to move it to simple

[21:05] requirements. I need a missile that goes this far in this environment with this payload, etc. You industry come and meet with your ideas on how to do it. And then you got to find a way to do it. Yeah. And

[21:17] and and we'll buy it and I firm fixed price. And if you make a better margin is sort of the Elon model and why he was so successful at SpaceX. Um well, then everyone wins, right? They'll be and the venture community

[21:30] model, right? You bet on winners. Some are not everyone's going to win, Some are not everyone's going to win, but uh cost plus endless um endless development cycles doesn't work. Um

[21:43] and so we need faster development cycles, risk sharing with industry, clear demand signals, simpler ways to do business. And that those are the kind of bureaucracies that like every day I'm

[21:56] >> That's good. You're like regulatory Moses. That's good. Uh so we we we that that to me is one of the most important things that's changed and it actually gets the founders fired up to build. What what is it that uh

[22:11] that the companies can do better to work with the government, to work with you? Freedom tour, you've visited a bunch of startups. Um but what is it that you need now that the government is saying we're we're ready to do business, we're

[22:24] we want the best capabilities? What do What do you need from the companies and Um so we need companies to uh and this is this is just the one thing the primes have an advantage on is

[22:39] not the inventiveness. Um it's the the production and manufacturing ability to scale what they do with with what

[22:51] they've initially built. And I think the opportunity for startups is to take the the great technologies and concepts, build up their muscle on how do you build a factory and produce these things at scale and do the quality

[23:05] testing and all that thing all that kind of stuff. And so you do have to borrow from the old world to do that effectively so you're not just reinventing the whole thing. Um and I think that's the next stage and

[23:17] cross that chasm here in the next one to two years where they've demonstrated or the right people and they figured it out. And then that hope it hopefully

[23:29] >> [snorts] >> And then venture capital dollars will continue to coalesce around this this marketplace which I would desperately want. So um I think that's the thing to consider and there are the other thing

[23:44] if I'm on your side if I'm on the on the new entrant side department of 3 million people say man this is great I love it. I love you man. I love your love your product. And but money talks. So are they buying it? Are

[23:58] they testing it? Are they doing those Are they Are they actually push pulling you through the process because that's the best signal of your Are you actually successful because the culture there again is to never say no.

[24:13] And I've tried to move it to faster yeses faster no's so that if you're a startup and I'm I felt this pain as a startup guy when you don't really know told no so that I can either move on to the next partner

[24:26] something and and that's what we're trying to move the the culture to and there. Awesome. Well we're very appreciative of those efforts and uh it's good for the taxpayer. Last question as we wrap up here you know you

[24:41] have uh you have a good life you're very successful. This is not a 9-to-5 job I assume you have a family takes you away from your family. Um what what would you say to people that are in the startup and tech side of the world who are

[24:55] with the government, supporting the government, um and look at you as an they would like to to follow and steps they would like to follow. Well, I I think, you know, everyone can most patriots figure out a way to give

[25:11] back. This was my way, which is language was Arabic, I moved to this country, I get to Silicon Valley, I've seen some of the and been able to participate and build some of the most

[25:23] interesting companies around and it was the right time in my life to say like, to serve my country." I want to have my kids see it so that they can see that our system doesn't come for free. People

[25:37] there have to have builders, people who care, people who sacrifice to do it. Um not to mention all the war fighters who sign up for the jobs that they they sign up. This is the way I could sign up. And

[25:49] and, you know, put making sure that they feel that. For me, that's incredibly motivating. And ever hope everyone else who's in that the startup world finds business, but after in the right point in your career and all that because we

[26:03] need more people to do that because we used to have government service as an honored profession. The Manhattan Project, their best scientists. Now, industry is has a lot of opportunities to really exercise your brain and your

[26:16] you know, in those ways, but we can't forget that we need patriots to kind of and again. Well, thank you. We are so appreciative of the work you're doing We know you are extraordinarily busy. Thank you.