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

1. 0:00 – 2:50

   Introduction

   1. EMEmil Michael0:00

      We're faced with the biggest military buildup in history. We're trending toward artificial general intelligence, a substrate, a layer, something that'll touch everything. But we're way behind in AI at the department.

   2. DUDavid Ulevitch0:12

      You are a CTO for the Department of War. How do you take stock of where those priorities are?

   3. EMEmil Michael0:17

      When I took the role, we had fourteen 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.

   4. DUDavid Ulevitch0:30

      There has been an incredibly public discussion about commercial AI models being used in the Pentagon. What has changed in this latest discussion?

   5. EMEmil Michael0:39

      I had a holy cow moment because there were things well beyond what you've been hearing in the press in the last couple weeks.

   6. DUDavid Ulevitch0:53

      All right. Thank you for being with us. I know, um, every week is very busy for you, but it feels like this past week has probably been the most publicly busy for you. So thanks for, thanks for joining us.

   7. EMEmil Michael1:03

      My pleasure. Good to be here.

   8. DUDavid Ulevitch1:04

      Um, look, we're gonna talk about, uh, anthropic AI and defense, but I think we wanna talk first a little bit about you, how 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 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 now?

   9. EMEmil Michael1:41

      Um, you know, after my first company, Tellme Networks, we had this speech recognition software we sold to Microsoft in '07. I kinda needed a break from tech, so I applied to this, uh, White House fellowship program, which was super cool. Colin Powell had done it. Uh, uh, Chairman of Joint Chiefs of Staff, uh, Admiral Kane-- General Kane had done it. It was just a cool program. It was a year nonpartisan program. And I got selected, which was awesome, and I got assigned to Robert Gates, who was the Secretary of Defense at the time. So I got to spend time in Afghanistan, Iraq, Pani-- Pakistan. I got a passion for, for that world, and it was so new to me. And I said, "Someday I'll come back when I'm ready, uh, to, to really go." And then, then President Trump got elected, and I was like, "Wow, this, this is a moment where dis-- you know, you have a disruptor at the top." He chose Secretary Hegseth, and that meant all the problems I'd seen, you know, there'd 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

2. 2:50 – 5:20

   Why Wartime Speed Matters

   1. EMEmil Michael2:50

      be there.

   2. DUDavid Ulevitch2:50

      Awesome. Well, why don't you talk to us, uh, a little bit about that. You have been outspoken, uh, that the Department of War cannot operate at peacetime speed. Um, this is kinda like how we tell founders, you can be a wartime CEO or a peacetime CEO. Uh, what is-- what does peacetime speed mean? What is the problem with it? And, uh, and what, what does winning look like? What does, what does moving with urgency look like?

   3. EMEmil Michael3:13

      Well, p-you know, peacetime speed started after the Cold War was over at the Department of War. And, uh, I guess we, we-- there was some, there was some famous event called The Last Supper, where the, the leaders of the Pentagon said to industry, "Hey, there's not gonna be a lot more buying of weapon systems or innovation, so y'all, y'all should consolidate and slow down sort of your, your growth, basically, and become dividend payers and stock buybackers." Um, and that lasted for a long time, and then the industry consolidated down to four or five primes. So then we're faced with the biggest military buildup in history in China starting in the mid, uh, two-two thousands, uh, two thousand and ten, and we didn't catch up. So all of a sudden, we've outsourced a lot of our key, uh, domestic production on many different areas, whether it's critical minerals, batteries, um, some of the supply-- a lot of the supply chain stuff. And then you look up, and you're like, "Ho-holy cow, we've got a lot of catching up to do." So wartime speed is, um, ensuring that we're re-domesticating the critical things we need for national strength and, um, we are moving out on, on that. We have 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.

   4. DUDavid Ulevitch4:43

      You know, it was amazing to me, uh, we work with a company called Skydio, and they were, they were sanctioned by China. And, uh, you know, we usually hear stories about how companies are, you know, sanctioned by the United States from doing business here. But actually, if you're a company that's an important company and you get sanctioned by China, 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, uh, defense procurement cycle, and we can't get them anymore, it's a huge, huge problem. So it, it-- you know, we, we've learned in, in our practice that it's not just the defense industrial base, but also all those precursors.

3. 5:20 – 7:22

   Cutting Priorities to Six

   1. EMEmil Michael5:20

      Got it. Mm-hmm.

   2. DUDavid Ulevitch5:21

      Um, so talk to us a little bit about as you stepped into the role, you are a CTO for the Department of War. How do, how do you prioritize? How do you take stock of where those priorities are? How do you figure out? I mean, you know, if you read the news, it feels like there's an endless list of things that, uh, we need to catch up on.

   3. EMEmil Michael5:37

      Well, I, I-- when I took the role in May, I was sworn in, uh, like, did the inventory like any new leader would do, and we had fourteen critical priority areas in, in this role. And my predecessors had ten, and then someone added four, so there were fourteen, and they hadn't changed in, in nearly a decade. So I get to look at them and say, "Well, okay, well, why are these critical? And by the way, who can remember fourteen things when you're trying to 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, um-Uh, 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 power and for our industrial base. And that was the starting point. And applied AI was number one. So then, um, we moved the, the chief digital and AI office into, into my group, and we were able to run extremely fast with that because we're way behind in AI at the department. And we know it's, uh, it's penetrating the rest of the world so dramatically, so quickly, um, and, and our adversaries were also using it for, for, uh, lots of different purposes because they have less trust in their command and control. So they wanna use computers to sort of eliminate human decision-making. We wanna enhance human decision-making. Um, so that's been a priority, and we've kind of in ninety days, I think we've had one point two million of the three million people at the department use some form of AI. When that was-

   4. DUDavid Ulevitch7:18

      Incredible.

   5. EMEmil Michael7:18

      That number was eighty thousand before I started.

   6. DUDavid Ulevitch7:21

      Incredible.

4. 7:22 – 9:17

   Applied AI Across Defense

   1. EMEmil Michael7:22

      Yeah.

   2. DUDavid Ulevitch7:22

      Um, let's talk a little bit more about why it's important to have 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 on, like, making missiles and stuff?

   3. EMEmil Michael7:40

      [laughs] Um, well, y-you know, AI can help make missiles if it helps you solve phys-physics problems, material science problems, aerodynamics problems, um, or opportunities. But w-we split up the AI sort of, um, efforts into three areas, like enterprise corporate use cases, like any big organization would do for efficiency purposes, and, uh, that's just normal, like, goodness. Everyone's happier when you could do mundane tasks faster. And then intelligence purposes, which is, you know, we collect an enormous amount of intelligence. We have a h- a huge repositories of data at the department that's sitting there siloed, unused. Imagine decades of satellite imagery that you could use to train a model and get insights and then use that to do anomaly detection, so you could find out what's happening. So you, you take a human analyst, and you increase their throughput by a thousand. Um, and then for warfighting. You know, warfighting they talk about is like, uh, big part of it is logistics. How do you plan logistics and find assets and do wargaming and, um, plan operations and, uh, do simulations, and so on. So there's a lot of really important use cases that we could, we could benefit from.

   4. DUDavid Ulevitch8:54

      Yeah, I think we, we, uh, you know, we, we are the beneficiaries of startups that pitch us their ideas all the time, and because it's American dynamism, we hear about companies that say, "Look, we're gonna really, you know, we're gonna save fifteen percent of the Pentagon's fuel budget through logistics by using AI. We're gonna figure out how do you move the troops and the equipment and the vehicles in the most efficient way in a contested environment." It's like these are all amazing-

   5. EMEmil Michael9:16

      Totally.

   6. DUDavid Ulevitch9:16

      Amazing, incredible

5. 9:17 – 14:39

   Commercial Models and Lock-In

   1. DUDavid Ulevitch9:17

      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 Anthropic, uh, being used inside the department. What-- You know, in, in, in the old software days, and I'm gonna really be in the old software days before even SaaS, people would just buy software, and then the customer would use it however they want. What, what has changed in this latest discussion? What, what has come up? What are the issues? Um, I assume most people in this room have been following along, so we should-- I think it's safe to assume there's a baseline understanding. Um, but what, what have, what have become the key issues, and why, why did they come up now?

   2. EMEmil Michael9:58

      Well, they came up now because as I started to look at the, uh, contracts that had been written during the last administration for the use of AI, I had a hol-holy cow moment because there were things not well beyond what you've been hearing in the press in the last couple weeks. Things like you couldn't move a satellite, you couldn't plan, you know, uh, an operation, couldn't plan it, not use AI to execute it-

   3. DUDavid Ulevitch10:25

      Right

   4. EMEmil Michael10:25

      ... if it would potentially lead to a kinetic strike or something. Dun-dozens of restrictions, and yet this, this, these AI sort of models were baked into some of the most sensitive and 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, INDOPACOM whose area of responsibility is China or SOUTHCOM, which is, uh, uh, Venezuela and South America, were all using this model, and there was no two vendors. It was a vendor lock situation with terms that, in theory, if 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 deploying this in the department." So that raised all these, these issues. And then second, after the Maduro raid, one of the, the, the primary vendor for this had raised a question, senior exec, about whether their software was used during the Maduro raid, which is one of the most successful op-- military oper- military operations of our lifetime. Like truly-

   5. DUDavid Ulevitch11:37

      Incredible

   6. EMEmil Michael11:37

      ... an incredible operation. And that sort of [sighs]

   7. DUDavid Ulevitch11:42

      Yeah. [audience clapping] It's been a bad few months for the enemies of America.

   8. EMEmil Michael11:48

      It has been. And I got to meet the, the guys who did that. The lead helicopter, uh, guy who got the Medal of Honor was a truly outstanding American. I mean, he, he was shot and, and kept his cool, didn't tell anyone he was shot so that the first landing team could land and, uh-

   9. DUDavid Ulevitch12:04

      Incredible

   10. EMEmil Michael12:04

       ... 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, "Hey, was our software used there? 'Cause 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 stranger's like, "Hey, I saw your kid at school yesterday playing kickball." And you're like, "Who, who are you?"

   11. DUDavid Ulevitch12:24

       Right.

   12. EMEmil Michael12:24

       You know, "What?" Um, so that set off a series of events of, whoa, are we single-threaded on a vendor who's concerned about how we're using their software after the most successful military raid, and the terms of service do not comport with the 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 touch everything, like the internet touched everything, or the telecommunications network touched everything. Then to tell the users of that substrate of technology, you can't use it for legal things, things that Cong- have come through the democratic system, laws passed by Congress, executed by the executive branch. In the military, which is the most sensitive part of the US government, 'cause we're pr- our job is to be the strength department, to protect Americans, you do have a moment of truth there, like we've had, which is this u- this technology, if we're loose using it lawfully, this substrate, um, has to be our choice. It can't-- The software, the soul, someone's soul of their model, their constitution, which is not the US Constitution, can't be dictating our command and control environment and telling generals and warfighters what to do and not do.

   13. DUDavid Ulevitch13:50

       That's right. So it, it, it, first of all, I think you just shared a bunch of backstory and information that, um, you know, has not been readily, uh, found, I think, by reading the news and following along. Although probably a lot of people in this room could have, could have guessed, but it's nice to hear that part of the impetus for this and the catalyst for this discussion w- was originally about making sure that you have ways to use this capability that fit in with our democratic norms. And, and, you know, you mentioned that, you know, we have a constitution, and they have a constitution. It's kind of crazy that a company even has a constitution. There's not that many companies, I think, that have their own constitution. [chuckles]

   14. EMEmil Michael14:25

       Corporate values, yes. Constitution, no.

   15. DUDavid Ulevitch14:26

       Right. Corporate culture, corporate values, for sure. I don't, I don't know how many have a, a term that they say, "This is our constitution," um, especially when there's, you know, often a revolving door of executives at companies. Like, you know, who knows

6. 14:39 – 19:30

   Democratic Oversight and Guardrails

   1. DUDavid Ulevitch14:39

      what they'll think tomorrow. Um, so ta-talk a little bit about the role of democratic oversight, elected leadership, uh, that, that sort of guides the process that we have in this country, uh, for deploying AI capabilities, uh, for national security, for defense.

   2. EMEmil Michael14:55

      Yeah. So when it, when it comes to, um, American civil liberties, there's a very, like, robust debate historically, especially after nine eleven and, um, Foreign Intelligence Surveillance Act, the National Security Act nineteen forty-seven, all these acts where pe- uh, the government has tried to balance civil liberties, and the good news has been, like, a robust debate on it. And, and maybe those, those laws and rules haven't been updated yet, and maybe they should be. 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 three million people in the department and then three hundred and fifty million people in the country," you don't get to do that-

   3. DUDavid Ulevitch15:42

      Right

   4. EMEmil Michael15:42

      ... if you believe in the system. If you 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 it upon 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 its country. America 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 writing regulations on that law. And, you know, we've got forty-page internal directives that have been there for years about autonomous weaponry, and we're looking at Ukraine and Russia and seeing what's happening there. And then we're looking at the Chinese stealing American models, taking the guardrails off, and potentially using those against us. So am I gonna have my ha- my arm tied behind my back against the same model that has been stolen [chuckles] by, by the adversary?

   5. DUDavid Ulevitch16:51

      Sure.

   6. EMEmil Michael16:51

      It's sort of, you get into Orwellian sort of situations where it's hard to have anyone make sense of it and sort of be on the other side of that question.

   7. DUDavid Ulevitch16:58

      Yeah, ab-absolutely. I think the, the point about our adversaries is well made.

   8. EMEmil Michael17:01

      Yes.

   9. DUDavid Ulevitch17:01

      They are not having this debate. They are, they are full steam ahead. Um, how do we... W- was there anything more you want to share about where we are today in the AI-- wh-where, where are we today in the AI debate, discussion? Um, and w- and, like, is this put to bed, or are we, is there, is there a long road ahead?

   10. EMEmil Michael17:19

       I, I think there's still, there's still work to do. Um, and it's interesting, you have four companies that you could call frontier companies, and then you have this sort of Major League Baseball roster of researchers, 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, uh, everyone feels are vital, and how do you, how do we work with that dynamic where we have enough, um, companies engaged with us that I'm not, never single-threaded again, which is a, a, a terrible gift that the last administration handed us. So we have multiple avenues who are interested in national security, who are patriotic, very much like the two thousand eighteen, um, Maven, where, where Google didn't want to bid on the, on the contract. Now Google is a great partner.You know, and, and so I'd hope some of the newer companies would learn from what Google did, which is, you know, they didn't wanna serve the government 'cause they had employee mob issues, but now they're some of-- one of the government's best partners.

   11. DUDavid Ulevitch18:27

       We, we see, uh, the Google Project Maven moment in twenty eighteen 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 government to have the best technology and best capabilities. I do wanna build." I mean, that, you know, I would say 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 that said, "Wait, I don't, I don't agree with the protesters at Google. I, I want first responders and, uh, you know, the men and women who defend our country to have the best techni-technologies and capabilities." And, uh, I always-- whenever, whenever someone asks 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 w-w-- the technology that was used, and it was, it was public, and, uh, like, do you not-- did you wanna leave someone behind? Like, what, how-- what's the alternative? Um, and so I think that, uh, this will also be a galvanizing moment. I certainly hope it will be for a whole nother set of founders that are excited to, to support their country and, and the people that

7. 19:30 – 22:08

   Fixing Procurement Bureaucracy

   1. DUDavid Ulevitch19:30

      serve the government. Um, let's talk about the Department of War, um, structurally inside, things that need to change. Uh, you know, in order to make sure that you have the best capabilities, best technology, and you get them out in the field, you know, we saw on the news, I won't, I won't ask you about it directly because you probably can't even answer, but, you know, we saw photos on the news of what th-- looks like new, new technology, new capabilities. But what, what is changing culturally and structurally inside the Department of War? You know, obviously it starts with bringing in people that understand technology like you. Um, but, but what is changing to actually enable the Department of War to modernize?

   2. EMEmil Michael20:07

      [lip smack] Uh, well, Secretary Hegseth says we're, we're on a unstoppable battle against the bure- the bureaucracy. That's not the people, it's the bureaucracy that's built up over decades that prevents new companies with new 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 perform-- uh, requirements. So, for example, we used to do things like, here's the thousand requirements in our RFP. A vendor would s- would sort of fill it out and say, "Yes, yes, yes, yes, yes," even if it was physically impossible, the physics didn't work.

   3. DUDavid Ulevitch20:52

      Right.

   4. EMEmil Michael20:53

      Then we 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 three years of development, another couple billion dollars. So we're trying to move it to simple requirements. I need a missile that goes this far in this environment with this payload, etc. You, industry, come to me with your ideas on how to do it, and then you get a five-year approach.

   5. DUDavid Ulevitch21:15

      We'll pay, we'll pay for it.

   6. EMEmil Michael21:16

      Yeah.

   7. DUDavid Ulevitch21:17

      Yeah.

   8. EMEmil Michael21:17

      And, and, and we'll buy it at a firm fixed price. And if you make a better margin because you're able to economize, this is sort of the Elon model and why he was so successful at SpaceX, um, well, then everyone wins, right? There'll be... A-and the venture community sort of is very comfortable with that model, right? You bet on winners. Some are-- not everyone's gonna win, but, uh, cost plus endless, um, endless development cycles doesn't work. Um, 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 moving the debris out to try to make it happen.

   9. DUDavid Ulevitch21:58

      That's good. You're like regulatory Moses.

   10. EMEmil Michael22:00

       [laughs]

   11. DUDavid Ulevitch22:00

       That's good. Um, 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

8. 22:08 – 26:48

   What Startups Must Deliver

   1. DUDavid Ulevitch22:08

      up to build. What, what is it that, uh, that the companies can do better to work with the government, to work with you? You know, you've done this Arsenal of 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 gonna make it easier to do business. We want the best capabilities." What do, what do you need from the companies and the startups?

   2. EMEmil Michael22:30

      Um, so we need companies to, uh... This is, this is just tr- the one thing the primes have an advantage on is not the inventiveness. Um, it's the pro-- the, the production and manufacturing ability to scale what they do with, with what 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 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 you're gonna see companies start to cross that chasm here in the next one to two years, where they've demonstrated or they've foot faulted, but then they've hired the right people and they figured it out. And then that hope-hopefully encourages a lot of other companies like, "This can be done." And then venture capital dollars will continue to coalesce around this, this marketplace, which I desperately want. So, um, I think that's the thing to consider. And there are... The other thing, if I'm on your side, if I'm on the, on the new entrant side, you could always find someone in the department, uh, three million people say, "Man, this is great. I love it. I love you, man. I love your, I love your product." [laughs] Uh, but money talks, so are they buying it? Are they testing it? Are they doing those-- Are they te-- Are they actually push it, pulling you through the process? 'Cause that's the best signal of you-- are you actually successful? Because the culture there again is to never say no. And I've tried to move it to faster yeses, faster nos, so that if you're a startup, and I'm-- I've felt this pain as a startup guy, when you don't really know if you're getting a deal, I'd rather be told no so that I can either move on to the next partnerReadjust my product strategy, do something, and, and that's what we're trying to move the, the culture to, and what I tell the, the young founders out there.

   3. DUDavid Ulevitch24:34

      Awesome. Well, we're very appreciative of those efforts-

   4. EMEmil Michael24:36

      Mm-hmm

   5. DUDavid Ulevitch24:36

      ... and, uh, it's good for the taxpayer. Last question as we wrap up here. You know, you have, uh, you have a good life. You're very successful. This is not a nine-to-five 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 thinking about spending time working with the government, supporting the government, um, and look at you as an inspiration and somebody who-whose shoes they would like to, to follow, and steps they would like to follow?

   6. EMEmil Michael25:06

      Well, I th-I think, you know, everyone can... Most patriots figure out a way to give back, and there's lots of ways to give back. This was my way, which is, you know, I'm an immigrant. My first 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 those interesting companies around, and it was the right time in my life to say, like, "Okay, well, this is the way I'm gonna serve my country." I wanted to have my kids see it so that they can see that this, you know... Our system doesn't come for free. People, they have to have builders, people who care, people who sacrifice to do it. Um, not to mention all the warfighters who sign up for the jobs that they, they sign up. This is the way I could sign up. And, and, you know, put-- making sure that they feel that, for me, that's incredibly motivating, and every-- hope everyone else who's in the, the startup world finds their own moment to do that, if not in business, but after, in the right point in your career and all that, because we need more people to do that because we used to have government service as an honored profession. The Manhattan Project, their best scientists. Now industries has a lot of opportunities to really exercise your brain and your, you know, in those ways. But we can't forget that we need patriots to kinda come do these kinds of things every now and again.

   7. DUDavid Ulevitch26:22

      Well, thank you. We are so appreciative of the work you're doing, and thank you for being with us today. We know you are extraordinarily busy.

   8. EMEmil Michael26:27

      Thank you. [audience applauding] [outro music]

Episode duration: 26:48