AI transcript
0:00:05 We are in this really very challenging, very dangerous geopolitical moment.
0:00:07 Perhaps the most challenging and dangerous of the last 50 years.
0:00:10 Autonomy will play a critical role.
0:00:13 It’s redefining the way conflicts have been fought in the past.
0:00:17 Ultimately, it’ll be the faster, not the bigger, that will win.
0:00:21 It just takes too long for the government to buy things today and take advantage of things.
0:00:26 75, 80 years ago, a new technology platform could last 30, 40, 50 years.
0:00:29 And if it took you three to five more years to get there, you could still be ahead.
0:00:30 That no longer works.
0:00:34 The U.S. has to have a response that cannot be driven solely by the government,
0:00:38 solely by the existing defense base, solely by the Valley.
0:00:39 It’s really going to take everybody.
0:00:40 It’s life and death.
0:00:44 Today, you’ll hear a conversation from Horacio Rozanski,
0:00:47 CEO of Booz Allen Hamilton and Gary Steele,
0:00:53 CEO of Shield AI, about how technology and partnerships are reshaping America’s defense strategy.
0:00:57 We’ll discuss lessons from Ukraine, the future of autonomous systems,
0:01:01 and why the U.S. needs to build faster, not just bigger, to maintain its edge.
0:01:02 Let’s get into it.
0:01:06 Gary Haracio, welcome to the podcast.
0:01:08 Thank you.
0:01:08 Thank you.
0:01:11 Because of Booz and Shield and your relevant positions,
0:01:14 you guys have a front row seat into what’s happening in defense.
0:01:16 I want to get to the big questions right away.
0:01:21 If China were to take Taiwan, or to try to, are we ready to defend it?
0:01:23 What does being ready to defend it even mean?
0:01:24 I think the answer is yes.
0:01:30 Indo-PACOM has been thinking about being ready to fight tonight for several years now,
0:01:32 and the nation is ready.
0:01:36 The political will under this administration is there.
0:01:40 We’re recording today on Columbus Day, so happy Columbus Day.
0:01:46 But it’s also the day where the president is in Israel and Egypt announcing a major peace agreement,
0:01:50 which was driven by American power, American superiority,
0:01:55 and our ability to project that into a peace-through-strength framework.
0:01:58 And I think the same is true in the Pacific.
0:02:01 I don’t think that the country is interested in conflict.
0:02:03 I think the nation is interested in peace,
0:02:07 but I think it’s certainly prepared and able to do what it needs to do.
0:02:13 And what I’m super encouraged by is the ability to bring the world’s best technology to the fight.
0:02:17 And I think one of the reasons that we have a unique opportunity
0:02:20 is to take that advanced technology and apply it to deterrence
0:02:24 and to winning any conflict that we might get involved in.
0:02:26 And I think we’re in a unique position today.
0:02:28 And I don’t know that I would have said that three or four years ago,
0:02:29 but I actually feel that way today.
0:02:30 Absolutely right.
0:02:35 Your guys’ work on autonomy would be central to any effort in the Pacific.
0:02:39 And I think we’ve all watched the various conflicts that have gone on around the globe.
0:02:42 I think we’re much smarter as a result of that,
0:02:44 and we’re going to apply all that knowledge and innovation
0:02:47 to solving the problems that our military has.
0:02:50 And I think we can save a lot of lives as a result of that.
0:02:53 Yeah, the other thing I would say is I’ve spent time in Taiwan,
0:02:55 and they are getting ready.
0:02:56 They’re moving fast.
0:02:57 They’re very determined.
0:02:58 They’re very focused.
0:03:03 And they have a very futuristic view of how to apply technology
0:03:04 in the right way to get the right outcomes.
0:03:05 100%.
0:03:09 Let’s get deeper on this for people who are not as familiar into the specifics.
0:03:11 Say more about what being ready means.
0:03:12 You guys think we’re ready.
0:03:13 Some people think we’re not ready.
0:03:15 What is the disagreement about, actually?
0:03:17 And one thing you disagree is three or four years ago,
0:03:18 you might not have said that we’re ready,
0:03:20 or it might not have been as confident.
0:03:21 What changed?
0:03:22 So maybe let’s get deeper.
0:03:23 What does it mean to be ready?
0:03:25 Like, what are the actual specifics of that?
0:03:27 And then sort of how has that evolved over time?
0:03:30 Readiness is a combination of political will,
0:03:33 capacity and capability in the region.
0:03:35 And as Gary said, having the right technology position,
0:03:38 the right place to do what it needs to do.
0:03:39 Everybody’s been looking.
0:03:42 The thing that struck me the most when I was last in Taiwan
0:03:48 is how closely they had looked at both Ukraine and Israel
0:03:50 to understand what they needed to do.
0:03:52 One of the things, for example, that they’ve done
0:03:55 that I think is encouraging is they’ve extended
0:03:58 the length of the draft of their military service
0:04:00 so that people can be properly trained.
0:04:01 And that’s actually very helpful.
0:04:04 And in addition, they’ve passed a budget
0:04:05 and they’re actually spending
0:04:07 against the key technology priorities
0:04:08 that matter the most.
0:04:12 And the same thing is true for Indopaycom
0:04:13 and for the U.S.
0:04:16 There’s a lot of capability now deployed
0:04:18 from space to undersea
0:04:22 that could make a decisive difference.
0:04:25 And of course, that is going to accelerate over time.
0:04:29 I think that this administration is really bringing new tools,
0:04:31 new technology to bear, whether it’s in C2,
0:04:36 whether it’s in autonomy, whether it’s in AI use more broadly,
0:04:39 that will enhance an already pretty awesome fighting force.
0:04:43 And the thing that I’ve seen change fundamentally
0:04:48 is the world shifted from a technology point of view.
0:04:49 The venture community shifted.
0:04:51 The opportunity shifted for entrepreneurs
0:04:54 to begin to fund innovation
0:04:59 that could be directed towards the defense of the U.S.
0:05:02 and to be used in circumstances like Taiwan.
0:05:05 And so as the world shifted,
0:05:07 the investments, the focus,
0:05:10 a lot of the work that had been done traditionally
0:05:12 for the commercial world
0:05:14 has gotten applied to defense.
0:05:17 And we’re seeing that innovation curve
0:05:19 and that innovation opportunity play out
0:05:21 as it relates to Taiwan.
0:05:23 And as Horatio was saying,
0:05:25 if you look at what happened in Ukraine,
0:05:26 everyone’s been watching what’s going on.
0:05:28 There’s been a lot of education
0:05:32 where you’ve seen a very big shift
0:05:33 in the way conflicts get fought.
0:05:35 And that’s educated the Taiwanese
0:05:37 on how to place investments
0:05:40 and think about innovation and technology
0:05:41 in a fundamentally different way.
0:05:42 Exactly right.
0:05:44 Let’s zoom out to just compare more broadly
0:05:46 U.S. and China
0:05:48 as it relates to sort of military readiness.
0:05:50 What are our weaknesses relative to theirs?
0:05:52 And what are some stuff that they do
0:05:53 that we don’t quite do yet
0:05:53 or can learn from?
0:05:56 I would say, obviously, in this context,
0:05:57 their primary strength is proximity.
0:05:58 Yeah.
0:06:01 And so we need to project power
0:06:03 where this is much easier for them
0:06:05 to do in this context.
0:06:07 And so our entire strategy
0:06:09 needs to be one of understanding
0:06:13 that fundamental asymmetry, if you will.
0:06:16 Our strength lies both geopolitically
0:06:18 in the fact that we have true allies
0:06:21 some partners that are going to fight with us.
0:06:24 Secondarily, that our armed forces
0:06:26 truly are second to none,
0:06:30 both in capacity, ability, and talent.
0:06:32 And third, as Gary is saying,
0:06:33 is the engine of progress
0:06:35 of the American economy
0:06:37 translated in this moment in technology
0:06:40 continues to give us an edge.
0:06:41 Now, you’re going to hear me talk
0:06:43 about speed all the time.
0:06:45 China is not standing still.
0:06:49 And so while we still have
0:06:50 a clear technological edge
0:06:52 on some of these fundamental technologies,
0:06:55 we need to continue to accelerate
0:06:56 the deployment, the use,
0:06:58 and the development of these technologies
0:07:00 in the real world
0:07:03 because they are accelerating themselves.
0:07:07 I think that’s the thing that the U.S. government
0:07:08 has to improve on.
0:07:10 The speed with which they adopt new technology,
0:07:12 the speed with which they consume
0:07:15 and participate in that innovation process
0:07:16 is going to be critical.
0:07:19 And there have been improvements.
0:07:20 It is getting better,
0:07:21 but we still have a long ways to go
0:07:23 to be able to take things
0:07:25 that are relatively new
0:07:27 and think creatively about
0:07:28 how do you get these things deployed
0:07:29 broadly across the military
0:07:31 to really empower them
0:07:32 to do what they need to do.
0:07:33 How should we think about
0:07:35 whether our defense industrial base
0:07:37 can sustain a prolonged
0:07:39 great power conflict with China?
0:07:41 And what else should we be doing
0:07:42 that we may not be doing
0:07:43 at the moment as well as we should?
0:07:44 The thing that has to happen
0:07:47 is we have to unlock speed
0:07:48 in the procurement process
0:07:48 through the government.
0:07:50 It just takes too long
0:07:52 for the government to buy things today
0:07:53 and take advantage of things.
0:07:56 And so if you can unlock
0:07:57 and break down some of those hurdles
0:08:00 and drive dollars more broadly
0:08:01 into the development
0:08:02 of these capabilities
0:08:05 that will create tremendous outcomes
0:08:05 for our military,
0:08:06 that has to happen
0:08:07 and it has to get better.
0:08:09 And what are the bottlenecks for that?
0:08:11 It’s really just the purchasing process
0:08:13 and the program process
0:08:14 that exists today.
0:08:17 And there’s been a very big focus
0:08:18 on how do you improve that
0:08:19 and accelerate that.
0:08:21 I think the great thing about it
0:08:23 is if some of these barriers
0:08:24 can be removed,
0:08:26 the government will get
0:08:27 much more value
0:08:29 from the dollar that they spent.
0:08:29 It’ll be good
0:08:31 for the American consumer.
0:08:34 There will be a lot more accountability
0:08:35 in the dollars that gets met.
0:08:35 Right.
0:08:37 I mean, just to back it up a moment
0:08:38 for people that don’t live
0:08:39 in this world,
0:08:40 the big issue is that
0:08:42 the entire procurement process
0:08:44 is built on minimizing risk.
0:08:47 Not minimizing cost,
0:08:49 not accelerating technology,
0:08:50 not moving fast,
0:08:51 is minimizing risk.
0:08:53 That actually was probably
0:08:54 the right posture
0:08:56 75, 80 years ago
0:08:58 where a new technology platform
0:09:00 could last 30, 40, 50 years
0:09:01 and you just had to get it right
0:09:02 and if it took you
0:09:03 three to five more years
0:09:03 to get there,
0:09:05 you could still be ahead.
0:09:06 That no longer works.
0:09:09 And so the new process
0:09:10 needs to do two things.
0:09:12 One, once it’s deployed
0:09:14 in the hands of a warfighter,
0:09:16 it needs to work.
0:09:17 It simply cannot fail
0:09:18 at that point.
0:09:20 But when you work
0:09:21 upstream of that,
0:09:22 the process has to offer
0:09:23 a lot more failure
0:09:24 because without failure
0:09:25 there’s no success.
0:09:25 Without failure
0:09:26 there’s no speed.
0:09:28 You try four things,
0:09:29 three don’t work,
0:09:30 one does.
0:09:31 You double down on that,
0:09:32 you try three more things.
0:09:34 And that process,
0:09:36 which is very common
0:09:36 to the Valley
0:09:37 and is very common
0:09:38 to a startup
0:09:39 and is very common
0:09:39 even to a company
0:09:40 like us
0:09:41 that works in technology,
0:09:43 is anathema
0:09:43 to the way
0:09:45 not the Department of War
0:09:46 wants to operate,
0:09:47 but it’s anathema
0:09:47 to the way
0:09:48 the laws
0:09:49 and the regulations
0:09:49 are written
0:09:50 for the Department of War
0:09:51 to operate.
0:09:53 And I think that
0:09:54 there’s very good lessons
0:09:55 that can be learned
0:09:57 from the Ukrainian conflict
0:09:58 where they are in
0:09:59 a fast path
0:10:00 of iteration
0:10:01 where they bring things
0:10:02 to the battlefield,
0:10:04 they either work
0:10:04 or they don’t work
0:10:05 and they iterate quickly.
0:10:07 And that path
0:10:07 of iteration
0:10:08 has actually been
0:10:09 the path
0:10:10 that has created
0:10:11 sustainment
0:10:11 and success for them.
0:10:13 And we have to learn
0:10:15 that same agile
0:10:16 iterative process
0:10:17 in the U.S. government
0:10:19 for the U.S. government
0:10:20 to deliver
0:10:21 the right capabilities
0:10:22 to the military
0:10:23 and not be shut out
0:10:24 of innovation.
0:10:25 Now, to be fair,
0:10:26 it is getting better.
0:10:27 It is getting better.
0:10:28 It’s better now
0:10:29 than it was five years ago.
0:10:30 It’s better than it was
0:10:30 10 years ago.
0:10:32 But we have a long ways to go.
0:10:34 Well, we need to move faster
0:10:35 because, again,
0:10:37 this is a competition
0:10:39 with a very well-funded
0:10:40 adversary
0:10:42 with, frankly,
0:10:43 a different even moral framework,
0:10:44 not just legal frameworks.
0:10:46 And so,
0:10:47 if we don’t move at speed,
0:10:48 eventually,
0:10:49 they’re going to catch up.
0:10:50 To that end,
0:10:52 how worried should we be
0:10:53 about supply chain vulnerabilities?
0:10:54 I think that’s in the news
0:10:55 right now, right?
0:10:55 I mean,
0:10:57 the entire conversation
0:10:58 about critical minerals,
0:11:00 we do need to be worried
0:11:01 about that.
0:11:02 A few years ago,
0:11:03 we were working
0:11:05 on a directed energy program
0:11:07 inside Booz Allen.
0:11:09 And I said,
0:11:09 this is great,
0:11:12 but I want you to prove to me
0:11:13 that it can be made
0:11:15 completely by things
0:11:16 that are either sourced
0:11:17 or procured in the U.S.
0:11:19 Or if it cannot be procured
0:11:20 in the U.S.,
0:11:21 it needs to be procured
0:11:22 by an ally
0:11:24 that is steadfast
0:11:25 and that we would not lose
0:11:26 in a conflict.
0:11:28 Ultimately,
0:11:28 the answer was
0:11:29 that could not be done.
0:11:32 And so now,
0:11:34 so to me,
0:11:35 this is the kind of issue
0:11:37 that needs to ultimately
0:11:38 get solved.
0:11:39 I do think we need
0:11:40 to be worried about it again.
0:11:42 There’s very strong efforts
0:11:44 underway right now
0:11:45 by the administration
0:11:47 across energy,
0:11:48 interior,
0:11:49 commerce,
0:11:51 defense,
0:11:51 and so forth
0:11:53 to try and address it.
0:11:54 But
0:11:56 right now,
0:11:56 it’s an issue.
0:11:58 and there’s a lot
0:11:59 of attention on this issue,
0:12:01 not just within the government,
0:12:02 but within the companies
0:12:02 that manufacture
0:12:03 and how they’re working
0:12:04 their own supply chains.
0:12:06 But it doesn’t change overnight.
0:12:08 That’s a long process.
0:12:10 And the positive thing
0:12:11 is there’s progress being made,
0:12:13 but it’s going to take some time.
0:12:15 I want to zoom out again.
0:12:16 Yeah, you mentioned Ukraine.
0:12:18 I want to zoom out
0:12:19 and ask first,
0:12:21 just how has that conflict
0:12:22 changed our understanding
0:12:23 of war
0:12:24 and what it takes
0:12:24 to be successful?
0:12:26 Yeah, I’ll start.
0:12:27 We’ve got
0:12:30 a couple dozen employees
0:12:31 deployed there
0:12:32 working alongside
0:12:33 the Ukrainians
0:12:34 to provide
0:12:35 high-value targets
0:12:37 against the Russians.
0:12:38 And
0:12:39 I can speak personally
0:12:40 for the experience
0:12:40 we’ve had.
0:12:41 We just get smarter
0:12:42 every day.
0:12:44 What product capabilities
0:12:45 we need,
0:12:46 it forces us
0:12:47 to find ways
0:12:48 to fix things overnight
0:12:49 if we need to
0:12:50 because it’s
0:12:51 life and death.
0:12:51 Like,
0:12:53 if we can make a difference
0:12:54 in the next 24 hours,
0:12:55 we’re going to do that.
0:12:56 And so I think
0:12:57 the number one
0:12:59 thing that we’ve seen
0:13:00 is the agility
0:13:01 that has been forced
0:13:02 onto
0:13:05 suppliers
0:13:06 supporting the military
0:13:07 and the ability
0:13:08 to change tactics
0:13:08 quickly.
0:13:10 And the simplest thing
0:13:11 that I would say
0:13:11 is that
0:13:13 we operate in a
0:13:14 GPS-denied,
0:13:16 comms-denied environment.
0:13:17 And so you’ve got
0:13:18 to have capabilities
0:13:19 that exist
0:13:20 in your products
0:13:20 that can operate
0:13:21 in that environment
0:13:22 because you literally
0:13:23 never have,
0:13:24 you never have comms.
0:13:25 That’s exactly right.
0:13:26 And that’s something
0:13:27 that is often lost.
0:13:28 And, you know,
0:13:29 if you look at
0:13:30 where Booz Allen
0:13:31 is playing
0:13:32 most effectively,
0:13:33 I’ll highlight
0:13:34 two areas.
0:13:34 One
0:13:35 is on,
0:13:36 at the edge.
0:13:37 We’re somewhat
0:13:38 unbeatable at the edge,
0:13:39 especially when it comes
0:13:39 to communications,
0:13:40 cyber,
0:13:42 and being able
0:13:43 to interoperate
0:13:44 across these
0:13:45 various technologies.
0:13:47 And that is something
0:13:49 that the Ukrainians
0:13:50 have had to do
0:13:51 on a shoestring.
0:13:53 But we,
0:13:54 as a nation,
0:13:55 have become
0:13:56 very good at
0:13:57 and we’re learning
0:13:58 how to iterate
0:13:59 faster
0:14:00 and how to,
0:14:01 they’ve gotten
0:14:01 very good
0:14:02 at incorporating
0:14:02 commercial technology
0:14:03 real-time
0:14:05 into what they’re doing
0:14:07 and iterating
0:14:08 it once it’s inside
0:14:09 the mission
0:14:09 as opposed to
0:14:10 trying to do
0:14:10 all of it
0:14:12 before it comes in.
0:14:13 The other area
0:14:14 that has been
0:14:14 fascinating,
0:14:16 to me at least,
0:14:17 is this concept
0:14:18 of open source
0:14:19 intelligence,
0:14:19 you know,
0:14:20 intelligence that
0:14:20 can be gathered
0:14:22 from people’s
0:14:23 cell phones,
0:14:25 commercial satellite,
0:14:27 social media feeds,
0:14:28 and the like.
0:14:30 In lots of cases,
0:14:31 we have found
0:14:32 that the OSINT
0:14:34 is as good
0:14:35 or perhaps
0:14:36 not quite as good
0:14:38 as what comes in
0:14:39 on the classified channels,
0:14:41 but it can get there
0:14:41 faster.
0:14:42 And again,
0:14:43 in a time
0:14:44 where speed
0:14:46 is of the essence,
0:14:47 that’s been a huge
0:14:49 mind shift
0:14:50 for a lot of people.
0:14:50 And I think,
0:14:52 stating the obvious,
0:14:53 but it plays out
0:14:54 every single day
0:14:55 and it played out
0:14:56 in Israeli conflict
0:14:56 as well,
0:14:58 is the importance
0:14:59 of autonomy
0:14:59 in drones.
0:15:01 And so this idea
0:15:03 that, you know,
0:15:04 you’re reducing
0:15:06 the risk of life
0:15:07 and that you’re
0:15:07 deploying these
0:15:08 autonomous systems,
0:15:09 whether they’re
0:15:10 low-cost attack drones
0:15:12 or surveillance drones,
0:15:13 whatever it might be,
0:15:13 that is having
0:15:14 a huge impact
0:15:16 on the outcomes
0:15:17 in that conflict.
0:15:18 And you see
0:15:19 the use by,
0:15:20 very effective use
0:15:21 by the Ukrainians,
0:15:21 you also see the effective
0:15:22 use by the Russians.
0:15:24 But it’s redefining
0:15:25 the way conflicts
0:15:26 have been fought
0:15:26 in the past.
0:15:27 And autonomy will play
0:15:28 a critical role
0:15:30 as we think about
0:15:30 broader conflicts
0:15:31 around the globe.
0:15:33 Can you share more
0:15:35 about that in terms of
0:15:37 describing in greater detail
0:15:38 what it used to be
0:15:41 before this development
0:15:42 in terms of,
0:15:42 you know,
0:15:43 what dictated,
0:15:43 you know,
0:15:44 which side would win
0:15:45 or what was most important
0:15:46 to get right.
0:15:47 And now in this
0:15:48 sort of post,
0:15:48 you know,
0:15:49 in other words,
0:15:50 entering sort of more
0:15:51 drone-focused wars,
0:15:52 what’s most important
0:15:54 and what changes there
0:15:54 in terms of
0:15:55 what’s needed to win?
0:15:57 Yeah, well,
0:15:58 in the past you had
0:16:00 the systems were always
0:16:01 human-man systems
0:16:02 putting human life
0:16:03 at risk every single day
0:16:04 for every aspect
0:16:05 of the conflict.
0:16:07 And today what you see
0:16:09 is a variety
0:16:11 of autonomous systems
0:16:12 or drones
0:16:14 that are playing
0:16:15 a very critical role.
0:16:16 Now,
0:16:17 it plays,
0:16:18 it pushes more
0:16:20 responsibility on technology
0:16:21 for technology
0:16:21 to work well,
0:16:23 to make these systems
0:16:24 operate in a way
0:16:25 to get the right
0:16:25 mission outcome.
0:16:27 But it’s taking the human
0:16:29 and putting the human
0:16:29 in a place
0:16:30 where they’re not
0:16:31 always at risk
0:16:32 and you’re not always
0:16:34 flying the most
0:16:36 expensive warfighters,
0:16:38 the most expensive systems,
0:16:40 and you’re doing it
0:16:41 in a more cost-effective,
0:16:43 mission-capable way.
0:16:45 Is America ready
0:16:47 for sort of this future
0:16:47 of warfare,
0:16:48 sort of, you know,
0:16:50 see more about
0:16:50 our current position here
0:16:51 and, you know,
0:16:52 what’s needed to get forward?
0:16:53 The answer,
0:16:54 short form,
0:16:54 the answer is yes.
0:16:56 We, I think,
0:16:57 our military understands
0:16:58 that we’re not fighting
0:16:59 across five domains
0:17:00 simultaneously.
0:17:01 It’s no longer just
0:17:02 air, land, and sea.
0:17:04 It’s also cyberspace
0:17:05 and actual space.
0:17:06 And they have to be able
0:17:07 to operate
0:17:08 in an integrated way
0:17:10 across all of those domains
0:17:11 that, in many cases,
0:17:12 you have to be able
0:17:13 to operate autonomously
0:17:15 on all of those domains,
0:17:16 especially the further
0:17:16 that you get
0:17:18 from the human,
0:17:20 the more the autonomy systems
0:17:22 have to be highly accurate
0:17:23 and highly reliable.
0:17:24 Think about space.
0:17:26 The latency issue alone,
0:17:28 if somebody is shooting
0:17:30 at your satellite,
0:17:31 there’s not enough time
0:17:32 for the satellite
0:17:33 to start a whole
0:17:34 communication chain
0:17:35 about what do I do.
0:17:36 The satellite is going
0:17:37 to have to react
0:17:38 real time.
0:17:41 And so all of these
0:17:42 things are understood.
0:17:43 All of these things
0:17:44 are in train.
0:17:47 And there’s significant
0:17:47 investment
0:17:49 against all of them.
0:17:49 You know,
0:17:51 we’ve been very lucky
0:17:51 at Booz Allen.
0:17:52 We’re at the forefront
0:17:53 of cyber.
0:17:54 We’re the largest provider
0:17:55 of AI to the federal government
0:17:56 and we’re builders.
0:17:57 So we’re building
0:17:59 a number of
0:18:01 edge systems
0:18:03 that
0:18:04 either are
0:18:05 soldier-born
0:18:06 communication platforms
0:18:07 or we build
0:18:08 an amazing technology.
0:18:09 this is why we have
0:18:10 this partnership
0:18:10 we can build
0:18:11 on Hivemind
0:18:12 and the incredible
0:18:13 things that Shield
0:18:14 is doing
0:18:16 to accelerate
0:18:17 this future.
0:18:18 Are we ready?
0:18:19 Yes.
0:18:20 But it’s a future
0:18:20 that is changing
0:18:21 by the day.
0:18:22 Let’s actually go
0:18:23 deeper into both
0:18:24 your respective companies.
0:18:25 Booz, of course,
0:18:26 one of the biggest
0:18:27 contractors for the government,
0:18:27 been around
0:18:28 over 100 years.
0:18:30 Why don’t you give
0:18:30 a little bit of the history
0:18:31 of how it became
0:18:32 one of the biggest
0:18:33 partners for the government
0:18:34 and where your focus
0:18:35 is now?
0:18:36 So, you know,
0:18:37 people get surprised
0:18:38 when I tell the story
0:18:39 of who we are now.
0:18:40 So if you look
0:18:41 at Booz Allen now,
0:18:42 we are in the business
0:18:44 of injecting technology
0:18:45 into the most
0:18:47 critical national security
0:18:48 challenges
0:18:49 of our country.
0:18:50 Like I said,
0:18:51 number one in AI,
0:18:52 number one in cyber,
0:18:55 and very strong
0:18:57 set of edge technologies,
0:18:58 just to name a few.
0:19:00 About 75% of what we do
0:19:01 is national security.
0:19:03 So then the question is,
0:19:04 how did you get there?
0:19:04 Because certainly
0:19:05 you weren’t any of those
0:19:06 things 100 years ago.
0:19:09 And if I were to describe
0:19:10 to you the story
0:19:11 of the last 25 years
0:19:12 really quickly,
0:19:13 I would say we’ve been
0:19:14 through three phases.
0:19:16 The first one was
0:19:17 to become very
0:19:18 mission-centric.
0:19:19 We are obsessed
0:19:20 with success
0:19:21 in the mission.
0:19:22 This was born
0:19:23 out of our work
0:19:24 in cyber early on,
0:19:26 our counterterrorism work
0:19:27 post-9-11,
0:19:29 and our counter-ID work
0:19:30 in Iraq and Afghanistan.
0:19:31 It really put us
0:19:32 at the center
0:19:33 of these missions.
0:19:35 The second thing
0:19:35 that happened
0:19:36 is once we were there,
0:19:37 we realized
0:19:38 the power of technology
0:19:39 to transform
0:19:40 these missions real-time
0:19:41 and make ourselves
0:19:41 much more effective,
0:19:43 which is why
0:19:44 we got into AI
0:19:45 in 2017
0:19:46 when people
0:19:46 were really talking
0:19:47 about it,
0:19:48 into autonomy
0:19:50 earlier than most,
0:19:52 into C2 systems
0:19:53 that operate
0:19:54 at the edge
0:19:55 and that embed
0:19:57 all sorts of artificial intelligence
0:19:58 into it
0:19:59 from the waveform
0:20:00 to the way they operate.
0:20:03 And then the third thing
0:20:04 has been
0:20:06 this speed-centricity.
0:20:07 I’m obsessed with speed.
0:20:09 I think that ultimately
0:20:11 it’ll be the faster,
0:20:11 not the bigger,
0:20:12 that we’ll win.
0:20:14 And I believe that
0:20:15 for the country,
0:20:15 I believe that
0:20:16 for our company,
0:20:17 which is why
0:20:18 we’re forming
0:20:19 these amazing partnerships
0:20:20 because we don’t
0:20:21 want to reinvent the wheel.
0:20:22 We want to work
0:20:24 on top of the best technology
0:20:25 out there
0:20:26 to extend it,
0:20:27 to help it be more successful,
0:20:28 to integrate it
0:20:29 with things that we’re building.
0:20:30 And that’s exactly
0:20:31 what our two companies
0:20:32 are doing as we speak.
0:20:33 And to them,
0:20:34 why don’t you give
0:20:35 a description
0:20:37 of the history of Shield
0:20:38 and how it got into autonomy
0:20:39 and where you’re focused now
0:20:40 and then let’s get
0:20:40 into the partnership.
0:20:41 You bet.
0:20:43 So Shield
0:20:44 is a 10-year-old company.
0:20:45 We focus on next-generation
0:20:46 autonomous systems.
0:20:48 We have two product lines today.
0:20:51 We have a software product line
0:20:52 that delivers
0:20:53 a software development kit
0:20:54 for autonomy developers
0:20:55 to be able to
0:20:59 extend the core platform
0:21:00 to make a variety
0:21:01 of things fly.
0:21:02 And one of the things
0:21:02 that has really
0:21:03 differentiated us
0:21:04 is our time to flight.
0:21:05 We can get something
0:21:05 up and running
0:21:07 in a very short period of time.
0:21:09 We started in air,
0:21:10 but we are now
0:21:11 doing work in maritime
0:21:13 and will move cross-domain
0:21:15 with that broad platform.
0:21:17 And then we also have
0:21:18 an aircraft product line.
0:21:19 Today we offer
0:21:20 a Group 3 drone
0:21:21 primarily used
0:21:21 for surveillance
0:21:22 and targeting.
0:21:24 And it’s unique
0:21:24 in that it’s vertical
0:21:25 takeoff and landing.
0:21:27 It allows us to be deployed
0:21:29 in a lot of complex situations
0:21:31 that traditional runway-based
0:21:33 Group 3 drones have not.
0:21:34 And we’re continuing
0:21:35 to invest broadly
0:21:36 in next-generation aircraft.
0:21:37 And you’ll hear more
0:21:38 about that from us
0:21:39 in the coming weeks
0:21:42 as we release new products
0:21:44 in that particular area.
0:21:45 One of the things
0:21:46 that’s been really exciting
0:21:47 about the relationship
0:21:48 with Booz Allen
0:21:49 is being able
0:21:52 to take that software SDK
0:21:53 that we offer
0:21:55 and work collaboratively
0:21:56 to deliver great mission outcomes
0:21:58 for mutual customers.
0:22:01 And our focus is
0:22:02 how do we help
0:22:03 organizations
0:22:04 extend the platform
0:22:05 to fly whatever
0:22:05 they want to fly.
0:22:07 And Booz has been
0:22:10 an incredible partner
0:22:11 in delivering
0:22:12 those kinds of outcomes.
0:22:12 And as we look
0:22:13 around the globe,
0:22:14 one of the things
0:22:15 we hear in the international
0:22:15 markets in particular
0:22:17 is the need and desire
0:22:18 to have sovereign autonomy.
0:22:21 So take that core platform
0:22:22 but then extend it
0:22:25 into the specific aircraft,
0:22:27 weapons systems, etc.
0:22:28 that a particular country
0:22:29 may want.
0:22:30 And they want to be able
0:22:31 to do it their own way
0:22:32 and not have it be,
0:22:35 it just needs to be
0:22:36 unique to them.
0:22:37 And that’s what’s been
0:22:38 a big differentiator
0:22:40 for S.H.I.E.L.D.
0:22:41 and it really creates
0:22:42 this mutual opportunity
0:22:43 between S.H.I.E.L.D.
0:22:43 and Booz Allen.
0:22:45 That’s very awesome.
0:22:46 You’ve talked about
0:22:48 this all-of-nation approach.
0:22:49 Why don’t you discuss
0:22:51 what that means
0:22:52 and how companies
0:22:52 should get involved?
0:22:54 I feel very strongly
0:22:55 that we are in
0:22:57 this unique,
0:22:58 really very challenging,
0:22:59 very dangerous
0:23:01 geopolitical moment.
0:23:03 Perhaps the most challenging
0:23:03 and dangerous
0:23:04 of the last 50 years.
0:23:06 With the rise of China,
0:23:08 with what Russia is doing,
0:23:08 you know,
0:23:09 Iran is now
0:23:10 somewhat diminished
0:23:12 but, you know,
0:23:12 hopefully forever
0:23:13 but who knows.
0:23:14 But for now.
0:23:18 And North Korea
0:23:18 is always lurking
0:23:20 and there’s other
0:23:21 actors around the world
0:23:23 and the challenge
0:23:24 is not just
0:23:24 that they exist,
0:23:26 it’s that they are collaborating
0:23:27 and you see it
0:23:28 in the battlefield,
0:23:30 you see it in Ukraine,
0:23:32 you see it all over the place.
0:23:34 And so it is,
0:23:36 so the U.S.
0:23:37 has to have a response
0:23:38 that cannot be driven
0:23:39 solely by the government,
0:23:42 solely by the existing
0:23:44 defense base,
0:23:45 solely by the valley.
0:23:47 it’s really going to take
0:23:47 everybody.
0:23:49 And in my mind,
0:23:51 it operates in multiple levels
0:23:52 but at the core of it
0:23:53 is these unique partnerships
0:23:55 where companies
0:23:56 are looking for
0:23:57 points of commonality
0:23:58 to move faster
0:23:59 like we are
0:24:00 and are going
0:24:01 to market together.
0:24:03 And in some ways,
0:24:05 we have both pushed
0:24:06 the I believe button
0:24:07 that says,
0:24:08 if we do this together,
0:24:09 we can do great things.
0:24:10 We did not spend
0:24:11 months and years
0:24:12 writing business plans.
0:24:13 The business plan,
0:24:14 part of the business plan
0:24:15 just happened
0:24:16 as we were getting ready
0:24:18 for this podcast.
0:24:20 This is how we need
0:24:20 to iterate
0:24:21 on a basis
0:24:23 of both common purpose
0:24:24 and some trust.
0:24:26 And I think it’s really true
0:24:28 of these new waves
0:24:28 of technology
0:24:29 as you think about
0:24:30 physical AI
0:24:31 and leveraging
0:24:32 physical AI
0:24:35 around the globe.
0:24:37 I think it’s the partnership
0:24:38 that allows us
0:24:39 to drive that agility
0:24:40 and speed.
0:24:42 And by ourselves,
0:24:43 while we will go
0:24:44 and tackle it,
0:24:45 we can go so much faster
0:24:46 with an amazing partner
0:24:46 like Booz.
0:24:49 So expand that
0:24:50 to the entire ecosystem
0:24:50 and who else
0:24:51 can the two of us
0:24:52 bring into this conversation
0:24:53 that would add
0:24:54 a new effect,
0:24:55 a new behavior,
0:24:57 a new platform,
0:24:58 a new way of operating
0:25:00 that would accelerate
0:25:01 both of us
0:25:02 and give somebody else
0:25:03 the ability
0:25:05 to play.
0:25:06 I think these complex
0:25:07 partnerships,
0:25:09 I hate to use the word
0:25:09 ecosystem because
0:25:10 everybody uses it,
0:25:12 but it sort of is that.
0:25:13 It is that, yeah.
0:25:15 If we can get that
0:25:16 done correctly,
0:25:18 we bring the best
0:25:19 of the U.S. economy
0:25:20 into the national
0:25:21 security mission,
0:25:22 which is ultimately
0:25:23 how we won the
0:25:24 Second World War,
0:25:25 how we won the Cold War,
0:25:25 and how we’re going to
0:25:26 need to win this one.
0:25:28 Talk more about,
0:25:28 you mentioned AI,
0:25:29 talk more about
0:25:30 what it takes
0:25:31 to certify
0:25:32 trust and safety
0:25:33 as it relates
0:25:34 to AI
0:25:35 and lethal systems.
0:25:36 Is the bottleneck
0:25:37 the technology?
0:25:37 Is it policy?
0:25:39 Is it something else?
0:25:39 How should we think
0:25:40 about that?
0:25:41 I think it’s
0:25:41 an all of the above.
0:25:42 I mean,
0:25:44 I think the challenge
0:25:45 with AI
0:25:47 is that it is
0:25:47 both similar
0:25:48 and different
0:25:49 from what preceded it.
0:25:50 Right at one level
0:25:51 it’s an algorithm.
0:25:52 And we’ve been
0:25:53 using algorithms
0:25:54 since,
0:25:55 you know,
0:25:55 think about
0:25:57 the bow and arrow
0:25:58 in the forest
0:25:59 with the string
0:25:59 and somebody
0:26:00 walked through it
0:26:03 and the arrow
0:26:04 went,
0:26:05 that’s an algorithm,
0:26:06 right?
0:26:07 A landmine operates
0:26:07 on an algorithm
0:26:08 of a certain amount
0:26:08 of pressure
0:26:09 and so forth.
0:26:11 The difference is
0:26:11 these algorithms
0:26:12 are dynamic
0:26:14 and they’re learning,
0:26:14 they drift,
0:26:15 and they’re
0:26:16 incredibly powerful.
0:26:19 But at the end
0:26:19 of the day,
0:26:21 we can’t create
0:26:23 an entire new framework
0:26:24 to regulate them,
0:26:25 which is part of
0:26:26 what some countries
0:26:27 are trying to do
0:26:29 because it’s unnecessary
0:26:30 and it’ll slow us down
0:26:31 and it’ll sit on top
0:26:32 of the existing frameworks.
0:26:33 And at the other,
0:26:35 and you can’t just say,
0:26:35 well,
0:26:36 whatever,
0:26:37 we’ll figure it out later
0:26:39 because all of these technologies
0:26:40 do have a downside.
0:26:42 So there is a regulatory component
0:26:44 to all of that.
0:26:45 But I really think
0:26:46 the biggest challenge
0:26:48 is to learn
0:26:49 how to use
0:26:49 and evolve
0:26:50 these algorithms,
0:26:51 again,
0:26:52 like the Ukrainians
0:26:52 have done,
0:26:54 real time,
0:26:55 in the field,
0:26:57 in the fight,
0:26:58 to be willing
0:26:59 to have some level
0:27:00 of experimentation
0:27:01 upstream and up front
0:27:03 and then to prove
0:27:04 the thing enough
0:27:04 that you can actually
0:27:06 launch it much faster
0:27:08 than it’s been launched.
0:27:09 Right now,
0:27:10 it takes too many iterations
0:27:12 to get that done.
0:27:15 I think we can accelerate
0:27:16 the heck out of it.
0:27:16 Frankly,
0:27:17 technology itself
0:27:18 will be part of the solution.
0:27:19 You know,
0:27:20 we’re doing amazing things
0:27:22 with digital twins
0:27:23 that allow you
0:27:23 to both train
0:27:24 the algorithm
0:27:25 a lot faster.
0:27:26 This is work
0:27:26 we’re doing
0:27:27 with NVIDIA,
0:27:28 but also
0:27:29 allows you
0:27:29 to demonstrate
0:27:30 the validity
0:27:30 and the power
0:27:31 of the algorithm
0:27:33 a lot faster.
0:27:34 We can get there.
0:27:37 it’s not rocket science,
0:27:39 but it’s going to take
0:27:40 a conservative effort.
0:27:40 Yeah,
0:27:40 and I think
0:27:41 as a supplier
0:27:42 in this world,
0:27:43 the one thing
0:27:44 that we think
0:27:45 a lot about
0:27:45 that we think
0:27:46 is really important
0:27:47 is ensuring
0:27:49 that we’re doing
0:27:50 everything we can
0:27:51 from a cybersecurity
0:27:52 point of view
0:27:53 to give
0:27:54 our customers
0:27:55 the confidence
0:27:57 that there will
0:27:58 not be tampering,
0:27:59 there will not be
0:28:00 some form of intrusion.
0:28:02 and we think
0:28:04 very holistically
0:28:05 about that
0:28:06 and we own
0:28:07 and are responsible
0:28:08 for ensuring
0:28:09 that what we deliver
0:28:10 has the right
0:28:12 security controls
0:28:12 that are necessary
0:28:13 to give
0:28:16 our in-customers
0:28:17 the confidence
0:28:19 that we’re tamper-proof.
0:28:20 That’s an excellent point.
0:28:21 It’s super important.
0:28:22 One of the areas
0:28:22 where we’re collaborating
0:28:23 is Blue Zellen
0:28:23 is the leader
0:28:25 because of our cyber business
0:28:26 in adversarial AI,
0:28:27 which is both
0:28:28 how would you attack
0:28:28 an algorithm
0:28:29 and how would you defend it?
0:28:31 And we’re bringing
0:28:32 that knowledge
0:28:34 into this set of missions
0:28:35 because obviously
0:28:37 the most powerful thing
0:28:37 you could do
0:28:38 is mess with
0:28:38 somebody’s algorithm
0:28:41 and have the opportunity
0:28:42 to affect their autonomy
0:28:44 at the right time.
0:28:46 And S.H.I.E.L.D.
0:28:47 is at the leading edge
0:28:47 of understanding that
0:28:48 and the leading edge
0:28:49 of actually implementing
0:28:52 the right practices.
0:28:52 I think that
0:28:54 you didn’t ask this question,
0:28:55 but the biggest challenge,
0:28:55 to me,
0:28:57 the biggest risk
0:28:57 that we have
0:28:59 to this whole thing
0:29:02 is an event
0:29:05 that pushes everything back,
0:29:07 either a serious safety event,
0:29:08 a serious cyber event,
0:29:10 or something like that.
0:29:12 And so this is the balance
0:29:13 between it’s got to work,
0:29:15 but you can’t wait
0:29:16 until everything works perfect.
0:29:17 no, and I think the way
0:29:18 to think about this
0:29:19 different than
0:29:21 the military has thought
0:29:22 about it in the past
0:29:23 is you need to think about it
0:29:24 like traditional
0:29:25 commercial software.
0:29:27 So think about
0:29:28 updating a fleet
0:29:30 of autonomous jets
0:29:32 with a new software update
0:29:33 and how can you deliver
0:29:35 confidently
0:29:36 from a security
0:29:38 and resilience point of view
0:29:40 that that’s going
0:29:41 to work flawlessly.
0:29:42 And you think historically
0:29:43 you’ve built
0:29:44 a very big,
0:29:45 complex,
0:29:47 custom stack
0:29:47 of software
0:29:49 that’s different
0:29:50 than everybody else’s.
0:29:51 No, you want to be able
0:29:51 to leverage
0:29:52 the practices
0:29:54 of commercial software
0:29:56 to drive updates,
0:29:57 but to do that
0:29:58 you’ve got to ensure
0:30:00 that there’s no cyber issues.
0:30:02 We’ve spent time
0:30:02 talking about China,
0:30:04 we’ve talked about
0:30:04 Ukraine and Russia,
0:30:06 you briefly mentioned
0:30:07 sort of Iran
0:30:08 doesn’t seem like
0:30:09 as big of a threat
0:30:09 for now.
0:30:10 Why don’t you talk about
0:30:12 what’s happening right now
0:30:13 in the Middle East
0:30:14 in terms of
0:30:16 its significance
0:30:17 or how we should think
0:30:17 about sort of
0:30:18 that region
0:30:20 going forward
0:30:21 as we sort of evaluate
0:30:22 potential short
0:30:23 medium-term threats?
0:30:24 I can start.
0:30:25 I mean, I think
0:30:26 what’s happening right now
0:30:27 has the potential
0:30:28 for being historic
0:30:30 in terms of
0:30:30 the expansion
0:30:31 of the Abraham Accords
0:30:33 and creating
0:30:33 a different
0:30:35 model for cooperation
0:30:37 in the Middle East
0:30:38 and I think that
0:30:39 I’m hugely optimistic
0:30:40 about that.
0:30:42 I think none of us
0:30:42 are also
0:30:44 assuming that
0:30:44 this will be
0:30:46 perfectly peaceful
0:30:47 forever.
0:30:48 You have a number
0:30:49 of additional dynamics
0:30:50 like the
0:30:51 Shiite-Sunni dynamic
0:30:53 and, you know,
0:30:54 some of the tribal issues
0:30:56 in and between
0:30:57 some of those nations.
0:30:58 so the Middle East
0:30:59 is going to continue
0:31:00 to be an area
0:31:03 that is important
0:31:06 to participate in heavily,
0:31:07 to look out for,
0:31:08 and to build alliances
0:31:09 and partnerships,
0:31:10 many of which
0:31:11 are based, again,
0:31:13 on the deployment
0:31:14 of the right technologies.
0:31:16 and I won’t speak
0:31:17 for Gary,
0:31:17 but I think
0:31:18 one of the realities
0:31:20 is that
0:31:22 you can invest
0:31:23 more if the
0:31:24 customer base
0:31:25 is bigger,
0:31:26 if your PAM
0:31:27 is bigger,
0:31:29 and having the ability
0:31:30 to seamlessly
0:31:32 trust a set of allies
0:31:33 and partners
0:31:33 so you can sell
0:31:34 technology to
0:31:36 at the speed
0:31:37 at which it’s being developed,
0:31:37 which, again,
0:31:38 we talk about
0:31:39 the acquisition processes,
0:31:40 but the export control
0:31:40 processes
0:31:42 are just as low.
0:31:44 I think that is
0:31:46 part of the future.
0:31:47 And, again,
0:31:48 from our perspective,
0:31:49 our program,
0:31:50 Thunderdome,
0:31:51 which is essentially
0:31:52 the essential
0:31:53 zero-trust program
0:31:57 for all military networks
0:31:59 and going more broadly,
0:32:00 is a big part of it
0:32:01 because one of the challenges
0:32:04 in lots of these places
0:32:05 in terms of
0:32:06 sharing technology
0:32:08 is you have to trust
0:32:09 that their networks
0:32:10 are now so compromised,
0:32:11 that the moment
0:32:12 you give something
0:32:13 to an ally,
0:32:14 you simultaneously
0:32:15 gave it
0:32:17 to all of your adversaries.
0:32:19 And that’s a big part
0:32:20 of the work
0:32:20 that we’re doing.
0:32:21 And I think
0:32:22 if you look at
0:32:23 what’s happening
0:32:23 in the Middle East
0:32:25 from a positive point of view,
0:32:27 there’s very heavy adoption
0:32:27 of AI
0:32:28 across the Middle East
0:32:29 and a willingness
0:32:30 and desire
0:32:31 to take
0:32:32 a lot of that
0:32:33 advance of technology
0:32:34 and apply it
0:32:35 to their defense.
0:32:37 And so I think
0:32:37 there is an opportunity
0:32:40 as things
0:32:41 begin to stabilize there
0:32:43 to engage more directly
0:32:44 to get
0:32:46 the right aligned outcomes
0:32:47 across the Middle East.
0:32:47 And I think
0:32:49 AI can be frankly
0:32:50 a conduit
0:32:51 from an innovation standpoint
0:32:52 to deliver
0:32:53 different outcomes
0:32:54 and joint funding
0:32:56 for how these outcomes
0:32:56 can come about.
0:32:59 So I’m actually
0:33:00 reasonably optimistic
0:33:01 things change all the time
0:33:01 and I think
0:33:02 we need to be thoughtful
0:33:03 about that.
0:33:04 It’s also very difficult
0:33:05 for the U.S. government
0:33:06 to figure out
0:33:07 one day
0:33:07 are you going to get
0:33:08 an export approval
0:33:08 or not.
0:33:11 That’s always a challenge
0:33:12 but I think
0:33:13 the interest in AI,
0:33:14 the willingness
0:33:15 to fund it
0:33:15 and step up
0:33:17 from a dollars perspective,
0:33:17 I think
0:33:18 they can be
0:33:19 very interesting
0:33:20 from a partnership
0:33:21 perspective
0:33:22 with the U.S.
0:33:23 in funding
0:33:23 some of the things
0:33:24 that are critical for us.
0:33:25 For sure
0:33:26 and we need them
0:33:27 as allies and partners
0:33:28 on what’s really
0:33:30 a global geopolitical situation
0:33:31 where the Middle East
0:33:31 will play a role.
0:33:33 That makes sense.
0:33:34 I want to go back
0:33:35 to procurement reform.
0:33:36 You mentioned
0:33:37 it’s been getting better
0:33:39 the last five years
0:33:40 or the last 10 years.
0:33:41 What is the mechanism
0:33:43 by which it gets better?
0:33:44 And I asked to say
0:33:46 what needs to happen
0:33:47 for it to get better again
0:33:48 and we said
0:33:49 it needs to get better faster
0:33:52 or we have a long way to go.
0:33:54 For people who are not
0:33:54 in the weeds
0:33:55 of how this works,
0:33:56 why don’t you
0:33:57 dig us behind the curtain
0:33:57 a bit?
0:33:58 You know,
0:33:59 there’s two aspects
0:34:00 to this.
0:34:00 One,
0:34:02 as Gary is saying,
0:34:03 is cultural
0:34:04 and the practices
0:34:05 and the way people
0:34:06 think about
0:34:08 what they want to do
0:34:10 and whether they have
0:34:11 the authority to do it
0:34:12 in the way they want to do it.
0:34:14 And then the second part
0:34:14 of it is
0:34:15 the regulatory framework
0:34:17 that constrains
0:34:18 those authorities.
0:34:20 What’s been getting better
0:34:20 is I think
0:34:21 people are
0:34:23 exercising their authorities
0:34:25 with a little more
0:34:25 alacrity
0:34:28 and with more vision
0:34:29 and more foresight.
0:34:30 So even without
0:34:32 major regulatory change,
0:34:34 we have seen
0:34:35 over the last few years
0:34:38 greater desire
0:34:38 to buy,
0:34:40 not just buy commercial
0:34:41 products,
0:34:43 but buy commercial products
0:34:44 the way
0:34:46 a commercial buyer
0:34:46 buys them.
0:34:46 That’s right.
0:34:47 And that’s been
0:34:49 the big breakthrough
0:34:50 because you can take
0:34:51 a commercial product
0:34:53 and layer on top of it
0:34:54 all of the traditional
0:34:55 government requirements
0:34:56 and it stops being
0:34:57 a commercial product
0:34:58 and it slows down
0:35:00 just as much
0:35:02 as something custom
0:35:03 would slow down.
0:35:04 And that has really changed
0:35:05 over the last five years,
0:35:07 last 10 years
0:35:08 for the better.
0:35:10 The piece that is left
0:35:11 is the regulatory framework
0:35:13 is still
0:35:15 75 to 100 years old.
0:35:17 There’s an over-reliance,
0:35:17 for example,
0:35:19 on the idea of cost plus.
0:35:21 And cost plus
0:35:23 does have a role,
0:35:23 probably.
0:35:24 I don’t know that
0:35:24 you can buy
0:35:25 a nuclear submarine
0:35:26 any other way,
0:35:28 but it’s a much more
0:35:29 limited role
0:35:30 than the way
0:35:32 it’s been driven now.
0:35:35 I think the reliant,
0:35:36 the understanding
0:35:37 that outcome-based
0:35:38 is the way
0:35:39 of the future
0:35:40 that the government
0:35:41 should pay,
0:35:42 whether it’s in military
0:35:43 or in health
0:35:44 or in any area,
0:35:44 for an outcome
0:35:46 as opposed to
0:35:46 for a set of inputs
0:35:48 is both
0:35:48 fundamental
0:35:49 and transformative.
0:35:51 But then the second thing
0:35:52 is this is regulation
0:35:53 on top of regulation
0:35:54 on top of regulation.
0:35:58 And more things
0:35:59 keep getting added
0:36:01 and nothing is taken away.
0:36:02 And so there’s an effort
0:36:02 right now
0:36:03 which is highly promising
0:36:05 at moving away
0:36:06 from these regulatory frameworks
0:36:07 and almost start
0:36:08 with a blank sheet
0:36:10 because you almost
0:36:11 can’t fix it
0:36:12 from where it is.
0:36:12 it’s not about
0:36:13 can you reduce this thing
0:36:15 by 10% or 15%
0:36:16 is the only way
0:36:17 you’re going to reduce it
0:36:17 by 80%
0:36:19 while keeping the stuff
0:36:20 that is really important
0:36:21 is to start fresh.
0:36:23 And there’s a couple
0:36:23 of efforts,
0:36:24 one in the executive branch
0:36:27 and one in Congress
0:36:27 as we speak
0:36:29 that aim to do just that.
0:36:31 And if any of that
0:36:31 comes to fruition,
0:36:33 I think that would be
0:36:34 the key to unlocking
0:36:35 the next level of speed.
0:36:37 And you’re starting
0:36:38 to see some efforts
0:36:39 within the current administration
0:36:40 under the Department of War
0:36:41 where it’s really
0:36:42 rapid adoption
0:36:43 of technology
0:36:44 and it is
0:36:46 a path through
0:36:47 a faster path
0:36:47 of procurement
0:36:49 but then putting pressure
0:36:50 on the supplier
0:36:51 like a shield
0:36:52 to deliver
0:36:53 in a particular time frame.
0:36:55 And so there is this
0:36:56 positive movement
0:36:58 in the thinking
0:37:00 within Department of War
0:37:01 about how can you
0:37:03 drive a faster process
0:37:04 for new technologies
0:37:05 that are going to
0:37:06 fundamentally move
0:37:06 the needle.
0:37:07 And while that’s not
0:37:09 a broad reform
0:37:10 of all government procurement,
0:37:12 it’s green shoots
0:37:15 in changing the way
0:37:16 defense technology
0:37:17 has been procured
0:37:17 in the past.
0:37:18 I think it’s a really
0:37:18 good thing.
0:37:19 Yeah, ultimately
0:37:20 companies like ours
0:37:22 whether alone
0:37:22 or in partnership
0:37:23 want to get paid
0:37:24 for an outcome.
0:37:26 Give me a tool
0:37:27 whether it’s
0:37:28 an autonomous drone
0:37:30 or a communication system
0:37:32 or a cyber platform
0:37:33 or whatever it is
0:37:35 that accomplishes
0:37:36 this in this way
0:37:37 at this cost
0:37:37 in this time frame.
0:37:39 And you figure out
0:37:39 how to do it.
0:37:41 as opposed to
0:37:42 we’re going to tell you
0:37:42 exactly how to do it
0:37:43 we’re going to monitor
0:37:44 every single aspect of it
0:37:47 and we’re going to test you
0:37:48 every five minutes.
0:37:50 And if you can’t
0:37:51 deliver the outcome
0:37:52 you’re going to go out of business
0:37:53 and if you can
0:37:54 you’re going to grow.
0:37:55 And I think that
0:37:57 to people that
0:37:59 live in the commercial world
0:38:00 where I spent
0:38:01 a lot of my career
0:38:02 that’s obvious.
0:38:04 If you operate
0:38:05 in this context
0:38:07 again for good
0:38:08 and valid historical reasons
0:38:10 it just operates differently
0:38:11 and so
0:38:12 while people are being
0:38:13 held accountable
0:38:13 they’re not being
0:38:14 held accountable
0:38:15 but to the outcome
0:38:16 they’re being held accountable
0:38:18 to a set of interim steps.
0:38:19 that’s a good description.
0:38:20 I think that’s a good
0:38:20 place to wrap.
0:38:21 Gary Horacio
0:38:22 thank you so much
0:38:23 for coming to the podcast.
0:38:24 Thank you so much.
0:38:24 Appreciate it.
0:38:25 Nice meeting you.
0:38:25 Take care.
0:38:29 Thanks for listening to this episode
0:38:31 of the A16Z podcast.
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0:00:07 Perhaps the most challenging and dangerous of the last 50 years.
0:00:10 Autonomy will play a critical role.
0:00:13 It’s redefining the way conflicts have been fought in the past.
0:00:17 Ultimately, it’ll be the faster, not the bigger, that will win.
0:00:21 It just takes too long for the government to buy things today and take advantage of things.
0:00:26 75, 80 years ago, a new technology platform could last 30, 40, 50 years.
0:00:29 And if it took you three to five more years to get there, you could still be ahead.
0:00:30 That no longer works.
0:00:34 The U.S. has to have a response that cannot be driven solely by the government,
0:00:38 solely by the existing defense base, solely by the Valley.
0:00:39 It’s really going to take everybody.
0:00:40 It’s life and death.
0:00:44 Today, you’ll hear a conversation from Horacio Rozanski,
0:00:47 CEO of Booz Allen Hamilton and Gary Steele,
0:00:53 CEO of Shield AI, about how technology and partnerships are reshaping America’s defense strategy.
0:00:57 We’ll discuss lessons from Ukraine, the future of autonomous systems,
0:01:01 and why the U.S. needs to build faster, not just bigger, to maintain its edge.
0:01:02 Let’s get into it.
0:01:06 Gary Haracio, welcome to the podcast.
0:01:08 Thank you.
0:01:08 Thank you.
0:01:11 Because of Booz and Shield and your relevant positions,
0:01:14 you guys have a front row seat into what’s happening in defense.
0:01:16 I want to get to the big questions right away.
0:01:21 If China were to take Taiwan, or to try to, are we ready to defend it?
0:01:23 What does being ready to defend it even mean?
0:01:24 I think the answer is yes.
0:01:30 Indo-PACOM has been thinking about being ready to fight tonight for several years now,
0:01:32 and the nation is ready.
0:01:36 The political will under this administration is there.
0:01:40 We’re recording today on Columbus Day, so happy Columbus Day.
0:01:46 But it’s also the day where the president is in Israel and Egypt announcing a major peace agreement,
0:01:50 which was driven by American power, American superiority,
0:01:55 and our ability to project that into a peace-through-strength framework.
0:01:58 And I think the same is true in the Pacific.
0:02:01 I don’t think that the country is interested in conflict.
0:02:03 I think the nation is interested in peace,
0:02:07 but I think it’s certainly prepared and able to do what it needs to do.
0:02:13 And what I’m super encouraged by is the ability to bring the world’s best technology to the fight.
0:02:17 And I think one of the reasons that we have a unique opportunity
0:02:20 is to take that advanced technology and apply it to deterrence
0:02:24 and to winning any conflict that we might get involved in.
0:02:26 And I think we’re in a unique position today.
0:02:28 And I don’t know that I would have said that three or four years ago,
0:02:29 but I actually feel that way today.
0:02:30 Absolutely right.
0:02:35 Your guys’ work on autonomy would be central to any effort in the Pacific.
0:02:39 And I think we’ve all watched the various conflicts that have gone on around the globe.
0:02:42 I think we’re much smarter as a result of that,
0:02:44 and we’re going to apply all that knowledge and innovation
0:02:47 to solving the problems that our military has.
0:02:50 And I think we can save a lot of lives as a result of that.
0:02:53 Yeah, the other thing I would say is I’ve spent time in Taiwan,
0:02:55 and they are getting ready.
0:02:56 They’re moving fast.
0:02:57 They’re very determined.
0:02:58 They’re very focused.
0:03:03 And they have a very futuristic view of how to apply technology
0:03:04 in the right way to get the right outcomes.
0:03:05 100%.
0:03:09 Let’s get deeper on this for people who are not as familiar into the specifics.
0:03:11 Say more about what being ready means.
0:03:12 You guys think we’re ready.
0:03:13 Some people think we’re not ready.
0:03:15 What is the disagreement about, actually?
0:03:17 And one thing you disagree is three or four years ago,
0:03:18 you might not have said that we’re ready,
0:03:20 or it might not have been as confident.
0:03:21 What changed?
0:03:22 So maybe let’s get deeper.
0:03:23 What does it mean to be ready?
0:03:25 Like, what are the actual specifics of that?
0:03:27 And then sort of how has that evolved over time?
0:03:30 Readiness is a combination of political will,
0:03:33 capacity and capability in the region.
0:03:35 And as Gary said, having the right technology position,
0:03:38 the right place to do what it needs to do.
0:03:39 Everybody’s been looking.
0:03:42 The thing that struck me the most when I was last in Taiwan
0:03:48 is how closely they had looked at both Ukraine and Israel
0:03:50 to understand what they needed to do.
0:03:52 One of the things, for example, that they’ve done
0:03:55 that I think is encouraging is they’ve extended
0:03:58 the length of the draft of their military service
0:04:00 so that people can be properly trained.
0:04:01 And that’s actually very helpful.
0:04:04 And in addition, they’ve passed a budget
0:04:05 and they’re actually spending
0:04:07 against the key technology priorities
0:04:08 that matter the most.
0:04:12 And the same thing is true for Indopaycom
0:04:13 and for the U.S.
0:04:16 There’s a lot of capability now deployed
0:04:18 from space to undersea
0:04:22 that could make a decisive difference.
0:04:25 And of course, that is going to accelerate over time.
0:04:29 I think that this administration is really bringing new tools,
0:04:31 new technology to bear, whether it’s in C2,
0:04:36 whether it’s in autonomy, whether it’s in AI use more broadly,
0:04:39 that will enhance an already pretty awesome fighting force.
0:04:43 And the thing that I’ve seen change fundamentally
0:04:48 is the world shifted from a technology point of view.
0:04:49 The venture community shifted.
0:04:51 The opportunity shifted for entrepreneurs
0:04:54 to begin to fund innovation
0:04:59 that could be directed towards the defense of the U.S.
0:05:02 and to be used in circumstances like Taiwan.
0:05:05 And so as the world shifted,
0:05:07 the investments, the focus,
0:05:10 a lot of the work that had been done traditionally
0:05:12 for the commercial world
0:05:14 has gotten applied to defense.
0:05:17 And we’re seeing that innovation curve
0:05:19 and that innovation opportunity play out
0:05:21 as it relates to Taiwan.
0:05:23 And as Horatio was saying,
0:05:25 if you look at what happened in Ukraine,
0:05:26 everyone’s been watching what’s going on.
0:05:28 There’s been a lot of education
0:05:32 where you’ve seen a very big shift
0:05:33 in the way conflicts get fought.
0:05:35 And that’s educated the Taiwanese
0:05:37 on how to place investments
0:05:40 and think about innovation and technology
0:05:41 in a fundamentally different way.
0:05:42 Exactly right.
0:05:44 Let’s zoom out to just compare more broadly
0:05:46 U.S. and China
0:05:48 as it relates to sort of military readiness.
0:05:50 What are our weaknesses relative to theirs?
0:05:52 And what are some stuff that they do
0:05:53 that we don’t quite do yet
0:05:53 or can learn from?
0:05:56 I would say, obviously, in this context,
0:05:57 their primary strength is proximity.
0:05:58 Yeah.
0:06:01 And so we need to project power
0:06:03 where this is much easier for them
0:06:05 to do in this context.
0:06:07 And so our entire strategy
0:06:09 needs to be one of understanding
0:06:13 that fundamental asymmetry, if you will.
0:06:16 Our strength lies both geopolitically
0:06:18 in the fact that we have true allies
0:06:21 some partners that are going to fight with us.
0:06:24 Secondarily, that our armed forces
0:06:26 truly are second to none,
0:06:30 both in capacity, ability, and talent.
0:06:32 And third, as Gary is saying,
0:06:33 is the engine of progress
0:06:35 of the American economy
0:06:37 translated in this moment in technology
0:06:40 continues to give us an edge.
0:06:41 Now, you’re going to hear me talk
0:06:43 about speed all the time.
0:06:45 China is not standing still.
0:06:49 And so while we still have
0:06:50 a clear technological edge
0:06:52 on some of these fundamental technologies,
0:06:55 we need to continue to accelerate
0:06:56 the deployment, the use,
0:06:58 and the development of these technologies
0:07:00 in the real world
0:07:03 because they are accelerating themselves.
0:07:07 I think that’s the thing that the U.S. government
0:07:08 has to improve on.
0:07:10 The speed with which they adopt new technology,
0:07:12 the speed with which they consume
0:07:15 and participate in that innovation process
0:07:16 is going to be critical.
0:07:19 And there have been improvements.
0:07:20 It is getting better,
0:07:21 but we still have a long ways to go
0:07:23 to be able to take things
0:07:25 that are relatively new
0:07:27 and think creatively about
0:07:28 how do you get these things deployed
0:07:29 broadly across the military
0:07:31 to really empower them
0:07:32 to do what they need to do.
0:07:33 How should we think about
0:07:35 whether our defense industrial base
0:07:37 can sustain a prolonged
0:07:39 great power conflict with China?
0:07:41 And what else should we be doing
0:07:42 that we may not be doing
0:07:43 at the moment as well as we should?
0:07:44 The thing that has to happen
0:07:47 is we have to unlock speed
0:07:48 in the procurement process
0:07:48 through the government.
0:07:50 It just takes too long
0:07:52 for the government to buy things today
0:07:53 and take advantage of things.
0:07:56 And so if you can unlock
0:07:57 and break down some of those hurdles
0:08:00 and drive dollars more broadly
0:08:01 into the development
0:08:02 of these capabilities
0:08:05 that will create tremendous outcomes
0:08:05 for our military,
0:08:06 that has to happen
0:08:07 and it has to get better.
0:08:09 And what are the bottlenecks for that?
0:08:11 It’s really just the purchasing process
0:08:13 and the program process
0:08:14 that exists today.
0:08:17 And there’s been a very big focus
0:08:18 on how do you improve that
0:08:19 and accelerate that.
0:08:21 I think the great thing about it
0:08:23 is if some of these barriers
0:08:24 can be removed,
0:08:26 the government will get
0:08:27 much more value
0:08:29 from the dollar that they spent.
0:08:29 It’ll be good
0:08:31 for the American consumer.
0:08:34 There will be a lot more accountability
0:08:35 in the dollars that gets met.
0:08:35 Right.
0:08:37 I mean, just to back it up a moment
0:08:38 for people that don’t live
0:08:39 in this world,
0:08:40 the big issue is that
0:08:42 the entire procurement process
0:08:44 is built on minimizing risk.
0:08:47 Not minimizing cost,
0:08:49 not accelerating technology,
0:08:50 not moving fast,
0:08:51 is minimizing risk.
0:08:53 That actually was probably
0:08:54 the right posture
0:08:56 75, 80 years ago
0:08:58 where a new technology platform
0:09:00 could last 30, 40, 50 years
0:09:01 and you just had to get it right
0:09:02 and if it took you
0:09:03 three to five more years
0:09:03 to get there,
0:09:05 you could still be ahead.
0:09:06 That no longer works.
0:09:09 And so the new process
0:09:10 needs to do two things.
0:09:12 One, once it’s deployed
0:09:14 in the hands of a warfighter,
0:09:16 it needs to work.
0:09:17 It simply cannot fail
0:09:18 at that point.
0:09:20 But when you work
0:09:21 upstream of that,
0:09:22 the process has to offer
0:09:23 a lot more failure
0:09:24 because without failure
0:09:25 there’s no success.
0:09:25 Without failure
0:09:26 there’s no speed.
0:09:28 You try four things,
0:09:29 three don’t work,
0:09:30 one does.
0:09:31 You double down on that,
0:09:32 you try three more things.
0:09:34 And that process,
0:09:36 which is very common
0:09:36 to the Valley
0:09:37 and is very common
0:09:38 to a startup
0:09:39 and is very common
0:09:39 even to a company
0:09:40 like us
0:09:41 that works in technology,
0:09:43 is anathema
0:09:43 to the way
0:09:45 not the Department of War
0:09:46 wants to operate,
0:09:47 but it’s anathema
0:09:47 to the way
0:09:48 the laws
0:09:49 and the regulations
0:09:49 are written
0:09:50 for the Department of War
0:09:51 to operate.
0:09:53 And I think that
0:09:54 there’s very good lessons
0:09:55 that can be learned
0:09:57 from the Ukrainian conflict
0:09:58 where they are in
0:09:59 a fast path
0:10:00 of iteration
0:10:01 where they bring things
0:10:02 to the battlefield,
0:10:04 they either work
0:10:04 or they don’t work
0:10:05 and they iterate quickly.
0:10:07 And that path
0:10:07 of iteration
0:10:08 has actually been
0:10:09 the path
0:10:10 that has created
0:10:11 sustainment
0:10:11 and success for them.
0:10:13 And we have to learn
0:10:15 that same agile
0:10:16 iterative process
0:10:17 in the U.S. government
0:10:19 for the U.S. government
0:10:20 to deliver
0:10:21 the right capabilities
0:10:22 to the military
0:10:23 and not be shut out
0:10:24 of innovation.
0:10:25 Now, to be fair,
0:10:26 it is getting better.
0:10:27 It is getting better.
0:10:28 It’s better now
0:10:29 than it was five years ago.
0:10:30 It’s better than it was
0:10:30 10 years ago.
0:10:32 But we have a long ways to go.
0:10:34 Well, we need to move faster
0:10:35 because, again,
0:10:37 this is a competition
0:10:39 with a very well-funded
0:10:40 adversary
0:10:42 with, frankly,
0:10:43 a different even moral framework,
0:10:44 not just legal frameworks.
0:10:46 And so,
0:10:47 if we don’t move at speed,
0:10:48 eventually,
0:10:49 they’re going to catch up.
0:10:50 To that end,
0:10:52 how worried should we be
0:10:53 about supply chain vulnerabilities?
0:10:54 I think that’s in the news
0:10:55 right now, right?
0:10:55 I mean,
0:10:57 the entire conversation
0:10:58 about critical minerals,
0:11:00 we do need to be worried
0:11:01 about that.
0:11:02 A few years ago,
0:11:03 we were working
0:11:05 on a directed energy program
0:11:07 inside Booz Allen.
0:11:09 And I said,
0:11:09 this is great,
0:11:12 but I want you to prove to me
0:11:13 that it can be made
0:11:15 completely by things
0:11:16 that are either sourced
0:11:17 or procured in the U.S.
0:11:19 Or if it cannot be procured
0:11:20 in the U.S.,
0:11:21 it needs to be procured
0:11:22 by an ally
0:11:24 that is steadfast
0:11:25 and that we would not lose
0:11:26 in a conflict.
0:11:28 Ultimately,
0:11:28 the answer was
0:11:29 that could not be done.
0:11:32 And so now,
0:11:34 so to me,
0:11:35 this is the kind of issue
0:11:37 that needs to ultimately
0:11:38 get solved.
0:11:39 I do think we need
0:11:40 to be worried about it again.
0:11:42 There’s very strong efforts
0:11:44 underway right now
0:11:45 by the administration
0:11:47 across energy,
0:11:48 interior,
0:11:49 commerce,
0:11:51 defense,
0:11:51 and so forth
0:11:53 to try and address it.
0:11:54 But
0:11:56 right now,
0:11:56 it’s an issue.
0:11:58 and there’s a lot
0:11:59 of attention on this issue,
0:12:01 not just within the government,
0:12:02 but within the companies
0:12:02 that manufacture
0:12:03 and how they’re working
0:12:04 their own supply chains.
0:12:06 But it doesn’t change overnight.
0:12:08 That’s a long process.
0:12:10 And the positive thing
0:12:11 is there’s progress being made,
0:12:13 but it’s going to take some time.
0:12:15 I want to zoom out again.
0:12:16 Yeah, you mentioned Ukraine.
0:12:18 I want to zoom out
0:12:19 and ask first,
0:12:21 just how has that conflict
0:12:22 changed our understanding
0:12:23 of war
0:12:24 and what it takes
0:12:24 to be successful?
0:12:26 Yeah, I’ll start.
0:12:27 We’ve got
0:12:30 a couple dozen employees
0:12:31 deployed there
0:12:32 working alongside
0:12:33 the Ukrainians
0:12:34 to provide
0:12:35 high-value targets
0:12:37 against the Russians.
0:12:38 And
0:12:39 I can speak personally
0:12:40 for the experience
0:12:40 we’ve had.
0:12:41 We just get smarter
0:12:42 every day.
0:12:44 What product capabilities
0:12:45 we need,
0:12:46 it forces us
0:12:47 to find ways
0:12:48 to fix things overnight
0:12:49 if we need to
0:12:50 because it’s
0:12:51 life and death.
0:12:51 Like,
0:12:53 if we can make a difference
0:12:54 in the next 24 hours,
0:12:55 we’re going to do that.
0:12:56 And so I think
0:12:57 the number one
0:12:59 thing that we’ve seen
0:13:00 is the agility
0:13:01 that has been forced
0:13:02 onto
0:13:05 suppliers
0:13:06 supporting the military
0:13:07 and the ability
0:13:08 to change tactics
0:13:08 quickly.
0:13:10 And the simplest thing
0:13:11 that I would say
0:13:11 is that
0:13:13 we operate in a
0:13:14 GPS-denied,
0:13:16 comms-denied environment.
0:13:17 And so you’ve got
0:13:18 to have capabilities
0:13:19 that exist
0:13:20 in your products
0:13:20 that can operate
0:13:21 in that environment
0:13:22 because you literally
0:13:23 never have,
0:13:24 you never have comms.
0:13:25 That’s exactly right.
0:13:26 And that’s something
0:13:27 that is often lost.
0:13:28 And, you know,
0:13:29 if you look at
0:13:30 where Booz Allen
0:13:31 is playing
0:13:32 most effectively,
0:13:33 I’ll highlight
0:13:34 two areas.
0:13:34 One
0:13:35 is on,
0:13:36 at the edge.
0:13:37 We’re somewhat
0:13:38 unbeatable at the edge,
0:13:39 especially when it comes
0:13:39 to communications,
0:13:40 cyber,
0:13:42 and being able
0:13:43 to interoperate
0:13:44 across these
0:13:45 various technologies.
0:13:47 And that is something
0:13:49 that the Ukrainians
0:13:50 have had to do
0:13:51 on a shoestring.
0:13:53 But we,
0:13:54 as a nation,
0:13:55 have become
0:13:56 very good at
0:13:57 and we’re learning
0:13:58 how to iterate
0:13:59 faster
0:14:00 and how to,
0:14:01 they’ve gotten
0:14:01 very good
0:14:02 at incorporating
0:14:02 commercial technology
0:14:03 real-time
0:14:05 into what they’re doing
0:14:07 and iterating
0:14:08 it once it’s inside
0:14:09 the mission
0:14:09 as opposed to
0:14:10 trying to do
0:14:10 all of it
0:14:12 before it comes in.
0:14:13 The other area
0:14:14 that has been
0:14:14 fascinating,
0:14:16 to me at least,
0:14:17 is this concept
0:14:18 of open source
0:14:19 intelligence,
0:14:19 you know,
0:14:20 intelligence that
0:14:20 can be gathered
0:14:22 from people’s
0:14:23 cell phones,
0:14:25 commercial satellite,
0:14:27 social media feeds,
0:14:28 and the like.
0:14:30 In lots of cases,
0:14:31 we have found
0:14:32 that the OSINT
0:14:34 is as good
0:14:35 or perhaps
0:14:36 not quite as good
0:14:38 as what comes in
0:14:39 on the classified channels,
0:14:41 but it can get there
0:14:41 faster.
0:14:42 And again,
0:14:43 in a time
0:14:44 where speed
0:14:46 is of the essence,
0:14:47 that’s been a huge
0:14:49 mind shift
0:14:50 for a lot of people.
0:14:50 And I think,
0:14:52 stating the obvious,
0:14:53 but it plays out
0:14:54 every single day
0:14:55 and it played out
0:14:56 in Israeli conflict
0:14:56 as well,
0:14:58 is the importance
0:14:59 of autonomy
0:14:59 in drones.
0:15:01 And so this idea
0:15:03 that, you know,
0:15:04 you’re reducing
0:15:06 the risk of life
0:15:07 and that you’re
0:15:07 deploying these
0:15:08 autonomous systems,
0:15:09 whether they’re
0:15:10 low-cost attack drones
0:15:12 or surveillance drones,
0:15:13 whatever it might be,
0:15:13 that is having
0:15:14 a huge impact
0:15:16 on the outcomes
0:15:17 in that conflict.
0:15:18 And you see
0:15:19 the use by,
0:15:20 very effective use
0:15:21 by the Ukrainians,
0:15:21 you also see the effective
0:15:22 use by the Russians.
0:15:24 But it’s redefining
0:15:25 the way conflicts
0:15:26 have been fought
0:15:26 in the past.
0:15:27 And autonomy will play
0:15:28 a critical role
0:15:30 as we think about
0:15:30 broader conflicts
0:15:31 around the globe.
0:15:33 Can you share more
0:15:35 about that in terms of
0:15:37 describing in greater detail
0:15:38 what it used to be
0:15:41 before this development
0:15:42 in terms of,
0:15:42 you know,
0:15:43 what dictated,
0:15:43 you know,
0:15:44 which side would win
0:15:45 or what was most important
0:15:46 to get right.
0:15:47 And now in this
0:15:48 sort of post,
0:15:48 you know,
0:15:49 in other words,
0:15:50 entering sort of more
0:15:51 drone-focused wars,
0:15:52 what’s most important
0:15:54 and what changes there
0:15:54 in terms of
0:15:55 what’s needed to win?
0:15:57 Yeah, well,
0:15:58 in the past you had
0:16:00 the systems were always
0:16:01 human-man systems
0:16:02 putting human life
0:16:03 at risk every single day
0:16:04 for every aspect
0:16:05 of the conflict.
0:16:07 And today what you see
0:16:09 is a variety
0:16:11 of autonomous systems
0:16:12 or drones
0:16:14 that are playing
0:16:15 a very critical role.
0:16:16 Now,
0:16:17 it plays,
0:16:18 it pushes more
0:16:20 responsibility on technology
0:16:21 for technology
0:16:21 to work well,
0:16:23 to make these systems
0:16:24 operate in a way
0:16:25 to get the right
0:16:25 mission outcome.
0:16:27 But it’s taking the human
0:16:29 and putting the human
0:16:29 in a place
0:16:30 where they’re not
0:16:31 always at risk
0:16:32 and you’re not always
0:16:34 flying the most
0:16:36 expensive warfighters,
0:16:38 the most expensive systems,
0:16:40 and you’re doing it
0:16:41 in a more cost-effective,
0:16:43 mission-capable way.
0:16:45 Is America ready
0:16:47 for sort of this future
0:16:47 of warfare,
0:16:48 sort of, you know,
0:16:50 see more about
0:16:50 our current position here
0:16:51 and, you know,
0:16:52 what’s needed to get forward?
0:16:53 The answer,
0:16:54 short form,
0:16:54 the answer is yes.
0:16:56 We, I think,
0:16:57 our military understands
0:16:58 that we’re not fighting
0:16:59 across five domains
0:17:00 simultaneously.
0:17:01 It’s no longer just
0:17:02 air, land, and sea.
0:17:04 It’s also cyberspace
0:17:05 and actual space.
0:17:06 And they have to be able
0:17:07 to operate
0:17:08 in an integrated way
0:17:10 across all of those domains
0:17:11 that, in many cases,
0:17:12 you have to be able
0:17:13 to operate autonomously
0:17:15 on all of those domains,
0:17:16 especially the further
0:17:16 that you get
0:17:18 from the human,
0:17:20 the more the autonomy systems
0:17:22 have to be highly accurate
0:17:23 and highly reliable.
0:17:24 Think about space.
0:17:26 The latency issue alone,
0:17:28 if somebody is shooting
0:17:30 at your satellite,
0:17:31 there’s not enough time
0:17:32 for the satellite
0:17:33 to start a whole
0:17:34 communication chain
0:17:35 about what do I do.
0:17:36 The satellite is going
0:17:37 to have to react
0:17:38 real time.
0:17:41 And so all of these
0:17:42 things are understood.
0:17:43 All of these things
0:17:44 are in train.
0:17:47 And there’s significant
0:17:47 investment
0:17:49 against all of them.
0:17:49 You know,
0:17:51 we’ve been very lucky
0:17:51 at Booz Allen.
0:17:52 We’re at the forefront
0:17:53 of cyber.
0:17:54 We’re the largest provider
0:17:55 of AI to the federal government
0:17:56 and we’re builders.
0:17:57 So we’re building
0:17:59 a number of
0:18:01 edge systems
0:18:03 that
0:18:04 either are
0:18:05 soldier-born
0:18:06 communication platforms
0:18:07 or we build
0:18:08 an amazing technology.
0:18:09 this is why we have
0:18:10 this partnership
0:18:10 we can build
0:18:11 on Hivemind
0:18:12 and the incredible
0:18:13 things that Shield
0:18:14 is doing
0:18:16 to accelerate
0:18:17 this future.
0:18:18 Are we ready?
0:18:19 Yes.
0:18:20 But it’s a future
0:18:20 that is changing
0:18:21 by the day.
0:18:22 Let’s actually go
0:18:23 deeper into both
0:18:24 your respective companies.
0:18:25 Booz, of course,
0:18:26 one of the biggest
0:18:27 contractors for the government,
0:18:27 been around
0:18:28 over 100 years.
0:18:30 Why don’t you give
0:18:30 a little bit of the history
0:18:31 of how it became
0:18:32 one of the biggest
0:18:33 partners for the government
0:18:34 and where your focus
0:18:35 is now?
0:18:36 So, you know,
0:18:37 people get surprised
0:18:38 when I tell the story
0:18:39 of who we are now.
0:18:40 So if you look
0:18:41 at Booz Allen now,
0:18:42 we are in the business
0:18:44 of injecting technology
0:18:45 into the most
0:18:47 critical national security
0:18:48 challenges
0:18:49 of our country.
0:18:50 Like I said,
0:18:51 number one in AI,
0:18:52 number one in cyber,
0:18:55 and very strong
0:18:57 set of edge technologies,
0:18:58 just to name a few.
0:19:00 About 75% of what we do
0:19:01 is national security.
0:19:03 So then the question is,
0:19:04 how did you get there?
0:19:04 Because certainly
0:19:05 you weren’t any of those
0:19:06 things 100 years ago.
0:19:09 And if I were to describe
0:19:10 to you the story
0:19:11 of the last 25 years
0:19:12 really quickly,
0:19:13 I would say we’ve been
0:19:14 through three phases.
0:19:16 The first one was
0:19:17 to become very
0:19:18 mission-centric.
0:19:19 We are obsessed
0:19:20 with success
0:19:21 in the mission.
0:19:22 This was born
0:19:23 out of our work
0:19:24 in cyber early on,
0:19:26 our counterterrorism work
0:19:27 post-9-11,
0:19:29 and our counter-ID work
0:19:30 in Iraq and Afghanistan.
0:19:31 It really put us
0:19:32 at the center
0:19:33 of these missions.
0:19:35 The second thing
0:19:35 that happened
0:19:36 is once we were there,
0:19:37 we realized
0:19:38 the power of technology
0:19:39 to transform
0:19:40 these missions real-time
0:19:41 and make ourselves
0:19:41 much more effective,
0:19:43 which is why
0:19:44 we got into AI
0:19:45 in 2017
0:19:46 when people
0:19:46 were really talking
0:19:47 about it,
0:19:48 into autonomy
0:19:50 earlier than most,
0:19:52 into C2 systems
0:19:53 that operate
0:19:54 at the edge
0:19:55 and that embed
0:19:57 all sorts of artificial intelligence
0:19:58 into it
0:19:59 from the waveform
0:20:00 to the way they operate.
0:20:03 And then the third thing
0:20:04 has been
0:20:06 this speed-centricity.
0:20:07 I’m obsessed with speed.
0:20:09 I think that ultimately
0:20:11 it’ll be the faster,
0:20:11 not the bigger,
0:20:12 that we’ll win.
0:20:14 And I believe that
0:20:15 for the country,
0:20:15 I believe that
0:20:16 for our company,
0:20:17 which is why
0:20:18 we’re forming
0:20:19 these amazing partnerships
0:20:20 because we don’t
0:20:21 want to reinvent the wheel.
0:20:22 We want to work
0:20:24 on top of the best technology
0:20:25 out there
0:20:26 to extend it,
0:20:27 to help it be more successful,
0:20:28 to integrate it
0:20:29 with things that we’re building.
0:20:30 And that’s exactly
0:20:31 what our two companies
0:20:32 are doing as we speak.
0:20:33 And to them,
0:20:34 why don’t you give
0:20:35 a description
0:20:37 of the history of Shield
0:20:38 and how it got into autonomy
0:20:39 and where you’re focused now
0:20:40 and then let’s get
0:20:40 into the partnership.
0:20:41 You bet.
0:20:43 So Shield
0:20:44 is a 10-year-old company.
0:20:45 We focus on next-generation
0:20:46 autonomous systems.
0:20:48 We have two product lines today.
0:20:51 We have a software product line
0:20:52 that delivers
0:20:53 a software development kit
0:20:54 for autonomy developers
0:20:55 to be able to
0:20:59 extend the core platform
0:21:00 to make a variety
0:21:01 of things fly.
0:21:02 And one of the things
0:21:02 that has really
0:21:03 differentiated us
0:21:04 is our time to flight.
0:21:05 We can get something
0:21:05 up and running
0:21:07 in a very short period of time.
0:21:09 We started in air,
0:21:10 but we are now
0:21:11 doing work in maritime
0:21:13 and will move cross-domain
0:21:15 with that broad platform.
0:21:17 And then we also have
0:21:18 an aircraft product line.
0:21:19 Today we offer
0:21:20 a Group 3 drone
0:21:21 primarily used
0:21:21 for surveillance
0:21:22 and targeting.
0:21:24 And it’s unique
0:21:24 in that it’s vertical
0:21:25 takeoff and landing.
0:21:27 It allows us to be deployed
0:21:29 in a lot of complex situations
0:21:31 that traditional runway-based
0:21:33 Group 3 drones have not.
0:21:34 And we’re continuing
0:21:35 to invest broadly
0:21:36 in next-generation aircraft.
0:21:37 And you’ll hear more
0:21:38 about that from us
0:21:39 in the coming weeks
0:21:42 as we release new products
0:21:44 in that particular area.
0:21:45 One of the things
0:21:46 that’s been really exciting
0:21:47 about the relationship
0:21:48 with Booz Allen
0:21:49 is being able
0:21:52 to take that software SDK
0:21:53 that we offer
0:21:55 and work collaboratively
0:21:56 to deliver great mission outcomes
0:21:58 for mutual customers.
0:22:01 And our focus is
0:22:02 how do we help
0:22:03 organizations
0:22:04 extend the platform
0:22:05 to fly whatever
0:22:05 they want to fly.
0:22:07 And Booz has been
0:22:10 an incredible partner
0:22:11 in delivering
0:22:12 those kinds of outcomes.
0:22:12 And as we look
0:22:13 around the globe,
0:22:14 one of the things
0:22:15 we hear in the international
0:22:15 markets in particular
0:22:17 is the need and desire
0:22:18 to have sovereign autonomy.
0:22:21 So take that core platform
0:22:22 but then extend it
0:22:25 into the specific aircraft,
0:22:27 weapons systems, etc.
0:22:28 that a particular country
0:22:29 may want.
0:22:30 And they want to be able
0:22:31 to do it their own way
0:22:32 and not have it be,
0:22:35 it just needs to be
0:22:36 unique to them.
0:22:37 And that’s what’s been
0:22:38 a big differentiator
0:22:40 for S.H.I.E.L.D.
0:22:41 and it really creates
0:22:42 this mutual opportunity
0:22:43 between S.H.I.E.L.D.
0:22:43 and Booz Allen.
0:22:45 That’s very awesome.
0:22:46 You’ve talked about
0:22:48 this all-of-nation approach.
0:22:49 Why don’t you discuss
0:22:51 what that means
0:22:52 and how companies
0:22:52 should get involved?
0:22:54 I feel very strongly
0:22:55 that we are in
0:22:57 this unique,
0:22:58 really very challenging,
0:22:59 very dangerous
0:23:01 geopolitical moment.
0:23:03 Perhaps the most challenging
0:23:03 and dangerous
0:23:04 of the last 50 years.
0:23:06 With the rise of China,
0:23:08 with what Russia is doing,
0:23:08 you know,
0:23:09 Iran is now
0:23:10 somewhat diminished
0:23:12 but, you know,
0:23:12 hopefully forever
0:23:13 but who knows.
0:23:14 But for now.
0:23:18 And North Korea
0:23:18 is always lurking
0:23:20 and there’s other
0:23:21 actors around the world
0:23:23 and the challenge
0:23:24 is not just
0:23:24 that they exist,
0:23:26 it’s that they are collaborating
0:23:27 and you see it
0:23:28 in the battlefield,
0:23:30 you see it in Ukraine,
0:23:32 you see it all over the place.
0:23:34 And so it is,
0:23:36 so the U.S.
0:23:37 has to have a response
0:23:38 that cannot be driven
0:23:39 solely by the government,
0:23:42 solely by the existing
0:23:44 defense base,
0:23:45 solely by the valley.
0:23:47 it’s really going to take
0:23:47 everybody.
0:23:49 And in my mind,
0:23:51 it operates in multiple levels
0:23:52 but at the core of it
0:23:53 is these unique partnerships
0:23:55 where companies
0:23:56 are looking for
0:23:57 points of commonality
0:23:58 to move faster
0:23:59 like we are
0:24:00 and are going
0:24:01 to market together.
0:24:03 And in some ways,
0:24:05 we have both pushed
0:24:06 the I believe button
0:24:07 that says,
0:24:08 if we do this together,
0:24:09 we can do great things.
0:24:10 We did not spend
0:24:11 months and years
0:24:12 writing business plans.
0:24:13 The business plan,
0:24:14 part of the business plan
0:24:15 just happened
0:24:16 as we were getting ready
0:24:18 for this podcast.
0:24:20 This is how we need
0:24:20 to iterate
0:24:21 on a basis
0:24:23 of both common purpose
0:24:24 and some trust.
0:24:26 And I think it’s really true
0:24:28 of these new waves
0:24:28 of technology
0:24:29 as you think about
0:24:30 physical AI
0:24:31 and leveraging
0:24:32 physical AI
0:24:35 around the globe.
0:24:37 I think it’s the partnership
0:24:38 that allows us
0:24:39 to drive that agility
0:24:40 and speed.
0:24:42 And by ourselves,
0:24:43 while we will go
0:24:44 and tackle it,
0:24:45 we can go so much faster
0:24:46 with an amazing partner
0:24:46 like Booz.
0:24:49 So expand that
0:24:50 to the entire ecosystem
0:24:50 and who else
0:24:51 can the two of us
0:24:52 bring into this conversation
0:24:53 that would add
0:24:54 a new effect,
0:24:55 a new behavior,
0:24:57 a new platform,
0:24:58 a new way of operating
0:25:00 that would accelerate
0:25:01 both of us
0:25:02 and give somebody else
0:25:03 the ability
0:25:05 to play.
0:25:06 I think these complex
0:25:07 partnerships,
0:25:09 I hate to use the word
0:25:09 ecosystem because
0:25:10 everybody uses it,
0:25:12 but it sort of is that.
0:25:13 It is that, yeah.
0:25:15 If we can get that
0:25:16 done correctly,
0:25:18 we bring the best
0:25:19 of the U.S. economy
0:25:20 into the national
0:25:21 security mission,
0:25:22 which is ultimately
0:25:23 how we won the
0:25:24 Second World War,
0:25:25 how we won the Cold War,
0:25:25 and how we’re going to
0:25:26 need to win this one.
0:25:28 Talk more about,
0:25:28 you mentioned AI,
0:25:29 talk more about
0:25:30 what it takes
0:25:31 to certify
0:25:32 trust and safety
0:25:33 as it relates
0:25:34 to AI
0:25:35 and lethal systems.
0:25:36 Is the bottleneck
0:25:37 the technology?
0:25:37 Is it policy?
0:25:39 Is it something else?
0:25:39 How should we think
0:25:40 about that?
0:25:41 I think it’s
0:25:41 an all of the above.
0:25:42 I mean,
0:25:44 I think the challenge
0:25:45 with AI
0:25:47 is that it is
0:25:47 both similar
0:25:48 and different
0:25:49 from what preceded it.
0:25:50 Right at one level
0:25:51 it’s an algorithm.
0:25:52 And we’ve been
0:25:53 using algorithms
0:25:54 since,
0:25:55 you know,
0:25:55 think about
0:25:57 the bow and arrow
0:25:58 in the forest
0:25:59 with the string
0:25:59 and somebody
0:26:00 walked through it
0:26:03 and the arrow
0:26:04 went,
0:26:05 that’s an algorithm,
0:26:06 right?
0:26:07 A landmine operates
0:26:07 on an algorithm
0:26:08 of a certain amount
0:26:08 of pressure
0:26:09 and so forth.
0:26:11 The difference is
0:26:11 these algorithms
0:26:12 are dynamic
0:26:14 and they’re learning,
0:26:14 they drift,
0:26:15 and they’re
0:26:16 incredibly powerful.
0:26:19 But at the end
0:26:19 of the day,
0:26:21 we can’t create
0:26:23 an entire new framework
0:26:24 to regulate them,
0:26:25 which is part of
0:26:26 what some countries
0:26:27 are trying to do
0:26:29 because it’s unnecessary
0:26:30 and it’ll slow us down
0:26:31 and it’ll sit on top
0:26:32 of the existing frameworks.
0:26:33 And at the other,
0:26:35 and you can’t just say,
0:26:35 well,
0:26:36 whatever,
0:26:37 we’ll figure it out later
0:26:39 because all of these technologies
0:26:40 do have a downside.
0:26:42 So there is a regulatory component
0:26:44 to all of that.
0:26:45 But I really think
0:26:46 the biggest challenge
0:26:48 is to learn
0:26:49 how to use
0:26:49 and evolve
0:26:50 these algorithms,
0:26:51 again,
0:26:52 like the Ukrainians
0:26:52 have done,
0:26:54 real time,
0:26:55 in the field,
0:26:57 in the fight,
0:26:58 to be willing
0:26:59 to have some level
0:27:00 of experimentation
0:27:01 upstream and up front
0:27:03 and then to prove
0:27:04 the thing enough
0:27:04 that you can actually
0:27:06 launch it much faster
0:27:08 than it’s been launched.
0:27:09 Right now,
0:27:10 it takes too many iterations
0:27:12 to get that done.
0:27:15 I think we can accelerate
0:27:16 the heck out of it.
0:27:16 Frankly,
0:27:17 technology itself
0:27:18 will be part of the solution.
0:27:19 You know,
0:27:20 we’re doing amazing things
0:27:22 with digital twins
0:27:23 that allow you
0:27:23 to both train
0:27:24 the algorithm
0:27:25 a lot faster.
0:27:26 This is work
0:27:26 we’re doing
0:27:27 with NVIDIA,
0:27:28 but also
0:27:29 allows you
0:27:29 to demonstrate
0:27:30 the validity
0:27:30 and the power
0:27:31 of the algorithm
0:27:33 a lot faster.
0:27:34 We can get there.
0:27:37 it’s not rocket science,
0:27:39 but it’s going to take
0:27:40 a conservative effort.
0:27:40 Yeah,
0:27:40 and I think
0:27:41 as a supplier
0:27:42 in this world,
0:27:43 the one thing
0:27:44 that we think
0:27:45 a lot about
0:27:45 that we think
0:27:46 is really important
0:27:47 is ensuring
0:27:49 that we’re doing
0:27:50 everything we can
0:27:51 from a cybersecurity
0:27:52 point of view
0:27:53 to give
0:27:54 our customers
0:27:55 the confidence
0:27:57 that there will
0:27:58 not be tampering,
0:27:59 there will not be
0:28:00 some form of intrusion.
0:28:02 and we think
0:28:04 very holistically
0:28:05 about that
0:28:06 and we own
0:28:07 and are responsible
0:28:08 for ensuring
0:28:09 that what we deliver
0:28:10 has the right
0:28:12 security controls
0:28:12 that are necessary
0:28:13 to give
0:28:16 our in-customers
0:28:17 the confidence
0:28:19 that we’re tamper-proof.
0:28:20 That’s an excellent point.
0:28:21 It’s super important.
0:28:22 One of the areas
0:28:22 where we’re collaborating
0:28:23 is Blue Zellen
0:28:23 is the leader
0:28:25 because of our cyber business
0:28:26 in adversarial AI,
0:28:27 which is both
0:28:28 how would you attack
0:28:28 an algorithm
0:28:29 and how would you defend it?
0:28:31 And we’re bringing
0:28:32 that knowledge
0:28:34 into this set of missions
0:28:35 because obviously
0:28:37 the most powerful thing
0:28:37 you could do
0:28:38 is mess with
0:28:38 somebody’s algorithm
0:28:41 and have the opportunity
0:28:42 to affect their autonomy
0:28:44 at the right time.
0:28:46 And S.H.I.E.L.D.
0:28:47 is at the leading edge
0:28:47 of understanding that
0:28:48 and the leading edge
0:28:49 of actually implementing
0:28:52 the right practices.
0:28:52 I think that
0:28:54 you didn’t ask this question,
0:28:55 but the biggest challenge,
0:28:55 to me,
0:28:57 the biggest risk
0:28:57 that we have
0:28:59 to this whole thing
0:29:02 is an event
0:29:05 that pushes everything back,
0:29:07 either a serious safety event,
0:29:08 a serious cyber event,
0:29:10 or something like that.
0:29:12 And so this is the balance
0:29:13 between it’s got to work,
0:29:15 but you can’t wait
0:29:16 until everything works perfect.
0:29:17 no, and I think the way
0:29:18 to think about this
0:29:19 different than
0:29:21 the military has thought
0:29:22 about it in the past
0:29:23 is you need to think about it
0:29:24 like traditional
0:29:25 commercial software.
0:29:27 So think about
0:29:28 updating a fleet
0:29:30 of autonomous jets
0:29:32 with a new software update
0:29:33 and how can you deliver
0:29:35 confidently
0:29:36 from a security
0:29:38 and resilience point of view
0:29:40 that that’s going
0:29:41 to work flawlessly.
0:29:42 And you think historically
0:29:43 you’ve built
0:29:44 a very big,
0:29:45 complex,
0:29:47 custom stack
0:29:47 of software
0:29:49 that’s different
0:29:50 than everybody else’s.
0:29:51 No, you want to be able
0:29:51 to leverage
0:29:52 the practices
0:29:54 of commercial software
0:29:56 to drive updates,
0:29:57 but to do that
0:29:58 you’ve got to ensure
0:30:00 that there’s no cyber issues.
0:30:02 We’ve spent time
0:30:02 talking about China,
0:30:04 we’ve talked about
0:30:04 Ukraine and Russia,
0:30:06 you briefly mentioned
0:30:07 sort of Iran
0:30:08 doesn’t seem like
0:30:09 as big of a threat
0:30:09 for now.
0:30:10 Why don’t you talk about
0:30:12 what’s happening right now
0:30:13 in the Middle East
0:30:14 in terms of
0:30:16 its significance
0:30:17 or how we should think
0:30:17 about sort of
0:30:18 that region
0:30:20 going forward
0:30:21 as we sort of evaluate
0:30:22 potential short
0:30:23 medium-term threats?
0:30:24 I can start.
0:30:25 I mean, I think
0:30:26 what’s happening right now
0:30:27 has the potential
0:30:28 for being historic
0:30:30 in terms of
0:30:30 the expansion
0:30:31 of the Abraham Accords
0:30:33 and creating
0:30:33 a different
0:30:35 model for cooperation
0:30:37 in the Middle East
0:30:38 and I think that
0:30:39 I’m hugely optimistic
0:30:40 about that.
0:30:42 I think none of us
0:30:42 are also
0:30:44 assuming that
0:30:44 this will be
0:30:46 perfectly peaceful
0:30:47 forever.
0:30:48 You have a number
0:30:49 of additional dynamics
0:30:50 like the
0:30:51 Shiite-Sunni dynamic
0:30:53 and, you know,
0:30:54 some of the tribal issues
0:30:56 in and between
0:30:57 some of those nations.
0:30:58 so the Middle East
0:30:59 is going to continue
0:31:00 to be an area
0:31:03 that is important
0:31:06 to participate in heavily,
0:31:07 to look out for,
0:31:08 and to build alliances
0:31:09 and partnerships,
0:31:10 many of which
0:31:11 are based, again,
0:31:13 on the deployment
0:31:14 of the right technologies.
0:31:16 and I won’t speak
0:31:17 for Gary,
0:31:17 but I think
0:31:18 one of the realities
0:31:20 is that
0:31:22 you can invest
0:31:23 more if the
0:31:24 customer base
0:31:25 is bigger,
0:31:26 if your PAM
0:31:27 is bigger,
0:31:29 and having the ability
0:31:30 to seamlessly
0:31:32 trust a set of allies
0:31:33 and partners
0:31:33 so you can sell
0:31:34 technology to
0:31:36 at the speed
0:31:37 at which it’s being developed,
0:31:37 which, again,
0:31:38 we talk about
0:31:39 the acquisition processes,
0:31:40 but the export control
0:31:40 processes
0:31:42 are just as low.
0:31:44 I think that is
0:31:46 part of the future.
0:31:47 And, again,
0:31:48 from our perspective,
0:31:49 our program,
0:31:50 Thunderdome,
0:31:51 which is essentially
0:31:52 the essential
0:31:53 zero-trust program
0:31:57 for all military networks
0:31:59 and going more broadly,
0:32:00 is a big part of it
0:32:01 because one of the challenges
0:32:04 in lots of these places
0:32:05 in terms of
0:32:06 sharing technology
0:32:08 is you have to trust
0:32:09 that their networks
0:32:10 are now so compromised,
0:32:11 that the moment
0:32:12 you give something
0:32:13 to an ally,
0:32:14 you simultaneously
0:32:15 gave it
0:32:17 to all of your adversaries.
0:32:19 And that’s a big part
0:32:20 of the work
0:32:20 that we’re doing.
0:32:21 And I think
0:32:22 if you look at
0:32:23 what’s happening
0:32:23 in the Middle East
0:32:25 from a positive point of view,
0:32:27 there’s very heavy adoption
0:32:27 of AI
0:32:28 across the Middle East
0:32:29 and a willingness
0:32:30 and desire
0:32:31 to take
0:32:32 a lot of that
0:32:33 advance of technology
0:32:34 and apply it
0:32:35 to their defense.
0:32:37 And so I think
0:32:37 there is an opportunity
0:32:40 as things
0:32:41 begin to stabilize there
0:32:43 to engage more directly
0:32:44 to get
0:32:46 the right aligned outcomes
0:32:47 across the Middle East.
0:32:47 And I think
0:32:49 AI can be frankly
0:32:50 a conduit
0:32:51 from an innovation standpoint
0:32:52 to deliver
0:32:53 different outcomes
0:32:54 and joint funding
0:32:56 for how these outcomes
0:32:56 can come about.
0:32:59 So I’m actually
0:33:00 reasonably optimistic
0:33:01 things change all the time
0:33:01 and I think
0:33:02 we need to be thoughtful
0:33:03 about that.
0:33:04 It’s also very difficult
0:33:05 for the U.S. government
0:33:06 to figure out
0:33:07 one day
0:33:07 are you going to get
0:33:08 an export approval
0:33:08 or not.
0:33:11 That’s always a challenge
0:33:12 but I think
0:33:13 the interest in AI,
0:33:14 the willingness
0:33:15 to fund it
0:33:15 and step up
0:33:17 from a dollars perspective,
0:33:17 I think
0:33:18 they can be
0:33:19 very interesting
0:33:20 from a partnership
0:33:21 perspective
0:33:22 with the U.S.
0:33:23 in funding
0:33:23 some of the things
0:33:24 that are critical for us.
0:33:25 For sure
0:33:26 and we need them
0:33:27 as allies and partners
0:33:28 on what’s really
0:33:30 a global geopolitical situation
0:33:31 where the Middle East
0:33:31 will play a role.
0:33:33 That makes sense.
0:33:34 I want to go back
0:33:35 to procurement reform.
0:33:36 You mentioned
0:33:37 it’s been getting better
0:33:39 the last five years
0:33:40 or the last 10 years.
0:33:41 What is the mechanism
0:33:43 by which it gets better?
0:33:44 And I asked to say
0:33:46 what needs to happen
0:33:47 for it to get better again
0:33:48 and we said
0:33:49 it needs to get better faster
0:33:52 or we have a long way to go.
0:33:54 For people who are not
0:33:54 in the weeds
0:33:55 of how this works,
0:33:56 why don’t you
0:33:57 dig us behind the curtain
0:33:57 a bit?
0:33:58 You know,
0:33:59 there’s two aspects
0:34:00 to this.
0:34:00 One,
0:34:02 as Gary is saying,
0:34:03 is cultural
0:34:04 and the practices
0:34:05 and the way people
0:34:06 think about
0:34:08 what they want to do
0:34:10 and whether they have
0:34:11 the authority to do it
0:34:12 in the way they want to do it.
0:34:14 And then the second part
0:34:14 of it is
0:34:15 the regulatory framework
0:34:17 that constrains
0:34:18 those authorities.
0:34:20 What’s been getting better
0:34:20 is I think
0:34:21 people are
0:34:23 exercising their authorities
0:34:25 with a little more
0:34:25 alacrity
0:34:28 and with more vision
0:34:29 and more foresight.
0:34:30 So even without
0:34:32 major regulatory change,
0:34:34 we have seen
0:34:35 over the last few years
0:34:38 greater desire
0:34:38 to buy,
0:34:40 not just buy commercial
0:34:41 products,
0:34:43 but buy commercial products
0:34:44 the way
0:34:46 a commercial buyer
0:34:46 buys them.
0:34:46 That’s right.
0:34:47 And that’s been
0:34:49 the big breakthrough
0:34:50 because you can take
0:34:51 a commercial product
0:34:53 and layer on top of it
0:34:54 all of the traditional
0:34:55 government requirements
0:34:56 and it stops being
0:34:57 a commercial product
0:34:58 and it slows down
0:35:00 just as much
0:35:02 as something custom
0:35:03 would slow down.
0:35:04 And that has really changed
0:35:05 over the last five years,
0:35:07 last 10 years
0:35:08 for the better.
0:35:10 The piece that is left
0:35:11 is the regulatory framework
0:35:13 is still
0:35:15 75 to 100 years old.
0:35:17 There’s an over-reliance,
0:35:17 for example,
0:35:19 on the idea of cost plus.
0:35:21 And cost plus
0:35:23 does have a role,
0:35:23 probably.
0:35:24 I don’t know that
0:35:24 you can buy
0:35:25 a nuclear submarine
0:35:26 any other way,
0:35:28 but it’s a much more
0:35:29 limited role
0:35:30 than the way
0:35:32 it’s been driven now.
0:35:35 I think the reliant,
0:35:36 the understanding
0:35:37 that outcome-based
0:35:38 is the way
0:35:39 of the future
0:35:40 that the government
0:35:41 should pay,
0:35:42 whether it’s in military
0:35:43 or in health
0:35:44 or in any area,
0:35:44 for an outcome
0:35:46 as opposed to
0:35:46 for a set of inputs
0:35:48 is both
0:35:48 fundamental
0:35:49 and transformative.
0:35:51 But then the second thing
0:35:52 is this is regulation
0:35:53 on top of regulation
0:35:54 on top of regulation.
0:35:58 And more things
0:35:59 keep getting added
0:36:01 and nothing is taken away.
0:36:02 And so there’s an effort
0:36:02 right now
0:36:03 which is highly promising
0:36:05 at moving away
0:36:06 from these regulatory frameworks
0:36:07 and almost start
0:36:08 with a blank sheet
0:36:10 because you almost
0:36:11 can’t fix it
0:36:12 from where it is.
0:36:12 it’s not about
0:36:13 can you reduce this thing
0:36:15 by 10% or 15%
0:36:16 is the only way
0:36:17 you’re going to reduce it
0:36:17 by 80%
0:36:19 while keeping the stuff
0:36:20 that is really important
0:36:21 is to start fresh.
0:36:23 And there’s a couple
0:36:23 of efforts,
0:36:24 one in the executive branch
0:36:27 and one in Congress
0:36:27 as we speak
0:36:29 that aim to do just that.
0:36:31 And if any of that
0:36:31 comes to fruition,
0:36:33 I think that would be
0:36:34 the key to unlocking
0:36:35 the next level of speed.
0:36:37 And you’re starting
0:36:38 to see some efforts
0:36:39 within the current administration
0:36:40 under the Department of War
0:36:41 where it’s really
0:36:42 rapid adoption
0:36:43 of technology
0:36:44 and it is
0:36:46 a path through
0:36:47 a faster path
0:36:47 of procurement
0:36:49 but then putting pressure
0:36:50 on the supplier
0:36:51 like a shield
0:36:52 to deliver
0:36:53 in a particular time frame.
0:36:55 And so there is this
0:36:56 positive movement
0:36:58 in the thinking
0:37:00 within Department of War
0:37:01 about how can you
0:37:03 drive a faster process
0:37:04 for new technologies
0:37:05 that are going to
0:37:06 fundamentally move
0:37:06 the needle.
0:37:07 And while that’s not
0:37:09 a broad reform
0:37:10 of all government procurement,
0:37:12 it’s green shoots
0:37:15 in changing the way
0:37:16 defense technology
0:37:17 has been procured
0:37:17 in the past.
0:37:18 I think it’s a really
0:37:18 good thing.
0:37:19 Yeah, ultimately
0:37:20 companies like ours
0:37:22 whether alone
0:37:22 or in partnership
0:37:23 want to get paid
0:37:24 for an outcome.
0:37:26 Give me a tool
0:37:27 whether it’s
0:37:28 an autonomous drone
0:37:30 or a communication system
0:37:32 or a cyber platform
0:37:33 or whatever it is
0:37:35 that accomplishes
0:37:36 this in this way
0:37:37 at this cost
0:37:37 in this time frame.
0:37:39 And you figure out
0:37:39 how to do it.
0:37:41 as opposed to
0:37:42 we’re going to tell you
0:37:42 exactly how to do it
0:37:43 we’re going to monitor
0:37:44 every single aspect of it
0:37:47 and we’re going to test you
0:37:48 every five minutes.
0:37:50 And if you can’t
0:37:51 deliver the outcome
0:37:52 you’re going to go out of business
0:37:53 and if you can
0:37:54 you’re going to grow.
0:37:55 And I think that
0:37:57 to people that
0:37:59 live in the commercial world
0:38:00 where I spent
0:38:01 a lot of my career
0:38:02 that’s obvious.
0:38:04 If you operate
0:38:05 in this context
0:38:07 again for good
0:38:08 and valid historical reasons
0:38:10 it just operates differently
0:38:11 and so
0:38:12 while people are being
0:38:13 held accountable
0:38:13 they’re not being
0:38:14 held accountable
0:38:15 but to the outcome
0:38:16 they’re being held accountable
0:38:18 to a set of interim steps.
0:38:19 that’s a good description.
0:38:20 I think that’s a good
0:38:20 place to wrap.
0:38:21 Gary Horacio
0:38:22 thank you so much
0:38:23 for coming to the podcast.
0:38:24 Thank you so much.
0:38:24 Appreciate it.
0:38:25 Nice meeting you.
0:38:25 Take care.
0:38:29 Thanks for listening to this episode
0:38:31 of the A16Z podcast.
0:38:32 If you liked this episode
0:38:33 be sure to like
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As global tensions rise, AI and autonomy are transforming how nations prepare for conflict.
In this episode, Horacio Rozanski, CEO of Booz Allen Hamilton and Gary Shield, CEO of Shield AI join Erik Torenberg to discuss how technology, speed, and public–private partnerships are reshaping America’s defense strategy.
They cover lessons from Ukraine and Taiwan, the rise of autonomous systems, and why the future of warfare will be defined by software, agility, and innovation.
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Resources:
Follow Gary on X: https://x.com/garylsteele
Find Horacio on LinkedIn: https://www.linkedin.com/in/horacio-rozanski-84a2519
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