Christopher Kirchhoff on Military Innovation and the Future of War

27:35Even though we know with encryption, there are going to be moments when tarot cells or nation -states are going to take advantage of it to successfully prosecute a small attack. So this is the dilemma that we face with AI on a grand scale. And what do you think we should do? You know, if you sit in the Pentagon and it's your profession as a national security professional to prevent 9 -11, to prevent wars from happening, You are very security minded and you are very biased towards restricting technology because that does in the end help the security equation But unless you have an argument about what to do with a particular technology with economists and trade experts and the rest of the government you're not gonna reach Consensus that is gonna be best for the nation so these arguments are gonna have to be fought out in the situation room with a variety of expertise and having sat in both places on the National Security Council and in the Pentagon.

28:32I am firmly in favor of dual use to the absolute extent we can because I think the net assessment of that is for the best. As the Cold War ended, it seems in the defense sector we saw a lot of consolidation, much smaller number of very big suppliers. Was it a mistake to let that happen? You know Bill Perry who had his famous last supper and asked for that consolidation at at the time did it because he was terribly concerned that the so -called peace dividend, the lower end of the military budget, it was not gonna be able to sustain the larger defense industrial base that we had in place at the end of the Cold War.

29:10So in his seat at the time, that was the call he made. It's turned out to be a disaster for the nation. It's essentially created five large companies that are so burdened by the system of requirements and the auditing and accounting requirements that go on with them to produce modern weapon systems, that the way to think about large defense primes is more akin to a utility company than it is a private sector company. And the result of that, of course, has been very slow innovation, a culture of cost overruns, even as some phenomenal technology is produced. And you have now, and what's really important is a rise thanks to Ash Carter starting defense innovation unit and starting off a whole new cycle of venture capitalism.

29:59You have companies like Anderoll and Shield AI and other defense startups that are joining Palantir and SpaceX that are becoming a new breed of product -oriented defense companies that are not burdened by the system of requirements that have turned our defense primes into electric utility companies, to be honest. And I think the real strategic question now before the nation is how quickly can we swing more of the weapons systems we build to this new generation of product companies that are better at it, are faster, and are far less expensive for the taxpayer. What do we need to do to keep DARPA dynamic?

30:37Well, you know, DARPA has always been very dynamic. But institutions atrophy, right? You see this almost everything in the world, and often the better it is, the bigger your later problem is because it becomes self -congratulatory. Well, one of my great frustrations, as I yawning in the Pentagon, was, you know, I got a chance both working for the Deputy Secretary of Defense and then for the Chairman of the Drenches of Staff to be there liaison to DARPA. So I got to be read into DARPA's entire set of programs. And they were doing incredibly impressive work. What was matting is they were so far ahead of the military services, the Air Force, the Navy, the Army, and seeing the future battlefield.

31:13field. And over the years, at least since I've dealt with them starting in 2009, they've been right way more than they've been wrong. But very few of their visions of operational concepts and the technology that back them have moved to the center of the systems that the services have adopted. So there's a giant adoption program going on. And this has to do with the fact that DARPA is a separate institution for the Pentagon and its focus is on creating new technology and there has been a leadership failure going on for years along the E -Rain that has prevented more of the technology DARPA and other of the leading labs that are produced into the mainstream of the military.

31:53How do we overcome what is sometimes called our Valley of Death Problem? The sum intermediate stage where an idea gets started but no one is picking up the ball and running with it. There's not yet a product that you can sell. How do we fix that? Well, there's a couple ways to do it. But Congress took a great step earlier this year by not only codifying defense innovation unit in law, but also granting it for the first time a really significant budget of just under a billion dollars a year. And there's a really big difference about what you can do in the defense innovation ecosystem with a billion dollars versus a hundred million dollars.

32:27So for a billion dollars, you can see programs for long enough to not only demonstrate their success, but to ensure a high likelihood that they will successfully transition to one of the services. You can in other words, create a springboard. So to spend more money in essence is the solution? No, no, no. I think we need to be spending way less money on legacy systems that are demonstrably defeatable today. So, you know, anybody that's been watching Ukraine in the last two months should decide that tanks are not a great investment for a modern military. Similarly, anybody that's read even news articles about hypersonic weapons should decide that buying more aircraft carriers is not a good thing.

33:02But we do need some of that some of those resources shifted to this new defense ecosystem. That's very experimental. That's building swarming weapons. And the Air Force is very commendable under the leadership of Secretary Frank Kendall. They now have what's called the combat collaborative aircraft. So this is a 10 ,000 aircraft buy of supersonic stealth drones who will fly a long -signed man fighters in the largest change of Air Force doctrine since really the right military flyer. And by the way, guess who the two finalists are for the production contract for this massive program. They're anderel on the one hand and another non -traditional defense contractor, General Atomics.

33:43The traditional primes lost to those two companies for this revolutionary contract. How is our system of inspector generals holding up? You know, Tyler, thinking back now that I've been in the private sector for a number of years to my tenure and government service. It's remarkable how little executive authority in government anyone has anymore. I'll just give you a couple examples. One, for me to go out to a think tank to come to the Mercatus Center for a lunch and listen to a lunch talk. When I was on the National Security Council, I would actually have to file a waiver with the lawyers to declare that I wasn't going to a lunch that I would accept an unethical gift.

34:22That's because we're feeding you or because you walk in the door. It's because you're feeding me and I have to make sure that you're feeding me less than I think $22 or there's some amount that changes every year, right? No, she's, yeah. No she's, she's exactly. But here's a couple more pernicious examples. So, when I had first jobs for the chairman of the Joint Chiefs of Staff General Marty Dempsey when he took over in 2012, a year of incredible change, technological changes. He wanted to go visit Silicon Valley, meet with venture capitalists, go to Google, meet with startups and see the kind of commercial technology that people were telling they would make a difference in the battlefield.

34:55So we organized a phenomenal trip for him to Silicon Valley that really shaped how he, as he was taken over the chairman chip, shaped his agenda as chairman. And you know, we get back on that trip and I get a phone call from General Dempsey's EA is his top officer and it says, you know, Chris, can you write me a couple pages of justification for the Silicon Valley trip we just took? and I thought, oh my gosh, sure enough, somebody had filed a complaint with the Inspector General that we had spent government dollars to take, you know, a boondogled to California, and IG was deciding whether or not to investigate.

35:29So here's a much more serious example. Mike Brown, the second director of defense innovation unit, the former CEO of Symantec, the largest cyber security in the world, somebody who really understands software, which is now the most important element of any military weapon systems was in a remarkable act of leadership and foresight nominated by President Biden to become the Undersecretary of Defense for Acquisition and Sustainment, so the lead weapons buyer in the Pentagon, somebody for responsible for driving how nearly $300 billion of the Pentagon's budget is spent on weapons. And just days before his confirmation hearing was scheduled in the news, bubbled up this whistleblower complaint that had been filed at Defense Innovation Unit weeks or months earlier, maybe even years earlier, alleging that he missed use hiring authorities to try and pay engineers in Silicon Valley close to market rate so they could come to work for the government, which by the way was the mission of Defense Innovation Unit, right, was to bring technologists into the government.

36:29It also alleged among other irregularities that the office snack fund called Snacko had an insufficient basis of cash counting. The person right in the complaint was a former comptroller employee. So, you know, receiving this complaint that their director had potentially violated Department of Defense Policy, the Defense and Innovation Unit General Council undertook an exhaustive investigation published an 82 -page report found no substance to any of the allegations that had been met. So you would think case closed. So at that time the Inspector General decided not to investigate the Pentagon's General Council said fine you've looked into it, they're complaints all over the place case closed.

37:09So on the eve of his nomination, this services again, the whistleblower goes to the media again. It services in a couple of articles, and he had to end up withdrawing. He had done nothing wrong, but somebody weaponized the Inspector General System against him. So we're in this situation where good -minded public servants, who are doing the right thing, who have done nothing wrong, are caught in this just bizarre sort of process of persecution that runs at its own sort of civil servant speed. And I think that's one of many factors, including, frankly, the Civil Service Act, that is making the talent base of the US government a road.

37:46I mean, why is it that governments like Singapore are so much further ahead of the United States in terms of the talent they're able to bring to their governments? And not just salaries, although that's a big part of it. It's part of the burden that you undergo by becoming a public servant. So more formally, if you're given the chance to restructure the status of whistleblowers. What would you change to make it better? Well, look, whistle blowing is an important function and there are cases of egregious behavior and they need to be called out and stopped. But at the same time, leaders in government, particularly those who have to work against the grain of their institutions, are going to rough all of a lot of feathers.

38:23And my co -author, Rajanai, found out that, you know, firsthand in trying to start up defense innovation unit on our first flight to Washington, our government credit cards got shut off out of spite because somebody wanted to slow us down, so we had to rebook our hotel reservations and pay out of our pocket. I was just one of many small examples of much larger political attempts to stop the IU. So I think anybody who is working against the grain institution to build something new should be given a lot of authority to prosecute that mission, to make that mission a success and how accountable if they don't.

39:00And getting wrapped up in IG investigations that end seven years after the fact is not going to make our system of public administration any more effective. Now, the title of your book again, it is Unit X. Have the Pentagon and Silicon Valley are transforming the future of war. Just tell us, what's Unit X? So Unit X is defense innovation unit experimental. And it was started in 2015, the year that Ash Carter became Secretary and it was started off an insight that Ash Carter had when he was just professor Ash Carter in 2001 when he wrote an article keeping the technological edge that was quite prescient about strategic trends.

39:38So he noted at the end of the Cold War that federal research and development was essentially flat lighting at the exact moment that the technology economy was taken off on a rocket -like trajectory straight up. And so by the time he arrived into office and he forecast this in his 2001 article, the market capitalization of all the major tech companies, Apple, Microsoft, Google, Amazon, were each themselves individually bigger than the entire defense industry combined. So what does that tell you that tells you that the locus of innovation has shifted away from military labs, away from DARPA, which used to be generations ahead in technology, to the commercial technology ecosystem.

40:20The problem is that the entire defense procurement system in the Pentagon's line of vision are tuned in to the military R &D labs and to the defense primes. But if they're no longer the ones coming up with the leading edge technology, the Pentagon is not structured to become in Ashes words a fast follower of the commercial market. So defense innovation unit, the Pentagon's first ever Silicon Valley office, started by Ashes, the first Secretary of Defense to visit Silicon Valley in over 20 years, was an attempt to pivot the entire US military to be able to more quickly adopt commercial technology, which was clearly starting to outpace the technology being built by the defense primes.

40:59And just to clarify, your role in all of this has been, you know, as a, as a native of Pentagon, I worked on a lot of technology issues. So I was asked by Secretary Carter to run the working group that created the concept for a defense innovation unit that he then launched. and just a few months after launching it, he asked Rod Shaw and myself to come take it over. He in fact ordered me that I would be moving from my then present position on the National Security Council to California, which I promptly did. I had to buy more pairs of jeans. I had one pair of jeans and five suits and I went but five more pairs of jeans and was ready for Silicon Valley and starting in 2016, began a really exciting couple of years at the helm of defense invasion unit where we, I'm on other things pioneered a new way to buy technology that was much faster and proved through a number of very successful pilots that you could actually use technology on the battlefield in decisive ways.

41:51And is there some reason in the incentives to think unit X won't ossify or is your view simply for now newness is enough, it may well ossify but then we'll create a new structure yet again. Well there is this, you know, Hagellian dialectic right in the history of defense agencies And so DARPA was created originally to solve a crisis in base flight because the Air Force wasn't up to snuff It actually spent some years in the wilderness before before becoming the dynamic institution that we know it today So far the trajectory of unit X has been very successful Part of the reason for that is you know We have people that come there kind of like DARPA for a few years at a time on rotation and They you know our project managers are they're very focused on getting things done and and oh by the way We've pioneered a way to buy technology at Silicon Valley speed.

42:42So, you know, if you want to go by a fighter jet or an aircraft carrier or a military radio, you're looking at using the federal acquisition rules, this sort of old testament like system of regulations, negotiating a contract typically takes 18 to 24 months. If you're a startup, you know, that simply doesn't work, right? Because you have to show profitability before your next round of venture investment. You're going to raise inside of that timeline, which is why when we arrived in the valley in 2016, venture capitalists would actively pull funding from startups that tried to go after government contracts, because they knew in the end it wouldn't be profitable.

43:17So, DIU had to figure out a way to break through that, and we did it through the ingenuity of a single person. And this is a historic, a heroic story of how one person can really affect change in the Department of Defense, a three million person organization. And her name was Lauren Daly, we met her when she was 29 years old. She's an acquisition specialist, stays up all night reading the newly released National Defense Authorization Act, another dictionary -sized tone of law. And our fourth day on the job, she comes to Roger and I, and says, hey, I found this sentence in section 815. And I think it's a giant loophole week and you used to create a whole new system of contracting.

43:55And Roger and I say, you know, this sounds fantastic. This is the biggest problem we have to come up with a bigger system of contracting. If we can't do that, a DAU will fail. And Lauren says, well great, well here's the 20 -page white paper that I wrote about it. So quite literally the next day, Lauren and I got on a flight to Washington and we met in rapid order with the head of acquisition policy for the department with the head acquisition lawyer for the department and with the Department of Defense General Counsel. And they all agreed that Secretary Carter blessed a whole new regime of using other transaction authorities, There's a poll or a little use contract mechanism to let contracts in between 30 and 60 days.

44:35And so in two weeks, we got the department to declare a DIA you could use this new method. And in the eight years since Lauren had that idea, $70 billion of technology has been acquired by the Department of Defense using the method that she pioneered. Does China have something at all like Unitex? China has something different. So in their system, they don't have one unit that is specifically focused on acquiring advanced technology from the best startups and technology firms in China. They have a, again, this doctrine announced in about 2015, a civil military fusion that mandates that if you were producing technology that might be dual use, that might have a military application, that you have to notify the people's liberation army.

45:19and perhaps the PLA officer will come and join your board to watch that technology advance. And if they see a use case, they might decide to pull that technology into the military. So in the sense of their command economy, that is how they are deciding to invest technology. How well do they do procurement in your opinion? You look at it, you think, wow, that's impressive, or you think, either they're doing well for other reasons, but their procurement is screwed up like ours? Well, I think any large public institution or large government institution, whether you're communist or capitalist is going to have inefficiencies in it.

45:55I think the Chinese have plenty of inefficiencies, but I think what's different is they have observed our military very carefully, really ever since the first Gulf War, when the precision strike complex, as it's called, really became debuted on the global stage and the whole world sauce on CNN dropping bombs down chimneys, right? So today, similarly, the entire complex of Chinese universities that have that study now just security and military institutes are looking very closely at Ukraine. By the time the book was published, I think we had caught something like 120 papers, academic papers being published in the Chinese literature about the Ukraine war, very clearly We see in the decisive use of starlink, calling for a Chinese version of starlink, calling for Chinese kinetic and non -kinetic means of jamming low -earth orbit space technology.

46:49So what's different about their procurement system is however good or bad it is, it's skewed at producing the exact kind of technology that will find the chinks in our own armor and could if we have to go to war in a Taiwan scenario and other scenario prove to be a potentially catastrophic awakening to the US military. Yes, even at exodog friendly office. Highly important question. You know, I arrived down in California with my golden retriever and I was jealous of Secretary Leon Panetta who both the CIA director and as Secretary Defense brought Bravo, his golden retriever to the office. Bravo, he's proud to say, was one of two canines cleared into the Bin Laden operation, the other one being the German shepherd that flew on the helicopters into Abada Bada.

47:37So I thought, here we are, we're in Silicon Valley, we're supposed to come up with an office of the different culture. Let's make our office dog friendly. And we did, but we had to go to war to do it. So we were in a National Guard building and there was some colonel there in charge of, you know, he was kind of our landlord. And even though there's no regulation against having a dog friendly office in the Department and we had published our dog policy. He threatened to evict us, and thus we ended our policy. His last name started with F, so we referred to him as Colonel Fear. And he's against the dogs.

48:11He's against the dogs. He's against the AU. He's an old school Colonel. He doesn't like any of this. So how do we not get evicted? Well, we figure out he's retiring in six months. So what we do is we tell him, we don't actually have a dog friendly policy. We have a service dog policy and we're unable, based on the reasons our Air Force physician has declared for each individual to have the three dogs in the office that we had, through HIPAA reasons to tell you why, but we can assure you that HIPAA compliant paper is filed declaring these service dogs. So we got our dog friendly office and Colonel Fiery went off to retire and not be heard from again.

48:49What's the biggest problem with the dog friendly office? I know there are some people that are allergic to dogs and so that's why many major tech companies that our dog friendly will have dog free areas. But in my view, especially now at a moment when offices are empty in most of the country and I make them more fun. And boy, it was fun to watch Secretary Mattis come in who himself loves dogs and be greeted by my golden retriever. And boy, it was even more fun to see crusty three and four star generals that were very skeptical that Silicon Valley had anything offered to first see my golden retriever and then see the woman who briefed our software demos whose hair was blue by the end of the day nonetheless be really impressed by the technology we were putting in front of them.

49:34Now you wrote a political science dissertation at Cambridge on governmental commissions, right? Yes Yes. What is it you learned from that dissertation that helped you do unit X, military procurement, more innovation? I'm really grateful I got the chance to go do a PhD and in particular to do it in the bridge system rather than the American system. Why? A shorter, that's always nicer, three years rather than five, but rather than spend all my time studying for qualifying exams, I actually got to read the classic tomes of political science and sociology and understand them. And I'm so grateful for that chance.

50:10And I ended up studying breakdowns in the National Security State. So what do you do after a catastrophic breakdown that the political system, the regular political system can't contain? And I ended up studying government commissions in part because I had had the chance early in my career to serve around a couple after action reports and investigations. The first, my first job out of college in 2003 was for the Spatial Columbia accident investigation, a look at NASA's safety culture, not only what was the physical cause of the Columbia disaster, but what was the organizational cause behind the physical cause.

50:44My second job was a chance to go to Iraq and work on a team of historians that was writing an official history of the reconstruction. Another major breakdown in American foreign policy. In fact, I've gone on to specialize in disaster in a few other areas. I wrote the Obama administration's after action report of Ebola. I used to joke that if I should have been your office, you were really having a bad day. But what I learned is that expertise is often wrong and settled notions of how business should be done is also often wrong. And those settled notions often kill people. And especially when they kill people that's a strong signal that it's time to go back and take a fresh look at everything.

51:27and to always be curious, always be skeptical, and always be as rigorous as you can, because established ways of thinking don't often evolve in ways fast enough to accommodate changing circumstances. What is it we need a commission for today where it might maybe plausibly succeed? Well, the Political Science Literature divides commissions into three types. The type that you don't want to be on is a disaster management commission. So this is where, oh, there's a giant political problem. We're going to name a blue room in commission that will never be heard from again to take the blame off politicians.

52:02The hardest kind of commission to be on is an agenda commission. So an agenda commission like the National Security Commission on Artificial Intelligence wasn't created after a 9 -11 or a catastrophic breakdown. But nevertheless, is a body that is going to have the bipartisan insights and support and the expertise to tackle AI, a really complex issue that spans government that at least when the AI commission was created, the government was in a position to itself take on in a really rigorous way. The most effective commissions are what are called crisis commissions. The 9 -11 commission is a classic example.

52:38They happen in the aftermath of a giant political rupture. When everybody knows there's been a huge breakdown where there's more openness to look freshly. And that commission went pretty well. A very high percentage of its recommendations were adopted. And more than that, it forcefully brought into the public light information that never otherwise would have made it out about who knew what and when. So I'm a strong believer in commissions as a form of government. The British government has a much more frequently than we do. They don't always work. I mean, I'm interested in historical anecdote.

53:14the first commission in the US was actually the Whiskey Rebellion Commission. It didn't work. George Washington had to get on his horse in the right west before the rebellion in Pennsylvania broke up. But as a forum of gathering concentrated expertise for a short problem to dive deep on a topic, I think they're very powerful instruments. And final question, what is it you want to learn about next? Anything. You know, I got a chance to spring to work at Anthropic and a policy residency working both on AI safety and AI and national security. It was a short -term residency. I was only there for a few months, but I am incredibly enchanted by generative AI.

53:55And I cannot believe based on my time inside a Frontier Model Lab, what is just around the corner. So I want to learn everything I possibly can about how to steer, democratize, and make safe this incredibly powerful new wave of technology that's about to crash down upon us. And how would you describe what you think is around this corner? On the national security front, there's been a heck of a lot of conversations about, is, is a, I sort of, as dangerous as an ex -nuclear bomb and everybody at Frontier Labs, when I last summer and watched Oppenheimer. And it's interesting just, culturally coming from the national security community where it was my day job to look at really awful stuff, to get up every morning and before the chairman came into the office or on that security council read the morning intelligence brief about all the things all the awful things going on in the world every day.

54:52So I look at AI as a technology that is not at all like nuclear. I never think it's going to achieve the sort of zero to one point technology as we would call it that nuclear is today where you either have a bomber or you don't. It's going to be much more diffused. It's going to be much more a part of the commercial economy. It's going to be much more a question of, do you have an iPhone 15 versus an iPhone 12? Do you have the most advanced AI versus AI that's a little bit older, maybe from an open source model? And because of that, as an international relations theorist and as the literature would suggest, it's not going to be like nuclear weapons.

55:34It's not going to create sudden disequilibria in the international system. It's going to be much more shades of gray, I think, in gradations. And that's good, because it means that we will have time on my nations to find new equilibria without hopefully finding ourselves in sudden deseclibria that could create an incentive for one nation to start a war against another. Again, the new book is Unit X. Have the Pentagon and Silicon Valley are transforming the future of war by Raj M Shah and Christopher Kirchhoff. Chris, thank you very much. Thank you, Tyler.

56:08Thanks for listening to Conversations with Tyler. You can subscribe to the show on Apple Podcasts, Spotify, or your favorite podcast app. If you like this podcast, please consider giving us a rating and leaving a review. This helps other listeners find the show. On Twitter, I'm At Tyler Cowan, and the show is At Cowan Convose. Until next time, please keep listening and learning.