Why Speed, Not Size, Will Define the Next War

0:00We are in this really very challenging, very dangerous geopolitical moment. perhaps the most challenging and dangerous of the last 50 years. An economy will play a critical role. It's redefining the way conflicts have been fought in the past. Ultimately, it'll be the faster, not the bigger, that will win. It just takes too long for the government to buy things today and take advantage of things. 75, 80 years ago, a new technology platform could last 30, 40, 50 years, and if it took you three to five more years to get there, you could still be ahead. That no longer works. The U.S. has to have a response that cannot be driven solely by the government, solely by the existing defense base, solely by the Valley, it's really going to take everybody.

0:40It's life and death. Today, you'll hear a conversation from Horacio Rozanski, CEO of Booz Allen Hamilton, and Gary Steele, CEO of Shield AI, about how technology and partnerships are reshaping America's defense strategy. We'll discuss lessons from Ukraine, the future of autonomous systems, and why the U.S. needs to build faster, not just bigger, to maintain its edge. Let's get into it. Gary Harasso, welcome to the podcast. Thank you. Thank you. Because of Booz and Shield and your relevant positions, you guys have a front row seat into what's happening in defense. I want to get to the big questions right away.

1:16If China were to take Taiwan or to try to, are we ready to defend it? What does being ready to defend it even mean? I think the answer is yes. Indo-Paycom has been thinking about being ready to fight tonight for several years now. And the nation is ready. The political will under this administration is there. We're recording today on Columbus Day, so happy Columbus Day. But it's also the day where the president is in Israel and Egypt announcing major peace agreement, which was driven by American power, American superiority, and our ability to project that into a peace through strength framework.

1:55And I think the same is true in the Pacific. I don't think that the country is interested in conflict. I think the nation is interested in peace, but I think it's certainly prepared and able to do what it needs to do. And what I'm super encouraged by is the ability to bring the world's best technology to the fight. And I think one of the reasons that we have a unique opportunity is to take that advanced technology and apply it to deterrence and to winning any conflict that we might get involved in. And I think we're in a unique position today. And I don't know that I would have said that three or four years ago, but I actually feel that way today.

2:29Absolutely right. your guys' work on autonomy would be central to any effort in the Pacific. And I think we've all watched the various conflicts that have gone on around the globe. I think we're much smarter as a result of that. And we're going to apply all that knowledge and innovation to solving the problems that our military has. And I think we can save a lot of lives as a result of that. Yeah, the other thing I would say is I've spent time in Taiwan and they are getting ready. They're moving fast. They're very determined. They're very focused. And they have a very futuristic view of how to apply technology in the right way to get the right outcomes.

3:04A hundred percent. Let's get deeper on this for people who are not as familiar into the specifics. Say more about what being ready means. You guys think we're ready. Some people think we're not ready. What is the disagreement about, actually? And one thing you disagree is three or four years ago, you might not have said that we're ready or it might not have been as confident. What changed? So maybe let's get deeper. What does it mean to be ready? Like, what are the actual specifics of that? And then sort of how has that evolved over time? So readiness is a combination of political will, capacity and capability in the region.

3:33And as Gary said, having the right technology position, the right place to do what it needs to do. Everybody has been looking. The thing that struck me the most when I was last in Taiwan is how closely they had looked at both Ukraine and Israel to understand what they needed to do. One of the things, for example, that they've done that I think is encouraging is they've extended the length of the draft of their military service so that people can be properly trained. And that's actually very helpful. And in addition, they've passed a budget and they're actually spending against the key technology priorities that matter the most.

4:09And the same thing is true for Indopaycom and for the U.S. There's a lot of capability now deployed from space to undersea that could make a decisive difference. And, of course, that is going to accelerate over time. I think that this administration is really bringing new tools, new technology to bear, whether it's in C2, whether it's in autonomy, whether it's in AI use more broadly, that will enhance an already pretty awesome fighting force. And the thing that I've seen change fundamentally is the world shifted from a technology point of view. The venture community shifted. The opportunity shifted for entrepreneurs to begin to fund innovation that could be directed towards the defense of the U.S.

4:59and to be used in circumstances like Taiwan. And so as the world shifted, the investments, the focus, a lot of the work that had been done traditionally for the commercial world has gotten applied to defense. And we're seeing that innovation curve and that innovation opportunity play out as it relates to Taiwan. and as Horatio was saying, if you look at what happened in Ukraine, everyone's been watching what's going on. There's been a lot of education where you've seen a very big shift in the way conflicts get fought and that's educated the Taiwanese on how to place investments and think about innovation and technology in a fundamentally different way.

5:41Exactly right. Let's zoom out to just compare more broadly U.S. and China as it relates to sort of military readiness. What are our weaknesses relative to theirs? and what are some stuff that they do that we don't quite do yet or can learn from? I would say, obviously, in this context, their primary strength is proximity. And so we need to project power where this is much easier for them to do in this context. And so our entire strategy needs to be one of understanding that fundamental asymmetry, if you will. Our strength lies both geopolitically in the fact that we have true allies and partners that are going to fight with us.

6:22Secondarily, that our armed forces truly are second to none, both in capacity, ability, and talent. And third, as Gary is saying, is the engine of progress of the American economy translated in this moment in technology continues to give us an edge. Now, you're going to hear me talk about speed all the time. China is not standing still. And so while we still have a clear technological edge on some of these fundamental technologies, we need to continue to accelerate the deployment, the use and the development of these technologies in the real world because they are accelerating themselves. I get every, I think that's the thing that the U.S.

7:07government has to improve on. The speed with which they adopt new technology, the speed with which they consume and participate in that innovation process is going to be critical. And there have been improvements. It is getting better, but we still have a long ways to go. To be able to take things that are relatively new and think creatively about how do you get these things deployed broadly across the military to really empower them to do what they need to do. Exactly. How should we think about whether our defense industrial base can sustain a prolonged great power conflict with China? And what else should we be doing that we may not be doing at the moment as well as we should?

7:43The thing that has to happen is we have to unlock speed in the procurement process through the government. It just takes too long for the government to buy things today and take advantage of things. And so if you can unlock and break down some of those hurdles and drive dollars more broadly into the development of these capabilities that will create tremendous outcomes for our military, that has to happen and it has to get better. And what are the bottlenecks for that? It's really just the purchasing process and the program process that exists today. And there's been a very big focus on how do you improve that and accelerate that.

8:19But I think the great thing about it is if some of these barriers can be removed, the government will get much more value from the dollar that they spent. It'll be good for the American consumer. There will be a lot more accountability in the dollars that gets met. Right. I mean, just to back it up a moment for people that don't live in this world, the big issue is that the entire procurement process is built on minimizing risk. not minimizing cost, not accelerating technology, not moving fast is minimizing risk. That actually was probably the right posture 75, 80 years ago where a new technology platform could last 30, 40, 50 years and you just had to get it right.

9:01And if it took you three to five more years to get there, you could still be ahead. That no longer works. And so the new process needs to do two things. One, once it's deployed in the hands of a warfighter, it needs to work. It simply cannot fail at that point. But when you work upstream of that, the process has to offer a lot more failure because without failure, there's no success. Without failure, there's no speed. You try four things, three don't work, one does. You double down on that. You try three more things. And that process, which is very common to the Valley and is very common to a startup and is very common even to a company like us that works in technology, is anathema to the way not the Department of War wants to operate, but it's anathema to the way the laws and the regulations are written for the Department of War to operate.

9:51And I think that there's very good lessons that can be learned from the Ukrainian conflict, where they are in a fast path of iteration, where they bring things to the battlefield, they either work or they don't work, and they iterate quickly. And that path of iteration has actually been the path that has created sustainment and success for them. And we have to learn that same agile, iterative process in the U.S. government for the U.S. government to deliver the right capabilities to the military and not be shut out of innovation. Right. Now, to be fair, it is getting better. It is getting better.

10:27It's better now than it was five years ago. It's better than it was 10 years ago. But we have a long ways to go. Well, we need to move faster because, again, this is a competition with a very well-funded adversary with, frankly, a different even moral framework, not just legal frameworks. And so if we don't move at speed, eventually they're going to catch up. To that end, how worried should we be about supply chain vulnerabilities? I think that's in the news right now, right? I mean, the entire conversation about critical minerals, we do need to be worried about that. A few years ago, we were working on a directed energy program inside Booz Allen.

11:08And I said, this is great. but I want you to prove to me that it can be made completely by things that are either sourced or procured in the U.S., or if it cannot be procured in the U.S., it needs to be procured by an ally that is steadfast and that we would not lose in a conflict. Ultimately, the answer was that could not be done. And so now, so to me, this is the kind of issue that needs to ultimately get solved. that I do think we need to be worried about it again. There's very strong efforts underway right now by the administration across energy, interior, commerce, defense, and so forth to try and address it.

11:54But right now, it's an issue. And there's a lot of attention on this issue, not just within the government, but within the companies that manufacture and how they're working their own supply chains. But it doesn't change overnight. That's a long process. And the positive thing is there's progress being made, but it's going to take some time. I want to zoom out. You mentioned Ukraine. I want to zoom out and ask first, just how has that conflict changed our understanding of war and what it takes to be successful? Yeah, I'll start. We've got a couple dozen employees deployed there working alongside the Ukrainians to provide high value targets against the Russians.

12:37And I can speak personally for the experience we've had. We just get smarter every day. what product capabilities we need. It forces us to find ways to fix things overnight if we need to, because it's life and death. Like if we can make a difference in the next 24 hours, we're going to do that. And so I think the number one thing that we've seen is the agility that has been forced onto suppliers supporting the military and the ability to change tactics quickly. And the simplest thing that I would say is that we operate in a GPS-denied, comms-denied environment. And so you've got to have capabilities that exist in your products that can operate in that environment because you literally never have comms.

13:24That's exactly right. And that's something that is often lost. And, you know, if you look at where Booz Allen is playing most effectively, I'll highlight two areas. One is at the edge. We're somewhat unbeatable at the edge, especially when it comes to communications, cyber, and being able to interoperate across these various technologies. And that is something that the Ukrainians have had to do on a shoestring. But we, as a nation, have become very good at. And we're learning how to iterate faster and how to—they've gotten very good at incorporating commercial technology real-time into what they're doing and iterating it once it's inside the mission as opposed to trying to do all of it before it comes in.

14:12The other area that has been fascinating to me, at least, is this concept of open source intelligence, you know, intelligence that can be gathered from people's cell phones, commercial satellite, social media feeds, and the like. In lots of cases, we have found that the OSINT is as good or perhaps not quite as good as what comes in on the classified channels, but it can get there faster. And again, in a time where speed is of the essence, that's been a huge mind shift for a lot of people. And I think, stating the obvious, but it plays out every single day and it played out in Israeli conflict as well, is the importance of autonomy in drones.

15:00And so this idea that, you know, you're reducing the risk of life and that you're deploying these autonomous systems, whether they're low-cost attack drones or surveillance drones, whatever it might be, that is having a huge impact on the outcomes in that conflict. And you see the use by the very effective use by the Ukrainians. You also see the effective use by the Russians. But it's redefining the way conflicts have been fought in the past. And autonomy will play a critical role as we think about broader conflicts around the globe. Can you share more about that in terms of describing in greater detail what it used to be before this development in terms of what dictated which side would win or what was most important to get right?

15:46And now in this sort of post, in other words, entering sort of more drone-focused wars, what's most important and what changes there in terms of what's needed to win? Yeah, well, in the past you had the systems were always human-man systems, putting human life at risk every single day for every aspect of the conflict. And today what you see is a variety of autonomous systems or drones that are playing a very critical role. Now, it pushes more responsibility on technology for technology to work well, to make these systems operate in a way to get the right mission outcome. But it's taking the human and putting the human in a place where they're not always at risk and you're not always flying the most expensive warfighters, the most expensive systems, and you're doing it in a more cost-effective, mission-capable way.

16:44Is America ready? for sort of this future of warfare, sort of, you know, see more about our current position here and, you know, what's needed to get forward? The answer, short form, the answer is yes. We, I think our military understands that we're not fighting across five domains simultaneously. It's no longer just air, land, and sea. It's also cyberspace and actual space. And they have to be able to operate in an integrated way across all of those domains that in many cases, you have to be able to operate autonomously on all of those domains. especially the further that you get from the human, the more the autonomy systems have to be highly accurate and highly reliable.

17:23Think about space. The latency issue alone, if somebody is shooting at your satellite, there's not enough time for the satellite to start a whole communication chain about what do I do. The satellite is going to have to react real time. And so all of these things are understood. All of these things are in train. And there's significant investment against all of them. We've been very lucky at Booz Allen. We're at the forefront of cyber. We're the largest provider of AI to the federal government, and we're builders. So we're building a number of edge systems that either are soldier-born communication platforms, or we build an amazing technology.

18:08This is why we have this partnership. We can build on HiveMind and the incredible things that Shield is doing to accelerate this future. Are we ready? Yes. But it's a future that is changing by the day. Let's actually go deeper into both your respective companies. Booz, of course, one of the biggest contractors for the government, been around over 100 years. Why don't you give a little bit of the history of how it became one of the biggest partners for the government and where your focus is now? So, you know, people get surprised when I tell the story of who we are now. So if you look at Booz Allen now, we are in the business of injecting technology into the most critical national security challenges of our country.

18:49Like I said, number one in AI, number one in cyber, and very strong set of edge technologies, just to name a few. About 75 % of what we do is national security. So then the question is, how did you get there? Because certainly you weren't any of those things 100 years ago. And if I were to describe to you the story of the last 25 years really quickly, I would say we've been through three phases. The first one was to become very mission-centric. We are obsessed with success in the mission. This was born out of our work in cyber early on, our counterterrorism work post-9-11, and our counter-ID work in Iraq and Afghanistan.

19:30It really put us at the center of these missions. The second thing that happened is once we were there, we realized the power of technology to transform these missions real time and make ourselves much more effective, which is why we got into AI in 2017 when people were really talking about it, into autonomy earlier than most, into C2 systems that operate at the edge and that embed all sorts of artificial intelligence into it from the waveform to the way they operate. and then the third thing has been this speed centricity I'm obsessed with speed I think that ultimately it'll be the faster not the bigger that we'll win and I believe that for the country I believe that for our company which is why we're forming these amazing partnerships because we don't want to reinvent the wheel we want to work on top of the best technology out there to extend it to help it be more successful to integrate it with things that we're building And that's exactly what our two companies are doing as we speak.

20:32And why don't you give a description of the history of Shield and how it got into autonomy and where you're focused now. And then let's get into the partnership. You bet. So Shield is a 10-year-old company. We focus on next generation autonomous systems. We have two product lines today. We have a software product line that delivers a software development kit for autonomy developers to be able to extend the core platform to make a variety of things fly. And one of the things that has really differentiated us is our time to flight. We can get something up and running in a very short period of time.

21:07We started in air, but we are now doing work in maritime and will move cross domain with that broad, broad platform. And then we also have an aircraft product line. Today we offer a Group 3 drone primarily used for surveillance and targeting. And it's unique in that it's vertical takeoff and landing. It allows us to be deployed in a lot of complex situations that traditional runway-based Group 3 drones have not. And we're continuing to invest broadly in next-generation aircraft. And you'll hear more about that from us in the coming weeks as we release new products in that particular area. One of the things that's been really exciting about the relationship with Booz Allen is being able to take that software SDK that we offer and work collaboratively to deliver great mission outcomes for mutual customers.

21:59And our focus is how do we help organizations extend the platform to fly whatever they want to fly. And Booz has been an incredible partner in delivering those kinds of outcomes. And as we look around the globe, one of the things we hear in the international markets in particular is the need and desire to have sovereign autonomy. So take that core platform, but then extend it into the specific aircraft, weapons systems, et cetera, that a particular country may want. And they want to be able to do it their own way and not have it be, it just needs to be unique to them. And that's what's been a big differentiator for S.H.I.E.L.D.

22:40And it really creates this mutual opportunity between S.H.I.E.L.D. and Booz Allen. That's very awesome. You've talked about this all-of-nation approach. Why don't you discuss what that means and how companies should get involved? I feel very strongly that we are in this unique, really very challenging, very dangerous geopolitical moment. perhaps the most challenging and dangerous of the last 50 years. With the rise of China, with what Russia is doing, you know, Iran is now somewhat diminished, but, you know, hopefully forever, but who knows? For now. But for now. And North Korea is always lurking, and there's other actors around the world.

23:22And the challenge is not just that they exist, it's that they are collaborating. And you see it in the battlefield, you see it in Ukraine, You see it all over the place. And so it is, so the U.S. has to have a response that cannot be driven solely by the government, solely by the existing defense base, solely by the Valley. It's really going to take everybody. And in my mind, it operates in multiple levels. But at the core of it is these unique partnerships where companies are looking for points of commonality to move faster like we are. and are going to market together. And in some ways, we have both pushed the I believe button that says if we do this together, we can do great things.

24:09We did not spend months and years writing business plans. The business plan, part of the business plan just happened as we were getting ready for this podcast. This is how we need to iterate on a basis of both common purpose and some trust. Yeah, I think it's really true of these new waves of technology. as you think about physical AI and leveraging physical AI around the globe, I think it's the partnership that allows us to drive that agility and speed. And by ourselves, while we will go and tackle it, we can go so much faster with an amazing partner like Booz. So expand that to the entire ecosystem and who else can the two of us bring into this conversation that would add a new effect, a new behavior, a new platform, a new way of operating that would accelerate both of us and give somebody else the ability to play.

25:05I think these complex partnerships, I hate to use the word ecosystem because everybody uses it, but it sort of is that. It is that, yeah. If we can get that done correctly, we bring the best of the U.S. economy into the national security mission, which is ultimately how we won the Second World War, how we won the Cold War, and how we're going to need to win this one. Talk more about, you mentioned AI, talk more about what it takes to certify trust and safety as it relates to AI in lethal systems. Is the bottleneck the technology? Is it policy? Is it something else? How should we think about that?

25:40I think it's an all of the above. I mean, I think that the challenge with AI is that it is both similar and different from what preceded it. Right now, at one level, it's an algorithm. And we've been using algorithms since, you know, think about the bow and arrow in the forest with the string and somebody walked through it and the arrow went, that's an algorithm, right? A landmine operates on an algorithm of a certain amount of pressure and so forth. The difference is these algorithms are dynamic and they're learning, they drift, and they're incredibly powerful. But at the end of the day, we can't create an entire new framework to regulate them, which is what some countries are trying to do, because it's unnecessary and it'll slow us down and it'll sit on top of the existing frameworks.

26:32And at the other end, you can't just say, well, whatever, we'll figure it out later, because all of these technologies do have a downside. So there is a regulatory component to all of that. But I really think the biggest challenge is to learn how to use and evolve these algorithms, again, like the Ukrainians have done, real time, in the field, in the fight, to be willing to have some level of experimentation upstream and up front, and then to prove the thing enough that you can actually launch it much faster than it's been launched. Right now, it takes too many iterations to get that done. I think we can accelerate the heck out of it Frankly, technology itself will be part of the solution.

27:19You know, we're doing amazing things with digital twins that allow you to both train the algorithm a lot faster. This is work we're doing with NVIDIA, but also allows you to demonstrate the validity and the power of the algorithm a lot faster. We can get there. It's not rocket science, but it's going to take a conservative effort. Yeah, and I think as a supplier in this world, the one thing that we think a lot about, that we think is really important is ensuring that we're doing everything we can from a cybersecurity point of view to give our customers the confidence that there will not be tampering, there will not be some form of intrusion.

28:00And we think very holistically about that. And we own and are responsible for ensuring that what we deliver has the right security controls that are necessary to give our in-customers the confidence that we're tamper-proof. That's an excellent point. It's super important. One of the areas where we're collaborating is BlueZellin is the leader because of our cyber business in adversarial AI, which is both how would you attack an algorithm and how would you defend it? And we're bringing that knowledge into this set of missions because obviously the most powerful thing you could do is mess with somebody's algorithm and have the opportunity to affect their autonomy at the right time.