The Pentagon is on a charm offensive in Silicon Valley but many see no need to embrace government
In May, Ashton Carter made his fourth trip to Silicon Valley to talk about innovation since becoming US defence secretary 15 months earlier. None of his predecessors had made this journey in the past 20 years.
A Rhodes scholar with a doctorate in theoretical physics, Mr Carter seems comfortable among the technology elite. But his frequent visits are also a reflection of his concern about a growing disconnection between the defence establishment and Silicon Valley, a divide that worsened in the wake of Edward Snowden’s 2013 revelations about government surveillance and that persists today.
For decades, there was a productive relationship between the private sector and the defence department, resulting in some of the most important technology around — from the internet to global positioning, imaging and sensor technology. Siri, Apple’s voice-recognition technology, began life with Department of Defense funds at Stanford Research Institute. Dave Packard, co-founder of Hewlett-Packard, was deputy secretary of defence in the Nixon administration.
But the relationship is no longer what it once was, potentially endangering American competitiveness in areas where it has always had an advantage.
In his remarks at the Defense One Tech Summit in June in Washington, Mr Carter pledged to repair the relationship. “I am committed to building and rebuilding the bridges between our national security endeavours at the Pentagon and innovators throughout the nation from the tech entrepreneurs in Silicon Valley,” he said, echoing remarks he had made at Stanford University.
As proof that his efforts are bearing fruit, Mr Carter can point to the creation this year of the Defense Innovation Board, which counts Google’s Eric Schmidt and LinkedIn founder Reid Hoffman as board members, along with pilot programmes such as “Hack the Pentagon”.
Like his broader Silicon Valley charm offensive, these efforts reflect Mr Carter’s acknowledgment that the DoD has lost the influence it had in stimulating some of the most advanced technology research and development. It is no longer clear that the Valley needs DoD as much as the DoD needs the Valley.
“Silicon Valley is a long way from its roots when it was funded by the DoD,” says Steve Blank, an entrepreneur and professor at Stanford University. “Most start-ups and innovative companies are unwilling to expose their intellectual property and go through the paperwork of dealing with the government so they choose not to pursue government ventures.”
Josh Wolfe, one of the founders of Lux Capital, which invests in start-ups developing technology with military and commercial applications, agrees that dealing with the DoD is a bureaucratic headache that is unfamiliar to young Valley innovators.
“Our mantra is to move fast and break stuff,” Mr Wolfe says. “And then we have these meetings with [the defence department] that are formal and bureaucratic.”
The robot race
For several years, the research arm of the US Defense Advanced Research Projects Agency has sponsored a robotics competition. Among the recent winners and top competitors have been robots from Schaft, a Japanese start-up, and Boston Dynamics. Google bought both of them, along with a few other leading-edge robot makers, as part of its big push into robotics.
Among the first messages from Google to these companies is that there would be no more dialogue with the DoD, according to two people familiar with the situation. Last year, at Google’s behest, Schaft did not compete in the Darpa competition at all.
“Google doesn’t want them to engage with us, even though Boston Dynamics’ early technology was paid for by the Department of Defense,” says Adam Jay Harrison, director of the department’s National Security Technology Accelerator, which was established to promote the development of defence start-ups. It will be officially launched on October 14.
“The Department of Defense is the world leader in funding high-risk, high-pay-off technology,” Mr Harrison adds. “But too many high-tech businesses and start-ups are turning their backs on us. We are no longer inventing the future. Others are. That’s something we have to change.”
(The robotics companies are now controlled by Alphabet, the holding company that Google established last year to run its businesses separately. Boston Dynamics has been put up for sale.)
Some Silicon Valley executives who work with Darpa insist that the system worked exactly the way it is supposed to with regard to robotics and the emerging field of automation. Darpa has always funded companies and technologies that may not have a connection to the DoD later on, they say, adding that they see the full benefit from their research investment in autonomous vehicles and robotics.
Yet Mr Harrison, who has a foot in both defence and technology, sees a frayed relationship and is determined to close the gap between the DoD and the Valley.
There are several reasons for the increasingly inimical landscape. For one thing, the DoD’s more limited resources and the relatively smaller size of the orders it gives out contrast mightily with the bulging coffers of tech companies and the venture capital firms that back them. Many specialised technologies the private sector develops need scale to be profitable — and the scale of orders they can garner from commercial applications is essential to make the investments pay off.
That means that the private sector has less financial incentive to deal with the DoD. Invariably, it is no longer the biggest player with the deepest pockets.
“The emergence of international commercial and consumer high-tech markets has substantially displaced DoD as the centre of gravity” for global research and development, noted a study from New York University that examined the National Security Technology Accelerator. While through the mid-1980s, the US government accounted for nearly 50 cents of every research dollar globally, today the amount is less than one-tenth of that, the paper says.
“When Clinton became president [in 1993], two-thirds of the relevant technology was developed by the DoD. Eight years later, when he left the White House, the percentages were reversed,” says Mario Mancuso, a former member of George W Bush’s national security team and now a partner at Kirkland & Ellis, the law firm.
Mr Carter said the Pentagon has not “completely ceded research and development funding and innovative thinking” in an April speech at Stanford.
“Overall, our budget invests nearly $72bn in R&D. Now, to give you a little context, that’s more than double what Apple, Intel and Google spent on R&D last year combined,” he said.
But he acknowledged that $12.5bn of that, far less than what the leading technology groups spend, was “specifically invested in science and technology to support groundbreaking work happening in our dozens of DoD labs and engineering centres”.
Perhaps more importantly, pursuing military work is not nearly as lucrative these days for many private sector firms.
For example, iRobot, an independent robot company, developed two parallel technologies. One, iRobot’s military technology, was the recipient of an order from the DoD to defuse improvised explosive devices and other improvised bombs in Iraq and Afghanistan by safely tearing out the wiring without endangering bomb disposal technicians. The other was more mundane: a robot called Roomba that vacuums carpets. In February, iRobot said it was selling its defence and security business for $45m.
Don’t stand so close
Beyond the changing economics, the revelations from Mr Snowden three years ago concerning the extent of the National Security Agency’s spying aggravated the rift.
In 2012, Keith Alexander, then the head of the NSA, was warmly welcomed at the annual Defcon conference, which traditionally has brought together hackers and the military. After Mr Snowden’s disclosures, however, the conference invitation was rescinded.
In February last year, when President Barack Obama came to Silicon Valley to attend a summit on cyber security, Amazon and Apple were among the few tech companies to appear. Three months later, the heads of virtually every company in the Valley, with the exception of defence and security contractors such as Palantir, signed a letter to Mr Obama protesting the government’s demands for a back door to information they had encrypted.
In retrospect, 2013 “might have been the high-water mark of co-operation between the US tech industry and the nation’s government”, writes Scott Malcomson in his book Splinternet. “The programmes [Snowden] exposed showed that the US government was spying and it was using American companies whether they knew it or not and whether they liked it or not. For Silicon Valley, it is a disadvantage to be seen as a tool of the US government.”
Since then, Silicon Valley has been wary of appearing to be close to the defence department. When Mr Harrison shows up in the Valley, some companies ask him not to sign their visitors’ book, he says.
‘Better to do nothing’
One of the biggest challenges for the Pentagon is the increasing power and availability of ‘dual use’ technology. From data mining and drones to 3D printing and sensor systems, many of the most significant technology developments today have both civilian and military applications.
The development of GPS technology illustrates how dual-use applications tend to evolve. The technology behind GPS was first developed by the military and was originally restricted for use in missile guidance systems. The CIA’s venture capital arm In-Q-Tel funded what became Google Earth. When commercial firms developed global positioning system technology, it brought costs down, ultimately benefiting consumers and the military, which could afford to give every soldier in the field a GPS receiver.
But the wider consumerisation of tech has put sophisticated technology into the hands of terrorists and would-be military rivals, reducing the competitive advantage of big defence. And as dual-use technologies accelerate, the cultural divide between the Pentagon and the Valley becomes more acute. Can the DoD move faster, work with start-ups and gain the benefits of the next generation of tech? Or is it hamstrung by old processes developed for big weapon systems and old military contracting methods?
“You have to remember that DoD has been accused of having a culture where it’s better to do nothing than it is to do 99 things right and one thing wrong,” says Mr Harrison.
He predicts that as tech companies pursue technologies such as driverless cars and satellite-based surveillance systems, they could soon have military-relevant technology that is actually superior to that of the DoD.
Moreover, the widening chasm between the two worlds comes as China is providing stiff competition with the US in leading-edge technological spheres such as drones and human genome sequencing. The world’s largest supercomputer resides at China’s National Military University with parallel super processors made in the US.
Nevertheless, many analysts say the conservative DoD culture is only begrudgingly acknowledging the threat that the US military will be left with second-rate technology in a more dangerous world. And some are not optimistic that its efforts to change will succeed.
“Ash Carter’s laudable outreach efforts are doomed to break his heart,” says Mr Mancuso. “To show up saying you are from the government and are there to help is not the best way to win friends and influence people in Silicon Valley.”
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