Last week’s POLITICO AI and Tech Summit included a panel discussion on the Future of Defense Innovation. This session offered a timely discussion with Ryan Tseng, President and Chief Strategy Officer, Shield AI, and Emil Michael, Under Secretary of Defense for Research and Engineering, and Acting Head of Defense Innovation Unit (DIU), that explored the evolving relationship between Silicon Valley and the Pentagon; the shifting landscape of drone and AI investment; the impact of recent acquisition reforms and the strategic priorities now shaping U.S. defense innovation policy. Here are some key points from the session:
Silicon Valley-Pentagon Partnership: Stronger Than Ever
The panelists agreed that the partnership between the defense sector and Silicon Valley is at its strongest in decades. Mr. Michael explained that his own background as a tech entrepreneur positioned him to lead the DIU and keep the “front door” open for start-ups with commercial solutions adaptable for military needs. The Department of Defense (DOD) has renewed efforts to streamline the contracting process, especially for new entrants unfamiliar with government procurement, to ensure rapid integration of cutting-edge capabilities.
Ukraine Lessons on Drones
Mr. Tseng shared insights from Shield AI’s operations in Ukraine, where the company has deployed a 40-person team. He highlighted the operational difficulties faced by drone units, especially in electronic warfare conditions where communications and GPS are jammed. He noted a “peak kill” rate as low as 2% for some Ukrainian drones, driving home the need for AI that can autonomously navigate, target and adapt even when traditional tools are denied. Experiences and lessons learned in Ukraine are now influencing U.S. drone programs and counter-drone priorities.
The Replicator Program and Counter-UAS Innovation
Mr. Michael described the Pentagon’s Replicator initiative, aimed at building a “mass drone arsenal,” and additional research efforts such as the “T-Rex” proving grounds, where over 100 drone makers can test their products in communications- and GPS-denied environments. In parallel, a new joint interagency task force is focusing on counter-UAS technology—emphasizing swarms and new methods to neutralize large-scale drone attacks. The DOD has expressed its intent to continue buying both offensive and counter-drone tools, with regular procurement cycles expected to continue.
Reforming Acquisition
Both panelists agreed that major strides have been made to simplify and speed up the acquisition process. Reforms include an executive directive to default to other transaction authorities (OTAs) and prioritize commercial, off-the-shelf (COTS) solutions. This shift makes contracting for new technology far easier than in previous decades by breaking down barriers that have historically slowed down U.S. military innovation.
Strategic Priorities
Mr. Michael reaffirmed China as the pacing threat in the forthcoming National Defense Strategy, even as the Pentagon increases attention to homeland defense and other regional threats. Both speakers stressed that speed is critical: lessons from Ukraine reveal the stark contrast between the rapidly iterative software and weapons development on the battlefield, versus the historically slow U.S. upgrade cycles. Industry and government need to “move fast together” to keep pace.
A Future of AI Everywhere
Finally, Mr. Michael previewed the Department’s ambitious plan to deploy AI tools across 3 million DOD desktops within nine months, with the goal of supporting efficiency, intelligence and warfighting applications. While he noted that the U.S remains far ahead of China in AI, he emphasized that the global intensity of the AI race means there is no room for resting or complacency.
There has been an explosion of venture and start-up interest in defense tech, with more companies crossing the once-formidable “valley of death” for government adoption. It’s important to keep up the momentum and blend a more agile acquisition and strategic innovation to define the next era of American defense leadership.