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Small, fast-moving American technology companies are using the war in Ukraine to demonstrate a new generation of military systems, but they face the challenge of selling them to a risk-averse Defense Department.
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A message from Washington
Capella Space, a San Francisco-based start-up, is building a fleet of small, low-cost satellites that can track enemy forces as they move at night or under clouds that traditional optical satellites can't see through.
Fortem Technologies, a small aerospace company from Utah, wants to provide the Pentagon with a new type of unmanned aerial vehicle that can destroy enemy drones.
HawkEye 360, a Virginia-based company, used private equity funds to launch its own satellites that use radio waves emitted from communications equipment and other electronic devices to detect the presence of enemy troop concentrations.
Each of these systems has been field-tested in the war in Ukraine, praised by top officials there, and validated by investors who have put money into the field.
But they face a tough challenge on another battlefield: the Pentagon's slow, risk-averse military procurement bureaucracy.
When it comes to drones, satellites, artificial intelligence and other areas, startup companies often offer the Pentagon cheaper, faster and more flexible options than the weapons systems produced by the handful of giant contractors the Pentagon normally relies on.
But while the military has given small grants and short-term contracts to many start-ups, those contracts often expire too soon and aren't big enough for the young companies to pay their salaries — or to grow as fast as their venture capitalists expect. Several were forced to lay off people, slowing the advancement of new technologies and tools of warfare.
As the United States tries to maintain its national security lead over China, Russia and other rivals, Pentagon leaders are just beginning to figure out how to bring the spirit of Silicon Valley to the sprawling military industrial complex.
"Changes like this don't always go as smoothly or as quickly as I would like," Defense Secretary Lloyd J. Austin III admitted.speech in Decembercrowd in Simi Valley, California, including executives from many tech start-ups.
Current and former senior Pentagon officials have acknowledged in interviews that the Defense Department often still needs years of congressional planning and funding decisions before it can buy products from startups in quantities sufficient to sustain its operations.
"Sometimes we have too much bureaucracy — too many checkers, checking checkers," Deborah Lee James, the former secretary of the Air Force, said last month.
Industry leaders call their situation a "valley of death," where the slow pace of government contracts could leave them without funds pending decisions. A start-up based in San Francisco,Primer Technologies, makes an artificial intelligence tool that has analyzed thousands of hours of unencrypted Russian radio communications to help find targets, but has struggled to stay afloat while waiting for major defense contracts.
"Small businesses can't spin around for two or three years until our contract goes into effect," Heidi Shyu, assistant secretary of defense for research and engineering, said at a Reagan National Defense Forum late last year.
Pentagon officials responsible for the purchase are also trained to avoid risk, after decades of scandals related tooverpriced toilet seats, shipsThat doesn't workUcorruption. That culture doesn't suit technology companies that thrive on innovation, speed and constant improvement of their products.
"Customers at the Pentagon are trained to say 'no' often – to stay within the rules," said Payam Banazadeh, founder and CEO of Capella Space.
The war in Ukraine is still largely fought with 20th century weapons, such as rifles, artillery and howitzers.
William A. LaPlante, assistant secretary of defense for acquisition and sustainment, scoffed at some claims about the importance of American technology in Ukraine,say military contractorslast year that "whatever your favorite gadget is, it's hardcore production of really serious weapons and that's what matters."
He added that the fight against Russia in Ukraine is not currently being led by "Silicon Valley, even if they will try to take credit for it."
But he said in an interview that he agrees that commercial technology has changed the battlefield in important ways, particularly commercial satellite tools that have given Ukraine a much greater surveillance capability.
"Technology is really important," he said.
For the Pentagon, the task of selecting new companies is complicated by the tendency of certain startups to exaggerate the capabilities of their technologies and by the different approaches companies take to meet military needs.
"We recommend that you pick the winners, support them meaningfully and see what they can deliver," said Whitney McNamara, a former Pentagon science adviser, describinga new report for The Atlantic Councilexploring ways to accelerate the acquisition of war technology.
From the first months of the warStarlink van SpaceX-a, the satellite Internet service founded by Elon Musk, has played a key role for Ukrainian soldiers on the front lines. But small drones and a denser array of satellites also help provide the capability for ubiquitous surveillance, allowing Ukraine to continuously identify and monitor threats and targets.
A new generation of cheaper and more accurate attack drones with bombs can hover independently in the air until it finds a target. AI-enabled computer systems can aggregate this collected data and other feeds to make targeted decisions faster than any human.
The Ukrainians have innovated a lot themselves, impressing Pentagon officials by turning commercial drones into mini-bombers, for example.
Taken together, said Thomas X. Hammes, who studies war history at the Pentagon-backed National Defense University, the events represent "a veritable military revolution," and one that is happening much faster than the passing infantry shift. foot in World War I motorized and mechanized armies of World War II.
"The current pace of change does not give the United States and its allies and partners the luxury of two decades to transition," said Mr. Hammes, a 30-year Marine veteran. “You're starting to see a willingness to accept that this is happening, all the way down to the overall three- and four-star level. They understand that it has to be done. The question is: how to organize it?
Exam table in Ukraine
Backed by drums and patriotic music, montagevideo recordingsdemonstrate a series of successful interceptions in rapid succession with a new type of war tool: an unmanned vehicle that takes off when an enemy drone is detected, tracks the incoming weapon and, using a Spider-Man-like web, disables it.
Manufactured by Fortem, a Utah-based start-up, it was nicknamed the "Shahed Hunter" in reference to the Iranian attack drones that intercepted the Fortem drone.
It's just one of at least 30 new products identified by The New York Times, mostly made by small tech startups in the United States that have been used on the front lines in Ukraine or used by allies helping the Ukrainians.
This American technology arrives in Ukraine through various arrangements. They include donations from companies, outright acquisition by the Ukrainian government or groups that support it, or purchase by the United States government, which thensends to Ukraine.
The most conventional of these devices are commercial satellites that provide traditional photographic images of Russian military equipment and troops, and come from companies such as Maxar Technologies, BlackSky and Planet Labs, which have successfullybillions of dollars in governmentcontracts.
The United States government has had advanced space satellites for years, with capabilities that still exceed what commercial companies can offer. But in the beginningfive years ago, private sector players like Capella have begun to launch smaller, cheaper units that are faster to build, providing more frequent coverage of the world than even the US government can provide.
"This is truly the first major war where commercially available satellite imagery can play an important role in providing open-source information on troop movements, military build-ups in neighboring countries, refugee flows and more," said Ukraine's Innovation Minister Mykhailo Fedorov,written in March 2022at the start of the war, accurately predicting the vital role these commercial data have played ever since.
Closer to the ground, small drones manufactured by a growing list of US companies — including AeroVironment, Skydio, Shield AI, Teal Drones, BRINC and Anduril Industries — help Ukraine provide the so-called constant surveillance needed to track targets. identify and monitor the movement of refugees, as well as other threats, according to information from companies, the Pentagon or the Ukrainian government.
The US government had its own much larger attack drones that were used extensively in Iraq and Afghanistan with names likePredator i Reaper, both made by California-based General Atomics, cost as much as57 million dollars each.But the new generation of drones is much smaller, cheaper and easier to build, and could give the military new capabilities on the battlefield.
Wahid Nawabi, CEO of California-based AeroVironment, which makes the Switchblade 300 and 600 attack drones, both of which have been used in Ukraine, said the military is moving toward using swarms of small drones in attacks, with perhaps 50 or even a few about a hundred of them descend on the targets at the same time. The company has sold the Pentagon about 5,000 of these attack drones over the past decade, but it is awaiting much larger orders, as Mr. Nawabi said it could produce as many as 16,000 a year.
"The enemy could even defeat 10 to 20 percent of the resources coming to him," Nawabi said. “But I can't beat half plus. And that's why a swarm can be effective."
Other US-based military technology companies, including Virginia-based Dedrone and California-based SkySafe, have supplied products to Ukraine that allow the government there to track incoming enemy drones or, in Dedrone's case,a gun-like devicewhich emits targeted radio pulsesget stuckenemy drone, disabling it before it can hit the target.
Perhaps the most revolutionary use of American technology in Ukraine is the application of software using artificial intelligence, created by Palantir, to assist in targeting efforts. Company director, Alex Karp,traveled to Ukrainelast year to meet with President Volodymyr Zelensky.
"If you're going to compete with old-fashioned technology," Mr. Karp said at a conference this yearan eventfor a discussion of AI tools in warfare, "and you have an adversary that knows how to install and implement digitized targeting in AI, you're clearly at a huge disadvantage."
Some experts say artificial intelligence, which has been used in Ukraine to help find vast amounts of data collected through surveillance, will eventually prove as devastating to the nature of warfare as nuclear weapons.
"A.I. it's capable of making millions of decisions even before a person realizes a decision needs to be made,” said Will Roper, who served as the Air Force's chief acquisition officer until 2021 and continues to serve as an adviser to the Pentagon. "It is as if we are at the dawn of a new era of warfare."
A pattern of business behavior
For Primer, a small artificial intelligence company based in downtown San Francisco, it was a breakthrough.
Not long after the war in Ukraine began, engineers, working with Western allies, exploited a tidal wave of intercepted Russian radio communications. It used advanced software to clean up crackling audio, automatically translate conversations, and in particular isolated moments when Russian soldiers in Ukraine discussed weapons systems, locations and other tactically important information.
The same job would require hundreds of intelligence analysts to identify a few relevant clues in a mass of radio traffic. Now it happened in a matter of minutes.
The findings were quickly linked to other so-called open-source intelligence streams, such as geolocation data from social media accounts, which provided updates on the location of troops or equipment, comparable to drone video surveillance or satellite imagery.
"It gets situational awareness," says Sean Gourley, founder of Primer.
But at the same time, the Pentagon was still deciding when to proceed with large purchases of its technology. The company was draining its cash reserves too quickly, so Mr. Gourley laid off engineers and other employees.
"These engineers are great at creating solutions to solve these problems and that's what's important," Mr Gourley said. "But there is uncertainty: when will this contract be concluded? It's very, very hard to justify that expense.
Mr. Gourley said he decided instead to put more money into government relations efforts by hiring a former top aide to the Senate Armed Services Committee to help the company promote its Washington activities.
"The big defense companies don't really invest in technology," he said. “They're just investing in how to navigate this bureaucracy. It's bullshit, but that's how you have to play this game.”
In interviews, nearly a dozen top executives from technology-focused companies shared stories of stalled efforts or frustrations.
Capella Space has approximately 200 employees and has raised approximately $250 million in venture capital funding. He used some of that money to launch 10 of his small satellites.
The Pentagon informed Capella that it would continue to purchase services as part of ademonstration project, but is unlikely to be ready to give her a full "program of record" contract until 2025, said Mr. Banazadeh, the company's chief executive.
"They don't promote themselves by taking risks," Mr. Banazadeh said of contract officers. "So now you have to go through this mysterious three-year budgeting process with a fighter screaming and yelling and saying, 'I really want this stuff.'
The company recently laid off a number of employees pending the Pentagon's decision.
Mr. Roper, a former Air Force acquisition chief, said another problem was the Defense Department's historic attempt to create its own solutions to problems rather than buy new technologies from commercial companies. He noted that artificial intelligence, for example, has not yet been integrated into Air Force flight operations beyond some basic experiments.
"The Pentagon is still in 'invention mode' that goes all the way back to the Cold War, when it should now be in cooperation mode to accelerate private industry," Mr. Roper said. "And he fails at that."
There are some success stories.
Defense Innovation Unitmade the programwhich evaluated several surveillance drones coming to market and created a contracting tool that allowed Pentagon agencies to purchase them outright, without a multi-year procurement process. Mr Austin, the Defense Secretary, recently announced that the Defense Innovation Unit would do just thatreport directly to him, in the company of a new recruit from Apple.
Skydio, one of the companies approved through the program, now sells a drone that uses artificial intelligence that allows it to fly remotely and avoid collisions even when piloted by a novice pilot. The AI-enhanced drone can fly indoors in very tight spaces, allowing it to look inside a building before, for example, sending troops inside.
But for every success, there are many other tech startups struggling to pay the bills while they wait for the Pentagon to make a purchase decision.
"We're definitely trying to address a lot of these procurement pain points," said Ms. Shyu, the Pentagon's undersecretary for research and engineering and chief technology officer. "I'm working on bridging Death Valley."
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