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How the Pentagon joins forces with Silicon Valley startups

The U.S. military has been closely connected with Silicon Valley since it "started-up" in the 1960s. More recently, the Defense Department has set up an innovation base of sorts to get closer to the new technology companies they need to help with strategic and tactical needs. Special correspondent Michael Cerre reports.

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  • Judy Woodruff:

    Next, special correspondent Michael Cerre looks at the growing relationship between the United States military and the high- tech firms of Silicon Valley. It's tonight's installment of "The Leading Edge," our weekly series on science and innovation.

  • Michael Cerre:

    At the height of last year's North Korean missile crisis, Secretary of Defense James Mattis was in Silicon Valley visiting DIUX, the Defense Department's Innovation Unit Experimental.

    Presumably, he had more than a passing interest in the companies it's working with, on miniature satellites for looking at any spot on the planet 24/7, even through clouds. Artificial intelligence programs for scanning millions of aerial images to detect changes in activities. Maritime drones for patrolling remote coastlines.

    The Defense Department recently set-up a forward operating base of sorts right here in the middle of California's Silicon Valley to get closer to the new technologies they need for some of the more immediate strategic and tactical needs.

    Don't let the artillery pieces fool you. The idea is to act less like a military and the government and more like venture capitalists and entrepreneurs.

  • Sean Heritage:

    I am the managing partner in an interim capacity at DIUX.

  • Michael Cerre:

    So you're using a V.C. term. That's not a military term, managing partner.

  • Sean Heritage:

    That is not a military term. So, there's a lot of things that we do here that are done differently.

  • Michael Cerre:

    Sean Heritage is not your typical commanding officer, nor is DIUX a typical military office with uniforms, cubicles and the DOD's, the Department of Defense's, more regimented mindset.

  • Sean Heritage:

    We have a strong relationship with V.C.'s across the Silicon Valley ecosystem and we leverage a lot of their portfolio companies to solve DOD problems.

  • Michael Cerre:

    For small tech start-ups, the military's bureaucracy and lengthy procurement requirements can consume more time and resources than they can afford. That's especially true for new technology projects that could be obsolete before they get through the traditional contracting process.

    Tech entrepreneur Raj Shah feared that with his first start-up.

  • Raj Shah:

    After my 10th meeting with some senior general, you know, realizing how long things were taking, we stopped pursuing that market.

  • Michael Cerre:

    Shah, a former Air Force F-16 pilot, a McKinsey consultant and entrepreneur, went back on active duty to run DIUX for two years before recently returning to the startup world.

  • Raj Shah:

    There is a civil military divide. And so, because of that, many companies don't look to DOD as a customer. And so, what DIUX is trying to do is bridge that gap, bridge the gap of understanding and bridge the gap of process.

  • Michael Cerre:

    The military has been closely connected with the Silicon Valley since it started up in the '60s, by funding the first semi conductor developers and the first satellite surveillance and submarine missile systems after the Russians launched the space and arms race with Sputnik.

  • Payam Banazadeh:

    We are building an infrastructure of sensors in space to change the way we collect information of what we do here on Earth.

  • Michael Cerre:

    DIUX is helping aerospace engineer and entrepreneur Payam Banazadeh kickstart Capella Space, his start-up, building a new generation of smaller, cheaper, and for some purposes, better satellites out of this nondescript facility in San Francisco.

  • Payam Banazadeh:

    We can quickly redesign and reiterate and we do everything here in-house that allows us to go from a design a concept in a paper napkin to what we are now, which is we're launching a satellite in two years.

  • Michael Cerre:

    Like so many Silicon Valley start-ups from Hewlett Packard to Google, Payam developed his idea while studying at Stanford. He took a hacking for defense course partially sponsored by DIUX.

  • Payam Banazadeh:

    We can do global coverage, high (INAUDIBLE) time, night and day, all weather with satellites looking at everywhere on earth.

  • Michael Cerre:

    As innovated as the technology team, so was DIUX's contracting supervisor, Lauren Schmidt, who is able to get Capella Space a $10 million contract in less than three months, which could be modified after the project started.

  • Lauren Schmidt:

    We've done about 60 of these deals so far, worth about $200 million and our average time from hosting our solicitation to designing the project and awarding the project getting it on contract is about 75 to 90 days, which is light speed for the Department of Defense.

  • Kevin O’Brien:

    At this period of time, we counted 38,963 cars in Paris. We can do that anywhere in the world.

  • Michael Cerre:

    Kevin O'Brien is the chief operating officer of Orbital Insight, an artificial intelligence and machine learning company DIUX is working with to decipher the avalanche of new aerial imagery too massive for humans to analyze in real-time.

  • Kevin O’Brien:

    The power of these new constellations is that you can look at every corner of every inch of the planet every day. And so, when you think about that, we can identify different types of objects, whether they're cars, whether they're trains, whether they're planes, whether it's roads or new buildings being developed.

  • Michael Cerre:

    Orbital Insight preferred working with commercial clients until the military could catch up to Silicon Valley's deal making speed.

  • Kevin O’Brien:

    Our first contract with DIUX took about six months. Our contracts that we're working with them now take about six weeks.

  • Michael Cerre:

    DIUX is different from DARPA, the Defense Advanced Research Projects Agency, the original and much larger military R&D agency, which works on more futuristic, longer term technology projects.

  • Sean Heritage:

    Our business model is focused on solving DOD problems faster, cheaper and better than traditional mechanisms. Therefore, we do not go for a 100 percent solution out of the gate, looking 10 years down the road. We look for an immediate solution that is practical right out of the chute.

  • Michael Cerre:

    Most of DIUX's funding priorities come directly from what they call operators, military people in the field working on real problems, like trying to coordinate midair refueling operations in the Middle East using a whiteboard of all things.

    DIUX contracted a Silicon Valley software company to develop a management app with an internal Air Force team recruited by DIUX's Colonel Enrique Oti.

  • Col. Enrique Oti:

    They started writing the code and they started learning from a commercial company how to write the code, how to use the technologies. And they were able to put together from nothing to work in combat operations in four months.

  • Michael Cerre:

    The Air Force recently cancelled a more than a half billion dollar contract with Northrop Grumman, a major defense contractor, for being more than two years overdue in delivering similar types of air operations software.

  • Eric Schmidt:

    The nature of AI is a long term technology. They will be useful for defensive and perhaps offensive purposes as well.

  • Michael Cerre:

    Former Google CEO and Alphabet chairman Eric Schmidt chairs the Defense Department's Innovation Board and has been working on guidelines for the military's use of artificial intelligence.

    More than 3,000 Google employees recently signed a petition, and a dozen engineers resigned in protest to a defense contract Google has since decided not to renew, highlighting ethical concerns some technologists have with contributing to what they consider to be the business of war.

  • Payam Banazadeh:

    Guess what? Government likes to look at hotspots around the world very persistently, more reliably. And so, there's a lot of commonality between what we do for the commercial sector as well as for defense and intelligence.

  • Kevin O’Brien:

    And so, we have very strict privacy guidelines, we have very strict rules on what will and what we don't do. We've never come across anything to saying that's a showstopper.

  • Man:

    Colorful socks are very important.

  • Michael Cerre:

    That's good creed.

  • Man:

    Yes, you have to wear colorful socks. You know, a lot of times, "Star Wars" socks. I forgot those today.

  • Michael Cerre:

    As much as they make light of adapting the Silicon Valley work style while serving on the new frontlines of tech warfare, most of the military personnel assigned to DIUX have served overseas as war fighters with tactical units. They appreciate the difference between a cool new technology they are helping develop and its intended mission, with a much different set of risk-reward metrics.

  • Sean Heritage:

    We would rather leverage autonomous technology to map out the battlefield before a human has to go into harm's way. We're trying to buy down risk.

  • Michael Cerre:

    Buying down the risk by leveraging the nation's tech capital.

    For the PBS NewsHour, this is Mike Cerre reporting from Mountain View, California.

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