The DoD's critical tech priorities, like hypersonics and directed energy, focus on scaling. The goal is to transform expensive, "exquisite" systems into cheaper, mass-producible assets, shifting the cost-benefit analysis of modern warfare.
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To attract innovation, the DoD is shifting its procurement process. Instead of issuing rigid, 300-page requirement documents that favor incumbents, it now defines a problem and asks companies to propose their own novel solutions.
The conflict in Ukraine exposed the vulnerability of expensive, "exquisite" military platforms (like tanks) to inexpensive technologies (like drones). This has shifted defense priorities toward cheap, mass-producible, "attritable" systems. This fundamental change in product and economics creates a massive opportunity for startups to innovate outside the traditional defense prime model.
To prevent promising startups from failing from funding gaps—the "Valley of Death"—the DoD actively "crowds capital" around them. This stack includes rapid R&D contracts, manufacturing grants, and low-cost loans from a $200B lending authority.
Emil Michael warns defense tech founders that a prototype is not enough. The Department of War requires a credible plan for mass production. Startups must prove they have mastered the "skilled manufacturing piece" to win large contracts.
The Under Secretary of War's primary job is not just to fund technology, but to actively cultivate an ecosystem of new defense contractors. The stated goal is to create five more major companies capable of challenging established primes like Lockheed Martin, fostering competition and bringing new capabilities into the defense sector.
The US defense industry's error was creating a separate, "exquisite" industrial base. The solution is designing weapons that can be built using existing, scalable commercial manufacturing techniques, mirroring the successful approach used during World War II.
The defense tech sector is experiencing a perfect storm. This 'golden triangle' consists of: 1) Desperate customers in the Pentagon and Congress seeking innovation, 2) A wave of experienced founders graduating from successful firms like SpaceX and Anduril, and 3) Abundant downstream capital ready to fund growth.
The decisive advantage in future conflicts will not be just technological superiority, but the ability to mass-produce weapons efficiently. After decades of offshoring manufacturing, re-industrializing the US to produce hardware at scale is Anduril's core strategic focus, viewing the factory itself as the ultimate weapon.
Anduril's co-founder argues America's atrophied manufacturing base is a critical national security vulnerability. The ultimate strategic advantage isn't a single advanced weapon, but the ability to mass-produce "tens of thousands of things" efficiently. Re-industrializing is therefore a core pillar of modern defense strategy.
The US military's 30-year strategy, born from the Gulf War, of relying on small numbers of technologically superior weapons is flawed. The war in Ukraine demonstrates that protracted, industrial-scale conflicts are won by mass and production volume, not just technological sophistication.
