A slew of emerging tech firms now has a new angel investor: the U.S. military. On Wednesday, Secretary of Defense Ash Carter praised the Defense Innovation Unit Experimental (DIUx), which is working to put new technologies into the hands of service members. Based in the heart of Silicon Valley, the unit began operations last August. He announced version 2.0 of the program, which will include another tech hub to be built in Boston, and promised that more will follow. (Rumor has it that Austin, Texas will be the next one.)
“In our budget for the coming year, we've requested $30 million in new funding to direct towards nontraditional companies with emerging commercially based technologies that meet our military’s needs,” Carter stated. He added, “With co-investment from the military services, this number is really just a starting point.”
The Pentagon bureaucracy never liked the idea of a semi-independent California office operating outside their traditional sphere of control, and initially it didn’t give DIUx any money or contracting authority. However, DIUx 2.0 will not be as bogged down in the Pentagon’s red tape; it will report directly to Carter. “I can’t afford to have everybody do that, but this is to signify the importance I attach to this mission, and also the importance of speedy decision-making,” he stated.
At the time of the Secretary’s last visit to Silicon Valley, in March, DIUx officials said that the unit had identified 22 pilot projects with tech companies and start-ups that had never before worked with the Pentagon. Five projects were being executed, and 17 others were in various acquisition phases. Then-director George Duchak said that since August the unit had hosted individual meetings with more than 500 start-ups, entrepreneurs, executives, and corporations, as well as put on several signature events.
DIUx is much more than just an investment vehicle, however. The program has built “on-ramps and off-ramps” for technical talent to flow between the Department of Defense and the tech sector in both directions, Carter said. The new Defense Digital Service brings in technologists for a tour of duty with the department -- just for a year or two, on maybe one project. “But they make a lasting contribution to us and our mission, and also experience being part of something bigger than themselves,” he underscored. These outside experts were also part of the “Hack the Pentagon” project, which has already found 80 bugs in the system that needed to be fixed.
Like any other startup, DIUx is evolving. But because it is bridging the gap between the private tech world and the Pentagon, it faces challenges from both sides. Startups are frustrated by the still-slow pace of government acquisition, and Congress is threatening to withhold some of DIUx’s funding if it doesn’t provide greater transparency on its dealings. Still, the idea of quickly bringing in useful tech innovation to the military is a worthy one that should be scaled up.