Emil Michael serves as Under Secretary of Defense for Research and Engineering and acting director of the Defense Innovation Unit. A Silicon Valley veteran who previously founded Tell Me Network (sold to Microsoft), he completed a White House Fellowship under Defense Secretary Robert Gates, gaining experience in Afghanistan, Iraq, and Pakistan.

This conversation, recorded at the A16Z American Dynamism Summit in Washington D.C., covers Michael's efforts to modernize Pentagon AI capabilities amid the largest military buildup in history. He discusses reducing bureaucratic obstacles, managing AI vendor relationships, and ensuring democratic oversight of military technology deployment.

The discussion reveals previously unreported details about problematic AI contracts within sensitive military commands and the catalyst behind recent public debates over commercial AI models in defense applications.

From Silicon Valley to Pentagon: The Path to Public Service

After selling Tell Me Network to Microsoft in 2007, Michael took a break from tech and applied to the White House Fellowship Program, a nonpartisan program previously completed by Colin Powell and General Kane.

"I got assigned to Robert Gates, who was the Secretary of Defense at the time. So I got to spend time in Afghanistan, Iraq, Pakistan. I got a passion for that world" - Emil

Michael returned to government service under President Trump, seeing an opportunity for disruption: "this is a moment where you have a disruptor at the top" with clear ways to solve problems he had previously identified.

Wartime Speed vs Peacetime Bureaucracy

Peacetime speed began after the Cold War with The Last Supper event, where Pentagon leaders told industry to consolidate and slow growth, becoming "dividend payers and stock buybackers."

"We're faced with the biggest military buildup in history in China starting in the mid-2000s, like 2010, and we didn't catch up" - Emil, describing how the U.S. outsourced critical domestic production.

Wartime speed means "re-domesticating the critical things we need for national strength" while maintaining leads in key areas and ensuring self-reliance in critical supply chains.

Streamlining Pentagon Priorities: From 14 to 6

Upon taking the role in May, Michael found 14 critical priority areas that "hadn't changed in nearly a decade" and were written in "techno-babble" like "integrated network systems of systems."

"Who can remember 14 things when you're trying to motivate a workforce?" - Emil, explaining the reduction to 6 priorities focused on greatest opportunity for change and impact.

Applied AI became the top priority, with the chief digital and AI office moved into Michael's group to accelerate deployment across the department.

AI Deployment Crisis: Vendor Lock-in and Operational Control

Michael discovered existing AI contracts with "dozens of restrictions" including prohibitions on moving satellites or planning operations that could lead to kinetic strikes.

"These AI models were baked into some of the most sensitive and important places in the U.S. military" with vendor-locked terms that could "stop in the middle of an operation and put lives at risk" - Emil

After the successful Maduro raid, a primary AI vendor questioned whether their software was used, prompting Michael to compare it to "a stranger at a coffee shop asking about your kid at school."

"A company's soul of their model, their constitution, which is not the U.S. Constitution, can't be dictating our command and control environment" - Emil on the fundamental sovereignty issue.

Democratic Oversight vs Corporate Constitutions

Michael emphasized the importance of democratic processes over corporate decision-making: "If you don't believe in the system, as imperfect as it is, then what do you believe in? You're taking upon yourself to kind of be God."

The department has "40-page internal directives that have been there for years about autonomous weaponry" while observing developments in Ukraine and Russia.

"The Chinese stealing American models, taking the guardrails off, and potentially using those against us. So am I going to have my arm tied behind my back against the same model?" - Emil

Structural Reform: From Cost-Plus to Fixed-Price Contracts

Traditional contracting involved "thousand requirements in our RFP" with vendors saying "Yes, yes, yes, yes, yes" even when "physically impossible," leading to cost-plus contracts and endless change orders.

The new approach uses "simple requirements: I need a missile that goes this far in this environment with this payload" with firm fixed-price contracts following "the Elon model and why he was so successful at SpaceX."

Michael is "moving the debris out" of bureaucratic obstacles daily, creating "faster yeses, faster no's" so startups know where they stand rather than receiving indefinite non-committal responses.

Scaling Challenges and Patriotic Service

Startups need to develop "production and manufacturing ability to scale" beyond initial concepts, requiring them to "borrow from the old world" for quality testing and factory operations.

"Money talks" - Michael advises startups to focus on actual purchases and testing rather than just positive feedback from department personnel who culturally "never say no."

"I'm an immigrant. My first language was Arabic. I moved to this country... this is the way I'm going to serve my country" - Emil on his motivation for public service and wanting his children to see that "our system doesn't come for free."