As Silicon Valley and Washington strengthen their relationship, tech leaders are providing insights on how the government can innovate more effectively and efficiently. Founders and investors of defense tech startups suggest that the Pentagon should reduce lead times and increase its risk tolerance to develop new weapons.
After years of attempting to penetrate the complex U.S. defense sector, Silicon Valley is starting to have more opportunities. Several new defense startups from the Valley are engaging with Washington at a time when the Pentagon is actively seeking new technologies. Notably, many tech leaders supported President Donald Trump’s reelection, solidifying a new connection between an industry traditionally aligned with Democrats.
A recent conference in the nation’s capital underscored the strengthened ties between the tech industry and the government. The Hill and Valley Forum featured CEOs from leading defense tech firms, such as Palantir’s Alex Karp and Anduril’s Brian Schimpf, interacting with government officials including then-national security advisor Mike Waltz and members of the Senate Armed Services Committee like Joni Ernst, Mike Rounds, and Jack Reed.
Amid the U.S.’s escalating geopolitical rivalry with China, tech leaders’ calls for the government to adopt their innovation approaches gained attention. The White House is committed to reforming technology acquisition processes to modernize the U.S. military, Waltz stated before leaving his role as national security adviser.
President Trump signed several executive orders aimed at streamlining the Department of Defense’s acquisition methods. Defense tech startups have long argued that existing procedures hindered their ability to compete with established military contractors with more entrenched relationships in the Pentagon.
The executive orders aim to address inefficiencies, costs, and delays, according to Waltz, who emphasized the administration’s proactive approach to defense and acquisition reform.
Central to the discussions was the Pentagon’s tendency for lengthy bidding processes and a risk-averse culture that made adopting experimental tech more challenging.
Palantir CTO Shyam Sankar highlighted the inherent messiness and chaos of innovation. The White House submitted its 2026 federal budget, proposing $1.01 trillion in funding for the Department of Defense. Defense tech startups, though frustrated with the DoD’s operations, are also eager to secure its business. They have found political allies for the reforms they advocate.
However, despite the DoD opening its procurement process, tech companies and startups will still encounter challenges, according to Palantir’s Karp. He compared the situation to an uphill battle but more feasible than before.
Anduril’s Schimpf proposed that the Pentagon should place substantial orders with defense startups to stimulate capital flow into the sector. Without guarantees of large contracts, Anduril has deemed certain developments, like air-to-air missiles, as non-viable.
Emil Michael, the nominee for undersecretary of defense for research and engineering, suggested the Pentagon should be less reliant on custom defense systems and more open to existing commercial products. Michael also urged the DoD to prioritize time-saving measures alongside cost-efficiency.
In discussions about adopting new technologies, the principle of “fail fast, fail often” was frequently mentioned. Venture capitalist Vinod Khosla emphasized the insignificance of failures compared to the magnitude of eventual success.
Palantir’s Sankar suggested increasing competition among Defense Department program managers to foster innovation. He argued that the DoD’s monopsony status stifled innovation by being the sole buyer in the defense marketplace.
Conference speakers noted that ongoing geopolitical tensions and the AI arms race with China have heightened the urgency for innovation in defense technologies. Michael remarked on the significant economic and strategic value at stake with each innovation.
This story was originally featured on Fortune.com.
