a16z Podcast | Government, Startups, & Innovation -- with U.S. Secretary of Defense Ash Carter

Critique of Current GPS Infrastructure

• Secretary Carter identifies GPS as vulnerable to jamming, signal shadowing in urban/canyon environments, and prohibitively expensive due to semi-synchronous satellite deployment.
• The Department of Defense currently bears the full cost of maintaining this satellite infrastructure, which Carter deems unsustainable for future defense needs.
• Proposed Solution: "GPS of Things"
  • Shift toward integrating MEMS (microelectromechanical systems) chips containing accelerometers, gyroscopes, and precision clocks into every Internet of Things object.
  • These chips will calibrate position, orientation, and time at manufacture, allowing devices to track location independently of satellite signals.
  • Strategic Rationale: Ensures bomb guidance and critical operations remain functional even if satellite signals are jammed.
  • Economic Pathway: The DoD will act as the initial high-cost market leader to fund development; costs will subsequently drop to allow commercial adoption.

Evolution of DoD-Technology Ecosystem

• Market Role Shift: The DoD is transitioning from being the sole "inventor" (traditional spinoff model) to the "devourer" of outside technology, acting as the world's largest IT buyer.
• Research Investment Strategy:
  • Commitment to maintaining brisk funding for high-risk, long-term basic research that the commercial sector avoids.
  • Bottleneck: Connecting this basic research to marketable products to prevent isolation in "research ghettos."
  • Mitigation: Implementation of "animal proximity" strategies to physically co-locate innovators with end-users to bridge the silo effect.

DoD Innovation Unit & Commercial Relations

• New Initiative: Creation of an "Experimental" unit in Silicon Valley to lower entry barriers for startups and facilitate direct marketing to the DoD.
• Operational Philosophy: Acknowledges that the government is currently a "slow and stodgy buyer" where bureaucratic knowledge often outweighs technological superiority.
• Goal: To create pilot projects that teach the DoD how to welcome Venture Capital-backed firms and teach startups how to navigate government procurement without forcing them to sell to larger incumbents.

Cybersecurity Strategy & Threat Response

• Current Gap: Global industry is "late to the need," investing inadequately in security until recently, often staffed by personnel lacking sufficient security expertise.
• DoD Dual Roles in Cyber Defense:
  • Innovation Leader: Developing and funding expensive, cutting-edge defense techniques that will eventually spin off to the commercial sector.
  • Deterrence & Defense: Defining clear thresholds where cyber attacks on American firms constitute actionable threats warranting intervention, counterattack, or offensive toolkit deployment.
• Key Innovation Priorities:
  • Threat Information Sharing: Establishing a "meta network" where companies and the government share attack signatures and tools anonymously at "network speed" to improve collective defense without exposing specific victims.
  • Interactive Defense: Moving beyond passive firewalls to active, internal monitoring to detect "insider threats" (e.g., data exfiltration by careless or malicious employees) and continuous perimeter patrolling.
  • Insider Threat Detection: Emphasizing the need for anomaly detection systems capable of identifying employees with no logical association to their data access, citing the Edward Snowden case as a failure of current monitoring.