Under Secretary of War on Iran, Anthropic and the AI Battle Inside the Pentagon | The a16z Show

2026-03-13 · Source: a16z · Field: Government & Public Sector — Public Policy & Governance, Public Safety & Security, Digital Government & E-Government · Depth: Intermediate, extended

Summary

The Department of War's CTO discusses the urgent need for "wartime speed" in AI adoption and defense modernization, contrasting it with the post-Cold War "peace-time speed" that led to industrial consolidation and supply chain vulnerabilities. The department, under new leadership, reduced 14 critical priority areas to six, with applied AI as the top priority. This shift has dramatically increased AI usage within the department, from 80,000 to 1.2 million users in 90 days. The CTO highlights the importance of AI for enterprise efficiency, intelligence analysis (e.g., anomaly detection from satellite imagery), and warfighting logistics and simulations. A critical "holy cow moment" involved discovering restrictive contracts for commercial AI models, some of which were single-vendor locked and contained terms that could halt operations, raising concerns about vendor control over military command and control, especially after a vendor questioned the use of their software in a successful military operation.

Key takeaway

For technology executives and founders considering defense partnerships, recognize the Department of War's aggressive push for AI and modernization. Your company's ability to scale production and navigate streamlined, performance-based contracting will be key. Be prepared for rapid engagement, but ensure clear demand signals and actual procurement to validate product-market fit, as the department aims for faster decisions to avoid vendor lock-in and enhance national security capabilities.

Key insights

The Department of War is rapidly accelerating AI adoption to counter adversaries and overcome past bureaucratic inertia.

Principles

• National strength requires self-reliance in critical areas.
• Bureaucracy hinders technology adoption and modernization.
• Democratic oversight must guide AI deployment in defense.

Method

The CTO prioritized AI by consolidating 14 legacy priorities to six, integrating the Chief Digital and AI Office, and shifting contracting from prescriptive requirements to performance-based, firm-fixed-price models to foster innovation and scale.

In practice

• Focus on scaling production and manufacturing capabilities.
• Seek clear demand signals and test/purchase commitments.
• Embrace faster "yeses" or "nos" from government partners.

Topics

• AI in Defense
• Military Modernization
• AI Vendor Restrictions
• Defense Technology Strategy
• Government Procurement Reform

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Related on AIssential

• Emil Michael: Iran, Anthropic and the Future of AI at the Pentagon — Commercial AI contracts with restrictive terms pose critical national security risks, necessitating democratic oversight and vendor diversity.
• Palantir CEO on Iran, AI Weapons and America's Advantage | a16z American Dynamism Summit — Military superiority and global influence are increasingly driven by technological advantage and a unified national strategy.
• Is Defense the Next Trillion-Dollar Category? | a16z American Dynamism Summit — Rebuilding the defense industrial base requires autonomy, simplified design, and commercial market integration to overcome fragility.
• Google expands Pentagon’s access to its AI after Anthropic’s refusal — Major AI firms are navigating complex ethical and commercial tensions regarding military AI use.
• These aren’t AI firms, they’re defense contractors. We can’t let them hide behind their models - The Guardian — AI systems in modern warfare automate "chosen blindness," eroding accountability and enabling rapid, opaque targeting decisions.
• NSA spies are reportedly using Anthropic’s Mythos, despite Pentagon feud — Anthropic's restricted Mythos model is being used by the NSA despite prior DoD "supply-chain risk" designation.

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Editorial summary, takeaway, and curation by AIssential. Original article published by a16z.