DCVC DTOR 2024: Startup thinking will help the defense and security sectors prepare for new threats

What President Dwight Eisenhower called the ​“military-industrial complex,” dominated by a handful of consol­i­dated defense contractors, emerged during and after World War II in part because projecting world-leading military power takes coordinated, continued investment on a scale only national governments and big companies can afford. But the landscape of threats and vulner­a­bil­i­ties has shifted, and today smaller players, including venture-scale startups, can contribute to maintaining and modernizing our defense infrastructure. 

First, there’s a new domain where offensive and defensive capa­bil­i­ties take a very different form: cyberspace. When computer systems are globally inter­con­nected, they can be globally disrupted. ​“The next series of [cyber] attacks are going to be AI-generated,” says DCVC general partner Ali Tamaseb. ​“And we need to be able to catch that with AI.” 

Second, we’ve entered an era when small, inexpensive weapons pose a growing threat. Today drones and other commercial-off-the-shelf (COTS) tech­nolo­gies can quickly, cheaply, and stealthily carry out high-precision single-use strikes. That makes our traditional ​“big iron” platforms such as tanks, planes, and surface ships look increas­ingly lumbering. The Ukrainian military, for example, has been able to use airborne drones, some costing only a few hundred dollars, to monitor the movement of Russian forces, identify artillery targets, drop munitions on tanks and trenches, and damage military instal­la­tions. At sea, Ukraine has used remote-controlled drone boats to hit multiple Russian targets. 

The world’s largest militaries are not adjusting quickly to these asymmetric threats. ​“It’s still important to build systems that can deliver a lot of throw weight against our adversaries,” says DCVC managing partner Matt Ocko. ​“Rockets, artillery systems, ICBMs aren’t going away. But today someone with relatively small financial resources and few connections could put together a private army, air force, or navy and degrade the U.S. Sixth Fleet [which operates around Europe and Africa] as a combat operational group. The technology is there to do this right now. And frankly, that should concern us tremendously.”

At DCVC, we believe entre­pre­neurs can help counter asymmetric threats and regain a technology advantage over our real and potential adversaries. Fortem Tech­nolo­gies, the leader in AI-powered drone-hunting systems, is a prime example. The company builds small, high-definition radar systems — from the size of a pencil box to that of a laptop — that enable drone-on-drone defense. Its DroneHunter drones can detect other fixed-wing and rotary drones and fire coun­ter­mea­sures such as tether nets that bring the enemy craft to the ground without destroying them. ​“The Ukrainians have also been partic­u­larly successful in repro­gram­ming the captured drones and using them against the Russians, which saves the Ukrainians consid­er­able time and money that would otherwise be spent on purchasing and programming their own drones,” says Fortem CEO Jon Gruen. The same net drones have been used to protect the World Economic Forum in Davos and the World Cup in Qatar. 

Geospatial intel­li­gence is another key to antic­i­pating and defending against attacks. In this area we’ve invested in Capella Space, whose constel­la­tion of synthetic aperture radar (SAR) satellites offers ²⁴⁄₇, all-weather imagery of Earth’s surface. Together with Planet, DCVC’s first space investment in 2013, Capella is imaging Earth every day and helping security officials detect changes on the ground and anticipate threats. And thanks to SAR’s high resolution and high contrast, as well as Capella’s high revisit rate, buyers of the company’s unclas­si­fied images can better monitor sea lanes, ports, and other facilities to track the arrivals and departures of ships and aircraft. (Editor’s note: this May, quantum computing leader IonQ [NYSE: IONQ], which is estab­lishing a space-to-space and space-to-ground quantum-secure internet, announced that it had signed a definitive agreement to acquire Capella.)

AI technology from a DCVC portfolio company called Primer is another compelling example of a dual-use technology that can aid in national defense as well as commercial appli­ca­tions. The company monitors both proprietary and publicly available data, such as text, audio, and video, and uses AI models to organize and summarize it and help analysts identify changes linked to critical entities, locations, or events. Primer can also help make sense of the data held inside a customer’s orga­ni­za­tion, says DCVC operating partner and Primer board member Clay Hutmacher, who is a retired major general and former director of operations for the U.S. Special Operations Command. The Department of Defense is ​“applying [Primer’s] AI to questions like, How would the Air Force and the Navy quickly disperse ships in the event of a conflict?” Hutmacher says. ​“How can they improve maintenance procedures on aircraft and ships and to give them more operational availability?” 

The reality, we think, is that many of the ideas the U.S. military needs to stay ahead of both near-peer adversaries and smaller foes can and should come from the startup world. In Washington, D.C., we’ve advocated for increased investment in efforts such as the Defense Innovation Unit (DIU), which is working to accelerate the adoption of commercial technology throughout the military. We’ve also pushed for more spending within the combatant commands to support testing and adoption of such tech­nolo­gies. And together with other defense-tech investors, we intend to back more Silicon Valley – style companies creating a new backbone of distributed, autonomous, intelligent, affordable systems.

The 2025 edition of DTOR will be released in late June.