The problems with the so-called “arsenal of democracy” are well known. It can’t produce enough shells to keep up with its client states’ wars. Elsewhere, there are design issues, delays, massive cost overruns, worker and supply shortages, and the final product is usually inferior to other countries.
In short, US oligarchs’ greed has hollowed out the US industrial base, making it more difficult to enforce their rentier capitalism around the world. Despite that fact, there does not seem to be a plan to do anything about the loss of Western industrial capacity even while the US-led bloc thrashes about and creates more conflicts. In a recent piece on this topic I somewhat sarcastically asked if the plan was for AI to figure it out.
It turns out, that is the plan – as much as it can be labeled as such. A new report from the Watson Institute for International and Public Affairs at Brown University titled “How Big Tech and Silicon Valley are Transforming the Military-Industrial Complex” details how the racket is evolving.
At its heart, the plan is to make a lot of people obscenely wealthy and hope that a wonder weapon or two emerges from the bottomless money pit.
Malcolm Harris’ 2023 book “Palo Alto: A History of California, Capitalism, and the World” went into great detail on Silicon Valley’s military-industrial complex and all the eugenics and class warfare that emerge from capitalism’s citadel in the Bay Area. I wrote up Harris’ book back in March, but here are just two key passages dealing with Silicon Valley’s emergence as the epicenter of the military-industrial complex and class warfare:
War Capitalism could put on a blindfold and run into a maze of horrific, absurd plans with confidence because it had class power echolocation for a guide: As long as the rich strengthened and the working class weakened, then things had to be going in the right direction. It didn’t matter that capitalists were investing in finance sugar highs, monopoly superprofits, and an international manufacturing race to the bottom rather than strong jobs and an expanded industrial base. The twenty-first century was going to be all about software anyway, baby. The robots will figure it out. Silicon Valley leaders sat on top of this world system like a cherry on a sundae, insulated from the melting foundation by a rich tower of cream…
If the country couldn’t beat the world market in primary materials and heavy manufacturing, then it would play to its own advantage: making shit up.
The problem there is that such practices are exposed in actual conflict – as we can see in Ukraine, the Red Sea, and maybe we’ll get another big reminder with Iran if the neocons have their way. And there’s always China on the horizon.
This report from Brown acts as a brief update to Harris’ opus, and the situation is only getting worse. The 26-page account reinforces that Silicon Valley’s role in the military-industrial complex is to serve as a giant self-licking ice cream cone to make a bunch of grifters fabulously wealthy while producing zero benefits for American society. Not only that, but if they hit it big on an item that can effectively surveil or kill, they will, as always, be used to aid the capitalist class in its plunder – in the US and abroad.
So, what does the report say? More and more money from the government, venture capital, and private equity firms is pouring into big tech companies and startups for surveillance, weaponized AI, drone technologies, and other tech tools of war. Fortunately, there is little sign it is effective unless the goal is to enrich a bunch of well-connected insiders as the products are described as “ineffective.” On the downside, they’re also “unpredictable and unsafe when deployed in real world conditions.”
Patriotic Graft
The report notes that US military and intelligence agencies awarded at least $28 billion to Microsoft, Amazon, and Alphabet between 2018 and 2022, but the actual value is likely to be significantly higher, since so many of contracts with tech companies are classified. Military and Intelligence also continue to increase their funding of startups:
According to some analysts, pilot projects launched by defense tech startups may succeed in creating prototypes, but frequently fail to cross the so-called “valley of death” lying between early prototype production and multi-year Pentagon contracts. Historically, the overhead costs associated with U.S. government procurement processes have made it difficult for smaller firms to compete.
This began to change in 2015, when then Defense Secretary Ash Carter established DIUx. It was headquartered in Silicon Valley and designed as a venture capital fund: the goal was to quickly identify and invest in startups developing cutting-edge technologies that might have military applications. With DIUx, the Pentagon built its own startup accelerator to fund firms specializing in AI, robotics, data analytics, cybersecurity, and biotechnology. DIUx was intentionally located in the heart of Silicon Valley, near Amazon’s Lab126, Microsoft’s Silicon Valley campus, and Apple’s corporate offices. Carter, who had spent several years at Stanford University prior to his appointment as Defense Secretary, had reportedly been impressed with the Bay Area’s innovative entrepreneurial spirit. In 2018, DIUx was renamed Defense Innovation Unit (DIU), indicating that it was no longer experimental. Between June 2016 and September 2022, DIU awarded contracts worth a total of $1.2 billion to more than 320 companies.
Carter modeled DIU after In-Q-Tel, a firm established by the CIA in the late 1990s to capitalize on innovations being developed in the private sector, particularly in Silicon Valley. By channeling CIA funds to nascent companies building surveillance, intelligence gathering, data analysis, and cyberwar technologies, the agency hoped to outdo global rivals by funding firms with creative engineers, hackers, scientists, and programmers. In-Q-Tel has made more than 500 investments across an extraordinary range of startups. In-Q-Tel’s portfolio includes firms with futuristic projects such as Cyphy, which manufactures tethered drones that can fly reconnaissance missions for extended periods using a continuous power source; Atlas Wearables, which produces fitness trackers that closely monitor body movements and vital signs; Fuel3d, which sells a handheld device that produces detailed three-dimensional scans of structures or objects; Sonitus, which has developed a wireless communications system, part of which fits inside the user’s mouth;and Saildrone, which produces autonomous maritime surveillance drones enabled by AI. In-Q-Tel has also invested in data-mining firms like Geofeedia, TransVoyant, and PATHAR.
If this all sounds like underwhelming crap, well, that feeling isn’t uncommon. Retired Air Force Lieutenant General Jack Shanahan had this to say about the AI-powered advances: “I’m less worried right now about autonomous weapons making their own decisions than just fielding shitty capabilities that don’t work as advertised or result in innocent people dying.”
Nonetheless, more than $100 billion in venture capital funding went to defense tech startups between 2021 and 2023.
Historically, the largest VC firms were generally reluctant to invest in defense tech startups, but this has changed dramatically over the past few years. Why has it changed?
There has been a lot of PR about it being a form of patriotism and the need for the US to have military and technological superiority to counter supposed threats from Russia and China, but unsurprisingly it’s really just about making a boatload of money.
Venture capital and private equity are betting that an expansion of DoD spending on high-tech products will lead to lucrative returns, and they’ve been right so far.
The revolving door is certainly helping to drive profits. One of the biggest cons nowadays is the constant fear mongering that China is poised to surpass the US in a global “AI arms race,” and that the future depends on the outcome. While the report argues this is vastly overblown, government officials who help propagate it and steer money towards research of AI-powered weaponry, surveillance, and logistics systems are rewarded upon leaving office:
After leaving his Pentagon post, Robert Work became an advisor to defense tech startup Hawkeye 360, then joined Raytheon’s board of directors in 2017. David Norquist now serves as president and CEO of the National Defense Industrial Association, which lobbies on behalf of defense contractors.104 Patrick Shanahan is on the board of directors for Leidos, an AI company specializing in autonomous maritime and aerial vehicles for military use.
But perhaps more importantly, dozens of senior Pentagon and national security officials are now gravitating towards defense-related VC or private equity firms as executives or advisors after they retire from public service. While in the past, the “revolving door” usually meant that a former DoD official might accept an executive position with weapons manufacturers like Lockheed Martin or McDonnell Douglas, there are new, more lucrative options. At least fifty former Defense Department officials are now working in VC and private equity, leveraging their connections with current DoD officials or members of Congress to push for legislation that might benefit the defense tech firms that are part of their firms’ investment portfolios.106 The implications of this are significant: the new “revolving door” is likely to accelerate some of the trends outlined in this report, most notably increased military and intelligence agency funding for early-stage defense tech startups.
Jack Poulson, a mathematician who worked at Google before founding Tech Inquiry, put it this way: “I believe we are witnessing the transition of major U.S. tech companies into defense contractors and would go so far as to predict them purchasing defense contractors in the coming years—something like Amazon buying Raytheon.”
The US strategy can be summed up as a steadfast belief that the best way to preserve U.S. dominance is by prioritizing corporate needs, zero accountability, and hope that for-profit corruption produces something worthwhile.
Meatspace Application
It’s clear that no lesson has been learned from the West’s spectacular failure in Ukraine. The fact that Russia ground down the collective capacity of NATO is apparently not a concern, even as Washington prepares to make the same mistake with China.
The US is currently “building” an Asian NATO, and as mentioned above, all the focus is on winning a nonexistent AI race. Think tanks like The Center for Strategic and International Studies (CSIS), whose biggest funders are biggest donors include defense firms Lockheed Martin, Northrop Grumman, and RTX—and significantly, tech giants like Alphabet-Google, Microsoft, Amazon, Meta-Facebook, and Apple, continually push for confrontation with China and argue that AI is key victory. Maybe they should be worried about something else.
Buried in one of its recent reports, CSIS admits the following:
China’s defense industrial base is operating on a wartime footing, while the U.S. defense industrial base is largely operating on a peacetime footing. Overall, the U.S. defense industrial ecosystem lacks the capacity, responsiveness, flexibility, and surge capability to meet the U.S. military’s production and warfighting needs. Unless there are urgent changes, the United States risks weakening deterrence and undermining its warfighting capabilities. China is heavily investing in munitions and acquiring high-end weapons systems and equipment five to six times faster than the United States. China is also the world’s largest shipbuilder and has a shipbuilding capacity that is roughly 230 times larger than the United States. One of China’s large shipyards, such as Jiangnan Shipyard, has more capacity than all U.S. shipyards combined.
Maybe it’s possible that a wonder weapon emerges from all the money sloshing around. I’m not a weapons aficionado, so hopefully some readers in the know can chime in, but the history of US military boondoggles is obvious.
One of the earliest signs that the strategy to rule by silicon and fire was going to be problematic was the Semi-Automatic Ground Environment (SAGE) system money pit. The 1950s collaboration between the Air Force, MIT, and most major computer computers, it fed punch cards coded with a day’s planned air routes into a computer; if something was amiss it was supposed to catch it, and missiles or aircraft could be deployed to intercept what was assumed to be a Soviet nuclear bomber. IBM produced a 12-minute advertising video on it, and it was a major PR victory for the company. The trouble is, it didn’t work – at all. A SAGE engineer compared it to Forrest Gump: “It was very fast, financially successful, and incredibly stupid.”
Or how about the Strategic Defense Initiative aka “Star Wars”? Or the F-35? And countless others.
Lastly, if we take a further step back, we can maybe view the greatest waste in all of this – more than all the incompetence and greed.
It’s that obscene amounts of money are going to these weapons of war in the first place. Meanwhile, hundreds of thousands of Americans sleep in Hoovervilles and there is really no threat to the US. Maybe US oligarchs’ interests are threatened around the world, but that does not affect 99.9 percent of the US population.
With so much money pouring into Silicon Valley for tools of war, all the supposed bright minds in the Bay Area are assigned to developing wonder weapons, but not only are they unsuccessful on that front, it also means they’re not focusing other issues:
One can only imagine the scientific opportunities that have been lost or delayed because they are not aligned with military priorities: for example, increased research to better understand and develop mitigation plans for accelerating climate change and its effects; better tools for forecasting epidemic diseases; and improved methods for sustainable agriculture and resource management.
Many of the Bay Area’s youth, trained from a young age to enter this system of bezzles are also miserable and suicidal – a major focus of Malcolm Harris’ Palo Alto. That’s the downside of being the product of a stock farm system designed to enrich the select few:
[Palo Alto’s] biggest export, more than code, circuit design, and marketing fluff, is human capital. Stanford switched from colts to young people, but it was still a breeding and training project. Labor intensification applied to students as to wage workers, and local leaders spent a century on educational augmentation schemes meant to provide the best genetic material with the top instructional apparatus. The strategy paid untold dividends, and Silicon Valley has shown remarkable economic resilience, always finding another bubble to inflate, a new technological frontier, a new boom, a new gold rush. It looks helter-skelter, but as I’ve said, Palo Altans managed to generate sinks to absorb and grow huge amounts of capital over and over, with remarkable consistency during the period in question. In a world starved for efficiency gains – novel ways to tighten costs – a bet on the Valley keeps getting better. Just ask some rich people.
It’s worth retracing our steps to the Palo Alto system, in which potential counts for everything –– but only a specific kind of potential. A colt that won’t pull a cart is no good to the system, no matter how fast. And a colt that organizes all the horses to strike? That’s no potential at all.
As the US-led international system is in the process of being overturned, maybe now would be a good time to upset this apple cart here at home as well.
