Silicon Valley’s Obsession With a $10 Billion Prize: Term Sheet
Here’s the story behind the JEDI contract.
This morning, Fortune published a captivating investigation of the inner-workings of 21st-century military-techno complex. It’s called “How Amazon and Silicon Valley Seduced the Pentagon,” and it was done in partnership with ProPublica, the non-profit investigative news organization.
The story delves into the JEDI project (Joint Enterprise Defense Infrastructure), which is the Pentagon’s initiative to move its information technology systems to the cloud. And there’s a $10 billion, 10-year contract at stake.
The story explains how some of America’s biggest tech companies used a little-known advisory board, some aggressive advocacy by a few billionaires and some unofficial lobbying to open a backdoor into the Pentagon. And so, no matter who wins the JEDI contract, one winner is already clear: Silicon Valley. The question is no longer whether a technology giant will emerge with the $10 billion prize, but rather which technology giant (or giants) will.
From the story:
There are certainly benefits. The Pentagon’s technological infrastructure does indeed need to be modernized. But there may also be costs. Silicon Valley has pushed for the Pentagon to adopt its technology and its move-fast-and-break-things ethos. The result, according to interviews with more than three dozen current and former DOD officials and tech executives, has been internal clashes and a tortured process that has combined the hype of tech with the ethical morass of the Washington industry-government revolving door.
The story reminded me of the Q&A I did with Founders Fund partner Trae Stephens. Stephens served on Donald Trump’s transition team and made recommendations on changes to the U.S. Defense Department ahead of his inauguration. He said he spent a lot of time talking to people about the individual agencies, like the Defense Digital Service and the Defense Innovation Unit – Experimental. When asked if he came out of those conversations feeling optimistic, he said, “It’s difficult to come out of conversations with a huge bureaucracy feeling super optimistic.”
Fortune’s new story provides so much more detail and color about the way those agencies are run. An excerpt:
The Pentagon’s cloud initiative ultimately ended up being led by Chris Lynch, the head of Defense Digital Service. DDS was no ordinary unit; it was a corps of software engineers hired from Google, Amazon and other tech companies to “challenge the status quo, burdensome policies and established bureaucracies in an effort to streamline DOD’s ability to introduce modern software development, tools and practices,” according to a department spokesperson.
And Lynch himself was no ordinary government employee. As a teenager, he had been arrested and expelled from his Ohio high school after he and some friends called in a bomb threat as a joke. But he grew up, earned his high school degree, worked at Microsoft and then ran a series of startups. At 43, he wore hoodies to an office dominated by starched white shirts and still considered himself an insurgent, a point he conveyed by posting a sign reading “The Rebel Alliance” outside the entrance to his group’s office; the name also reflected his obsession with Star Wars. (His team came up with the acronym JEDI for the cloud project.)