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This transcript is from a CSIS event hosted on June 9, 2025. Watch the full video here.
Gregory C. Allen: Good afternoon. I’m Gregory Allen here at CSIS, where we’ve got an incredible event, a discussion with Ryan Tseng, the co-founder and president of Shield AI. We’re going to get into a lot today, including Ryan’s background, the evolution of Shield AI as a company, and the current state of AI and autonomy in warfare and its adoption not just in ongoing conflicts, like the war in Ukraine, but also by the United States Department of Defense.
Ryan is a serial entrepreneur, having previously founded the company WiPower, which was acquired by Qualcomm, and now leads Shield AI from its inception almost a decade ago to now being one of the largest defense technology startups in the world, and at the forefront of so many of the trends of AI and autonomy. Ryan, thank you so much for coming to CSIS.
Ryan Tseng: Thanks for having me, Greg.
Mr. Allen: So you and I actually have kind of an interesting, overlapping life story. You, obviously vastly more successful than me in this overlapping life story. But your brother, Brandon Tseng, also a co-founder of Shield AI, was a Navy Seal and then went to Harvard Business School, where I also went to graduate school. And on the campus at the business school they have this thing called the i-lab where they try and incubate exciting new startups. And 10 years ago one of those exciting startups was Shield AI, a company thinking about the future of defense technology. And I have to say, at a time when defense technology was not a very attractive word to be uttering in Silicon Valley venture capital firms.
So Brandon, as I said, a former Navy SEAL, and you, an entrepreneur at the time with a different company, decided to join forces and create this new company. And at the time, I was like, well, there’s a lot of startups in the i-lab. Some of them will be interesting. Some of them won’t be interesting. But, wow, Shield AI actually had a pretty good run over the past 10 years. The company has raised over a billion dollars of venture capital investment. Was recently valued at being worth more than $5 billion. Enjoys contracts with the Department of Defense. And has been a real supporter of the war on Ukraine, not just in words but also in deeds, providing technologies that are used operationally by Ukrainian armed forces.
I want to get into the meat of so much of that story, but I want to start with your story. So how did you come to be in the technology field? How did you come to be in the defense technology field?
Mr. Tseng: Yeah, well, just on the i-lab, I remember visiting it once. And it stood out to me because Shield AI was the only company that had a desk in the i-lab. And I asked Brandon how it happened. They said, they wouldn’t give me a desk so I just put my name tag on it. (Laughter.) And he claimed a desk for his for his own in the i-lab. And that was the beginning of Shield AI.
But my story? Look, I started a company right after undergrad focused on doing wireless charging. I sold that company to Qualcomm. And I ran the wireless charging group there for about four years. And in my last year at Qualcomm, for the first time in my life I didn’t feel like I had the fire in the belly that I had had throughout my career. So growing up my parents had a couple messages for me that became deeply ingrained in who I – who I was, and, frankly, am today. One was, work hard. Two was, work hard. And three was, work hard.
And so in my last year at Qualcomm, you know, not feeling that fire for the first time, you know, in my career was this sort of confusing moment that I decided to take time off and reflect on what it was that motivated me, that would give me that fire not for the next year or five years, but for the rest of my life. And after some searching, I basically decided that if I could find the intersection of three things I’d have that fire for the rest of my life. And one was the opportunity to contribute to a noble mission. Two was the opportunity to work with extraordinary people. And three was a chance to define the possible.
And so I set about looking for, you know, companies or opportunities that sat at the intersection of those things. And it was my brother getting ready to prepare for his – for his interviews at Harvard that led me to Shield AI. He asked if I would help him prepare for his business school interview. We’re very competitive. We’re brothers. And so this is a very unusual request. But, of course, I agreed.
And it started with a simple question from me to him, which is what’s the most challenging circumstance you’ve ever faced and what did you do about it. Having been to business school myself and, you know, knowing what I said and a lot of people said I was ready for a lame answer.
What he shared with me was a story that brought me to tears. It was a story of service and sacrifice on behalf of teammates and people that couldn’t stand up for themselves, and I remember thinking to myself what an incredible mission, what an incredible person.
And after that, several weeks later when I encouraged him to think about what he wanted to do in life he came back and said, I want to bring the best of what’s going on in the autonomous driving sector to the mission of protecting service members and civilians.
I thought, amazing mission. I also thought it was a dumb business. (Laughter.) So I encouraged him to, you know, have a great time.
Mr. Allen: So I think people forget today because, you know, you’ve got exciting companies like Shield AI, like Anduril, like Palantir, that have made defense technology a pretty hot sector. But in 2015 it was not a hot sector. This was not a fashionable idea for startups.
So what was going through your head when you thought this was not a good idea?
Mr. Tseng: I think it was categorically considered, you know, idiotic to start a technology company focused on defense and, certainly, Palantir and SpaceX existed at that time. But the refrain from the venture community was, well, those were started by billionaires so, you know, that’s – you know, they don’t count.
But yeah, it was just – and I think at the time there was the Maven thing going on at Google with Silicon Valley and I think there was this letter, and people were just sort of openly against supporting the national security mission.
So it was a pretty unusual step and, basically, having started and sold a company to Qualcomm and knowing the sensibilities of that community I just thought it was going to be very hard to get the attention of investors.
Mr. Allen: Mmm hmm. And so what changed your mind?
Mr. Tseng: My brother’s a persistent person and, you know, SEALs, if you haven’t met them, are persistent people and Brandon is –
Mr. Allen: Yeah. Stubborn in a good way.
Mr. Tseng: – is on brand and what I told him is, look, go talk to a hundred people that you don’t know and get a sense of how real the problem is and he said, I’ll do it but I want you to come with me.
And, you know, I wasn’t actually doing anything at the time. I was in between looking for something to do, so I went with him and the thing that struck me was the scope of the problem and how little was being done about it.
I was shocked to learn how my brother and his teammates would clear buildings of threats, and so this not having eyes and ears in the places where you need them was costing the lives of service members.
Mr. Allen: You’re talking about the clear, hold, and build, you know, mission set where you’re going into a building, somebody has to be the first human through that door and you don’t know if there’s, like, 10 machine guns pointed at that door or if there’s a bunch of friendly people who mean no harm on the other side of that door.
Mr. Tseng: Yeah. Yeah. And my brother gave me an opportunity to, you know, put on kit and, you know, experience it with him. And I was just blown away that there are people that go and execute this mission and, frankly, humbled to live in a place where so many of those people sign up for that mission.
But the problem of not having eyes and ears in the right places can be just around the threshold of a doorway or it can be at a theater scale.
Mr. Allen: Yeah.
Mr. Tseng: And so it was a huge problem and one that I felt like the technologies in the autonomy sector could truly contribute to.
Mr. Allen: So you mentioned your brother Brandon was sort of thinking about autonomous driving as his mental model. Your company’s initial work stream was focused around aerial drones.
Can you talk a little bit about that evolution?
Mr. Tseng: Yeah. So it was a mission that we were familiar with and then it also turned out that nobody would give us the keys to a jet, you know.
Mr. Allen: Yeah.
Mr. Tseng: And probably a good decision. You know, when you’ve got three people in a garage in 2015 who knows what would have happened to that jet?
So we had a strategy that we called climbing the aviation food chain where we would build an AI backbone that we would apply to quadcopters and allow those to be the first thing through a threshold, which requires solving a lot of hard problems – GPS denying navigation, autonomous decision making when you lose communications.
Because in many ways the inside of a building like a concrete structure or a cave is a small version of an EW battlefield where GPS and communications are anything but assured.
And so we started on the path to bring AI to clearing buildings with autonomous quadcopters.
Mr. Allen: This is for primarily a Special Forces customer community, initially?
Mr. Tseng: For the Special Forces community, with the intent of being able to use that AI backbone as we, quote, “climbed the aviation food chain,” getting to progressively more consequential aviation platforms.
Mr. Allen: That’s amazing.
So, you know, you talked a little bit about where you were in those early days. Now, today, you know, you’re a really exciting startup with a ton of growth and a ton of capability that you’re already bringing. Can you sort of just walk us through the journey of who was Shield AI – you’ve talked a little bit about this – in 2015, but who were you in 2017, who were you in 2020, who are you now in 2025? Talk us through the story of climbing the ladder, as you called it.
Mr. Tseng: Yeah. I’d say the one common through that entire journey has been commitment to mission and values. I think we’ve been very clear-eyed about who we’ve been from the very beginning, and our mission is to protect servicemembers and civilians with intelligent systems. And that – in 2015, that made our journey very difficult.
Turns out, by the time Brandon converted me to believing in the mission and the ability for the company to contribute to the mission, still nobody else in the world had been converted. And I remember just going to investor after investor and being told, no, this is never going to hunt. And when we finally got an offer for a term sheet for $5 million, it came with the criteria that we change our mission.
Mr. Allen: Whoa, whoa, whoa. This is – this is a pretty remarkable thing. So you’ve gone to venture capital company after venture capital company. Everybody’s slamming the door in your face. And the first people you meet who give you yes, it’s like, yes, but you have to give up on national security. Is that right?
Mr. Tseng: Yes. Yeah.
Mr. Allen: That’s incredible. I mean, that speaks to the time.
Mr. Tseng: Yeah. And I remember – we had convinced our other co-founder, Andrew Reiter, to quit his job. He was a rising star in AI and autonomy, and I had assured him that, like, hey, we’re going to raise the money; it’s going to be fine. And so I remember coming back with, hey, I’ve gone through my entire rolodex; the only option we have is this one. And it was a short conversation, but I remember Andrew saying I’d rather go out of business trying to make mission impact than take this money.
And so we passed on that term sheet. It would be another year before we got a term sheet not for $5 million, but this time for $800,000 –
Mr. Allen: Wow.
Mr. Tseng: – in 2016 that let us build the company that we wanted to build.
Mr. Allen: And that $800,000 let you pursue the vision of national security.
Mr. Tseng: Yes. Yes
Mr. Allen: Great. And so who was your first customer?
Mr. Tseng: First customer was Defense Innovation Unit, actually.
Mr. Allen: OK, so this organization that DOD set up to actually help startups connect to DOD.
Mr. Tseng: It was – it was funny; it was sort of a joint coming of age of the DIU, the organization –
Mr. Allen: (Laughs.) Because they were pretty young then, too.
Mr. Tseng: They were. They didn’t even have a location on their – on their website. We just saw it get announced around the same time that we were starting the company, and we remember seeing a picture that, you know, somehow through a reflection my brother saw that it was at Moffett Field, and so he took an Uber there when we were in San Francisco and, like, ran – tracked down this building and tried to walk in the front door.
Mr. Allen: What, he was like, ask the guard at the gate? Oh, where is the Defense Innovation Unit? OK.
Mr. Tseng: Yeah, yeah. So we got sent home and said, you don’t just come in.
Mr. Allen: (Laughs.)
Mr. Tseng: But anyway, so it was – so, anyway, that was the first program.
But you asked about the evolution. And you know, coming back to that, 2017, you know, when we met, you know, a big milestone, I think, was Andreessen Horowitz deciding to invest and lead our Series A round. And –
Mr. Allen: Which was kind of a big moment for the entire sector, right? It was like the big venture capital companies finally saying it is – it is OK, you know – it is OK to invest in national security. And that was – you were part of that first wave of being taken seriously.
Mr. Tseng: Yeah, yeah. And I think even for Andreessen it was a bit of an unusual move. The partner who led it, Peter Levine, made a comment along the lines of, you know, sometimes I just look for what seem like the dumbest possible investments because, you know, it’s either, you know, crazy or it’s brilliant.
Mr. Allen: (Laughs.)
Mr. Tseng: And at the time he just didn’t know – (laughs) – but he was willing to make a bet on it, and national security was something that, you know, he was passionate about and willing to take a flier on it.
You know, just very quickly, fast-forwarding through, in 2020 we took our first step up the aviation food chain with the acquisition of two companies, one called Martin UAV that makes a VTOL tail-sitting aircraft called the V-BAT that can fly for about 12 hours. And we can talk about that later.
Mr. Allen: Definitely.
Mr. Tseng: It’s a, like, 12 feet tall, 12-foot wingspan. And then we acquired another company called Heron Systems that had been doing some pretty remarkable work with reinforcement learning applied to jet aircraft, so all the way at the top of the aviation food chain and had famously won, I think, the alpha dogfight trial, or something.
Mr. Allen: Yeah, so this was – certainly I remember, because I was in the DOD at this time. And the Heron Systems winning the DARPA competition, where they had an AI pilot facing off – in simulation – but facing off against real fighter pilots in dogfighting simulations, and the AI system not just winning but, like, smoking them by the end of the story, was kind of a wakeup call to a lot of generals. It was a wakeup call to the fighter pilot community that, like, look, this may not be ready right this second, but we have to – we have to invest in this technology, because the potential here is really exciting. And so that company then becomes a part of Shield AI. And so where does that take you?
Mr. Tseng: Yeah. So, and by the way, on that point, I think that one of the things that both DARPA and the team at Heron did so well there was, you know, many – pockets of people were starting to develop that, you know, really believed that AI and autonomy were going to be a significant part of the future of defense and national security. But the question always was, like, how do you make that point? And I think that, you know, DARPA and Heron did such a good job of picking an example that really made the point in a powerful way, that, hey, this technology is coming. And when it matures, it’s going to be a force to be reckoned with.
So where it took us from there was we set the objective to fly an F-16 with an AI pilot in real life by 2022. We met that objective. We set the objective to do a human versus AI dogfight in live flight in 2023. And we hit that objective. And then in 2024 that program, along with where – you know, the program, including Shield AI, was one of four finalists for the Collier Trophy, which is for the highest achievement in aerospace and astronautics in the preceding years. The Wright brothers won it. Chuck Yeager won it. The moon landing won it. So it was pretty amazing to be one of four finalists for that award, on the back of that – the nine-year journey to that point.
Along this same pathway, we continue to expand the application of AI. And we can talk about it later, but brought our technology to – brought our AI technology to V-BAT, achieved some pretty remarkable outcomes in Ukraine, some of which were written about in August last year by The Wall Street Journal.
Mr. Allen: Yeah. So I definitely want to go there, because you’ve talked about, you know, the evolution of the company, climbing the autonomy ladder, climbing the aviation food chain. But at the same time, you know, you’re evolving as this – as this company, the world is changing in a big way, waking up to the reality that we’re in a new era for national security. You know, AlphaDogFight, a very crystallized point there. Russia’s full-scale invasion Ukraine, a very crystallized point there.
And so I think you have been really out front amongst defense technology executives talking about the importance of supporting Ukraine and putting your money where your mouth is, putting your kit where your mouth is. So walk us through the story of how Shield AI got involved in Ukraine, how it went initially, how it’s going now.
Mr. Tseng: So Shield AI got involved in Ukraine, I think, alongside many companies, right at the outset of the conflict. And we deployed some aircraft pretty early on. We suspected that they wouldn’t have some of the right capabilities, but we weren’t sure. And those aircraft were unsuccessful, for the same reason that I think basically, you know, most systems today continue to be ineffective. They weren’t ready for the – for the EW environment.
Mr. Allen: What do you mean by that, for folks who are not familiar with electronic warfare and what it really means in today’s conflict?
Mr. Tseng: Yeah. So there are two very fundamental, you know, assumptions that a lot of weapon systems make. One is that you have GPS, right? And GPS, because it’s coming from a satellite, you know, far in space, it has to cover a large area, it’s just a very weak signal by the time it gets to Earth. So basically people will take microwave ovens, turn them inside out, blast them up in the sky, and GPS is no longer functioning over, like, very large geographic regions. And then, two, your communication channels, same story. Those end up being degraded. And so if you had a remotely piloted aircraft and, you know, one of the foundational assumptions for anything to be successful is where am I in the world, it no longer knows.
Mr. Allen: Right. So, like, if you think about the drones – the really charismatic drone aircraft of the Iraq and Afghanistan conflicts, like a Predator or Reaper, they spent most of their operational life having perfect comms, perfect GPS. And they were designed, you know, to live in that environment. We go to Ukraine, facing a different kind of adversary, those assumptions are no longer able to be taken for granted at all. And everybody, all the U.S. companies who are used to always having the best stuff, you know, come up against this, you know, very painful realization that what they have is not fit for purpose for this conflict. So, as you said, you know, you had to realize, whatever you’re going to make it has to work in a world with no GPS and no comms.
Mr. Tseng: Yes. And so, you know, we were faced with a decision. Focus somewhere else, or solve the problem. And we just felt strongly we could solve the problem, because that was fundamental to our autonomous quadcopters that had to work inside of buildings. And so we set about bringing that to the V-BAT. And so August 2024 it was disclosed, but shortly before that we made the decision to deploy new V-BATs that would work without GPS and with, like, heavily contested communications. And the culmination of it was the Ukrainians using it to find a Russian – I think it was an SA-11, like, a $100 million air defense asset – finding it without GPS, targeting it, and resulting in a successful strike and destruction of that asset.
And to that point –
Mr. Allen: And so in this case – the V-BAT, in this case, is the spotter?
Mr. Tseng: The V-VAT is the spotter.
Mr. Allen: Yeah.
Mr. Tseng: And it’s generating targetable coordinates without GPS, which basically blew the minds of, you know, everybody up and down the Ukrainian side, because number one of how deep in the territory we were, and the fact that we were able to do that without GPS, was just this insanely compelling outcome.
Just on the path to do it, you know, interesting story, and I think important for the future of autonomy in any military system. When we reattacked in 2024, it initially actually wasn’t successful in our first attempt. So we decided to solve the problem. We got all of our notes and intelligence from the Ukrainians about when we would have GPS. And so we use that to inform the design of the system. Basically, at 200 feet altitude we’d start getting hit by Ukrainian jammers, which, of course, are active to protect from Russian attack. And after that point, we would have no GPS. So we designed the V-BAT to start with GPS on the ground, do its thing, and at 200 feet transition to an alternative navigation solution.
When we went to go fly, GPS was lost at about two feet. And so –
Mr. Allen: (Laughs.) A bit earlier than expected yeah.
Mr. Tseng: (Laughs.) Yeah. And so the aircraft takes off, and it just goes the wrong direction. And it flew for about 60 kilometers just in the wrong direction. It was like a scene straight out of the movie Interstellar, with the Ukrainians and some of our team hanging out the side of the –
Mr. Allen: Yeah, when Matthew McConaughey is chasing the drone in the cornfield. This is like you. You’re Matthew McConaughey.
Mr. Tseng: Yes. Yes. Yeah, not me, but some people on our team. And they’re on a laptop trying to figure out where this airplane is. And eventually they found it orbiting 60 kilometers away, and they were able to bring it down and land in a sunflower field, actually, not a cornfield.
Mr. Allen: Oh, wow.
Mr. Tseng: But the team was able to change the software in the span of 24 hours, replan the operation 24 hours later, and then execute the mission that became very successful. And since then, I think we’ve done over 170 sorties with the aircraft in the conflict. Zero of those sorties have had GPS at any point in the mission.
Mr. Allen: I mean, I think this is – this story I think is a lovely crystallization of what I’m beginning to understand is, like, one of the defining cultural traits of Shield AI, which is this just stubbornness towards the mission. Because, you know, your first time getting involved in Ukraine in 2022, at the outset of the full-scale invasion, you really have a really tough experience, you know, meeting the reality that conflict. You reengage now with a souped-up V-BAT in August 2024. Once again, you know, have a pretty fall on your face moment, and you get right back up. And then you finally, you know, reach this culmination of 170 sorties, and that really exquisite example of blowing up – well, helping blow up, I should say – $100 million worth of Russian air defenses. I mean, that’s pretty amazing vindication of being stubborn for both you and your brother and the entire Shield AI team.
I want to ask, though, the part of that story that I just hope everyone in the audience understands how astonishing what you said is, changing the software on an aircraft in 24 hours, because the traditional ethos of the Department of Defense for anything that’s flight-critical software is once it works for the love of God never touch it again, because getting through flight certification is this incredibly painful ordeal, and so once you have something that’s passed that flight certification you never want to touch it again. But what you’re encountering in Ukraine is an entirely different approach to software in a national security context, which is the only way to be relevant, the only way to survive is to embrace rapid iteration, rapid turnaround times, and rapid change. What was that like?
Mr. Tseng: Well, one, I just want to double tap. The difference between going home and never having any impact at all and doing now 170 sorties, many of which that have culminated in successful strikes on strategic assets, was the ability to within a short timeframe turn around the software to make it mission-relevant, and to change fundamental assumptions about it, and push it forward.
I believe that future battlefields in large part will be defined by the agility of the software that’s behind our forces that enables them to operate effectively as conditions are fast evolving. And, yes, we have programs where to change software can take the better part of a year. Like, that’s not an exaggeration. If you wanted to change flight software, it can take a year.
Mr. Allen: And that’s mostly a regulatory and process story, right?
Mr. Tseng: And I think it’s just where the risk rheostat is set, right?
Mr. Allen: Yeah.
Mr. Tseng: Crashing a plane is, of course, a very big deal.
Mr. Allen: I mean, especially with that plane, you know.
Mr. Tseng: And V-BAT is, you know, like, a million-dollar airplane, by the way.
Mr. Allen: Yeah.
Mr. Tseng: So just for context of the audience, you know, where you set the risk rheostat. But you know, there’s practice like you play, practice like you fight. I think that there’s a real question that, look, in the Ukraine, you know, it’s a – they’re in duress. Their risk rheostat is set differently.
Mr. Allen: Right.
Mr. Tseng: Accepting software updates on a 24-hour basis, you know, makes a lot of sense given the situation.
The United States in some programs – and you know, I can’t speak for all programs, but – has a very conservative risk rheostat. And so there’s a question of, well, is it the best thing to sit at this very conservative dial when we’re not rehearsing what the future could look like, right, because I don’t know anybody in industry that’s truly practicing 24 hours or 48 hours from software update to combat deployment.
Mr. Allen: Right.
Mr. Tseng: Right? And if you’ve never done it, is it reasonable to expect that if we find ourself in extremis we will be highly effective at suddenly pivoting to a very agile motion of development, test, deployment?
Mr. Allen: Right. And it’s not that you’re abandoning testing before you deploy. It’s not that you’re, you know, giving up on the canonical things of aircraft development – you know, responsible development of aircraft. It’s just that you’re saying this has to be done in a relevant timeframe.
Mr. Tseng: Yeah. It has to be done at the speed of relevance. And basically, I have sort of three pillars that I think are essential for winning in autonomy.
Basically, the industry-government team has to find a way to sit at the intersection of performance, right? It has to do the mission and it has to do it well.
Assurance, right? It has to be airworthy. It has to have the right cyber hardening.
And speed. You have to be able to deliver one and two in a timeframe of relevance. What’s that timeframe? I would argue what we should be aiming for is you can get through that cycle in 24 hours, and I think there’s a lot of work to go to get it to a 24-hour cycle.
But I think if you have – and I think this is where just autonomy in general needs a lot of work. It’s not a well-industrialized process compared to many other industries, right? A lot of autonomy programs, they’re brilliant Ph.D.s and people. Like, it’s a pretty young industry, and you’ve got these collections of super-smart people to sort of bootstrap every new project from the ground up, but you don’t have this foundational development infrastructure that you have, say, for, like, mobile app development, right, where if I want to develop a mobile app for Android or iOS they’ve put guardrails on the process to enable me or anyone to go a hundred times faster and be a hundred times more effective than was possible 15 years ago.
Mr. Allen: Right.
Mr. Tseng: And so this happens in industries through time. It has not yet happened in the autonomy space where the infrastructure has been put in place that allows developers to sit at the intersection of performance, assurance, and speed.
Mr. Allen: Yeah.
And you know, we talked about DIU and you partnering with DIU in the early stages of the company. Are there any parts of the DOD that stand out to you as – maybe not at the speed of Ukraine but as effectively drawing lessons learned from Ukraine and incorporating them into a changed operational approach?
Mr. Tseng: I’d say that some of the big takeaways have been, I think, positive, which is if it doesn’t work in Ukraine it’s probably not going to work, you know, anywhere else just on the account of if you can’t operate without GPS and if you can’t operate with severely degraded communications I think a lot of people are starting to see that, I think, correctly they do not pass go capability.
Mr. Allen: Yeah. And just to your point, right, I mean, I think there’s, obviously, the hypothetical of what if we’re in a fight with China over the Taiwan Strait. I would expect China is going to have some formidable electronic warfare capabilities.
But even when you’re not fighting against a near peer adversary or a peer adversary, in the recent conflict against the Houthis we’ve had to reexamine fundamental assumptions about the nature of American air dominance as we experienced it in Iraq and Afghanistan, right?
We lost Reapers at a significantly higher than typical attrition rate just in this most recent conflict against the Houthis because suddenly ground-based air defenses are within the reach of an actor like the Houthis, which don’t have the world’s biggest defense budget or anything like that.
And so the urgency of learning these lessons from Ukraine I hope, right, is being very deeply understood by the leadership in the DOD and so – sorry, I’ve interrupted you. Please keep going.
Mr. Tseng: Well, I think that, you know, we talked about EW. I think that there’s another pillar there which is integrated air defense systems are more capable and less expensive, or let’s just call it air defense systems because some of them might not even be that well integrated –
Mr. Allen:
Mr. Tseng:
Right.
– in the case of the Houthis – have become much more effective, and so these are very low-cost Iranian surface-to-air missiles that are shooting down very expensive aircraft and, certainly, you see some of that same capability in Ukraine as well.
So that’s been another, you know, I think, wakeup call in addition to the EW environment.
And the third one that I’ll call out is a lot is written about mass. So a lot of people – you know, and I think it’s another great takeaway. Like, clearly, the world is going to involve or conflicts in the future will involve much more mass than has been historically the case, much more use of drones.
I don’t know what the latest numbers are. Do you know what the latest numbers are for Ukrainian production of drones?
Mr. Allen: Well over a million and a half is what they’re targeting for annual production.
Mr. Tseng: Yeah. Well over a million and a half per year. So just staggering numbers of drones. Yet –
Mr. Allen: And when you think about Predators or Reapers we’re talking – I don’t even know if they made it to more than a thousand. I mean, it was probably hundreds of aircraft if not hundreds of thousands.
Mr. Tseng: Yeah. And, yet, despite that production these lines don’t really move and there’s no, you know, victory for either side. And so I think an important question is how can you send a million and a half drones downrange per year and not get effect, right? And so I think that another reminder – because I think, certainly, a lot of people know this but –
Mr. Allen: Well, I think they are having some effect, right? There’s over a million Russian dead or wounded in this conflict and Ukraine has not fallen. That’s an effect.
Mr. Tseng: Yeah, I think that’s absolutely fair. What I think that the – like, there is a big, I think, targeting challenge in the world. The world is big. You can’t just fire a million and a half things down range and hope for effect.
They have to be well placed, and a gap that we have seen has just been the ability to get these drones to have the effect that is intended for, basically, information gaps in terms of, you know, where to send them and what effect did they have because it’s been so hard to get eyes and ears deep across the forward line of troops.
Mr. Allen: And so as we – connecting it back to the DOD, right, you talked about the big lessons learned about what is the exchange ratio of how much does our drone aircraft cost, how much does their surface-to-air missile cost.
You talked about the importance of mass and how we’re, like, multiple orders of magnitude away in production from where we probably need to be as the Department of Defense.
Are you seeing signs of movement in the DOD that are encouraging? I think about, for example, the collaborative combat aircraft program, which is putting in-flight autonomy in a formal program of record with a multibillion dollar budget.
I think about the Biden administration’s Replicator Initiative, which was looking specifically at that affordable mass and especially equipped with autonomy-type capabilities. Have these moves in your estimation, you know, affected the DOD’s position? And what else needs to be done?
Mr. Tseng: Look, I think there’s been substantial influence. And you know, some of the initiatives that you called out, I think, are some things that were already happening, maybe some of them more adjusted and informed by what’s happening in Ukraine. But certainly, I think that there’s a lot of positive momentum around updated technologies, platforms, and programs informed by what’s happening in Ukraine.
I also think, you know, there have been some callouts to make sure that we don’t learn the wrong lessons from Ukraine. And I think that’s, you know, absolutely a great callout that some people are making because you can’t just wholesale take, you know, what’s happening here and expect it to translate to other theaters.
Mr. Allen: Yeah. I mean, a ground war is different than a naval war to a first approximation – (laughs) – right, if we’re thinking about implications for China. So it’s important that we calibrate as we draw lessons learned.
Mr. Tseng: Yeah. Yeah.
Mr. Allen: So what – as you’re thinking about, you know, Shield AI and where you are in this moment, you know, you have the V-BAT, which is this exciting $1 million platform that can be airborne, I think you said, for 12 hours, which is – for a million dollars that’s a nice capability, right?
Mr. Tseng: Yeah.
Mr. Allen: I think a Reaper is somewhere in the 24- to 36-hour range and it’s, like, $25 million. So it’s a really interesting sort of return on investment, you know, kind of capability that you bring.
There’s also this autonomy part of the story, and I’m curious, you know, there’s a lot of discussion out there and has been for well over a decade, right – think about when Google originally pulled out from Project Maven – you know, about bringing AI into a warfighting context and whether or not that’s a desirable thing that America should be engaged in.
Where are we now in terms of the state of AI and autonomous capabilities and where should we be trying to go?
Mr. Tseng: I’ll start with the end state, which I think is just mass deployment of hyper intelligent AI on every vehicle or weapon in the arsenal.
In terms of where we are today, I think, frankly, there’s just a lot of work to be done to claw back to, let’s just call it, table stakes functionality, right? GPS existed for a long time. It’s this magical, brilliant sensor that tells you where you are in the world and tells you what time it is precisely.
No questions asked for a long time, and so much was built on that infrastructure and today that infrastructure is – you know, cannot be trusted in large swaths of the world.
And so a lot of the energy for AI and autonomy needs to be applied to building back to the base case of knowing where you are in the world. And so, you know, sometimes people wonder if you can do all this great stuff with swarming or, you know, pick your capability, you know, why don’t we see that right now and it’s just a lot of effort has to go back to, you know, creating a stand-in for GPS.
And AI is a great foundational technology to, you know, figure out where you are.
Mr. Allen: Yeah, and this is something that I’ve talked about with your colleagues, which I think is just a helpful illustration. You know, talk to me about the difference between swarming in, like, the Chinese Lunar New Year demonstration, which people maybe see a YouTube video of and say, like, oh my gosh, China already has swarming technology. Talk to me about the difference between that kind of swarming and battlefield relevant swarming capabilities.
Mr. Tseng: Yeah. So it’s just that you have – you either have GPS or you don’t. (Laughter.) And if you have GPS putting up 10,000 drones to do these preprogrammed displays becomes relatively – well, becomes dramatically more accessible.
And so as – and it’s all technologically possible. We’re doing it, but in terms of what’s actually deployed, you know, there’s very little that has weaned itself fully off GPS.
Mr. Allen: Yeah. I think just to crystallize it, right, there’s a difference between have GPS tell you where you are, then fly up 10 feet, right 10 feet, back three feet – you know, that preprogrammed sequence of instructions – that when you look at it make this beautiful display that appears highly, highly coordinated there’s a difference between that and we’re on a battlefield, there’s a hundred drones. Literally none of them can effectively talk to each other and, yet, they all have to work like a team by watching each other, by watching the environment and making intelligent decisions, and that’s kind of the gap that you’re trying to cross.
Mr. Tseng: Yes. Yes. And I will say that, you know, the state of technology is such that pretty quickly we will have effective stand-ins for GPS. Of course, like, Shield AI is running a lot of sorties. Those technologies are becoming more accessible, easier to deploy. And once you have that –
Mr. Allen: Can you talk a little bit about, like, what is effective in a GPS-denied environment, you know, whether that you uses AI or otherwise?
Mr. Tseng: Yeah. So the name of the game is for us you need observability and then, you know, you need to combine that information to create some estimate of where you are. So people will use cameras. They’ll use radio frequency. They’ll use thermal cameras, star cameras. They’ll use inertial measurement units, magnetometers.
Mr. Allen: So when you – when you have a camera, you’re talking about, like, taking a picture of the ground and being – like, comparing it to some map database you have –
Mr. Tseng: Correct.
Mr. Allen: – and saying, like, if I see the Washington Monument, then I must be near Washington, D.C. or whatever the Ukrainian battlefield equivalent of that is.
Mr. Tseng: Correct. Correct.
Mr. Allen: And that’s leveraging AI computer vision?
Mr. Tseng: It is. And so that’s one event. And then it – and then it turns out that on cloudy days, or at night, or over the ocean that won’t work, and there’s sort of like eight big conditions and a camera looking at the ground works in one of the eight conditions.
Mr. Allen: Got it.
Mr. Tseng: So where I think things will fast go and are fast going is building from that foundation to enable the deployment of very large teams of machines, whether vehicles or weapons, to produce, you know, coordinated effects and outcomes. And really the only thing, I think, that has been slowing down the deployment of that has been, again, getting back to, like, basics with the where-am-I-in-the-world question. But I think, you know, we’re well on our way there, and then it’s just a matter of, you know, taking that next step.
But I do think that one of the major gaps is a lack of industrialization of the overall process. So even if it’s technologically within reach, is it actually scalable if it requires a bunch of Ph.D.s in, you know, AI and robotics to field a capability? Because there are only so many of those people in the world. And so how do you take something that for the longest time has required very high expertise and make it accessible to the defense industrial base so that, you know, we can deploy it not once but across a number of vehicles and weapons that the mission demands?
Mr. Allen: Yeah.
So we’ve talked a lot about how the DOD needs to change in terms of, you know, what types of technologies it needs to prioritize. You talked about mass. You talked about operating in GPS-denied environments, talked about prioritizing AI and autonomy. I want to talk about, you know, programmatically and regulatorily, you know, what is the difference between the DOD many times saying, you know, a software update takes a year to get it through the regulatory approval process and in Ukraine it might take a day or a week?
And I kind of want to frame this just in a – as a startup founder who bet on doing work for national security well before it was fashionable, well before it was cool, well before it was considered anything remotely approaching a safe investment of time or money, what has made your life hard, right, as a defense entrepreneur trying to work with the DOD? And I mean that both in a, you know, getting on contract, and I also mean that in terms of, like, what makes it hard to build the right thing. You know, what are the pressures that you face? And where have you seen the DOD improve, and where could they still improve?
Mr. Tseng: Yeah. So number-one thing that usually makes an entrepreneur’s life hard is their own dumb decisions.
Mr. Allen: (Laughs.)
Mr. Tseng: So, like, we’ll just acknowledge that one –
Mr. Allen: Fair enough, yeah.
Mr. Tseng: – and, you know, put it in a box. But that’s number one on the list.
Mr. Allen: From the outside, right, it looks like you’re batting 1.000.
Mr. Tseng: (Laughs.)
Mr. Allen: You might not necessarily be batting 1.000.
Mr. Tseng: Yeah. But that aside, I think that the – it’s the complexity of the government acquisition system. It’s just a huge, huge machine with so many stakeholders.
Mr. Allen: Yeah.
Mr. Tseng: You know, this morning we were mapping out some program-capture activities, and I was looking at the different workstreams. And even today, 10 years later, I’m just thinking to myself it’s shocking how many people, right, are on the chessboard.
Mr. Allen: Who could say no?
Mr. Tseng: Yeah.
Mr. Allen: Right?
Mr. Tseng: And so getting alignment across so many people, and I think it’s just very hard for a startup company to comprehend or properly prepare yourself for the number of stakeholders that have a vote.
Mr. Allen: Right.
And I think, you know, to compare that with Ukraine, the way they approach acquisition of commercial drones is they have a special pot of money, and when you’re buying drones with that pot of money you face so many fewer regulatory challenges and so many fewer process steps, to the point where even individual battlefield commanders can be engaged in the procurement of actual weapons systems.
In the U.S. system we have what’s called different colors of money. There is procurement money, there is research money, there is operations and maintenance money. And different types of organizations are only allowed to have certain types of money. So a combatant command, the people who are actually engaged in the fighting or engaged in the deterrence activity, only have operations and maintenance-type money. So they’re not allowed to go say, I want to go buy this stuff. If they want more weapon systems, they have to ask another DOD organization, you know, please generate a requirement to tell somebody else to buy this for me. And by the time that, you know, game of telephone, snail mail completes, right, it’s nowhere near the speed of operational relevance.
And for an organization such as yourself, right, you’ve had – you’ve had to master this skill set of identifying the million stakeholders – whether it’s the operational users, the requirements setters, or the acquisition, you know, community. You got to be engaged simultaneously with all of those people. And as a startup, that is a really formidable skill set to ask, you know, an entrepreneur. In your case, right, the team started with three people to try and do that work. And you got an assist from DIU, but why are we asking – you know, why are we making it so hard, when we say – like, five different presidential administrations in a row have said they want to make it easier to do business with the DOD. But, at least to me, it still seems like it’s a formidable challenge.
Mr. Tseng: Yeah. I think that any entrepreneur that’s thinking about getting into this space, and I encourage it because I think the mission is worth it. You know, I wake up every day very proud to have an opportunity to contribute. But you need to be prepared for some complexity. One of the things that I’m excited about – my brother testified – gave congressional testimony on this, I think, last year – but is doing a more problems-based acquisition as opposed to requirements-based acquisition. I think that’s a great – if the department can find a way to lean into that, I think there’s a huge time savings to unlock there, right?
I might have a problem and I don’t know what the answer is, but it’s usually much quicker to identify you have a problem than specify the solution to that problem. And that’s where – I think where there’s an amazing opportunity to leverage industry and tech companies and just say: I’ve got this problem. And I can acquire against this problem. How would you solve it, right? And I think that could be something that cuts considerable amounts of time out of the overall acquisition system.
Mr. Allen: Yeah. I mean, there’s such a difference between what you just described and the typical requirements-setting process for the DOD, which is a we will buy a system with all of these parameters, and it must – we might even get to the level of, and it will use this engine, and it will use this radar, right? Like that’s sometimes how detailed these requirements specifications can go. And that’s so different from the way –
Mr. Tseng: Deeper still. (Laughter.)
Mr. Allen: And that’s so different from what Ukraine, you know, often has to do, which is they’re, like, we’re suffering this, you know, very vicious problem, and we urgently need a solution. Tell me if you’ve got one. And if it’s great, I’ll buy it. And that problems-based mindset, if you can have it, is really powerful.
Mr. Tseng: Yeah. I think – and, look, I’m not an expert on Ukrainian acquisition, by any stretch. I understand it’s got all sorts of its own problems. But in terms of our own experience and the way that, you know, it happened for us, it was just very evidence based. They said, you know, come out. And everybody has given us PowerPoints. So those just don’t fly here. (Laughter.) No pun intended. So they took us out to their EW range where they just slammed V-BAT for a couple days. And they’re like, OK, great. And like, but that’s not enough, right? We need to see it overfly, you know, the FLOT.
Mr. Allen: The Russian territory, or whatever.
Mr. Tseng: Yeah. So we, you know, trained their operators. And they overflew the FLOT. They did the thing that was written about in The Wall Street Journal. And it was, like, at that point that we started to get momentum. And even after that, they said we’ve done 170 sorties, there maybe more now, it’s just it’s a very evidence-based acquisition system. Which I think works very well, up until a point. I think that there are some – there are certainly programs that it’s pretty hard to – it’s pretty hard to show the evidence for.
Mr. Allen: Yeah. OK. We’re coming to the end of this. I’m really grateful for the time you’ve taken. I want to ask one final question. Is we’ve talked about, you know, who Shield AI was in 2015, who they were in 2017, who they were in 2020, who they are now in 2025. Where’s Shield AI going to be in 2030?
Mr. Tseng: Look, I hope we’re making mission impact at tremendous scale, still grounded to the values of honor, service, and excellence. I think that autonomy is, you know, foundational to the future of America. And we’re just humbled to have the opportunity to contribute to it.
Mr. Allen: Ryan Tseng, thank you so much for coming to CSIS.
Mr. Tseng: Awesome. Thank you so much.
Mr. Allen: This concludes our event. Thank you so much for watching. The replay will be available on both YouTube and at our website, CSIS.org.
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