To Promote Defense Innovation, Fund the Defense Innovation Unit

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Abstraction: Case for funding Defense Innovation Unit to bridge Pentagon-startup gap

Key points:

2024 DoD Appropriations Bill proposes increasing DIU budget tenfold to >$1B as a "hedge portfolio" of modular systems
DIU founded 2015 by Secretary Ash Carter; awarded $1.2B in OTA contracts 2016–2022, generating $4.9B in follow-on production contracts
House 2024 NDAA (Section 925) would make DIU director a direct report to the Secretary of Defense and head of the nontraditional innovation fielding enterprise
Key problem: "valley of death" between R&D funding and recurring production revenue causes many defense-tech startups to fail
Ukraine war demonstrated value of both major-contractor exquisite systems and startup-built lower-cost technologies (drones, ISR)
Shield AI and Anduril hold DIU contracts; most successful defense startups (Palantir, Anduril) were founded by already-wealthy entrepreneurs

Connections: Defense Innovation Unit · Anduril · Palantir · Defense Tech · Defense Innovation · Dual Use Technology