deciding on FY 2027 priorities. Today, if a prototype were deemed effec- tive and a Combatant Commander wanted to integrate a prototype space capability into the USSF arsenal, fund- ing would not be available until 2027. Imagine if Apple waited until 2027 to work on the next generation iPhone. In that timeframe, two generations of iPhones are likely to be released with millions of early adopters. That two- year timeline is crippling to Warfight- ers, disastrous to business revenue models, and cumbersome to venture capitalists who fund this commercial technology. Silicon Valley Outpost In 2015, recognizing the cadence of commercial innovation in the con- sumer technology market and its de- parture from national security needs, then Secretary of Defense Ash Carter established the Defense Innovation Unit Experimental (DIUx) as DoD’s outpost in Silicon Valley and a bridge to commercial start-ups and the venture capital ecosystem. In 2016, Carter said, “wherever innovation is hap- pening, we need to be able to tap into it.” Entrepreneurs and their investors were initially skeptical of DoD’s slow bureaucratic acquisition and test- ing, but they had a willing champion in Carter and an ally in what is now DIU (“Experimental” was dropped in 2018). The organization deploys non- dilutive funding into commercial com- panies and by 2023, nine years after its founding, DIU invested in more than 80 prototypes and helped steer $30 billion of private capital investments into technologies that the organiza- tion also was funding. Innovator’s Dilemma Even as DIU demonstrated the practicality of solving real Warfighter problems through commercial innova- tion, prototypes still struggled to gain traction or adoption by the Services. Adoption by the Services resides in the authorities granted to Service Acquisition Executives (SAEs) and Program Executive Officers (PEOs),
CASE STUDY: Remote Sensing
Early DIU Space Portfolio companies like Capella Space and Planet Labs have transformed the commercial remote sensing market and demonstrated their ability to raise private capital to develop and field commercial synthetic aperture radar and elec- tro optical systems to meet the DoD’s need for imagery products on operationally relevant timelines. Commercial remote sensing satellite constellations provide near real-time imagery and, in- creasingly, imagery analytics for Combatant Commanders and operational planners. These commercial products and tools are now available for any DoD customer to access. Through DIU, the DoD invested approximately $20 million to prototype and qualify both solutions while leveraging over $1 billion in private capital investments. This collaboration demonstrates that when DIU conducts a solicitation, there is a clear demand signal to commercial companies and private capital markets where the DoD is looking to invest long-term.
Chinese submarine entering an underground pen on Aug. 18, 2020, at the East Yulin Naval Base, which houses China’s ballistic-missile submarine base. Source: Satellite image from Planet Labs
Synthetic aperture radar (SAR) image of Dayushan Island, China, on Aug. 18, 2022. Source: Satellite image from Capella Space
44 | DEFENSE ACQUISITION | March-April 2025
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