Bloomberg Tech Screentime Special

SPEAKER_1 (0:02)

Bloomberg Audio Studios, Podcasts, Radio, News. Bloomberg Tech is live from the heart of Silicon Valley with Ed Ludlow in San Francisco.

Ed Ludlow (0:25)

Welcome to a special edition of Bloomberg Tech, live from Skunk Works, Lockheed Martin's Advanced Aircraft Development Facility in Southern California. Today, we go all in on Defense Tech and discuss some of the biggest names in this booming industry, from the conflict in Iran and competition with China to working with the US government, AI's role in the future of warfare. We start with one of the most profound changes for the Defense Tech industry, how it's doing business with the Pentagon. It used to be that defense companies competed for contracts based on requirements, set by the government. Now, Lockheed Martin's CEO, Jim Ticlet, wants to pitch that technology before the US government comes asking. I sat down with him to discuss that and much more.

Jim Ticlet (1:11)

Typically, the US government would set requirements, or the armed services would set requirements and say, well, I want a new plane that goes this speed, at this altitude, can carry this much equipment and weapons, whatever. And here's a 500 page set of requirements that we've identified, that we want you to design to.

Two or three of us would get, companies would get requests for information. Can you do this?

What are these requirements going to take to create? What's it going to cost? And then there'd be a bunch of input back from industry, and then there'd be a request for proposal. Okay, who really wants to step up And try to do this. Very well defined, extremely well defined requirement set. And then it would be two or three bidders, it'd be down selected to one, usually the lowest cost provider who was technically qualified would get the job. And then it would take years to actually create that capability.

What is different now is that the current leadership in the Pentagon has decided to take the straight jacket off the companies, which allows us to take the straight jacket off of our engineers and scientists, to allow us to be flexible, to propose solutions, to do prototypes, to go out, we go out in the field, and the field could be the Pacific Ocean, of course, for us. And we test prototypes on actual ships with sailors that are stationed on the ships, running the prototype to see if it works. And so, then we'll come back with that, or an army test range like Yuma Proving Ground. We actually shot some of our Jaga missiles out of our Grizzly launcher and showed the army and had their people operate it. It worked. So, we have this integration capability now, the straitjackets off the companies and the industry, and we welcome the new entrance, we welcome the startups, because we want that creativity so we can learn from it. And so, if we see somebody can do like Fordham, better capability at a certain size and shape and cost than we can, we want to bring that in really quickly. So, we welcome those investors, we welcome that talent, we welcome that technology, because we want to integrate it into our mission sets. And again, we can be the subcontractor too. If someone else has got a better mission profile than solution than we do, we would love to put the F35 into that profile. So, this can go both ways, actually, Ed.

Ed Ludlow (3:31)

Jim, what is Lockheed Martin's AI strategy? How core is AI to that technology roadmap?

Jim Ticlet (3:39)

It's very fundamental to the company and everything that we're doing.

Our chief engineer, when I started the company in management six years ago, said AI is really critical. And of course, to ask for budget to invest in our own AI containerized instance where we would not be going up using data sets off the internet. We would not be using models and then feeding our information back into the system where we would have a basically a controlled environment for our AI workloads. And one of our partners again in the technology space has been Jensen Wong. Back in 2000, 2001, where hardly anyone maybe had heard of NVIDIA. If you weren't a gamer, we were teamed with NVIDIA to get GPUs.

And that relationship continues today. So, we have our own GPUs, we have our own platforms, we host AI models on our own platforms and on our own GPUs. We use only data that we generated or we get from the US government. And then we can create AI driven solutions to those many of those mission sets that we just talked about a little bit earlier.

Ed Ludlow (4:50)