Craig Martell has seen AI adoption from more angles than almost anyone: a Silicon Valley machine learning leader (LinkedIn, Dropbox), the first Chief Digital and Artificial Intelligence Officer (CDAO) of the Department of Defense, and now CTO of Lockheed Martin. He brings that rare Valley-to-Pentagon vantage to one question: what does it actually take to field AI you can trust when lives are on the line.

Craig makes the case that AI is "statistics at scale" — gather data from the past to predict the future, and therefore guaranteed to be sometimes wrong. So the real work is defining the error envelope use case by use case and building "human escape hatches" where mistakes are cheap to detect and correct. We dig into why he's deeply bullish on the technology yet skeptical of a "not fully baked" product that ships with an asterisk, the product-management gap between how government writes thousand-page requirements and how the best new entrants build, and how the US and Chinese defense industrial bases really differ.

We then get into buy vs. build and learning from Ukraine, Silicon Valley's 70%-good-enough mentality vs. defense's demand for 100%, the fight over IP ownership and the stewardship of taxpayer dollars, and where an Apollo-scale public bet might still be worth making. Finally, the frontier Lockheed is investing in: quantum computing, sensing, and PNT; human-machine teaming and collaborative combat aircraft; microelectronics and friend-shored fabs; and Craig's "principle of stuff" — why all computing is ultimately manufacturing, and why low-power inference at the edge is going to matter.

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This and all episodes are enhanced with lots of useful links and transcripts which you can read at typhoonbearing.com

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Timestamps:

(00:29) Ukraine, Iran, and the future of modern war

(01:29) AI as "statistics at scale," guaranteed to be sometimes wrong

(06:44) Human escape hatches and error envelopes

(09:59) CDAO to CTO: the product-management gap in defense

(11:38) How the US and Chinese industrial bases differ

(14:06) The "not fully baked" product and the asterisk

(24:45) When will AI make a lethal decision on its own?

(28:58) Buy vs. build, and learning from Ukraine

(31:01) Silicon Valley's 70% vs. defense's 100%

(38:03) IP ownership, taxpayer dollars, and parallelism

(43:44) Quantum, GPU concentration, and an Apollo-scale bet

(48:34) Quantum sensing, PNT, and human-machine teaming

(55:15) Microelectronics, fabs, and friend-shoring

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I love mail. Send comments, critiques, and takes to ⁠⁠⁠typhoonbearing@gmail.com⁠⁠⁠

⁠Visit the Typhoon Bearing website: typhoonbearing.substack.com⁠

Follow me on Twitter:⁠⁠⁠⁠ @ChaseHDalton⁠

Bill Wiseman leads McKinsey’s Global Semiconductor Practice and founded its Taipei Design Lab. He brings a rare mix of semiconductor engineering and national security experience to one question: what happens if Taiwan cannot ship silicon. We unpack why Taiwan risk is bigger than “leading edge logic” including NOR flash, DRAM, advanced packaging, and the electronics manufacturing ecosystem.

Bill explains why this is a 15 year-plus problem, why markets struggle to price it, and why collective action fails without coordination. We then shift to export controls and coalition durability, why ASML and the Netherlands matter, and how corporate incentives differ for commodity components vs ecosystem businesses.

Finally, we get into the messy reality of IP leakage, cyber theft, and why quantum readiness may be the most practical near-term move, plus what the CHIPS Act should be measured on: HBM, packaging, talent, power, and grid margin.

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This and all episodes are enhanced with lots of useful links and transcripts which you can read at https://typhoonbearing.substack.com/p/semiconductors-and-national-security

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Timestamps:

(00:17) Taiwan disruption, global shock

(03:12) Markets, pricing, game theory

(07:05) Taiwan politics, silicon shield

(10:04) Board plans, inventory reality

(17:08) Export controls, coalition durability

(25:38) IP theft, quantum risk

(34:35) CHIPS Act success metrics

(46:01) Security needs beyond leading edge

(55:11) Recommendations and closing

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I love mail. Send comments, critiques, and takes to ⁠⁠typhoonbearing@gmail.com⁠⁠

Traditionally war came with loot. This loot took a lot of forms, ranging from slaves (definitely not allowed today), to enemy military equipment, and whatever you could plunder from the enemies cities and countryside. We still have a few vestiges of these sorts of takings that are "legal" in warfare today. Andrew Clapham argues that we should almost completely ban these sorts of prize-taking, along with blockades and other tools of warfare. I'd actually argue that they are not all bad, and we have a pretty good debate about the topic on this podcast.

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