AI and Defense (2020)

Abstract

This paper examines the development of artificial intelligence (AI) applications for Department of Defense (DoD) from a business strategy perspective. In 1945 the military-industrial base of the United States was equivalent to the general economy. The defense industry is now small relative to the general economy and most innovation in artificial intelligence comes technology firms. In order to capitalize on innovations in AI, the DoD is making efforts to find innovation outside of traditional defense contractors. Assessing the business environment allows us to understand which technology firms have an incentive to compete in the growing addressable market of AI in defense.

This white paper seeks to answer the following three questions:

• Is the defense industry positioned to deliver AI products to the DoD?
• Is private industry incentivized to provide AI products to the DoD?
• What changes could be made to the business environment to ensure that the best AI products are developed and delivered to the DoD?