In an essay published by Foreign Affairs on January 8, 2026, defense policy expert Margaret Mullins critiques Silicon Valley’s approach to U.S. national security. The report was titled “What Silicon Valley Gets Wrong About National Security.” The piece argues that tech entrepreneurs’ call for deregulation in military procurement is misguided and could deepen America’s defense vulnerabilities. Mullins, who is a former Senior Adviser to the Deputy Secretary of Defense, asserts that innovation requires stronger government intervention, not less, to address a “crisis of both modernization and production.”
The Silicon Valley Narrative and its Flaws
Silicon Valley leaders like Palantir CEO Alex Karp, Anduril founder Palmer Luckey, and Andreessen Horowitz partner Katherine Boyle promote a declinist narrative. “They blame excessive regulations, cumbersome processes, and favoritism toward legacy contractors like Lockheed Martin for stifling innovation. A key event in their story is the 1993 “Last Supper” meeting, where Clinton officials encouraged industry consolidation amid budget cuts, creating monopolistic giants that block startups.
According to Mullins, this view is “incomplete and ahistorical.” She traces problems to the 1970s-1980s, when globalization offshored production and financialization via debt-fueled mergers, which prioritized profits over resilience.
Reagan-era drawdowns from 1986 hollowed out suppliers, with a 1989 report showing 67% drops in key areas like submarines and satellites. The US defense market, as a monopsony with the government as the sole buyer, demands active state involvement, not deregulation.
Silicon Valley’s fixes, fixed-price contracts, reduced compliance, and commercial tech mirror the failed Clinton reform, like the 1994 Federal Acquisition Streamlining Act, which raised costs and eroded oversight.
Historical Roots of the Defense Industrial Base Crisis
Post-World War II, government investments in arsenals and labs were paired with private partnerships, which spurred innovations like GPS and semiconductors. But 1970s foreign subsidies and low labor costs led to offshoring. The 1980s saw “financial engineering,” with takeovers burdening firms with debt. Reagan’s privatization outsourced around 40000 positions, which were often at a higher cost due to the poor contracts it offered.
Shipbuilding exemplifies the decline: public yards once handled half of naval work, but in the 1970s-1980s, cuts decimated capacity. By the 1990s, firms faced debt and excess, and Clinton’s “civil-military integration” shrank the acquisition workforce by 50% from 1989 to 1999, leaving fewer experts for complex deals, which later administrations failed to rebuild, exacerbating shortages despite massive spending.
Tech Industry Consolidation
Mullins highlights irony: Silicon Valley firms criticizing consolidation are consolidating themselves. Anduril acquired nine companies since 2017, Palantir seven since 2013, AeroBirinment six since 2019, and Shield AI has acquired three companies since 2021. These mirror legacy strategies
Fixed-price contracts shift risks but lead to overruns on uncertain tech. Venture-backed firms may prioritize commercial viability over defense needs, as Palantir did by broadening its data licensing. Software can’t fix hardware shortages in ships or munitions; over-relying on private dynamism risks overcharging and vulnerabilities.
Stronger government intervention and Capacity Building
Mullins rejects the myths on “lean government,” quoting: “The government’s role is to advance the public interest, not to please its contractors.” She urges surge-ready contracts with scalability provisions and steady funding for organic bases like arsenals and shipyards.
A “build versus buy” process should guide in-house decisions. The Pentagon needs more acquisition officers, engineers, and technologists to reverse workforce cuts and ensure innovation. This would manage the monopsony effectively, extracting the industry’s best while safeguarding public interests.
Implications on US National Security
Defense is not demanding speed but is demanding scalability and resilience. Facing China, weakening institutions via “misconstrued history’ could prove costly. A competent state is innovation’s precondition, not obstacle, contrasting Silicon Valley’s libertarian view.
Emerging debates
The essay has sparked discussions, with Foreign Affairs promoting Mulin’s rejection of lean government narratives. Reactions from Silicon Valley are nascent, but it could influence procurement reforms amid ongoing shortcomings. As debates grow, her call for public-private balance challenges tech’s dominance in security discourse.
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