It has been less than three weeks since President Trump took office and appointed Elon Musk to head the Department of Government Efficiency (DOGE). Musk has already sent shockwaves throughout Washington D.C., finding billions in overspending and possible fraud at USAID and other government agencies. Now, Musk is targeting the most significant government apparatus of all – the defense sector.
In response to entrepreneur Chamath Palihapitiya’s observation Thursday evening that the Navy is planning to spend $40 billion per year for the next 30 years, or $1.2 trillion, on 364 ships or ~$3B per ship, Musk said, “American weapons programs need to be completely redone.”
“The current strategy is to build a small number of weapons at a high price to fight yesterday’s war,” Musk added. “Unless there are immediate and dramatic changes made, America will lose the next war very badly.”
Musk’s comments follow a recent interview he gave on the Inside West Point podcast about the future of technology in warfare.
During the interview, Musk highlighted that modern warfare, like the current Ukraine/Russia conflict, is now fought with drones. He sees this continuing and expects drones to get localized AI—AI on the individual bot—not controlled at a location far away from the frontline.
He also doesn’t see humans on the frontline anymore. “Drones don’t miss,” Musk said.
He added that the winner of the next war will depend on the number of drones the country has and the kill ratio. So even if the U.S. has a better kill ratio than its rivals, if it can’t scale up drones, it could still lose. Musk questions whether the U.S. could scale quickly enough, saying countries usually prepare for the “last war” they were in, not the ones ahead. He recommends adjusting now.
Musk also said communications are key in the next war. He highlighted that his Starklink is being utilized in Ukraine. When Russia blows up cell towers, underground fiberoptics, jams GPS, etc., Starlink provides a way to communicate with drones and humans in combat.
Musk believes AI will surpass human ability, although he didn’t give a timeline. He also said that he thinks AI will want to please humans and that truth-seeking AI will help humanity.
Musk also thinks the age of the fighter pilot is “coming to an end.” He said the pilot is a liability against a drone. “A drone you can sacrifice… a human you don’t want to sacrifice.”
Musk said, “Space is the ultimate high ground " in warfare. He also sees it as critical for communications.
Musk’s comments have widespread implications for the defense sector, including major defense stocks Lockheed Martin Corporation (NYSE:LMT), Northrop Grumman Corporation (NYSE:NOC), General Dynamics Corporation (NYSE:GD), Boeing Co (NYSE:BA), and Rtx Corp (NYSE:RTX), as well as drone-makers like AeroVironment Inc (NASDAQ:AVAV) and Kratos Defense & Security Solutions (NASDAQ:KTOS).