That work started in 2016 when the Defense Innovation Unit, the Pentagon\u2019s commercial technology hub, awarded Joby a $20 million contract to observe flight tests and gather data on the aircraft\u2019s electric propulsion system.<\/p>\n\n\n\n
At the time, the Santa Cruz, California-based startup was focused on the commercial market for its aircraft and wasn\u2019t looking to partner with the government, according to Greg Bowles, Joby\u2019s head of government affairs.<\/p>\n\n\n\n
\u201cWe didn\u2019t understand the importance of it,\u201d Bowles told C4ISRNET. \u201cInitially, we were worried about the complication it would cause.\u201d<\/p>\n\n\n\n
The company started building a relationship with DIU, and this first contract not only helped fund early testing but also showed private investors that the Pentagon saw promise in the company\u2019s work and the electric vehicle market more broadly, which ultimately helped attract more than $2 billion in private capital, Bowles said.<\/p>\n\n\n\n
It also led to more opportunities with the Defense Department. In 2017, Joby flew its first full-scale flight demonstration, becoming the first company to transition an electric vertical-takeoff-and-landing, or eVTOL, aircraft to flight. In 2020, the Air Force\u2019s technology cell, AFWERX, granted the vehicle its first airworthiness certification through the service\u2019s Agility Prime program<\/a>.<\/p>\n\n\n\n Meanwhile, the company is working to earn Federal Aviation Administration certification next year and to launch its commercial air taxi service in 2025.<\/p>\n\n\n\n Bowles said the company\u2019s early work with DIU did three things. First, it helped secure a footprint for Joby in the U.S. And second, it made it clear to the company there is a path forward to work with the Defense Department.<\/p>\n\n\n\n It also helped the firm overcome the so-called valley of death<\/a> \u2014 the often terminal phase between when a project starts and when it is adopted and fielded by a military service. While it\u2019s too soon to say how the military might use the aircraft in the future, Bowles said the company will likely explore whether it can support logistics and transportation missions.<\/p>\n\n\n\n \u201cDIU and [Agility Prime] together have kind of shown us a pathway to work with the government that doesn\u2019t take us directly over the valley of death. I think it kind of takes us around the valley of death,\u201d Bowles said. \u201cIt\u2019s a more tailored approach that works well for companies that are looking to kind of bring new technologies into existence.\u201d<\/p>\n\n\n\n Joby\u2019s experience exemplifies what has been the mission of DIU since its creation in 2015: to connect Silicon Valley technology companies with Defense Department users, helping those businesses avoid the pitfalls of government contracting and procurement and while allowing the department to take advantage of commercial products.<\/p>\n\n\n\n That mission has evolved over time \u2014 from an experiment in building inroads with commercial firms to an established organization with a proven model for prototyping and buying technology. And it\u2019s about to evolve again.<\/p>\n\n\n\n Driven by concerns that China\u2019s military is better at harnessing its domestic innovation sector, U.S. lawmakers are proposing major increases to DIU\u2019s budget \u2014 from $70 million in fiscal 2023 to about $1 billion in fiscal 2024. And Pentagon leaders are calling on the organization to play a bigger role in helping the department field more commercial capabilities<\/a> and to do so on faster timelines.<\/p>\n\n\n\n Doug Beck, a former Apple executive and a captain in the U.S. Navy Reserve, came on as DIU\u2019s director in April and has been crafting a strategy for its next evolution, dubbed DIU 3.0. Beck told C4ISRNET the idea is to take the types of capabilities the organization has fostered, prototyped and transitioned to military users over the last eight years and \u201cdeliver a strategic impact.\u201d<\/p>\n\n\n\n That means ensuring the technologies DIU pulls in can be directed toward the actual problems combatant commands and armed services are trying to solve, plus validating that the resulting capabilities are more than prototypes and therefore can be manufactured and fielded in large numbers.<\/p>\n\n\n\n \u201cIf you show up with some great tech and you have a couple prototypes floating around or flying around, that doesn\u2019t deliver strategic impact,\u201d he said in an interview. \u201cYou only achieve strategic impact once you scale to a level that makes a difference.\u201d<\/p>\n\n\n\n Executing on this next evolution, Beck said, will take resources, collaboration and buy-in from the armed services, the innovation community, senior Pentagon leaders and Congress \u2014 all of which have been lacking for the organization since its inception.<\/p>\n\n\n\n \u201cRight now, we need to make progress,\u201d he said. \u201cWe need to put points on the board, and we need to institutionalize the change.\u201d<\/p>\n\n\n\n When former Defense Secretary Ash Carter created DIU in 2015, his vision was for the organization to serve as a \u201cbeachhead\u201d in Silicon Valley<\/a>, according to Bob Work, who served as deputy secretary of defense during Carter\u2019s tenure.<\/p>\n\n\n\n \u201cIt was a horizon-scanning operation for the Department of Defense,\u201d Work told C4ISRNET. \u201cIt was supposed to allow us to hear what they were developing, and it was supposed to allow them to hear what we were developing.\u201d<\/p>\n\n\n\n But DIU got off to a rocky start. Its first director, George Duchak, had extensive experience fostering technology within the department, but lacked knowledge of Silicon Valley and the broader commercial tech community. The organization was also staffed and led by the undersecretary of defense for research and engineering, whose office wasn\u2019t providing the attention Carter believed DIU deserved.<\/p>\n\n\n\n In his 2019 book \u201cInside the Five-Sided Box,\u201d Carter, who died in 2022<\/a>, wrote that after the organization\u2019s first year, he realized DIU needed a fresh start.<\/p>\n\n\n\n \u201cAs the techies would say, I realized it was time to declare a \u2018fast failure,\u2019 \u201d Carter wrote.<\/p>\n\n\n\n He gave the unit a direct reporting line to his office and hired a new director, Raj Shah, who led the organization from 2016 to 2018<\/a>. Within its first three months, the rebooted organization logged five successful projects and had another 22 in the works. By the end of Shah\u2019s tenure, it had grown to include offices in Boston, Massachusetts, and Austin, Texas.<\/p>\n\n\n\n Shah also helped DIU take advantage of rapid acquisition authorities, allowing the organization to put companies on contract within 60 days, which Work said was previously unheard of. As of 2022, due in part to its contracting speed, DIU had transitioned 52 projects to the battlefield backed by multiyear production contracts from the military services worth up to $4.9 billion.<\/p>\n\n\n\n That speed helped address concerns from commercial companies about cumbersome DoD processes, but it didn\u2019t solve all of DIU\u2019s challenges. Its next director, Mike Brown, was vocal about the need for the department to reform its budgeting process to make it easier for firms to work with the government.<\/p>\n\n\n\n Brown, who left the department last year, had additional concerns about a lack of support for DIU from senior leaders and what he called a \u201cglaring weakness in modernizing DoD.\u201d By the time he started in 2018, the office had returned to its original reporting structure within the Office of the Under Secretary of Defense for Research and Engineering.<\/p>\n\n\n\n Brown and others have also pushed for a larger budget share for DIU, which relies largely on other Pentagon agencies for funding. Following a $10 million appropriation in FY17, the office\u2019s annual research and development funding hovered between $20 million and $35 million between FY18 and FY22.<\/p>\n\n\n\n In FY23, Congress appropriated nearly $70 million for DIU.<\/p>\n\n\n\n Beck said DIU is making progress on some of the bureaucratic and cultural issues it\u2019s faced in the past. Over the last year, Pentagon leaders took steps to give the organization more responsibility and influence \u2014 notably with Defense Secretary Lloyd Austin\u2019s decision in April to have DIU directly report to his office<\/a>.<\/p>\n\n\n\n \u201cThe 3.0 mission \u2014 you cannot do it buried. It wouldn\u2019t work,\u201d Beck said. \u201cWe needed to be a direct report to the secretary to do this.\u201d<\/p>\n\n\n\n Austin and Deputy Defense Secretary Kathleen Hicks also made DIU a member of the Deputy\u2019s Innovation Steering Group, which oversees DoD efforts to rapidly field high-tech capabilities to address high-need operational problems. Beck also chairs the Defense Innovation Working Group, which directly supports the steering group by vetting capabilities for it to consider.<\/p>\n\n\n\n These moves give DIU a key role in the department\u2019s innovation process, Beck said.<\/p>\n\n\n\n \u201cWe\u2019re at the heart of those things,\u201d he noted. \u201cThe innovation steering group \u2014 before I got here, DIU wasn\u2019t even at the table for that meeting.\u201d<\/p>\n\n\n\n In that capacity, DIU will play a central role<\/a> in an ambitious departmentwide effort called Replicator, which aims to field thousands of autonomous systems within the next 18 to 24 months<\/a>. The initiative is the first test of the Deputy\u2019s Innovation Steering Group\u2019s innovation process.<\/p>\n\n\n\n DIU also helps coordinate the department\u2019s innovation community and is deepening its partnerships within the services\u2019 acquisition offices and the combatant commands. Having a degree of authority and being embedded in those places, Beck said, will help with what he views as one of DIU\u2019s greatest challenges: resistance to change within the Pentagon.<\/p>\n\n\n\n \u201cThere are a lot of people in leadership who understand the imperative, who see the direction of the future, who are prepared to take some risk and move out,\u201d he said. \u201cThere are still a lot of people out there for whom the way we\u2019ve always done it \u2014 it\u2019s safe. … That takes time to change sometimes.\u201d<\/p>\n\n\n\n Because Replicator is tied to an operational imperative \u2014 jump-starting the DoD\u2019s innovation machine to better compete with China \u2014 Beck sees it as a way of making inroads and deepening partnerships with the services and the acquisition community. For those resistant to change and skeptical of DIU\u2019s role in it, Replicator could provide a way for senior leaders to push through that hesitation.<\/p>\n\n\n\n Since changing culture and deepening partnerships with the services won\u2019t happen over night, Beck said, he needs to make near-term progress on two more immediate obstacles: people and money.<\/p>\n\n\n\n The organization in recent months hired two senior executive service-level deputies, a civilian role that is equivalent to a military general or flag officer rank. DIU has never had a senior executive service official on its staff, and Beck said he counts these hires as a significant win.<\/p>\n\n\n\n There are other key roles he must fill, but the organization lacks the hiring authorities to move forward. Beck said he\u2019s working with Congress to get approval and has plans to have the right people in place by 2025, but he needs to bridge that gap until then.<\/p>\n\n\n\n \u201cIt\u2019s all the nitty-gritty nuts and bolts of getting that stuff done and pushing it through a system that is not used to working at this kind of speed,\u201d he said.<\/p>\n\n\n\n From a budget perspective, DIU has received help from Congress in recent months. In June, the House Appropriations Committee proposed boosting DIU\u2019s budget to $1 billion in FY24.<\/p>\n\n\n\n Attached to that funding would be the management authority for a \u201chedge portfolio\u201d<\/a> made up of innovative, commercially available systems like drones, satellites, agile computing and communication nodes, and artificial intelligence capabilities.<\/p>\n\n\n\n![\"\"](\"\/wp-content\/uploads\/2026\/08\/29_special_DIU.jpg.jpg\")
Silicon Valley beachhead<\/h1>\n\n\n\n
![\"\"](\"\/wp-content\/uploads\/2026\/08\/28_special_DIU.jpg.jpg\")
Elevating innovation<\/h1>\n\n\n\n
![\"\"](\"\/wp-content\/uploads\/2026\/08\/AP23216652223549.jpg.jpg\")
Near-term challenges<\/h1>\n\n\n\n
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