Air Force Secretary Frank Kendall talks Elon Musk, Ukraine, China, AI

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Air Force Sec. Frank Kendall: We're focusing on modernization to be more competitive

U.S. Air Force Secretary Frank Kendall does not shy away from commenting on controversy — even as it relates to the world’s richest person and a key Department of Defense contractor.

Kendall weighed in Tuesday after SpaceX CEO Elon Musk acknowledged withholding Starlink satellite service to Ukraine as it planned a surprise attack on Russian forces last year. The disclosure sparked criticism of Musk, and Sen. Elizabeth Warren, D-Mass., called for a probe into SpaceX.

The Air Force works with the company on a variety of missions, such as national security launches, but did not play a role in the use of Starlink in Ukraine when Musk made the decision last September. 

“At the time, SpaceX made some unilateral decisions about what to do for Ukraine. They were not on contract to the U.S. … I think they were definitely donating their services essentially, so they had discretion,” Kendall said in an interview with CNBC’s Morgan Brennan from the Air Force Association’s annual Air, Space & Cyber conference.

The dynamic has since changed. The Pentagon now has a contract with SpaceX for Starlink services in Ukraine.

“We write our contracts to basically ensure that we can get the services we need, as expected from them, and those are enforceable contracts, whatever the business arrangement may be — whether it’s individual ownership or a publicly held company. We write agreements with those businesses, they get us what we need at a reasonable cost,” said the Air Force secretary.

Follow and listen to CNBC’s “Manifest Space” podcast, hosted by Morgan Brennan, wherever you get your podcasts.

The public frenzy, triggered by a revelation in Walter Isaacson’s new “Elon Musk” biography, added fuel to an already simmering debate about whether the U.S. government and allies are too reliant on SpaceX —and particularly its founder and chief executive — for national security matters.

“SpaceX is an important supplier to the government launch services, and we do buy some communications, and so on,” said Kendall. “But we do that through business arrangements that we can enforce.”

The military’s role in space grows

Tensions with China rise

Air Force looks to the future

Air Force leadership has been taking steps to deter next-generation technological threats. It has a list of “operational imperatives” that span everything from modernization of the air-based leg of the nuclear triad, with the B-21 Raider that’s expected to make its first flight later this year, to a “space order-of-battle,” to the development of a sixth-generation fighter jet in the Next Generation Air Dominance competition.

The plan for NGAD also involves what the service refers to as uncrewed Collaborative Combat Aircraft, or drones. The Air Force is dedicating billions of dollars to autonomous capabilities over the next five years, believing the technology is mature enough and cost-effective.

Like other aspects of the government and the private sector, the Air Force is also incorporating artificial intelligence applications.

“It’s really a basket of technologies that offer a different range of capabilities. Military applications include autonomy, pattern recognition, data, analytics, and so on, with some of the functions that humans would normally perform to be automated and done much more accurately and more quickly through AI,” Kendall said.

“We are not talking about turning over control of lethality to machines — that is not what we have in mind,” he said. “Humans will always be in the loop and responsible for any decisions that are made about lethality. But we cannot ignore this technology, it’s going to provide a huge military advantage.”

So much hinges, though, on the future of defense policy and funding. As has happened multiple times in recent years, Congress appears unlikely to pass a fiscal 2024 budget before a end-of-the-month deadline.

Analysts expect lawmakers to pass a continuing resolution (CR) that temporarily maintains the status quo on government spending. But there is also the rising risk of a partial government shutdown, or even more detrimental to military modernization, the growing possibility of an extended CR.

“That would be devastating,” Kendall said. “All CRs have a very negative impact. They’re very inefficient. They delay modernization that is very important. They delay increases in programs that are going into production, for example, and then make it very difficult for us to plan and to move forward.”

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