Why AI Is Reshaping American Power and Modern Warfare | Liz Young McNally
Update:
This episode was recorded in December 2025. In January 2026, the U.S. Department of Defense announced a major realignment of its defense innovation structures, prioritizing speed, clarity, and commercial adoption under direct defense leadership. This shift reinforces many of the themes discussed in this conversation.
Full announcement:
https://www.war.gov/News/Releases/Release/Article/4376441/the-war-department-overhauls-innovation-ecosystem-to-accelerate-technology-to-t/
What does the next era of American power actually look like?
America’s Next Power Shift Is Already Underway.
In this episode of MacroMashup, Neil Winward speaks with Liz Young McNally — combat veteran and former Deputy Director of Commercial Operations at the Defense Innovation Unit (DIU) — about how AI, defense technology, and geopolitics are reshaping U.S. power faster than institutions can adapt.
From modern warfare and autonomous systems to supply chains, capital markets, and Pentagon reform, this conversation explores where real power is moving next — and why most investors and policymakers are behind the curve.
This was Liz Young McNally’s message in this conversation.
Topics discussed include:
• AI as a force multiplier in modern warfare
• Defense innovation and Pentagon reform
• Public vs private capital in national security
• Rare earths, supply chains, and U.S.–China risk
• Defense technology, returns, and long-term competitiveness
📍 Recorded December 2025
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Timestamps
00:00 – Why warfare is changing faster than governments can adapt
03:45 – The geopolitical inflection point reshaping global security
07:20 – AI as the biggest force multiplier in modern defense
10:55 – How Silicon Valley and the Pentagon began working together
14:30 – Venture capital’s expanding role in defense technology
17:50 – Rare earths, supply chains, and strategic vulnerabilities
21:40 – Autonomous systems and the economics of warfare
24:55 – Public–private capital partnerships and industrial policy
28:40 – What investors misunderstand about defense tech returns
32:10 – Leadership lessons from the US Army, McKinsey, and DIU
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