Shyam Sankar - Chief Technology Officer of Palantir: The Future of Warfare | SRS #190

With AI and the AI revolution, people. think, "Oh, it's going to make the. median person better." That's true, but. it's going to make the very best person. superhuman. Hot news right now is, you. know, the tariffs just came out. yesterday. I'm just curious, what are. your thoughts on that? When rocket man. was rattling his saber in 2017, the army. wanted to answer the question, how many. tanks are there in the army? That is a. 3-week data call. Are you serious? So, Operation Paperclip was our covert. action to bring the very best scientists. from Nazi Germany to the US to enable.

our defense program, in particular, our. rocket and space program. How worried do. we need to be about. [Music]. China? Sean Sankar, welcome to the show, man. Great to be here. Thanks for having. me, Sean. Yeah, my pleasure. We had Joe. on what. maybe four months agoish and uh man I'm. just fascinated with with what you guys. are doing over at Palunteer and uh it is.

just I'm super excited about this. interview and I want to dive more into. that and you've got a hell of a life. story. So I'm really excited to do this. Thank you for coming. Thank you. But uh. everybody starts off with an. introduction here. So Sham Sankar, chief technology officer. and employee number 13 of Palunteer. Technologies, BS in electrical and commu. in computer engineering from Cornell. University and an MS in management.

science and engineering from Stanford. University. Spent over two decades. building and delivering disruptive. software and AI solutions for the. government and the private sector. Widely known as the sworn enemy of. slowness and slayer of bureaucracy. I. love that. Dedicated your career to. uphending institutions that are failing. American people, starting with the. government. The Defense Reformation is. your manifesto, which you can read at 18. thesis.com. Your goal is to fix the way.

our military buys weapons and wages war. so that America can always win. And you. have a quote that I really like. My. parents' journey showed me that America. is not a place where everything is. perfect, but is a place where anything. is possible. Love that quote, man. But, um, you know, I just have I got a ton of respect for. you. I mean, from where you've grown up, which we'll dive into, to where you are. today, and and it's just it's.

fascinating, and I think it brings a lot. of hope. I mean, you've earned. everything that you've accomplished. And. uh I just I absolutely love these type. of stories. So once again, thank you for. being here. No, thank you for having me. I'm just I'm just really grateful for. everything this country has given us. Me. too. Me too. But uh everybody gets a. gift. [Applause]. Gummy bears made here in the USA. Legal. in all 50 states. There's no funny.

business in it. It's just candy. Of. course, they probably will be illegal. here when RFK gets going because uh you. know, it's got all the bad [ __ ] in them, but I love it. But they taste good. So, and then one other thing before we get. in the weeds. I've got a Patreon. account. Uh Patreon, a lot of these guys. have been with us since the very. beginning when I was doing this thing in. my attic. Then we moved here. Wife. kicked me out cuz we had a we had a kid. She's like, "Get all these people out of. the house." And um and then now we're.

building we're building a new studio. that's going to be about three and a. half times the size of this one. Should. be done in about 3 months. You have to. come back and see it. But one of the. things I do is I give them the. opportunity to ask each and every guest. a question. So this is from Kevin. Omali. Will the massive capacities of. quantum computers influence the balance. of power once they're leveraged as. offensive tools? I yes absolutely quantum quantum.

surprise staying ahead of it. understanding its implications. uh one way of thinking about it is. there's nothing new under the sun. there's just the udal loop and what is. quantum's implication on how quickly. you're going to go through John Boyd's. observe orient decide act udaloop I. think it has it has exponential. implications on that what what exactly. is quantum computing I hear it all the. time it sounds scary I mean is it just. really really fast. I mean, what what is. it? I think that it's really like.

millions of times faster is the way to. think about it. It's like you can. compute uh it uses quantum mechanics to. do the computation and you're able to. compute enormous permutations and. combinations of things at incredible. speed. The most obvious implication is. it breaks all of our legacy encryption. So your ability to communicate securely. and to the extent anyone has been. storing historical encrypted. communications their ability to decrypt. that oh boy will be near instantaneous. So it has huge implications there. But.

then for your ability going forward now. like the you're going to have to adopt. that. So you have quantum proof quantum. encryption that works. Um but then I. think there's even more implications. beyond that. The encryption is the first. thing that we have to worry about. The. next thing is how are we going to employ. this for decision advantage? How close are we to that? Well, that. that's that's kind of an open question. there. I think really smart people I. know keep saying we're really close, but. really smart people in the 60s thought. we were 10 years away from AI. So there.

we'll have to see. Is it who else is. working on it in the world? The Chinese. Great. Great. Well, we're going to talk. a lot about China in the interview, too. So, but getting into the interview, I mean, you grew up in a mud hut in India. So, what? My father did. My father Your. father did. Yeah. So, my father was the. the last of nine children in a single he. grew up he was born in a single room mud.

hut in in the south of India. And uh his. his his siblings all helped him get to. college, you And India had its own. version still does have its own version. of DEI there. So he was not allowed he's. very smart man but he wasn't allowed to. go to med school. He couldn't get a slot. but he became a pharmacist. That's like. the next best thing for him. Um and he. was sleeping after he graduated from. pharmacy school. He was sleeping. literally under the kitchen table of one. of his brothers. Um and his my his.

sister-in-law brother's wife got kind of. tired of having around the house. So. found him a job in Nigeria. He was 23 at. the time. Uh and so he, you know, young. man excited about a venture. Uh he he. went to Nigeria as a pharmacist to build. the first phaceutical manufacturing. facility in all of Africa. Until then, all the drugs were imported. And so he. did really well for himself at a very. young age. Uh I was he I was probably. born 7 years after he'd been living in. Nigeria. My my mom went back to India to. have me and then I came back to Nigeria.

as soon as you know as soon as old. enough to travel. So I really I my first. three or so years of my life I was in. Nigeria. Uh but the reason that came to. an end we had a horrible armed robbery. in the house which we lived across the. street from the manufacturing facility. where all of the cash was kept from from. the operation. And so it was a little. bit of an inside job of people who. worked there who who who did this. They. decapitated the dog. Uh they threatened. they pistol whipped dad. They threatened. to execute him. They threatened my mom.

I was a child and really I was just. excited to have visitors. You know, you. can't control a child. I was just. excited to have visitors in the middle. of the night. Um, dad was only spared. because one of the five armed robbers uh. was a regular at my mom ran an open. kitchen. Anyone anyone who worked at the. facility, anyone who was help, anyone. from the surrounding area, they could. always come and eat Indian food that mom. would make. And so this guy was a. regular and uh he just, you know, he. just made sure they didn't kill us. Wow.

And uh and so we left all of our earthly. possessions behind and had to find a. place to resettle. Um dad had a friend. who somehow just you know the how life. works had moved to LA, a friend that he. grew up with in this in this village. moved to LA and he was selling. knick-knacks at theme parks. He went. from pharmaceutical manufacturing to. selling knickknacks in the states. So. this friend was like, you know, there's. this place Orlando. I'm I live in LA. There's this place Orlando. all the.

theme parks are moving there. I need. someone I can trust there. Uh and that's. how we ended up in Orlando selling. knick-knacks to theme parks. Um which. was fantastic, you know, and it for me. it was fantastic. My after school care. program was really mom would pick me up. from school, we'd go to SeaWorld so she. could restock the shelves and I'd be, you know, petting the stingrays. Uh so I. thought that was normal. I didn't I. didn't quite realize that, you know, what a what a unique experience it was. Now there were some downsides to this. Uh, you know, some of the knick-knacks. we sold were t-shirts and I was until I.

was old enough to read. I was dressed in. all of the t-shirt misprints. It didn't. say Shamu. It would say like tamu, you. know, it's like everything that went. wrong that that was the free clothes I. got to have. Um, but it was also really. a privilege to grow up in the shadow of. the space coast. And Orlando's really is. close enough that in elementary school. you would vial out to the courtyard to. watch the shuttle launch. You would wake. up Saturday mornings to a double sonic. boom of the shuttle re-entering. And it. it gave you a visceral sense of um.

scientific progress, American. prosperity, what we can do collectively. when we when we put our mind to it. Wow. What What kind of stuff were you I mean. your dad's your hero, correct? He is my. hero. Yeah. Is he still with us today? He passed away in 21. I'm sorry to hear. that. Sorry to hear. that. So you grew up I mean you're an. entrepreneur. When did the entrepreneurial mindset. kind of kick in for you? Uh, at a pretty. early age because my dad in some sense. you could say was also an entrepreneur.

and he was always like encouraging me to. think about these things and um I I. worked at his pharmacy in Orlando as as. a child um in in high school. Um I. started programming. uh 11th grade. I started programming. professionally and and kept doing that. I tried I actually dropped out of. Cornell for a hot minute there to build. a company and try to get going with it, but I've always been dabbling in in. these sorts of efforts. And I knew that. ultimately I wanted to be part of.

creating something new, you know, being. part of of of an early founding team. And really the reason I went from. Cornell to Stanford in 2003 can be hard. to remember, but even Google didn't. recruit on the Cornell campus. most of. my technical classmates unfortunately. went into consulting and banking. You. know, these there's nothing wrong with. it, but it's it's it's not the same. thing as creating. Mhm. Uh and so I had. to find some way, some mechanism to get. to the West Coast to be with a bunch of. other people who really thought of. building as the primary purpose of of.

their life's mission. So within two. months of being at Stanford, I had a. full-time job as the fifth employee at a. at a startup called Zoom with an X um. that did international money transfer. was seedunded by Peter Teal and my my. interviews were with Roloff Botha and. Keith Ra Boy who are founding members of. the PayPal Mafia and that's how I kind. of got started in in that world. Man, that's it seems like all you guys know. each other pretty well. You and uh how. did how did you meet Joe? So, I uh I had.

been working at Zoom for almost 3 years. and one of the colleagues I was working. with said, you know, there's this. company that just sounds perfect for you. there. It's a small group of people. at. the time it was 12 people and my. freshman room dorm mate at Stanford is. one of the co-founders Joe. No kidding. So he put me in touch with Joe and Joe. was how I Joe Joe hired me. That's how I. got started. Wow. That's I love talking. to him man. He's he's like such a. fascinating guy. But um so what what was.

Palunteer at the at the start? At the. beginning it was honestly something much. smaller. I mean it was still ambitious. in the sense that this group of folks. wanted to work on problems to help a. handful of institutions in the world. with counterterrorism and we had this. idea that in a you know the discourse if. we can remember what it was like. immediately post 911 it was really the. political discourse was something like. what matters more security or privacy. and it's like to to us as engineers that. sounded stupid like don't those both. thing don't both of those things matter.

uh and so you know politicians they. debate where should you be on the. efficient frontier here. Should we trade. off this to have more of this or. whatever? But engineers, they build. things so you can have more of both. Uh, and so who's going to build the actual. technology that allows us to protect the. data so that we can maximize what we can. share? So that there's never going to be. dots that we can't connect again and do. so in a way that the American people. have confidence in and can believe in. And recognizing that a solution that was. really going to do that would have to. span countries. You know, one of the.

proudest operations that we were. involved with was defeating an ISIS cell. in uh in Iraq that had a downed US drone. that they were going to load with. explosives and bring to a hospital, explode it, and then blame it on the. coalition. And to solve that problem, it. required intel from the Danes, the. Americans, and the Brits, you know. And. how does that work historically? Uh. hopefully you you have friends at each.

of these services and you're all going. to share information and it gets through. the foreign disclosure process and you. know everything in that methodology is. set up so that we lose and you're not. going to be able to do it fast enough to. intervene. But you know our technology. enabled that to happen machine to. machine in a way. that before they could get the drone out. of their garage they were gone. Wow. I. mean, so. what even after interviewing Joe, I'm. still I'm I'm still trying to figure out. what I mean, what Palunteer does and and.

and how it deciphers all that. information. I mean, just a couple you. guys are in anti-moneyaundering, rail, energy, defense, insurance, semiconductors, utilities, retail. I. mean, there's got to be a list of at. least 30 things. Yeah. Well, it Yeah. Yeah, at this point. So, we do much more. than counterterrorism as you're pointing. out. The business, there's two sides of. it. There's the government side and the. commercial side. Okay. So, and it's. about. 50/50, which is unusual, I think, for. for reasons we'll maybe get into later.

But the commercial side, it's 50. different industries, energy and mining, insurance, pharmaceuticals, and and the. government side, most of what we're well. known for is defense and intelligence. Absolutely. that's that's twothirds of. the business, but also health, the IRS, tax fraud, you know, justice department, you know, helping these organizations. run themselves better. And what the. technology really does, you can think. about it as like an operating system for. an organization. Uh it it allows you to. actually see yourself. It's shocking how. hard this is. How do I have access to.

all of the data that's in my enterprise. in a way that I as a human think about. it? I as the principle, not just the. human, but I as the principle, like. what's my model for this? What are the. questions I want to ask? Simple example. When Rocket Man was rattling his saber. in 2017 in North Korea, the army wanted. to answer the question, "How many tanks. are there in the army?" That is a 3-w. week data call. Are you serious? It. takes 3 weeks to get an inventory. So, we got involved. It took 3 weeks to. answer that question because there is no. canonical representation of a tank. And. what do you mean by tank? Do you mean.

the ones that are ready or not ready? So, the way you would do it is you would. you would send down the data call to all. the units. They'd go check out the. motorbool, they'd come back with the. answer. And so there's no living, breathing canonical record that. continues to flow through this. We've. built these systems. The army is older. than the country, right? Like we've. built these systems. It's like. archaeology when you go back there and. try to look at this. It's not how you. would do it today, but that's our extent. reality. It's we have to deal with this. messiness. Sometimes uh you know, the. cynical way to think about Palunteer is.

it took something as sexy as James Bond. to motivate engineers to work on a. problem as boring as data integration. But that is the starting point. If you. can't see yourself, if you can't. integrate all your data, like you're. just always chasing your tail. Then on. top of that, we make powerful interfaces. for decision making. One of the. contrarian quips I have is that data is. not the new oil. You know, people have. been running around saying data is the. new oil. Data is the new oil. I think. data is the new snake oil. There's. nothing inherently valuable about data. It's only valuable if you can use it to.

make a decision. So that it's about. decision advantage. So, how do I. leverage this data I've now integrated. so that you can make a better decision, you can see further in the future that. you can out compete your competitor in. the commercial world or your adversary. in the defense. world. The only mattress I have in my. house right now for my family is Helix. If I want to sleep without interruption. and without tossing and turning, I can. always count on my award-winning. mattress from Helix. They have an option.

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example, the the down drone that ISIS. was going to move into a hospital and. blow it up and blame it on us. I mean, what what kind of data are you. guys. feeding Palunteer to to to make those. type of decisions and and to speed the. process up? So the to me like just for. example, so I'm a former SEAL. I hear that and. I'm I think okay well let's go raid the. compound while they're doing that, kill.

all the bad guys and recover the drone. And it so the decision. seems fairly I mean obvious in my. opinion. So what the decision is leading. up to the point where you realize that's. what they're trying to do, right? So how. do I integrate the human reporting that. I have that tells me what might be going. on? Now keep in mind that one part of. the reporting is in this country, one. part of the reporting is in that. country. You know who's willing to share. what? Who even knows that sharing it is. going to lead to a missionritical. outcome that saves lives. So how do you.

start to automate more of that? How do. you help them piece those those things. together? Um how do you combine the. technical collection you have with this. too? So maybe you have sigant that helps. you understand this helps you understand. that this reporting is correlated to. other cells that you actually care about. where you have intercepts that tell you. something. How do I use my historic FMV. footage observations of that compound. that help me piece together more more. things that lead to the conclusion we've. got a problem here and we've got a tight. timeline to act. Holy [ __ ] So it's so. basic. So am I right if I.

say I. mean contractor for the. agency operator for the Navy Seals I I. saw how inefficient government. communication is just within US stuff. CIA FBI DA Mill all these all these. different organizations all I mean it's. a disaster trying to talk to each other. and so basically this takes all the. information so all these entities are. feeding palunteer here the information.

and then Palunteer basically what. what disseminates or not disseminate but. processes the information and gives you. the probability of what is likely going. to happen it's like shining it's like. turning on the light on the battle space. the things that you couldn't see before. you could see now now it's important. might seem slightly technocratic but. we're providing the software to the. government customer so no one's. providing us all of this data the. government has the data great but it's. just sitting there it's it's it's in the. dark it's hard to see all of this.

information. It's It's overwhelming. Great. How do how do we get the. spotlight to highlight the things that. actually matter? How do I get to ask the. next question? So, here's here's. something that's risky. Okay. What are. the next 10 questions you're going to. want? Can you even answer those 10. questions in 10 seconds? Or is that. going to take you 10 weeks? If it takes. you 10 weeks, you're not even going to. bother answering those questions, right? So, can I make that fast enough that you. get to why does this matter? And is this. a threat or is this irrelevant? Um, that's that's the first part of it. Second part of it that's really. important is because you know why is.

this information sharing so hard? Well, there are lots of rules and regulations. People have different authorities. Different things can be shared. The way. we enforce that today is with humans. which is crazy which is why it's slow. and inefficient and you miss things. We. replace that enforcement with software. The software ensures no one can see. anything they're not allowed to see. The. software ensures under the right. conditions for information sharing the. right pieces of information flow from. one agency to the other. So by. automating that flow, it means that you. kind of have a hive mind. The entire. government can operate competently.

because you're actually able to see. everything you're allowed to see as. opposed to well we have humans who are. gatekeeping us along the way just. slowing everything down which always. when you have humans it always devolves. into control. You know you it's not it. the mission gets obuscated by well we do. this job they do that job and the. interpersonal factors get in the way. Wow. So, what what was it at the. beginning you guys were doing back when. you were employee number when you came. on as employee number 13? Well, you.

know, it was it it was really hard. because none of us had worked in. government. None of us had clearances. Um, we we would go to DC. We'd literally. carry our Pelican case with a projector. I mean, talk about state of technology. You couldn't even rely on a projector. being in the government commerce room. You had to bring your own projector to. make sure you could actually show the. customers what you were building. And we. were really eliciting feedback for them. like, "Okay, I built this, you know, and. we don't know your workflow, but based. on your reactions, I'm going to go away. and code that night and come back. tomorrow and show you something new.".

And we had to do all this kind of. notionally to begin with on lowside. synthetic data until we got to a. threshold of conviction. And that. threshold of conviction, I mean, almost. to the point, um, it it started because. of a renegade analyst, and I think she's. she's been a a prior guest of yours, actually, Sarah Adams. No kidding. Yes. So Sarah Adams, so Incel brought a a. fresh, brighteyed, bushy tailed cohort. of CI analysts out to the West Coast. We. were maybe 20 people at the time. We.

were one of the stops along the way. And. uh she saw the demo and she's like, I. need this. Why don't we have this? In. fact, I joined this organization because. I thought I'd be having James Bond. technology and somehow I have Word. Perfect and Lotus Notes, you know, and. she organized a day on her own. I think. she was like maybe like a GS12, you. know, on her own. She organized a day of. three meetings where more than 200. analysts came to see this thing. At some. point, the uh the deep state, the IT.

people got wind of this and came to this. meeting trying to shut it down, trying. to dampen the excitement, but they were, you know, the analysts were just in. revolt like why can't we have a pilot? Why can't we try this out? And that. broke the floodgates open for us. So. years I I probably did 300. demonstrations and meetings trying to. get a single pilot in that one day. She. made it all happen. I'm going to have talked to her about. that. She's been holding out on me. Um. Wow. So you So you guys were in defense.

tech at the very beginning and then it. grew into all these other It was always. about defense. I mean I'm I'm very happy. we have a commercial business. It it. powers a lot of innovation and frankly a. lot of what the things we learn learn in. commercial we're able to bring over to. give the government decisive advantages. You know we're able to amvertise the R&D. ideas that BP or Avis have make the army. better. That's one way of thinking about. it. But we really started because we. cared about the government mission. And. we honestly would not have built a. commercial business except for the fact.

that the government was so slow and so. hard that we were going to go broke if. we just stuck by being purely a. government company. Wow. What was the I. mean what was the push back from when. you when you're saying the deep state. was trying to pipe it down a little bit? A desire to build all this stuff. themselves. We don't need this. We don't. need these outsiders. You know, they. don't know our stuff. I'll give you I'll. reason by analogy. So I I I I recently. met someone who was in quadrilane in I. think it was 2014 when SpaceX was.

launching their early rockets. You know, and Elon was one launch he had four he. had three failures and he was one launch. away from losing the whole business. And. he said, you know, I was there and the. SpaceX facility is right next to the. Boeing facility. And you go to the. SpaceX facility and you and you compare. it to the Boeing. The Boeing facility is. like a clean room. You're wearing a. bunny suit. It looks so sophisticated. SpaceX, it's open air, parts on a table, things are rusting, and you're just. like, "These guys are never going to. make it, you know, like this. They don't.

know what they're doing." But you. fundamentally misunderstood what was. happening there. It's not where are they. today. It's how how what's the first. derivative? How quickly are they. improving? How good is that team? And. that is that is the world's best team, right? And look what's possible now. You. know, like our our launch capability is. unmatched and the price performance that. Elon is able to deliver. When I was a. kid growing up, shuttle, it used to cost. $50,000 per kilogram to get to orbit. With Starship heavy reuse, it'll be 10. to 20 bucks. You you I mean, it's just.

orders of magnitude difference, right? And I think there was something like. that in the early days for us, which is. this seems like a joke. Who are these. kids running around in shorts? You know, uh I I I remember one early meeting I. had in the Pentagon. I didn't wear a. tie. I mean, I wore I wore a suit, everything except for a tie. First 30. minutes of the meeting, I just got. dressed down for how disrespectful it. was to show up without a tie. Look, I. always wear a tie now. I've learned my. lesson. But I think we we we lost the. plot. Like the substance is the code,

not the quality of my tie. It's the. quality of the. code. Wow. Do you guys even still to. this day, but let's let's let's stick at. the beginning right now. I mean, you've. really disrupted I feel like you've. really disrupted the military-industrial. complex, the legacy companies, Loheed. Martin, Boeing, Rathon, Insert, whoever, you know, I. mean, was there a lot of push back from. them? There there was there was there. there's a lot of push back. There's a a. lot of.

um kind of fake partnerships, you know, like, hey, let's um let's bring you in. for some small tiny amount of work share. that will actually be zero. We don't. really need you is the vibe. But I would. say in fairness, when we first started, we thought the primes would be our big. competitors. What I didn't realize is. actually the government was our big. competitor. you know, when the way that. the government's structured, you have. these program offices and they have the. perfect five-year 10-year plan. They. kind of just want to lock in their plan.

And we were a threat that disrupted all. of their well-laid plans. Instead of. adopting us, you know, they they wanted. to reject us. And so, if you really look. at the early days of Palunteer, all of. our adoption was driven from the field. back, you know. So, all of our attempts. to get people in DC really interested in. what we're doing was in benefit of. hindsight was wasted time. You know, our. first deployment was with tenth group as. they took over siege of sodith AP in. Balad. And it's because the commander,

the colonel, it's just like 3 days. before deploying, he called us up. We. we've been showing him our software. He's like, "Well, I don't know. Like, I. don't buy things. I'm a war fighter. I. don't buy things." And 3 days before. going, he just had that feeling like I. need this. Like, if you guys come drive. Fort Carson, palletize your I'll. palletize your servers and I'll give you. four seats. Uh, and that's what. happened. We just drove all our stuff. over there, flew over for two weeks. The. crusty warrant officers were like, "Why. do I have to find housing for these 22.

year olds, you know, two weeks, but. after that, we earned our keep." They're. like, "I know why they're here." You. were over there. I didn't go on that. trip, but Matt Grim, who is uh one of. the co-founders of Andre, was working. for me at the time. He went over on that. trip. Um Greg Barbachia, who's now the. federal government CIO, he was one of. our first guys on the ground in Balad. But you've been over there. Yeah. What. was that like for you? It was eye. opening. I mean I most of my time I. spent at Leatherneck so in Helmond um. working with the Marines. Nice place.

I've been there. Dicey spot. But year that was 2012. My or 2011. 2011. No [ __ ] I was there around that. time. Interesting. What was So tell me about. it. How how did that experience go for. you? I mean, we we would have. these it's like a cup of motivation. undersells it. It's like a water tank of. motivation. You know, you have these. people, they come back from mission, they tell you what happened, they tell. you their ideas, their feature requests,

um, and you just have unbounded energy. to code right there. You're just in a. plywood little setup writing code and. okay, I'm going to have something better. for you for tomorrow. And you just do. that again and again. That the whole. product development life cycle. That was. really I was the first forward deployed. engineer at Palunteer which investors. hated cuz they thought it it was a. service business. It's not how you're. supposed to do software. Everything. about it was wrong to them but it was so. clearly right for our users. You know of. course you need the person who actually. knows how to build the product sitting.

forward in the tent with the people. doing the work so you can observe not. what people in headquarters think this. offer needs to be but the empirical. reality on the front of what is missing. what could make this person more. successful on the next mission than the. prior mission? And if you do that for. long enough, you just build this deep. understanding of everything that's. broken in the world, everything that. sucks about their experience, everything. that makes them more likely to come back. as a team together. And it's also, by. the way, how you stay, you know, there's.

lots of jobs coders can take, but you. know, this is it is an addiction to the. motivation. you know, your sense of. purpose is unbounded. Man, I love that way of thinking. I. mean, I I think like that just doing the. podcast, which but uh you know, I just. and I find whatever whatever sector I'm. operating. in, business, military, I mean, there's. just there's always this box that they.

want you to think inside of. And people. say, "Well, think outside of the box." I. just I think what box there is no box to. think of and so I'm always looking for. ways to innovate this and and to not go. by the typical road map that everybody. expects you and wants you to follow and. you guys. like nailed it nailed it. Well, I you. know to to take credit away from us and. give it to our customers. I think you.

know first of all this colonel is. absorbing a lot of risk by kind of. bending some I wouldn't say breaking but. bending some rules and going against the. system and that was the beginning of a. much longer fight. as that became. successful, more and more people, you. know, the first thing they do when they. would deploy would put in an urgent. operational need statement to get. Palunteer because what they had wasn't. working. And um, you know, some of those. people did suffer career consequences. for doing the right thing and and doing. that and you you knew you had to deliver.

for them. Um, but but the other part of. it is is really without their. partnership. It's like the good ideas. don't come eating strawberries in Palo. Alto, right? They come on the fire cells. of Djibouti and the factory floor of. Detroit where you can you can see. firsthand what's happening and not and. that's all the inspiration all the. creativity it comes from that environ um. and you know I I think now this. methodology has become more commonplace. people talk about forward deployed. engineering companies are building. around it and I think it's great because. I I would say a critique of the software.

industrial complex is if software is so. great why does nothing seem to work why. are doors falling off planes why do our. inst Why? Why is it, you know, why is. there so much fraud in our in our. government system? Like, we we should be. looking really hard at this. And and I. think it's because we've just been doing. it wrong. We haven't been holding. ourselves accountable to the primacy of. winning. It doesn't matter what box of. software you thought you were going to. make. Everyone living inside that. box, does it work? Does it matter what. what could you change that it worked. better tomorrow? You know, and are you.

impatient enough to go drive that. change? And a lot of that comes down to. um institutionalizing rebellion. You. know, there was nothing that. headquarters was going to tell our. engineers in the field that would make. them better at at at coming up with the. next feature. Like that was going to. come out of their own crazy creative. ideas being really right next to the. problem. So my job is to support them in. doing that to the greatest extent. possible as we continue to build the. company. So that the machine doesn't. crush them. The machine encourages them.

And that that's led to this philosophy. at Palanteer that we are not a factory. We're an artist colony. Like my job is. to find Delali and Monae and don't do. stupid things like yell at Monae to. paint more like Deli. Like each of these. people are unique artists and my job is. to get out of their way, make sure other. people stay out of their way, provide as. much room as possible and and help them, you know, just like an artist. It's not. like every piece of art is better than. the last one. You go through waves and. cycles and just create the environment. that allows them to do their their best. work.

Interesting. Um, you. guys, Palunteer sued the government. towards the beginning. Correct. Yeah. In. 2016, we sued the army because we were. unable to compete on their army intel. program. So, the the story is like all. these units as they would deploy, they. would they would request Palanteer. Um, the reason they had to request Palanteer. is there was an army program of record. as the government calls it called DIGs. And D6A was, you know, it was the bless. system that was supposed to do army.

intel, except it didn't really work. $26. billion, many years of development, and. you would honestly find it, you know, when when the generals came, people. would turn it on and pretend like it. worked. But it was a paper weight to. them. They would just, you know, store. it was just sitting there collecting. dust. Um, and we were there on the. ground. We were highly responsive and. all we wanted was the opportunity. So. this program was coming up for a. recompete and we wanted to compete to. win it. The way the army structured it.

precluded us from competing. It it. basically said you have to custom build. a product and turn over all your IP to. us or you're not even allowed to compete. which is illegal. It turns out, which is. why we sued, that there's there's a. there's a law from 1994 called the uh. commercial item preference, that if a. commercial product exists, the. government is not allowed to go. customdevelop something because that's. risky. It's probably going to cost you a. lot more. And um as a philosophy, we'd. rather tie our investments to think the.

commercial world is adopted because it. means, you know, it probably works. It's. been derisked. the hyperco competitive. free markets are voting on and providing. the stimulus to keep making it better. It's going to be. cheaper. So, we sued them. Uh it went to. appeal. We won on appeal. So, it's a. very very strong precedent. But I I. think the the key lesson from that. really is like how hard it is to. change just the momentum in the. bureaucracy. And one of my favorite. anecdotes is there was a a contractor.

working on this legacy D6A system in his. civilian job, but he was a reserveist. He got flipped to active duty uh and. deployed to Afghanistan. The first thing. he did when he hit the ground was put in. an arms for Palanter. So when his life. was on the line, he knew what he wanted. to back. Wow. Wow. What are some other I mean, how often were you guys going overseas? Constantly working with the war. fighters. Yeah, constantly like we would. we were in Iraq and Afghanistan.

throughout the conflict uh supporting. users. We were working with coalition as. well with with UK special forces. um other places, Philippines, Djibouti, um supporting, you know, ODAs. We we get. on the on the little I don't know what. you call it, the conveyor belt of. flights that would go visit the Ford. operating bases and make sure folks had. what they needed. um uh make sure that. they're forward locked like they would. take their laptops to do key leader. engagements where like all the intel was. really coming back and when you were.

alone and unafraid and disconnected like. this was this was your brain this is how. you were coordinating things. Uh, a lot. of the value was doing our part, you. know, you can't do it all, but doing our. part to change that the nature of the. conflict from being 17 one-year long. wars to really creating continuity. Like. some of the, you know, you'll have. Marines who tell you like there are. Marines alive today because of the. simple fact that we could look back at. past deployments and realize every time. prior teams landed at this HLZ, they got. bombed to [ __ ] You know, it was always. an ambush. And just being able to see.

things that we couldn't know because we. weren't there on the ground. um we as in. the current team, but being able to. learn from the history and the. experience of everyone else who's been. here before us made us smarter and more. lethal and more survivable. Any close calls when you were over. there? Um not for me personally. Some of. our teams definitely were under mortar. attack and you know a few convoys that. took some fire but but fortunately for. us no one got hurt. Right on man. Right. on. you know, volunteer sounds like one.

of the one of the main philosophies is. founders first or founder founderdriven. What does that mean? Yeah, I think one of the we could we. could all we could we could start by. what does it not mean? You know, I think. why do doors fall off airplanes? Why do. we have this legitimation crisis for our. institutions? This is this sense that. the institutions we have aren't kind of. working and I think it's because they're. stuck in manager mode. There's this idea. that there's a playbook and if you just.

follow the process, you know, everything. will work. Everything will be well. managed. My experience is it's all. well-managed into the ground. You know, whether it's a company or a country, there is no playbook. You know, it. really comes down to to human. discretion, human decision-m, bold. leadership, people with the right ideas. Um, and so certainly in our history and. it come it comes from one of our. founders, Peter. It's called the founders fund. The whole idea is that really the value. creation engine comes from the founder.

personality. Um, and the most dynamic. parts of our economy are led by. founders. You could look at this by in. Europe. Europe has created zero. companies in the last 50 years from. scratch that are worth more than hundred. billion dollars. Zero. We've created all. of our trillion dollar companies in. America from scratch in the last 50. years because of founders. And of all. countries in the world, we know there's. something special about founders. There's a reason we call them the. founding fathers. You know, this is a.

unique legacy of America that we should. really be leaning into and embracing. And it it it's it's more than just did. you found a company. It's really a. mentality, a personality. When you think. about Bill Nudson and how he mobilized. us for World War II and built the. arsenal of democracy, he's got a founder. personality. or Admiral Rickover. You. know, this guy born in a Polish shuttle, came here, I think when he was six years. old, short man, short stature, feisty. He was so hated at the US Naval Academy, they've actually torn his picture out of.

the out of the yearbook. Zumalt said. when he was CNO, uh, the Navy has three. enemies, Soviet Union, the Air Force, and Hyman Rickover, one of his own. Um. but he built the nuclear navy, you know, and that was really he he by total. happen stance after World War II he went. to visit Oakidge and he realized, holy. crap, this could this could power an. entire entirely different regime of sea. power here and could give us the ability. to keep our subs underwater more than an. hour. Those diesel subs back then, you.

know, it's kind of laughable when we. kind of think about it, but he did that. He was a four-star admiral for 30 years. and we kept him in place and he built. one of our last remaining asymmetric. advantages. That's a founder. personality. Um Gene CR who built the. Apollo program, Kelly Johnson who built. 41 airframes in his life, including the. U2 which we still fly and the ox cart. and the SR71, you know, the these people. did incredible things and the that's the. promise of America. We have these people. who do incredible things. Don't don't.

squash them. Don't crush them. let let. their innovation thrive. Uh and and. those people are in government that I. think the reason Jay- Soc was one of the. first places to adopt us is you got a. lot of founder personalities in. Jac that's how that institution works. That's what happens on the ground. You. know, they are entrepreneurs in a. different domain. And so then for us. it's like great when you have someone. who has the the creativity and the. vision I can build a software Iron Man. suit around them. I know how to make. them a hundred times more lethal or. effective in the business context than.

otherwise. when you have a manager who's. just trying to follow the rules, you. know, maybe you can make them 10%. better. Uh, and you're just you're kind. of just rearranging the deck chairs on. the Titanic, there's this constant need. for reinvention, right? Like we can't. rest on our laurels and it's it's these. founder personalities that push that. reinvention, who see what could be and. see what is broken and close that gap. So, it's enabling that. Yeah. Love that. You know, you you brought up the the. nuclear program in World War II, and I.

heard you downstairs talk a little bit. about Operation Paperclip. That's. something I've just been fascinated to. to hear about, and I haven't had the. time to dive into it. What was that? So, Operation Paperclip was our covert. action to bring the very best scientists. from Nazi Germany to the US to enable. our defense program, in particular, our. rocket and space program. You can think. about how hard that would be. These were. our sworn enemies. These were horrible. people. They did horrible things. They. absolutely did. But they were without.

exception the world leaders in this. capability and and they could either. fall into the hands of the Soviets or. and that would only create more problems. or we could bring them here, hold our. nose and figure out how to rehabilitate. them and use that for our own economic. prosperity and national advantage and. security. And we did that. But I think. what's really instructive about. operation paperclipip is there was two. competing programs. One was operation. paperclipip and the other one was called. fiat. Fiat was this idea that we don't.

need these dirty scientists. Let's just. steal the scientific papers. Let's take. the technical documents and we'll be. able to learn from the documents alone. It was a catastrophic failure. It turns. out there is something special about the. human separate and apart from just what. they wrote down on a piece of paper. that there's more to replicating these. things than um you know math. It there. is something about the human mind that's. really relevant here and it underscores. this point around the founders uh and. the primacy of people and which I think.

is one of our greatest national. resources as a country. The primacy of. our people how did we get them? Do you. know do you know anything about that CIA. operation? Um we you know the reason it. was called paperclipip is like that's. how we told so they would come in. through the front door through state. department which obviously would screen. out Nazis. So you had to have some sort. of cover some sort of ability to do it. Um and we we would have these files and. we would resettle them. This is how. Huntsville got started. Hey, where can. we put these people where it'll be a.

little low viz low profile and you know. we built a whole space industry in. Huntsville, Alabama uh around Veron. Braun and uh and his colleagues. Wow. Wow. That's That's. awesome. Hillsdale College is offering. more than 40 free online courses. That's. right, more than 40 free online courses. Learn about the works of CS Lewis, the. meaning of the US Constitution, the rise.

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you guys are involved in that? We don't. do predictive policing. We've it's it's. widely believed publicly we do. We. don't. And it has probably the most. scary name possible. Mhm. I think a. better way of thinking about it is um. the projects I've seen and been been. close to it's it's about resource. allocation. So where should I. preposition police to deter violence? You know, it might be nice like we look. at the historic data. We see there's a.

lot of stabbings at this Jack in the Box. at 2 a.m. on weekends when the. temperature is pleasant enough for. people to be outside roaming around. Okay, it might be nice to have a cop on. that block. make the presence known, deter any bad actors and behavior and um. that's been that's been effective where. it's been possible. I think the branding. of it has been really detrimental, but. there is a clear correlation between the. presence of policing and deterring. violence. Um the other aspect of it too.

is just understanding particularly with. gang violence, it's usually a cycle of. retribution. This person got killed. Okay. Well, the the family of the person. that got killed, their their their gang. knows who did it. There's going to be. retaliation. So, if you can figure out. ahead of time these relationships, you. can have presence there to suppress the. ability for retaliation to happen. without consequence, which then. hopefully gives time and space to quiet. down the violence. Okay. So this is this.

is kind of similar to what you guys are. doing just in a different outfit and. it's it's it's once again it's it's. sifting through data and telling you. where to allocate resources. Yeah. Interesting. Interesting. Well, let's get into you talked a lot. about the bureaucracy in America and. then and the challenges that it it it. caused you to guys you guys to overcome. What what do you think's wrong in. America today? What I think is wrong writ large with. the world is that.

um let's just steel man it the seauite. the executives of these agencies or. these companies they have a steering. wheel they're trying to steer the ship. they're trying really hard really. diligently but what they don't know is. that steering wheel is like a prop from. the Jungle Cruise ride in Disneyland. it's not connected to anything uh and. then the people on the factory floor. metaphorical or actual factory floor. they look up and They say, "How can my. leadership be so dumb?" Like, "How can. they not see what's actually happening.

here?" And then you have all the layers. in between. Part of their job is to make. sure the steering wheel doesn't actually. work and and they're controlling and. massaging the information as it goes. from one place to another. So, you can't. see yourself if you're at the top. And. then you you you have this sort of. nealism. It breeds this nealism like. nothing works. We should tear it all. down, you know? And sometimes that's the. answer. But also you have to kind of. wake up. There has to be some force. waking up trying to make these. institutions actually functional. And.

that that's what we see our software. doing. It's actually creating a steering. wheel for the seauite that is connected. directly to the people who do the work. and that gives you a basis to understand. what is happening. How do I you know. when I provide steering input is it. actually going to result in changes? How. do I iterate on my policy and my. strategy? When I have a question like. how many tanks are in the army, I should. know that in 3 seconds and that lets me. know, do I need more or not? You know, and I can move on to the next problem. The next problem if I have to wait 3. weeks to answer that, you can just see.

how the whole system just gets gked up. Nothing actually works. You don't. understand that the quality on assembly. of doors is not working and therefore. we're going to have problems and you. know small problems that can be solved. become big problems that people will. struggle to solve. This this breeds a legitimation crisis. Like the legitimacy of our institutions. is based on the fact that they work. How. do you spend 11 billion dollars on. highspeed rail in California and have. 1,600 ft of track that goes nowhere? Um,

with a government institution that's. really proud about how many jobs they. created by doing this. You compare that. to SpaceX. They've only spent $9.6. billion and they put more than 300. rockets into orbit. Or, you know, we we. spent $40 billion on rural broadband and. have no rural broadband. We've spent $80. billion on electric chargers and I think. we had like eight, you know. So it there. there's something wrong. Part of the. disease that we're facing is this idea. that all you need to do is cut a check. Like money will just solve the problem.

You know, money enables the founder. personalities. Money enables people to. do the work. It's it it's the front end. of enabling the work and it's the back. end. It's the reward for having done the. work. But someone's got to do the work. and you got to be really good at doing. the work. And that's like that's art. That's craft, you know. It's not a. commodity. It's not mindless. You don't. just outsource it. And we need people to. be proud of of that and our efficacy in. doing that. You know, you think about. um these these like I I think the.

counterfactual if you just say like we. didn't have Hyman Rick over, we had. someone else or we we did we had DAPA. back then and we rotated people in and. out of driving the nuclear navy every. two or three years, we wouldn't have it. wouldn't have worked. And so when we. look at so many of things, why does the. F-35, we conceived of it in the mid '9s. and it's just kind of working now, why. should it take 30 years when Kelly. Johnson could build as a single human at. Skunkworks, he's the founder of. Skunkworks, he he could build 41. airframes in his career, he could build.

the U2 in 13 months. Do you see this changing? I do. I mean, the reason I've been writing about it is. that I'm wildly optimistic that we're on. the verge of changing it. I feel like. it's a little bit like a ketchup bottle. You know, you you shake it, you shake. it, you shake it, nothing comes out and. then it comes out all at once. Like this. has been building and people can kind of. feel this subconsciously. They can see. it in the parts of the American economy. that are working, which frankly are the. only parts of the economy, you know, you. look at Europe, nothing's actually. working over there. So like the parts of.

the world economy that are working look. like this. the parts that don't you see. it with when when Doge goes to DC like. there's a lot of noise certainly from. the other side around. Doge but it's been amazing you know you. you have people who are the NBA athletes. of technology walking around kind of. realizing like oh that's a seventh grade. basketball team over there and you know. people who can call balls and strikes. and and conversely and be like that. person in government is a genius like. they're not empowered we need to empower.

this is the person who actually knows. the right answers we pull them. You. know, Doge has the ability to make those. calls and and to do so with taste, right? And that that realignment is is. um profoundly needed. Why do you I mean, why do you think there is so much push. back on that? What are they scared of? I. mean, this sounds it just I mean, we're. going to save money, things are going to. become more efficient. I I don't. understand. I do not understand the push. back. It's not supposed to work this.

way. We were following the playbook. we. had a playbook, you know, there's a. system. It's this it's this belief in. process over outcomes, you know, it's. like and and it and it's it's. um profane to have to blow up all the. process and to believe that everything. that we believed in the past didn't. actually work or that there would be. another way of organizing yourself that. would be superior and would work better. And I think that's the the subconscious. undertone of the push back. Um, and then.

people this, you know, it's like the. best engineers are, like I said with. Hyman Rick Overber, he was hated by the. Navy, but he was a national treasure. And can you hold that contradiction. that, okay, yes, the engineer said. something that hurt your feelings, but. they're right. Can you hold that. contradiction? Like, are you optimizing. the out? Because if you care about the. outcome, that's easy to get over. It's. like, yeah, you're right. So, it's ego. It's all. ego. What a shame, man. Been I think the. results will speak for themselves, you.

know, and I've seen this so many times. once the bureaucracy gets out the way, you can you can often solve these. problems inside of 30 days. So, and I. think that's the I know those guys, that's what they're focused on every. day, which is just delivering results, keeping their head down, delivering. results, and uh you know, I think it's. they're they're a national treasure. How. long ago could we have done this, do you. think? Uh from a technical perspective, we could have done it 30 years ago. I. think from a political will perspective, it took President Trump's political will. and the mandate that he got with the.

election in order to make it happen. And. you still see the amount of push back. that there is. Yeah, it's insane. I. mean, I just like I said, I just I don't. understand it. It just it just seems. like it's better for everybody if we do. this. And there's just I mean, people. are just screaming on the rooftops about. And to tie it back to founder mode, my. own support for President Trump is, you. know, when I I had a three-hour dinner. with him and presence of a few other. folks. And what I felt profoundly was a. founder personality. This is a person. who was going to throw away the manager. playbook, who actually had an intuitive.

understanding of the things that were. broken and what to do about them, was. going to make contrarian calls and and. actually cares about the outcome. I mean, speaking of President Trump, I. mean, hot news right now is, you know, the tariffs just came out yesterday. I'm. just curious, what are your thoughts on. that? Um, you worried about that at all? I'm. I'm not. I think there will be some. volatility. What I've been I've been. looking at the markets kind of thinking. about how much of this is the market.

reacting to the playbook. It's like. prophylaxis. before the pain is even. felt they're like but we take as an. axiomatic given from e from from our. economic theory that this is a bad thing. versus empirically it's already resulted. in badness. I think there's going to be. some chop between here and there but the. ultimate thing about the founder. playbook it's not that founders are. always right but it's that they are. first intuitionally driven and then. often can only fully explain their. intuition over time. And so there's you.

have to decide um is the rebuttable. presumption going to be we're going to. lean in and and try what the founder is. saying or are we going to resist every. step? Do I is the burden of proof such. that I will not take any action until I. perfectly understand everything or not? And I think no great things are. accomplished that way you know it's too. slow. The udaloop's too long takes too. long to bring everyone along. So I'm in. a suspension of disbelief mode. A lot of people are worried the price. I'm worried the prices are going to go. up on everything. I.

mean, but and I would say Scott Basant. is a very. smart human, very smart macro trader, you know, part part of an elite world. There's probably like on the order of 10. people in the world like him or current. Treasury Secretary. And um you know, I I. basically it comes down to confidence in. the team. I have a lot of confidence in. the team. Okay. You know, back to. Palunteer, what what other countries are. you guys working with? Well, the US and.

our allies is really our focus. So, you. know, we have most of Western European. uh intelligence organizations uh use our. software. Um you know, some of that is. look, they're subscale in many ways. So, I don't want to call it philanthropy, but it's it's the right thing to do. Um. after the Baklan massacre, we uh. volunteered to help the French out. massively. Um, and they took I think. that was actually kind of a marktomarket. moment of we need the help. A lot of. these European countries have their own. indigenous industrial base which they're.

very proud of but is is not at the level. of of the US industrial base. Uh, and so. there's a, you know, there's always a. conflation of what part of my industrial. base is a jobs program and what part is. supposed to provide deterrence and. lethality to protect my nation. Uh, and. so I think we're really happy with with. that level of work here. um Australia, uh Japan, you know, the US and our. allies. What do you think about I mean a. lot of stuff going on in Taiwan right.

now. How how important is it should we. even get involved in that? I think the. way the way I think about it is that we. want to. make any sort of. kinetic or even non-kinetic economic. action against. Taiwan too risky for our counterparts in. China. We want to we want to push out. If the Davidson window ends at 27, our. goal is to make that 28, then make it 29.

and 30 and just keep making it harder. and harder and too risky for the CCP to. do anything. That's the optimality and. that I think it plays to a sort you you. need that's the primacy of winning. It's. it's a it's a mindset that's like we're. not trying to solve the problem. We're. trying to make sure they can't move on. Taiwan. And how how exact could you be a. little more descriptive on how how would. we do that? We have to make it not survivable or. unpredictable of what the outcome is.

going to be. And I think the way the CCP. works, the amount of certainty they're. going to need um is pretty high for an. for an operation. And we need if if they. if they know exactly what we're going to. do, they're going to figure out a. counter plan. You know, they're the best. at long range planning. You know, they. have a 50-year plan and it's it's. actually really well thought through and. they're good at that. Um, but I think. the fundamental American strength, like. why I think we'll win in the end, is. that we're crazy. We don't know what.

we're going to when we get punched in. the face, we don't even know what we're. going to do. So, how could they? Uh, and. and so I think we have to kind of bring. that craziness left of left of the. balloon going up and make sure that the. level of. unpredictability that we're creating in. that battle space means that we stay in. competition and never get to crisis or. conflict. How I mean. how how dependent are we on Taiwan for. semiconductors and chips and all these. type of things for the leading edge vary.

and I think that's the important part of. our hedge strategy. We have to you know. I heard that Intel and TSMC are. announcing a new joint venture. We need. to bring this is part of the broader. need for reindustrializing the nation. You know we are we probably have two. weeks of pharmaceutical supplies. Most. of these pharmaceuticals are made and. the upstream ingredients, the APIs are. made in China. You know, like if we just. start going through the things we need. to ensure our American prosperity, too. many of them are in the hands of our.

lethal adversary. Yeah. I mean, China is a topic that we. we just continuously discuss here. So, I. mean, how how worried do we need to be. about China? I think it seems like they just have us. in all these different areas. They're. they're manufacturing. You mentioned. pharmaceuticals. Damn near. It seems. like it seems like our whole supply. chain comes from there. And you know, then there's the they're involved with. the the the drug the drug trafficking.

coming out of Mexico. First opium war, as I call it. Yeah. I mean, they're buying up all our land. They're. investing in our country. I. mean, where are they? How how far are we. behind China? I think we are we do not. yet have clarity of the threat amongst. the American people. The national. security security community has has not. confused. They understand it is the. priority threat. But um and I think part. of this might just come down to our.

media and our culture. What was the last. movie you saw that showed America is the. good guy and the CCP is the bad guy? You. know, when I was a child, even the. Worldwide Wrestling Federation had the. iron shake. We had the Iranians as the. back. That was the heel, right? There. was a USSR heel. We had a a very clear. sense of who our adversaries were and. that we were competing every day. If you. look at the essential Chinese. propaganda, which we kind of imposed on. ourselves with their ascendancy into the. World Trade. Organization, it it it it's taken two.

forms. One is we're so weak. There's. nothing to worry about here. we're so. weak. The other is we've already won. There's nothing to worry about here. because you've you've already lost the. competition. But I think these these two. lines of propaganda, even though they. seem contradictory, they have one thing. in common, which is saying we're not. competing because either we're. irrelevant or we've already won. But it. it was it was designed to obuscate the. fact that we are competing every single. day and viciously. And that's the. clarity that we need as the American.

people to realize like we're in a. competition today. It's an economic. competition. Let's let's do everything. we can to make sure it remains only an. economic competition that requires us to. invest in deterrence. You know, the. Chinese were kind of surprised that we. did nothing when they militarized the. Spratley Islands after telling us to our. face that they were not going to do it. And and so and this is the part where I. think their miscalculus comes in because. the the sort of Midwestern we positive. sum we're we're fair people you know we.

we seek peace so we'll take you at your. word and we'll treat you well but at. some point you'll break that and then. you know as as one admiral once told me. then the American udaloop comes out you. know observe overreact destroy apologize. and and so how do we. um how do we manage this so that we are. actually conveying and managing the. threat appropriately? I mean where you. know just where do you where do we even. start? I mean we have all these.

politicians that have businesses over. there. I rattled off a bunch of other. stuff that that we're involved in. I. mean what would happen? I mean where do. we start? What what would happen if they. just cut our supply chain? I mean. well right now it would be really bad. It would be very bad. And I. mean right now it would also be very bad. for them. Uh and and so they're they're. what what are they doing? You know, they're trying to produce their own. indigenous chips, their own GPUs. They.

want their own Nvidia. We're we've. curtailed their access. Of course, they're getting around sanction evasion. They're they're buying from Malaysia, buying from Singapore, but but we've. made it hard for them. We're creating. dilemmas and problems. So, they're. trying to make themselves. self-sufficient. We need to be investing. in the same things along strategic. areas. It it can it it can include our. allies. Sometimes I worry that friend. shoring is like a a half measure. It's. kind of an easy out. Like yes, I'm not. trying to exclude our allies from being. part of the solution here, but. everything that we can make at home in.

America, we should make at home in. America. Now, the pathing really. matters. When we were mobilizing for. World War II, we took Bill Nudson, a. Danish immigr direct commissioned him a. three-star general, and he was in charge. of war mobilization. And he had a lot of. room and a lot of flexibility and FDR. actually put him in charge as a civilian. in the lead in 38 I think is when it. happened. In 38 we have to remember. there was not consensus in America that. we should be involved in this European. matter. You know the strong sense of we. got to do this. We got to we should be. isolationist here. There's conflicting.

views. But the but what what FDR. realized is it takes time to build. factories. Like I need an option like. maybe we should be isolationist but what. I definitely don't want to do is be. isolationist because the cupboard is. bare. So how do we mobilize so that we. can provide credible deterrent and I. think this is not about wartime. mobilization. It's about mobilizing so. that there is not a war and that is. really mobilizing our. reindustrialization. And that was kind. of a term I've been talking about this.

for for 5 years now but back then it. seemed like a far-off fantasy. People. thought it was a little crazy. This term. has entered the mainstream. You will see. it on Fox News. Re-industrialization is. a theme. There are serious people who. are investing serious capital to do. this. When we get the American private. capital markets behind this, which is. starting to happen, it's going to be. unstoppable. I mean, how there's just so. many sectors though to to to build. I. mean, pharmaceuticals, chips, all these I. mean, just everyday products. I mean,

how are we or are we incentivizing. entrepreneurs to start to build these. factories? And to the point of of. confidence in your team, they're. thinking about that. I' I've heard. proposals that are around changing the. depreciation and amortization schedule. for factories and investments. So, how. do I use the financial math to encourage. the capital markets to view these things. differently? Fundamental deregulation. How do we change NEPA? How do we change. the regulation permitting processes so.

that it doesn't take you four years of. waiting for a bureaucrat to tell you. that you didn't dot the right eye or. cross the right tea but for minutes to. get the approval to go? This is what. unleashing American energy is about. What does a factory run on? Like the. cost of energy is a material input to. everything, right? It is the first input. into all the goods and services we buy. You bring the cost of energy down, it is. a massive deflationary force. And we are. the largest energy producer in the. world. like the resources we have. We. need to just get out of our own way on. this and not have a.

regressive mindset around like oh you. know using energy is bad. Actually the. basis of modern civilization is energy. and the more energy you use the better. your standard of living is the more. things are possible. And the I feel like. that's not a contrarian thing to say. anymore. That would you would have had. pitchforks and protests if you said that. 5 years ago and now people are like yeah. well obviously that's true. How do we. get after that? You see the tech. community investing in things like. fusion and fision and small modular.

reactors and people who recognize the. reason to be super optimistic. particularly on energy is that the the. AI companies are going to be crippled if. they're not able to have the energy. that's needed to run their AI which. means they are investing in it. themselves off their own balance sheet. They're not waiting for a utility to do. this or that. They're going to be. building energy production behind the. meter. Wow. It's not even going to the. grid. It's like captive energy for their. data center and and a lot of that is. just the bureaucratic BS of how long. does it take you know I was Oracle was.

just talking about how uh one state. utility company was saying oh we we. could get you this energy in the 2030s. 2030s you know it's like we should be. talking we need to measure everything in. months this is really the the core thing. that's going to solve our problems is. being impatient like we need to be. thinking about what can we be doing now. what can get done. That's what I love. The focus of this administration is very. much these are the things that must be. delivered inside of this administration.

That then changes how you think about. solving these problems. It's it it. forces you to realize that the playbook. and the process is totally screwed. It's. never going to get there. It was never. going to work anyways, but now it's just. clear it's not going to deliver on the. time. How do we reinvent ourselves in. this moment to go make it work? What. kind of energy should we be looking at? All types. Like I mean if you really. look at um you know we need more natural. gas uh we need to make investments in. nuclear it's going to take longer. Um we.

we sure bring on more renewables but. look at the irreliability around base. load the variability the battery storage. means that we need to be practical. So. I'm not trying to favor one type over. the other but we're going to need more. of all these types of energy. Would you. like to see more nuclear? Yes I would. Why? I think I think turning our back on. the atom was one of the gravest mistakes. for our rate of progress. Uh you nuclear. is largely expensive right now because. we've regulated ourselves to death. Um.

the the designs that we have are very. safe. Himman Rickover when he was. building the nuclear navy, his safety. standards were set so high, higher than. civilian safety standards because his. litmus test was my son will be in this. sub. How safe does it have to be for my. son to be in this. sub? If you compare that to the Soviet. submariners, they had to for every six. months they served, they had six months. of rest in Sochi to regenerate their.

bone marrow because they were irdiated. to all hell, you know. So there's a way. of doing it. You get the right people, the right design, the right founder mode. leadership. This stuff is safe and it's. abundant and it's clean and we can get. it at scale and you can build it in all. sorts of places. And we got we have to. be thinking about this from a. competitive advantage perspective. I'm. not sure it's a perfectly linear uh. extrapolation, but you know, in order. for our ship building to be. competitive, you need more than just. building government warships because to.

this point of of a diversified R&D base, uh workforce that knows how to do these. things. You need scale, right? As as we. all know, the one shipyard in China. alone has more than all the ship. building capacity of all the US. combined, right? They have 250 times the. ship building capacity that we do. 250. times. Yeah. I'm not sure that we need to match them, but we need to be able to produce ships. When we say we're gonna have two subs a. year, we need to have two subs a year,

not 1.1. You know, Palmer Lucky talked. about this when I interviewed him. He. said 250 times as well. And but I am. curious, what do those ships look like? Are they are they an equivalent. to something that we make or are is it a. shell that's basically a cargo ship? What. Do you have any insight on that? Uh, I. think it's it's all of the above. So, they're not building 250 times the. number of warships, but the ability to. produce commercial ships enables them to.

drive down the cost of producing the. warships and enables them to produce the. warships at a speed that's relevant to. building their navy up to be big enough. to keep us out of the theater or to. create dilemmas and problems that we. have to deal with. Uh and so I think we. should be thinking about how what would. be requ this is it's a thought. experiment but like what would be. required for commercial shipping ship. construction in America to be. competitive on the world stage. I think. we have to take an asymmetric approach. because you know if we're just doing.

labor versus labor we're going to lose. that. But if we say actually we're going. to build the first commercial nuclear. cargo fleet it's going to have the. lowest cost of operation. is going to be. able to be in service much longer. And. we're going to leverage the the Navy's. unique knowledge of how to do this in. order to power this American prosperity. That's going to then drive drive up the. volume in shipyards, drive up the. capital requirements and the ability to. leverage capital markets to build new. shipyards, bigger shipyards to do the. fiddleization facilitization because.

right now all that investment is on the. American taxpayer. And that's why we. struggle with it. Like how much should. the taxpayer keep dumping into these. shipyards? The answer is always more. But but we're getting less for our money. every single time. And the way out of. this problem is to realize that. monopsiny, the government as a sole. buyer is actually the problem. It's how. we got into this problem to begin. with. The world used to be very. different when when the Berlin Wall. still stood just came down only 6% of. major weapon system spending went to.

defense specialists. The other 94% went. to what I call as dualpurpose companies. Too much is said about dual use. You. know, a missile is single use. You know, you need Palmer to build lethal effects. that only the government is the buyer. of. But dual purpose, Chrysler used to. build cars and missiles. Ford built. satellites until 1990. General Mills, the serial company, built torpedoes and. inertial guidance systems and their. mechanics division. Oh [ __ ]. Everything they learned about building. machinery to process cereal, they were.

able to to leverage in the service of. national security to make our war. fighters more. lethal. And what happened was that over. time the government became such a. difficult buyer to work with. All sorts. of esoteric rules that only matter for. the government, all sorts of auditing, all sorts of bureaucracy that people. tried to figure out how to exit that. business. And wow, that started in the 70s. Boardroom started talking about it. It. accelerated in the 80s. And then when. the last supper happened in 1993, there.

was this dinner in the Pentagon. We used. to have 51 major defense primes. Uh. well, they got the 15 largest together. They had a dinner and they said, "We. need a peace dividend. We've won the. Cold War. We're going to slash defense. spending. So for every dollar we used to. spend, we're going to spend 33 cents and. it's going to happen all at once." You. guys are not all going to survive. you. have our permission to consolidate, to. merge, to to try to find commercial. lines of business, like do what you need. to do. And we let that happen until 1999.

when we blocked the merger of Lockheed. and Northrup. That was the LA. We said, "Okay, this is too much." So we went. from 51 down to. five. The popular narrative is what are. the five? Northrup, Lockheed, GD, Boeing, and Rathon. Um the popular narrative is this is when. we lost competition in the industrial. base. 51 down to five you have less. people to pick. from. That definitely happened but I. don't think it's the dominant problem.

The dominant problem is you lost that is. is really that the the consolidation. bred conformity. You had companies that. were you know almost like test tube. babies artificial mergers no single. unified culture. um they became. essentially like almost like stateowned. enterprises extensions of the government. just doing the government's bidding and. there was not enough heresy not not. enough crazy ideas that pushed the. envelope you know not enough Kelly. Johnson's of the world like it drove out.

the founders founders cannot work in a. conformist environment they are heretics. by their very nature and and drove the. founders to other industries like tech. the reason for immense optimism in this. moment so that that 6% % today is 86%. So the 6% that used to go to only. defense specialists has ballooned into. 86% that go to defense specialists. So. these companies have very little. commercial business. They are kind of on. the gopagos islands. They've built. specialist entities that only know how.

to sell and interact with the. government. And this is part of and this. is so that's the key. The key is to. learn how to how to sell and go through. all the all the red tape to sell to the. government. You compare that to China. So in China, their their primes, their equivalent of. our big five, only 27% of their revenue. comes from the PLA, the People's. Liberation Army. The rest comes from. commercial things they're they're. selling, unfortunately to us. So that. cheap crap we're buying on Amazon is. subsidizing lethality against potential.

lethality against future US service. members. Wow. Wow. That's. just that's enraging. So let me let me give you cause for. optimism. More than $120 billion of. private capital has been deployed in the. last 3 years in the service of national. security in the national interest. You. know the founders are back. Palmer Lucky.

is a archetypal example of this. You. talk about a heretic right? We have. people who are hard-headed, who are. doing this more with a horizon that is. beyond just what's going to happen this. quarter. They have a vision of what. they're trying to create in the world, and there are hundreds of them. Uh, and. the department is open to working with. them. There's a whole sea change, particularly with this administration, of recognizing the need for this. reformation. Uh, and so we're starting. to embrace that. I think we should, to. the point of the ketchup bottle, it is. coming out all at once right now, and it.

is the moment for us to to seize the. opportunity to to fix ourselves. What. are some of the other companies we. should be looking at other than. Palunteer and and Dural? Seronic and. their unmanned uh their their USVs, the. the surface vessels. Uh you have Eperis. with anti- drone technology. Uh. countercas uh shield AI. Um what's. shield AI? Shield. Shield builds. autonomous autonomy for fighter for. fighter pilots. They flew the F-16. autonomously. They built the VBAT which.

is a a drone that is so far seems like. the the primary USm made drone that is. able to survive in the contested Russian. EW environment in Ukraine. They you know. and to the point of of just getting out. of our own way. Like how do the. Ukrainians decide what drones to buy? They they once a quarter they have a. field test. They they create a test. range. They jam the crap out of the. environment. anyone who wants can show. up, fly your stuff. If it if it doesn't. fall out of the sky, we might buy it.

And Shield showed up to one of these. things and they were the only one who. didn't fall out of the sky. No kidding. No requirements document, no red tape, you know, the facts to the this is the. equivalent of Ford deployed engineering. You you go to where the problem is and. it either works or it doesn't work. You. know, you taste the steak. You either. like it or you don't. I don't know. You. know, if I had if you had to write a. requirements document of what is. required in a steak that you're going to. like, like it misses the essence of I. don't know. When I taste it, it either.

it's great or it's not. Yeah. Do you. want to talk about Eperis a little bit? I love that company. Yeah. I love I. mean, I think it was it was a great bet. by Joe very early on to take an entirely. different approach to this this this. gallium based semiconductor material to. generate walls of energy that actually. almost act like cyber effect. So unlike. it's not one to one where you're firing. a munition against a single drone, you're really putting a wall of energy. So it doesn't matter if it's one drone. or a thousand drones, it's going to have.

the efficacy of being able to stop them. and block them. Oh, so it's one wave. I. thought these I thought it was like. simultaneously shooting out EMT pulses. or whatever it is, you know. Yeah. It's. putting up an entire wall of energy and. that is, you know, it's a very clever. approach to solve the problem. I think. we're going to need defense and depth. with an approach like this. When you. think about the the UAS problem, it is a. massive offset that our adversaries have. against us. You know, how many. million-dollar missiles can you shoot at. $200 drones, even $2,000 drones? You're.

going to lose that equation. Um, and so, you know, we we're going to need. entirely different ways of thinking. about this. Now, this challenges, so. there's a question of like how quickly. can the force adapt these things and. recognizing that you're not going to. have just one answer that you're going. to actually have to have a series of. answers that mean that you're not afraid. of putting your destroyers into a. position to be relevant anymore. And and. that's that's the greatest threat. So, like when I look at Ukraine, there. really three lessons I take. away. Um, and this is one of them. Like.

the. Ukrainians, people often look and say, "Wow, isn't it amazing that they sunk. half the Russian Black Sea fleet even. though they don't have a navy?" And I. say, "No, no, no. It's it's because they. didn't have a navy. That's how they. could conceive of an entirely different. force structure that had seos. essentially, you know, these these these. cheap explosive munition drones that. that were guidable with a Starlink. Um, it's an entirely different conception of. the problem that I think a big surface. navy would have a would would could get.

there eventually, but it's not going to. get there as quickly or as dynamically. That's one lesson. The second one is we. should have realized we had a five alarm. fire when we went through 10 years of. 155 production in 10 weeks. And uh, you. know, I think in World War II, we used. to make like. 500,000 shells a month. And now we're. struggling to make roughly onetenth that. 65,000 or so, you know, and and we've. had some time. Ukraine didn't happen. last week. It's we've had some time. So.

what lessons can we take about what it's. going to take to actually ramp up the. industrial base as a consequence? And. and the lesson from that is that we got. it wrong. We thought the stockpile was. the deterrent. If we could go to our. adversaries and say, "Look at how much. stuff we have sitting on the stock,". they'd be scared. It's not. The. deterrent is your ability to produce the. stockpile, how fast you can make them. Yeah. And so we should never have cut. down to minimum minimum rate production. All these ideas that were really born. out of an economic fantasy that we could.

spend way less and still have as much. security. Look, I think it's reasonable. for democracy to debate like how much do. we want to spend, but to believe you're. not trading off security. Like we have. to just account for all the trade-offs. appropriately. And I think if if we all. understood like actually we're going to. change our spending profile and it's. going to mean that we're much less. secure, we may have made different. decisions along the way. So we. shouldn't, you know, that that is a. hard-earned lesson that the the. production, not the stockpile is a. deterrent. We shouldn't forget it. And. and it it it should shape everything. That's why you need something like an.

Andre. You need to be able to make. 10,000 of these things, not a hundred. And if when when you think in your mind, oh, I'm only going to need a hundred, you start having all the bells and. whistles, like, how do we make this. thing super exquisite, super fancy? It. needs to do all these things, and I'm. only going to have a few of them, so. let's make it like a Swiss Army knife. that can do everything. And then it. turns out it takes eight years to build. one of them, and they're ungodly. expensive. And then in the moment of. need, you realize, I actually need a. 10,000 of these. And so, and when you. start realizing those trade-offs, like,

how can we cut production time by a down. to 1/5? like it should take 20% as long. to build these things. They should be. affordable so we can be able to build a. hundred times as many as we would. historically have built. Um and now we. have now we're back to deterrent. Palunteer is down in you guys are. working with the border too, right? Down. border. What are you guys doing down. there? Yeah. So the work like that 10th. Mountain is doing out of Port Wuka uh. the work that NORAD Northcom does and. supporting border operations Southcom.

So all of that is our our our maven, our. AIdriven operating system for the. defense department. U in addition to. that, you know, we have a long-standing. relationship with ICE, which actually. started in 2011 when um I think it was. 2011, maybe 2010, when Jamie Zabata was. assassinated in Mexico, who's an ICE. agent, young 32-year-old American. Um. and we surged in to help them out. We we. had been t to the point of bureaucracy. and and these crises providing clarity. We had been talking to ICE for 12 months. before that about starting to work with.

them. We were stuck in in the. bureaucracy of how does one procure. these things? How does one buy these. things? After that assassination, we got. a call from one of the field agents. We. were up and running in 11 hours. Wow. And we were a big part of responding to. Operation Fallen Heroes, what that's. called, and a long-standing relationship. with them born out of of. of doing right by these these service. members uh after that. Um, and now I. think there's a much bigger role. There's there's of course border, there's immigration. These are two.

sides. A lot has happened. I think, you. know, a lot has improved on the border. We we've gone down from roughly in the. prior administration 2,000 getaways a. day to less than 80 a day now. So, that. border is getting sealed. uh and and I. think the bulk of the effort will turn. to uh an immigration problem of how do. we manage the illegals who are here and. the deportation operations around that. What do you think we should do about. that? Well, I I think we're starting in. the right place. Anyone who is a violent.

offender Yeah. It's hard to understand. I I I saw a. clip from JD that I thought was pretty. good, which is it's it's hard to even. understand what's on the other side of. this. Why should we not be deporting gang. members, violent offenders, people who. have committed crimes who have no right. to be here? How is that in the interest. of the American people? Now, I think. it's a large scale operation just given. what's actually happened here. Like, how. are we going to do it? You know, if you. think the numbers are between 10 and 20. million illegals, there's a question of.

how you actually are going to do that. How much treasure can you spend? How do. you do this as efficiently as possible? And so I think starting with precise. information that actually borrows a lot. of the lessons that we have from the. commercial side, you know, it's a value. chain optimization. You know, okay, where do I have detention capacity? Where where do I have logistics on. flights? Like how do I do this as. efficiently as possible in a way that. provides the the most um incremental. lift to the American people? And I think. that clearly starts with violent. offenders and areas that matter. What's.

working down there? I mean, getting into. the nitty-gritty down on the border. I. mean, how was it? How how did we seal it. off so fast? Um, I think a lot of it is I shouldn't. say a lot. First, it's important that. people realize we're taking the border. seriously. That alone is a deterrent. effect to trying to cross the border. So, what do you think's going to happen. on the other side? If the subtle. messaging was nothing, actually, just. come like you're you basically have an. open border. So now like, oh, you it's. going to be really hard for you when.

you're on this side here and you should. be you should be really worried that you. might be deported at any single moment. It's like, well, maybe I shouldn't come. So that's one step. Two, I think. designating the the cartels. There's a. supply chain behind helping people get. here. Designating them as as as. terrorist organizations has changed the. calculus as well. Um, it's kind of. changed the economics for the bad actors. and what they want to be involved with. So, I think it's probably overdetermined. like there's a number of factors, but I. wouldn't underestimate how important it. is that people realize like we're.

serious about this as a precondition. Let's take a quick break. Sure. When we. come back, I want to talk about the. future of warfare. Okay. You sign up for something, forget about. it after the trial ends. Then you're. charged month after month after month. The subscriptions are there, but you're. not using them. 85% of people have at. least one paid subscription going unused. every month. Thanks to Rocket Money, I. can see all my subscriptions in one.

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going to talk about the future of. warfare, but but I want to dive a little. bit more into the reverse opium war. Can. you go into that? Yeah. You know, so we. had the opium war where really the. Chinese felt like a lot of drugs were. flooding into China. The reverse opium. war is the Chinese are funding and. enabling uh fentanyl precursors to be. shipped to Mexico to then be funneled. into our country. uh we lose at least a 100,000 Americans.

to this war every year. You know, it is. an ungodly casualty rate. Uh and it's. not just happening on its own. And. um if if this was if if we were losing. even a fraction of this number of people. to kinetic attacks, we would have a. radically different posture uh to what's. happening here. I think some of this is. our own conflicted and I think. retrograde feelings of is it the fault. of the person who's using the drug? But.

you have to really step back and. recognize the environment that's what is. enabling all of this to happen. Um it. it's a tragedy at a big scale. And I. think obviously the cartels bear a lot. of responsibility but this these. precursors are coming from somewhere and. the Chinese have so much control over. their economy. If they didn't want it to. go, it wouldn't go. Uh, and I think they view it as part of. their national interest uh to undermine. us from the inside. Wow. So, how long.

ago was the Opium War? Um, was that the. 1800s? Was that long ago? Yeah. And what what why were we doing it? It. was just it was uh expansion, you know, it was economic expansion where people. were trying to trade with um with China. at the time. You had the collapse of the. historic dynasty, the beginning of the. century of humiliation. Uh, and it was kind of an outgrowth of. unbridled economic expansion. There was.

a market for it. I think it was largely. the British that were supplying it. Maybe was coming up from Afghanistan as. I recall. Um, and it it undermined the. the Chinese people. You know, you had. lots of people who were addicted to. opium. It undermined their productivity. And I think that's why it's the reverse. opium war. And we were pushing that. I. think largely the British, but I think. we were part a minor part of it. Why why. were we pushing it? I'm I don't know. And so so this this long later I mean.

this is this is because of that. Yeah. Well, it is it because of that or I. think more it is asymmetric way of of. weakening us, you know. It's it's an. asymmetric way of doing it. It's pretty. cheap. If you think about like if you. thought about cost per kill, it's pretty. cheap. It it disintegrates society. It. weakens families. It causes a lot of. trauma. It weakens our will. Mhm. It. distracts us from doing the things we.

need to do around our economic. prosperity, around re-industrialization, around taking them seriously as a. threat. One other thing I want to get to before. we go into the future of warfare is we. were talking about operation paperclipip. later. And so just downstairs, I just. had a thought. I mean, should we be. doing that today? We should. I I I've. been um trying to socialize this idea. and I think I don't know if we're at a. point of having the political will. Uh. Operation Paperclip 2 should really be.

around re-industrialization. If you. think about German middle companies as. like. these middle tier highskilled. manufacturing companies, you know, I. think they're kind of somewhat lost in. Germany today. You know, if you look at. what happened in Germany, the big. companies sold out the German economy to. the Chinese. You know, BASF, big. chemical company, most of their. factories now are in China, not in. Germany. Uh you Volkswagen and the. investments they've made in in China.

But that was never the perspective of. the middle tier German manufacturer. Most of these companies are. family-owned. They're hundreds of years. old and been in the family consistently. They're high skilled. It's not commodity. stuff. High high art, high trade. Um, you know, maybe some of them want to. move their manufacturing to America. Maybe we should enable that. Um maybe. there are uh we should be basically if. you if you generalize this concept you. have. entrepreneurs highly skilled who make.

things that are not commodity hard to. make anywhere in the world let alone. here and we can marry them up with the. deepest richest capital markets in the. world which exist in America. How do we. help them build their business create. employment and drive our national. security by re-industrializing America? Damn. I mean, who who all would you who. else should we be targeting other than. the Is there anybody that's making. defense tech or or anything that we. should be snagging up and bringing? I I.

would uh you know, you'd have to heavily. vet them, but I should I think we should. be thinking pretty seriously about. disaffected Chinese that we can be. pulling over. You get a little twofer. for that. You know, weakening them and. strengthening us. Uh and then the. surrounding areas like Taiwanese. entrepreneurs, Japanese entrepreneurs, manufacturers really um and then you. have a belt of these folks in Europe, a. little some in France, a lot in Germany, um maybe even a few of them a little bit. in Eastern Europe. But we should be. taking the cream of the crop who are.

doing these things in new and novel ways. and bringing them here. While the main. effort should be investing in the. founders who are here in the in the area. around Elsagundo where we have this. revival of American manufacturing. happening doing it in different ways and. I think it's worth double clicking into. that because you know the. conventional view of efficient. manufacturing is that you have this very. distributed supply chain. everyone makes. one part and these supply chains go. really deep and but what that's done is. it's hauled out the knowledge from the.

buyer. So if you're if you're at the top. of the stack and you're building jet. engines, you know, you don't even. understand your supply chain. You just. you just think you're buying something. We've like we've kind of [ __ ] your. mind in terms of how deeply you. understand the product that you're. building. You're just ordering parts and. essentially assembling them. That's not. what Elon did. You know, he vertically. integrated. He builds the whole rocket. engine himself. And that means he can. control and reduce the number of parts. He can say, "Hey, you know, these three. parts should be combined because it'll. be more efficient." And that's how you.

get the asymmetric advantage and the. leaps, the ability to innovate on these. things. Um, and so that's where I say. it's not that we're not good at making. things in this country. It's that the. old way of doing it is not competitive. anymore. We need this new way, much more. vertically integrated, much more. creative. His R&D engineers at SpaceX. sit on the factory floor of assembly. Usually these are these are these are. thought of as two totally different. things. You have people who design the. the parts, you have people who assemble. the parts, you know, but actually if the.

engineers can see what's happening in. assembly that's causing it to be slow, what's causing quality issues, it might. change how you design the parts. And so. how are they going to observe that if. they're not physically sitting together? It sounds so simple, but it speaks to. the cultural thing. And and it's. resonant with forward deployed. engineering, right? So, how do we. leverage this like uniquely American. perspective on doing these things to. just get back to being the best in the. world at doing it again? And you're. you're starting this conversation. How. are you doing that? Well, I'm I'm. talking to colleagues in the national.

security community about it to see if if. there's a way of doing it. I'm also. trying to just do it through the front. door. Are there companies in particular. where we can provide capital to to. reinvigorate it? The easy place to start. is in the US. You have a lot of these. mid-tier suppliers. they are actually family-owned. The next. generation maybe doesn't want to. continue the business. Um because the. government has been such a a promiscuous. buyer, so unpredictable in demand, they. haven't had the economic reason to. invest in capitalizing their facilities. to do much more. You know, there have.

been boom and bust cycles around this. But if you can if you can buy a bunch of. these up and aggregate scale. particularly in a thematic line where. it's like actually these three parts are. related and I could actually make it one. part uh and I could deliver the part. more cheaply generate more value. He's. like how do you get the math to work. out? But I think we could just start. here and start filling in the holes that. we have with capabilities and. technologies from allies. Yeah. You know. I mean there was a lot of lot of blow. was it the H-1B visas? A lot of.

blowback. That was something I was. scratching my head on for a long time. going like I don't I don't uh I don't. see what the problem is if we take the. world's best and consolidate them here. in our country. And I mean I mean and I. mean to be honest you're an example of. that. You know, I I I I'll I'll take. both sides of that cuz I I I feel like I. really do I I have a view of it, which. is um few people should argue with this. idea of taking the world's best, but so. much of the H-1B program has also been.

abused to. take average. Mhm. Right. And so then. that kind of you lose the moral high. ground on the entirety of the program. Gotcha. Um, and so yeah, like you know, that's what's amazing about America, that we can continue to incorporate the. world's best who want to come here, who. believe that America is a shining city. on the hill, who want to assimilate, who. want to be American. Um, but we have to. do so in a way that also is cleareyed. about our economic prosperity, that.

we're doing this in the service of the. American people. It's it's not just that. we want them to come here and be. prosperous. It's as a consequence of. them being prosperous. They're creating. jobs. They're creating innovation. They're creating economic security. And. um and I think large swats of the. program are used by by certain companies. to essentially hire cheap labor. They. probably could have been hiring here and. should be hiring here. And so, you know, both things can be true. There have been. abuses. And we want the very best to be.

here. Mhm. Mhm. And then something else. that you touched on that I wanted to. dive in fusion. What is fusion? Well, fusion, so fision is how do you split. the atom? Fision, excuse me. So, so. fision, nuclear fusion is how do you. split the atom to generate power? Fusion. is what our sun does, which is how do. you like jam hydrogen molecules together. to create um helium, but in doing so, it. also releases energy, huge amounts of. energy. Um, we don't have commercial.

grade fusion yet. That's that's more. R&D. Um, but fision is a triedand-true. technology. All of our all the nuclear. that when we think about nuclear, we're. really talking about fision. Um, and we. are experimenting with what's called. small modular reactors. How do you go. from what is otherwise a huge $30. billion multi- decade power plant and. make these things smaller, more modular? They're essentially preassembled so you. can put them where you need them. um they require less infrastructure, substantially less time to build, and.

the designs are modern in a way that. it's it's it's default safe. You're not. going you don't have a risk of a. meltdown. The physics just don't work. the same way that these legacy old. systems do, which frankly we've had the. technology for for a while, but because. of our I mean understandable fear around. it, we backed away from the atom and it. became politically we just started. investing in other things. I mean, how. so you were saying that companies are. basically producing their own power. supplies. I mean, how far do you think.

this goes? Do you think. that communities or even even households. will have their own power supply. eventually? Um, I think it'll be harder. for households to do. I'm hoping that the tech company's. enormous appetite for cheap power is. going to provide the necessary demand. stimulus to the economy to go build. these things again and provide the. necessary stimulus for the government to. reform the permitting process so that we.

can be cleareyed and focused on the cost. of power, the time it takes to build. these things. Um, but you're going to. need, you know, talk about another. industry that lacks founders like these. these public utilities are basically. also run like stateowned enterprises. Right. So, where is that innovation. going to come from? Well, it's going to. come from the small modular reactor. company or the non-traditional power. provider who's behind the meter. And. that that means that they're just. providing their power directly to the to. this data center. You know, they're not. trying to put it on the grid for.

everyone else to use. So, there's like. less regulation, less bureaucratic. coordination as a consequence of doing. that. But by doing that, eventually that. power is going to be there and any. excess power you're going to want to. connect to the grid at some point. So. that's that's going to drive the. stimulus to modernize the grid. infrastructure as well. We've really. underinvested in the grid. We probably. have a couple trillion dollars of. investment we need to make, but we. haven't been able it's been this chicken. or egg thing. Um, as we get economic. value out of being hopefully the world.

leader in the application of AI, um, I. think it will it will make the other. side of the equation clear of why these. why the modernization needs to happen. I. mean, you're. you're I would love to see that happen, but I mean, what what do you think. the I mean, you're going up against a. big machine with the utilities and. and how I mean, with all the lobbying. that goes on and all that kind of stuff. I mean, how how is that even possible? Step one is competition. You know, I. like to quip at some fundamental level.

You either believe in free markets or. you don't. And especially when you look. at the government having you know postc. cold war like everyone has given up on. communism including the Russians and the. Chinese except for Cuba and the US. government essentially like we have. fiveear centralized plans in DoD we call. it the FIP like literally we have a. 5-year plan that looks very very Soviet. in terms of how we think the world's. going to work. It's this centrally. unplanned approach. So if we can start. building stuff behind the grid uh behind.

the behind the. meter and if we can do the permitting. reform that's necessary that this the. this administration is focused on it's. going to enable new entrance to start. creating power and reduce the monopoly. that historically the utilities have had. which as a theory of change means like. they have to react to this. So they're. either going to slowly find themselves. shriveling and shrinking or they're. going to reinvigorate themselves and. show up to compete and be like, "Okay, these guys were the first movers and we. can do it." There's kind of a theory of.

the economy that's actually at any given. epoch, there's only maybe five to 10. live players, you know, founderdriven. institutions, really innovative, they. set the pace, they define what's. possible, and the other companies in the. economy are sort of. mimemetically copying. They're imitating. them. Um, and that and that's okay. because it provides the necessary. stimulus for the whole thing to kind of. work. And I think the problem we found. ourselves in in in the let's let's say. the last 20 years is outside of tech.

largely there have been no live players. These parts these parts of the economy. have kind of shrunk and shriveled and. become they're they're only dead. players. And so the reinjection of some. live players is how we'll reinvigorate. this. And is a live player for hardware. defense primes, right? And the heart the. other primes have to respond to that and. that if you're going to have hope in. them reinvict some of them may not but. the ones who want to survive are going. to respond to that. Similarly in. utilities the small modular reactor. companies the the upstarts are going to.

be the live players that drive the. change. Uh and this I feel like it's. such an exciting time because you start. to see the emergence of these live. players. People are coming out of their. shell and cocoon and you know you can. point to things that are worth investing. in. the capital markets are starting to. see that starting to put capital behind. these founders. You know, it's a great. time for the American revival. I mean, wouldn't. the wouldn't the utility companies just. buy the smaller companies and bury them? What usually happens is at first you.

just laugh at them. So, we're in this. phase of like, well, it's never going to. work. You know, the fish is in water. The fish doesn't understand what what. could possibly be outside the water. So, you know, yeah, for the utility company. and the rules they live by and the. bureaucracy they've ensconced themselves. in, it is never going to work. They. couldn't do it today, you know, but. these guys are throwing away the rule. book. They're not going to follow the. same rules and subject themselves the. same bureaucracy and have the same slow. decision-making process. They're going. to do it differently. And once this. starts. working, they're going to have to.

respond. this this so you know three of. the five and co-founders worked for me. you know and and they are worldclass. talent in my interaction with some of. the primes you know that the the the. thing they love to say is something like. Andrew is like the thrronos of defense. and is a fraud and I was really. scratching my head it's like why do they. believe this is so obviously not true. just to be 100% clear like obviously not. true these guys are crushing. it uh and I my conclusion was it's.

because they can't imagine of a. different way of doing it. Therefore, if. there's a company doing it a different. way, it must be a fraud. It can't work. So, as Andrew starts to just keep. crushing it out there, they will realize. there's a different way. They will have. to realize there's a different way of. doing it. They'll have to respond to. these things. Uh, and that's that's the. reinvention stimulus that the economy. needs. Makes sense. Makes sense. All right, let's move into the future of warfare.

What's it look like? I think it it both. looks exactly like the past and. completely different. So the part that's. exactly like the past is I think that. the kind of fundamentals of the udal. loop that it is about decision advantage. and speed is the same thing. Those. principles are not changing. The most. valuable application of technology then. is going to be towards that end you. know. So why is lethal autonomy so. valuable? You could say we've had that. for a while. If you're flying in a. fighter jet, you know, it is your.

computer that is telling you that there. is an enemy on your radar that you can't. see. You're trusting the computer. That. that sounds like autonomy to me. Uh and. then when you release when you press. fire control there, the the kind of. terminal guidance is happening through. an autonomous system through the. computer on on the. projectile. Okay. So, now we're talking. about we just let's just start there. It's a it's a difference of kind. I'm. sorry, it's not a difference of kind. It's it's a difference of degree. We. already have systems like this. We're.

just talking about supercharging it, doing substantially more with it. And. what is the more? The more is um a much. shorter decision-m life cycle at much. greater scale. Uh and you start to see. that with these first first player FPV. drones. I think the Russians are losing. roughly 1500 people a day to these. little drones that Ukrainians are. flying. So 1500 people a day. Wow. It's tough. That's effective. So if.

you start thinking about that, it's. like, well, that's the equivalent of far. small arms really. It's like part of the. innovation now is, okay, this drone has. become the equivalent of small arms, but. doctrally. And that's how the Ukrainians. treat it. It's like it's like the E3 E4. who has fire control on that weapon, right? But for us, you know, we're not. at war. We haven't changed our doctrine. Like we would think of the fire like the. authorities on that as something the. equivalent of a tomahawk like a cruise.

missile, right? It's going to go way up. the chain. And of course, if if the. balloon goes up, we'll throw all that. away and we'll reinvent our doctrine. But I think we should be getting ahead. of that now and start thinking about. what are small arms now because they're. not it's not just your M4. Mhm. Um uh so. so that's one piece of it. And then that. I think that also implies that the the. fighting force is going to have to be. more technical. They're not going to. have to be coders, but that that the. responsibility just like you know if. you're going through uh Green Beret. qualification, you learn everything.

about the gun. You know how to assemble. it, disassemble it. Well, they're going. to be that level of proficiency you're. going to need for a set of technical. capabilities that are going to be. decisive on the battle space, you know, and that it's going to extend to the. electronic warfare and cyber attacks and. space-based access and communication all. the way through to the end lethal. effects. I do think we're going to have. to invest in, and this is where you you. need the outside tech mentality in kind. of an Appleike experience here. You.

know, yesterday when I was at Bragg, um, part of this capability exercise that. General Bragga put on talking to the. different MOS's, you know, the the the. special ops medic was like, "My job is. the best job." You know, the weapons. officer, "My job is the best job." Well, the combo guy was like, "My job is the. worst job. When everything works, no one. even knows I'm around." And the second. thing stop working, you know, it's all. my fault. And what I saw in that was um. cognitive burden. basically like.

we you know how often does your internet. go down at home? How often do you have. to think about these things like the. amount of investment your your iPhone. just kind of works and we are doing a. great disservice to these como officers. or um NCOs by the burden we place on. them to have to manage these things. versus what our technology could. actually be doing. So we have to redraw. that front line so they can actually. focus on the decisions that make the. beer taste better so to speak. the. decisions that actually matter on the. battle space as opposed to the things. that set the conditions so that you can.

even think about those things. You know, I talked to Palmer a lot about this too. and I'm I'm just curious your thoughts. What how much of the military right now. is obsolete with all the new tech and. all the autonomous vehicles and and. weaponry. I think it's there's no doubt. that um a meaningful portion is. The. question is how do you know what that. portion is? And I think there's a fair. amount of good debate that needs to. happen about that. You know, let's take. the tank. Some people think the tank's. obsolete. I'm not so sure the tank's.

obsolete. Maybe it's obsolete on the. first island chain. You know, there. there's like there's a question of what. are the conditions around which you need. these things and how would you reinvent. these the hardware to make it relevant. I view that as a productive competitive. stimulus. Everyone who owns this. platform should be thinking about why is. my platform still relevant? what they're. but what the kind of initial. bureaucratic impulse is to say is to not. say why but just to dig in and say it is. relevant you just don't understand I. need to protect the program I need to.

protect this rice bowl that I have um. and and maybe the tank of the future has. to be different than the tank of the. past the way that we employ it may have. to be different or may not but that. that's something that you have to earn. that opinion you have to prove that out. um we don't have enough competing force. structures you know it would be better. if there was a group who was thinking. about the future relevancy of the tank. and a group trying to make the tank. irrelevant, you know, and and um that's. what I saw with the Ukrainians not. having a navy, which is they could. conceive of this completely differently.

You know, maybe we should have a navy. one and a navy 2. It's a thought. experiment. I wouldn't literally do it. that way, but you can see how you need. kind of these oppositional forces. There's a reason the tank was invented. by the UK Royal Navy, not by the UK's. land forces, right? The tank was. anathema to them. It was is heterodox to. the platforms that they already had and. they viewed it as unnecessary and wrong. and can you imagine they would have lost. World War I without it. What about personnel?

Um I think that's probably one of the. most important reforms that the first of. all the person is the program. So stop. thinking about these programs as. independent of do you have the right. human to lead this? And by the way once. you get the right human don't let them. leave. You know, we we know this where. the most important things like if you. the head of the nuclear reactor program. in the Navy, it's an eight-year gig. As. you as you well know, most gigs in the. military, they're like 2 to three years. There's a reason we made it an 8-year. gig because there's increasing returns. to expertise and it's a highly.

complicated thing and you need. continuity there. I actually think in. reality there's many more things that. look like that where you need. continuity. If you're in a role for two. to three years, you don't even know. you've made a mistake, let alone had the. opportunity to learn from a mistake. When I think about the 19 years plus. I've been a pounder, I have screwed so. many things up and I've had, you know, I've had the ability to learn from all. those things to make it better and. better and it's just compounded over. time. If you somehow had someone do my. role where we were just swapping every. two to three years, I you know, I don't.

I can't even imagine how much further. behind we would have been. Yeah. Uh so I. that that's one aspect of personnel. The. second aspect. is with AI and the AI revolution people. think oh it's going to make the median. person better. That's true but it's. going to make the very best person. superhuman. And so in a in a lethal. context and defense context that means. that's the only thing that matters like. who are the very best people? How do we. give them the decision advantage to win?

Uh and that then as a consequence you. have to think about who are your best. people. I'll tell you one of the. combatant commands. I won't get into all. the details. One of the combatant. commands there is a uh a major prior. police officer joined the service late. army major. Um he does the work of a 100. people. No [ __ ] 100 people kinetic. strikes around the world that are being. driven by his work. Uh I don't think the. military has ever been in a position. where it's that asymmetric. And so that. that has a lot of consequences for your. for your force structure and how you.

think about who should be in what role. what what are you gonna lose when that. person rotates out you know um and then. our ability you know because the more we. when I said earlier Palantry thinks of. itself as a artist colony as opposed to. a factory we didn't talk about what is a. factory to me a factory is a place where. you have this linear progression you. have this chart here's the ladder you. climb here are the rules here are the. experiences everything's mapped out and. that gives the human a lot of comfort. gives the institution comfort it's easy. to understand what to do you don't have. to really think that hard about what.

comes next or you know answer hard. questions like am I growing or any of. these things that people have legitimate. questions around but what it does is. deprivives you of the sense of what is. this human really good at what are they. world class at what is their superpowers. and how do I maximize that useful. lethality you can see that sort of. thinking in Jto smaller. community more primacy to the outcomes. that need to be driven higher stakes uh. but but the big machine loses that. qualitative sense uh and so I I think. that's going to be really important when. I think about the most important.

projects we've been involved with. They're really a handful of commanders. who were so insightful. I I think they. might be offended to hear me describing. this way, but they they are what we. would call in Silicon Valley product. managers. They are the people with the. vision of what they need the software to. do so that they can accomplish this. thing in the world. And they would not. see it as below them. They three star, four-star generals, they would not see. it as below them to sit there and. critique your mocks of and tell you. these pixels are wrong. I need it to be.

like this because they recognize that. what they're getting is an Iron Man. suit, a software Iron Man suit that. allows them to control the battle space. It's got to fit them perfectly. It's got. to be it's got to fit their mind. Uh. this is they are in this context founder. personalities, right? And as a. consequence, they can get so much done. And I think so much goes wrong when. you're trying to think about your. software solution independent of the. human who's going to be wielding it and. operating the principle, the founder. You know what? I understand all that. What I want to dive into as well is I.

mean with all these new autonomous. vehicles and like I said when I when I. talked to Palmer he was talking about. basically putting an AI brain in a lot. of the stuff that we already use tanks, planes, subs, all that kind of stuff. And so I mean just for a tank for. example I don't I don't know a lot about. tanks but I mean I would imagine I think. it takes what probably three to five. people to operate one. And so when we. put these these AI brains in all of. these vehicles and turn them into.

autonomous vehicles, I. mean, how much of the military personnel. is that going to cut out? I think it's it's one example of that. It'll cut out. It'll make you a much. smaller, leaner fighting force for sure. So let let's just call it half. you can. get, you know, you can you can probably. make everything half half as big and as. lethal or more lethal than before. There. there's so many things with tanks like.

how do you clear the range of fire? You. know, the commander has to pop their. head up. They have to somehow get on a a. phone and tell the other tanks like when. the soldiers are dismounting, you don't. want to be in the field of fire. You. know, that's should all be software. No. one should be picking up a phone. The. tank should be able to communicate to. the other tanks. And it's just like. that's just so once you start like. unpacking the layers of how many things. we're just covering down with human. labor, you start to realize like, oh, this stuff's going to go away. And um. and in fact, the humans are doing it. slow. We're doing at the speed that.

humans can do it. And we make mistakes. when we're doing it. And this it has a. huge training burden to do it. So how. long does it take to even ramp people up. changes? So I think it's going to be a. pretty dramatic impact. You have to earn. it though. you know, you have to kind of. ship these innovations to the operating. fighting force. And no one will be. faster to adopt this than the fighting. force. It makes them more survivable, more lethal. There's one there's one. project we did um in at NTC at Fort. Irwin. The the division was roaming.

around the desert, you know, division, big big army formation, but using the. latest technology just like this, they. were able to get their division. footprint down to 26 people. So instead. of the normal 400 plus people, you need. a big jock, big screens, which means the. enemy can see you. You're pretty. immobile. You're not going to be. survivable. You're going to be blown to. smitherines. 26 people, the red team. could not find them in the desert. No. kidding. You know, I don't want to come. across like I think that's a bad thing. I think I mean I don't want my kids.

going to war. I've been there and I. don't want them to have to do that. And. so I mean I think it's a good thing. It's I just I'm just trying to wrap my. head around, you know? I mean, I I think. there's. 450,000 active duty in the army. I don't. know how many of them are war fighters, but I mean, I I would I mean, would you. need anybody in any of these vehicles? Well, you definitely want first contact. to be made by entities that have no. blood in their system, right? Like the.

front the front line of troops, but. there's also the front line of robots, and that should be further front. Mhm. uh and and we need to be thinking about. how we have less risk to force as a. consequence and have you know improved. mission outcomes by doing this. I I do. think though that the tail is where the. immense opportunity is tooth to tail. here. So yes, it's going to make the. tooth sharper and you're going to need. fewer teeth, but the tail is enormous. You have more people in the acquisition. corps than you do in the Marine Corps.

And the human processes that we use to. support all of this, it's both very. latent and slow. Um, it obuscates. indirectly just because humans are. touching and massaging the data like. what's actually going on. Uh, and we. need to integrate that. When I think. about the most important missing. strategic asset to the US government. from a deterrence perspective, it is an. integrated view from the factory floor. to the foxhole. And by that I really. mean let's articulate the threats we. care about under the timelines of.

correct. these are the foxhole scenarios. that matter to us. This is the national. defense strategy. This is this is who. we're trying to deter and when. And work. that backwards to based on what I'm. spending and building, does any of that. stuff matter? Will it be there in time? You know, and and I think the Department. of Defense is the only institution I. know of that has divided up supply and. demand. You know, the the process of. integrating supply and demand is usually. the beating heart of a commercial. company. this sales and operation. planning process. People have different.

names for it. In the department, we ask. the services to go build things. That's. the supply side. And we ask the. combatant commanders to do the war. fighting. That's the demand side. They. have to respond to real world events. They don't really get that much of a. vote in terms of what's happening here. We have a lot of control over what's. happening here. Um, we have ideas about. the scenarios in the world we care about. making sure don't happen. How do we. integrate these things so that we. understand like you know what it. actually would be better to buy a less. capable weapon system we can make seven. times faster at a lower price point.

because the other stuff's not going to. be ready in a time that's relevant to. anyone right it's just running headless. by doing this now and I think if you had. that it becomes the first way you can. have meaningful conversations like yes I. know there are jobs in your district but. do you understand how you're actually. going to sacrifice American prosperity. we are going to lose over a hundred jobs. in your district And I think that. becomes now you've changed turned the. tables on what is politically survivable. with Palunteer. Palunteer you guys.

aren't only in software. You also have. vehicles you're making. The Titan Tenner. I mean could you go into those a little. bit? Yeah the Titan truck is a satellite. ground station on wheel that's really uh. wheels that's really about enabling long. range precision fires. So, how can we do. deep sensing of the battle space to. enable uh precision fires of the enemy. deep in their territory? What I think is. really cool about the Titan program is. that we were the first software company.

to win as a prime contractor. It is a. physical thing. We still don't think of. ourselves as a hardware company. Uh we. we we've built a team of super friends. of power horses. Androl, North of. Grumman, uh, L3 Harris, Sierra Nevada, they're helping us build this thing. But. what makes, you know, the truck in some. sense is a commodity. What's in the. shelter is what's doing the the AI. that's finding the enemy on the battle. space, using national technical means, using satellite communications, doing.

the processing, processing, exploitation, and dissemination on board. of this with a twoman crew. So very very. efficient and enabling then the the. transmission to the gun line to actually. go destroy and close with the enemy. Uh. and building this around the software. first. What does the software need to. do? That is our lethal capability. then. how do I make it as amazing for the war. fighter as possible as a consequence. rather than doing what we've done. backwards so many times is we have this.

hardware platform and then we're. constrained by what software can we put. in there and it's not good enough and. it's not adaptable and there's not. enough compute you kind of designed it. backwards and this is one of the. paradoxes so if you're if you're a true. historical hardware company you know you. can think about like building a house if. you're building a house you got to build. the foundation first you are entirely. limited by the foundation. software is not like that. With. software, you got to build the kitchen. first and you build the rest of the. house around the main thing. Um, and now.

we're starting to see that culture enter. into defense. That's that's what Tesla. does, right? That's what SpaceX. So, in. defense, we're starting to see that. happen where people are taking very. sophisticated next the next generation. of platforms and they're starting with. the software first approach. What does. this platform need to do? What are the. threats? What do I need to be able to. sense? Would I need to be able to. affect? Can I even build that compute. first? Which, by the way, goes pretty. quickly. That you can measure that in. months, not years, not certainly not. decades. Once I get that right, now I.

have the constraints around what I can. build my airframe or my land vehicle or. my submersible around because I know it. can accomplish the essential mission. that I need and has the capabilities to. do it. And you don't end up in these. situations like with the Frigot where. you buy the Frigot, you make a bunch of. changes along the way, and you realize. it won't float. you know, like the whole. thing is for not because you didn't. start with the the softwarebased. approach. What about the the boat? Yeah. So, the same the same concepts apply to.

um uh surface vessels and submersibles. and to airframes actually where you're. really thinking about what do I you. know, our our big challenge in the. Pacific is um how do we get inside the. weapon engagement zone? You know, the. enemy has been able to really build up a. lot of air defenses and hypersonics, and. they they can threaten and hold us at. risk when we're inside of this. engagement zone. We don't have. sufficient defenses. So, maybe we need. to be able to build a bunch of. relatively attritable, but certainly. autonomous systems that don't have risk.

to force uh that enable us to do the. sensing we need to create the maneuver. space we need. Uh and so there with with. Tenibus, it's really about using. commoditized approaches to building. ships so that we we're not relying on an. industrial base that can absorb more. capacity and then adding the mission. specific payloads that are highly. exquisite and highly classified um and. modular at the point of need. Um, and. using that is, you know, it's not just. about this ship or this family of ships, but really a family of capabilities,

whether it's. space, air, sea, land that give you this. sort of softwaredefined approach to. warfare. Does anybody else have these type of. technologies, any adversaries? This is I you know I think software is a. unique American strength and it really. comes down to culture because it's not. about I look there are smart people. everywhere in the world right but think. about it this way there are zero Indian. enterprise software companies that are. competitive on the world stage.

uh there are zero Chinese enterprise. software companies Europe only has a. handful and they're they're pretty. legacy so what is it about America that. we have all of this software expertise. and it's cultural. Sometimes people look at Silicon Valley. and they think maybe we imported this. culture from India or Israel. We didn't. We imported it from Iowa. It came from. Bob uh who is the co-founder of Intel, the co-inventor of the Transistor. It. comes from a Midwestern culture, a.

willingness to play positive some games, open communication, transparency, a. belief in working together. He brought. that with him. The word open door policy. noise coined that. It's a noism. And. there there's a way in which this. Silicon Valley doesn't even understand. how much we are the progeny of this. noise and this noisian culture. Um and. that's really permeated so much of how. we organize ourselves to be able to. build software at a scale that is world. beating by a long margin. Like the. second best country in the world is. Israel and they can build canoes not.

aircraft carri they can't get the. culture of collaboration to scale to the. even close to the level that that we. can. This is why you see like most. Israeli founders when they found their. second company, they moved to New York. to start it because you're you're just. not going to get it. You're not going to. get the big success that you want. otherwise. And so then I think we should. lean into that. Look, you're not going. to win the war by shooting bits at your. adversary. At the end of the day, you. have to bend metal. Like hardware is a. critical capability, but we should do it. asymmetrically. Our hardware should be. way smarter than our adversaries. That's.

something that we have the capability. uniquely to do. Even when you think. about deepseek which you know we have. this Chinese AI model you could see two. things from it. One. um they couldn't have built that model. without essentially distilling or. stealing this from open AI. So you. needed the requisite open AI investment. and then two they they did come up with. a couple of very clever software. optimizations like novel innovative. things that represent meaningful. refinements on what's been happening. here. But it is a refinement that as a.

precondition required it's not a. coincidence that all the frontier AI. labs are within 50 mi a 50 mi radius in. San Francisco right that density of. talent and the culture that's required. to organize around it is uh an American. superiority. What could go wrong with this stuff? I. mean could could an adversary. potentially hack. into our hardware or software as much as. they could today? you know, um I don't.

think I don't think it changes the. nature of the risks. The risks are the. same. You know, we still have to care. about cyber vulnerability and and. protecting ourselves and the adversaries. will have those vulnerabilities as well. Um I think the biggest risk is really of. inaction. This I was very frustrated. around the the constant AI safety. conversations because one I think it was. grossly overdone. We're really far away. from if you understand the technology. like the Skynet fear is wildly overblown. and almost like a conspiracy just to. slow everything down. Uh but the other.

thing is it's really about who is the. best at implementing these things, right? You can think about AI supply and. demand. The supply side is the model. These models, they took billions of. dollars to build. They can write poetry. They can do all these things, but who. cares like what's where's the economic. value or the decision advantage on the. battle space? That's the demand side. So, who's like leading the world at. implementing these things? AIG just just. discussed at their investor day earlier. this week how they've used 85 AI agents. built in Palunteer to automate their.

insurance underwriting. So, when when. you look at a solution like that, you. could say, okay, it used to take 3. weeks, very manual. Now, it takes 1. hour. There's a huge labor savings. there. But that's not actually what's. valuable about it. What's valuable about. it is they used to only be able to price. roughly 10% of the customer requests. because it was just too much work. Now. they can price 100%. They can take the. best and least risky assets and. underwrite that business and leave the. rest for their competitors. So you're. actually saddling your competitors with.

risks they probably shouldn't be taking. because you have a decision advantage in. doing that. Uh and so we need to be the. best at implementing AI for economic. value whether that's on the battle space. or in our companies. And I I think. there's a lot of promise in doing that. right now. If you look at Europe, they're still a little bit more than a. little bit. They're asleep at the wheel. at the pace at which they're willing to. move, the way they want to think about. it, the consensus driving versus you, you feel it in the American commercial. sector. People have rolled up their. sleeves. They are getting in, they're. experimenting, they're iterating. Like.

AI is just not something you can think. your way through. It's something you. have to have a lot of experience and um. um as a consequence develop expertise. in. Who who else should we be watching. out for other than China and the. cartels? I think we should be thinking. about the coalition China is able to. build, you know. Um could Iran be nearly. as successful as they are if the Chinese. were not buying oil from them? You know, uh what role did China have in stepping. in to support the Russian and Russian.

operations? Pretty substantial. You. know, why are North Korean soldiers on. the front lines in the Ukraine conflict? What is the trade that's happening? you. know, North Korea's submarine fleet, they have a lot of submarines, I think. on the order of 300, but they're all. diesel. They're all loud. They're all. legacy. Um, you know, we we have to make. sure that there isn't proliferation of. certain technologies that are going to. make them harder to see that there might. be sort of the deal, the trade that's. happening behind the scenes here. So, that we have this this kind of coalition. of adversaries. Um, might be a weak.

coalition. They might have their own. frictions between them, but I think at. at the root of it is the CCP trying to. be the the sole superpower in the world. and. undermine western. prosperity. Uh, and then they're going. to have a coalition of folks who share. that interest as well. Are you worried. about bricks at all? Are you familiar. with bricks? Yeah. Yeah. I view that as. a as as an economic threat to our. prosperity. Of course, you know, we have. the exorbitant privilege as as sometimes.

it's called of the dollar as a reserve. currency and um we need to fight to. maintain that. Uh. and the economic alliances that enable. people to undermine that will weaken. us. Let's talk about wrapping up the. interview here. The premise of winning. defense reformation thesis number five. only requirement is winning. We have come up with the most Byzantine. acquisition process you can possibly.

imagine where um you have to somehow. generate a requirement of what it is. that you want to buy. You were sharing. with me with with me that you bought a. $10 skateboard helmet as your combat. helmet when you went to work cuz the. other one was too heavy and. uncomfortable and it didn't work. It. didn't work. So, you know, you have your. set of requirements, what it is that you. need to go out there and fight. And. whatever was standard issue was just not. it. And actually, yesterday at Bragg,

soldiers were telling me they'd go out. on mission, come back with marks on. their head, helmet's uncomfortable, it's. crushing them. Well, one of the. requirements for the legacy combat. helmet was that it must be able to. withstand a Humvey, one wheel of a. Humvey being on top of it. Who decided. that was the requirement? You know, how. realistic is that as the end scenario? So what you get is an overly heavy. helmet that is not comfortable and. doesn't work and probably costs a lot as. as missions happen. So this requirements.

process is divorced from the actual. application. And I I think we need to. just remember this requirements process. is an approximation of what we think we. need. The only thing that matters is. winning. So, can we work backwards from. what it is that that is actually winning. and where the requirements get in the. way, recognize that was a suggestion, you know, get rid of that [ __ ] Don't. don't don't be so wedded to the playbook. that you don't have the common sense God. gave a goat. You know, when you need to. bend the rule to do the right thing, you.

got to do that. Um, we've wrapped. ourselves up around this stuff and it. leads to it leads to all sorts of. programs that have met all the. requirements and are irrelevant. We. spend all sorts of national treasure on. doing that. You know, this is where I I. I feel like if you integrate the per the. person as the program, you know, Heyman. Rickover could decide his own. requirements as he's building the sub. Gene Cray could change what he thought. he needed for Apollo is getting done or. John Boyd on the F-16 like the original. requirements document for the F-16 was. seven pages. That's how condensed and.

you know, as Mark Twain Mark Twain has. that quote, I didn't have time to write. you a short letter so I wrote you a long. one. when you get these 2,000page. requirements document almost rebuttably. you should think this is this is crap. you know why is this gonna work no one's. had the clarity of thought of what we. really need and what what's essential to. to getting this done you know I love. that you are going to brag and and. sounds like you guys are kind of. integrating in all over the place and. and um I mean I I wish I would have had.

that when I was in you know where we. could just articulate what we needed and. what we wanted and somebody like you. guys could implement it and get it back. to us and and how open is I mean I don't. I don't know if you guys are dealing I'm. sure you are. How open is uh Secretary. Hegs to to making that happen? Incredibly open. I mean I think he to. the point of common sense like this is a. common sense administration. They. completely recognize the the the value. of dualpurpose companies. People are. putting their own capital at risk to.

build things and you know if the. customer doesn't like it, guess what? You're out your capital. You know that's. that's a you problem. Like, but yeah, that's how American industry works. You. show up, you invest, you build things, you lean in, you have conviction. And I. I think the new team completely. understands the value of a commercial. first approach. Understands the value of. speed. We don't have time to lose. The. idea that things should get cheaper over. time, not more expensive over time. Uh. it's an opportunity to reimagine the. industrial base and I think there's a. tremendous amount of support. Are you.

guys integrating in with uh law. enforcement at all? it um certain maybe. on the border uh you know the the law. enforcement is not a market that we've. historically focused on just given how. many there are but I think make America. safe again is a huge priority so justice. department so federal law enforcement uh. will be a focus for us as we turn to the. next kind of couple years here um. probably not state and locals. well Sean I think that pretty much wraps. us up unless there's anything I'm.

missing no I think we covered everything. thank you Sean thank you. I really. appreciate you coming. This kind of find. fascinating. So, thank you guys. [Music]. [Applause]. Absolutely. No matter where you're. watching Shan Ryan Show from, if you get. anything out of this, please like, comment, subscribe, and most. importantly, share this everywhere you.

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