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

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Speaker 4 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.

Speaker 6 Hot news right now is, you know, the tariffs just came out yesterday. I'm just curious, what are your thoughts on that?

Speaker 4 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 three-week data call.

Speaker 6 Are you serious?

Speaker 4 So Operation Paperclip was our covert action to bring the very best scientists from Nazi Germany to the U.S. to enable our defense program, in particular our rocket and space program.

Speaker 6 How worried do we need to be about China?

Speaker 6 Sean Sankar, welcome to the show, man.

Speaker 4 Great to be here. Thanks for having me, Sean.

Speaker 6 Yeah, my pleasure. We had Joe on, what, maybe...

Speaker 6 Four months ago-ish.

Speaker 6 And man, I'm just fascinated with what you guys are doing over at Palantir. And it is just, I'm super excited about this interview.
And I want to dive more into that.

Speaker 6 And you've got a hell of a life story. So I'm really excited to do this.
Thank you for coming.

Speaker 4 Thank you.

Speaker 6 But

Speaker 6 everybody starts off with an introduction here. So,

Speaker 6 Sham Sankar, Chief Technology Officer and Employee Number 13 of Palantir Technologies.

Speaker 6 BS in Electrical and Commuter and Computer Engineering from Cornell University and an MS in Management Science and Engineering from Stanford University.

Speaker 6 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.

Speaker 6 I love that. Dedicated your career to upending institutions that are failing American people, starting with the government.

Speaker 6 The Defense Reformation is your manifesto, which you can read at 18thesis.com. Your goal is to fix the way our military buys weapons and wages war so that America can always win.

Speaker 6 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.

Speaker 1 I love that quote, man. But,

Speaker 6 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,

Speaker 6 it's fascinating, and I think it brings a lot of hope. I mean, you've earned everything that you've accomplished.
And I just, I absolutely love these type of stories.

Speaker 6 So, once again, thank you for being here.

Speaker 4 No, thank you for having me. I'm just, I'm just really grateful for everything this country has given us.

Speaker 6 Me too. Me too.
But everybody gets a gift.

Speaker 6 Amazing. Sleep 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 in RFK. It's going because,

Speaker 6 you know, it's got all the bad shit in them, but I love it. But they taste good.

Speaker 6 And then one other thing before we get in the weeds, I've got a Patreon account.

Speaker 6 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 because we had a kid.

Speaker 6 She's like, get all these people out of the house. And

Speaker 6 then now

Speaker 6 we're building a new studio that's going to be about three and a half times the size of this one. It should be done in about three months.
You'll have to come back and see it. But

Speaker 6 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 O'Malley.

Speaker 6 Will the massive capacities of quantum computers influence the balance of power once they're leveraged as offensive tools?

Speaker 4 Yes, absolutely. Quantum, quantum surprise, staying ahead of it, understanding its implications.

Speaker 4 One way of thinking about it is there's nothing new under the sun. There's just the OODA loop.

Speaker 4 And what is quantum's implication on how quickly you're going to go through John Boyd's observe-oriented decide-tact OODA loop? I think it has exponential implications on that.

Speaker 6 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 is it?

Speaker 4 I think that it's really like millions of times faster, is the way to think about it. It's like you can compute,

Speaker 4 it uses quantum mechanics to do the computation, and you're able to compute

Speaker 4 enormous permutations and combinations of things at incredible speed. The most obvious implication is it breaks all of our legacy encryption.

Speaker 4 So your ability to communicate securely and to the extent anyone has been storing historical encrypted communications, their ability to decrypt that

Speaker 4 will be near instantaneous. So it has huge implications there.

Speaker 4 But then for your ability going forward now, like that you're going to have to adopt that so you have quantum proof, quantum encryption that works.

Speaker 4 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?

Speaker 6 How close are we to that?

Speaker 4 Well,

Speaker 4 that's kind of an open question. 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

Speaker 4 we'll have to see.

Speaker 6 Who else is working on it in the world?

Speaker 4 The Chinese.

Speaker 6 Great.

Speaker 6 Great. Well, we're going to talk a lot about China in the interview, too.

Speaker 1 But

Speaker 4 getting into the interview,

Speaker 6 I mean, you grew up in a mud hut in India.

Speaker 6 So

Speaker 4 my father did.

Speaker 6 Your father did. Yeah.

Speaker 4 So my father was the last of nine children in a single, he grew up, he was born in a single room mud hut in the south of India.

Speaker 4 And

Speaker 4 his siblings all helped him get to college. You know, and India had its own version, still does have its own version of DEI there.
So he was not allowed.

Speaker 4 He's a 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.

Speaker 4 And he was sleeping after he graduated from pharmacy school. He was sleeping literally under the kitchen table of one of his brothers.

Speaker 4 And

Speaker 4 his sister-in-law brother's wife got kind of tired of having him 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 went to nigeria as a pharmacist to build the first pharmaceutical 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 seven years after he'd been living in nigeria my mom went back to india to have me And then I came back to Nigeria as soon as you know, as soon as I was old enough to travel.

Speaker 4 So I really, my first three or so years of my life, I was in Nigeria.

Speaker 4 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 the operation.

Speaker 4 And so it was a little bit of an inside job of people who worked there who did this. They decapitated the dog.
They threatened. They pistol whipped dad.
They threatened to execute him.

Speaker 4 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.

Speaker 4 Dad was only spared because one of the five armed robbers was a regular at my mom ran an open kitchen.

Speaker 4 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.

Speaker 4 And so this guy was a regular and he just, you know, he just made sure they didn't kill us.

Speaker 6 Wow.

Speaker 4 And so we left all of our earthly possessions behind and had to find a place to resettle.

Speaker 4 Dad had a friend who somehow, just, you know,

Speaker 4 how life works, had moved to LA, a friend that he grew up with in this, in this village, moved to L.A. and he was selling knickknacks to theme parks.

Speaker 6 He went from pharmaceutical manufacturing to selling knickknacks in the States.

Speaker 4 So this friend was like, you know, there's this place Orlando. I live in L.A.
There's this place Orlando. All the theme parks are moving there.
I need someone I can trust there.

Speaker 4 And that's how we ended up in Orlando selling knickknacks to theme parks,

Speaker 4 which was fantastic. You know, for me, it was fantastic.
My after-school care program was really mom would pick me up from school.

Speaker 4 We'd go to SeaWorld so she could restock the shelves and I'd be, you know, petting the stingrays.

Speaker 4 So I thought that was normal. I didn't quite realize that, you know, what a what a unique experience it was.
Now, there were some downsides to this.

Speaker 4 You know, some of the knickknacks 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.

Speaker 4 You know, it's like everything that went wrong. That was the free clothes I got to have.

Speaker 4 But it was also really a privilege to grow up in the shadow of the Space Coast.

Speaker 4 You know, Orlando's really, it's close enough that in elementary school, you would file out to the courtyard to watch the shuttle launch.

Speaker 4 You would wake up Saturday mornings to a double sonic boom of the shuttle re-entering.

Speaker 4 And 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 well 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 passed away in 21.

Speaker 6 i'm sorry to hear that sorry to hear that

Speaker 6 so you grew up i mean you're an entrepreneur

Speaker 6 when did the entrepreneurial mindset kind of kick in for you

Speaker 4 uh at a pretty early age because my dad in some sense you could say was also an entrepreneur, and he was always encouraging me to think about these things. And

Speaker 4 I worked at his pharmacy in Orlando as a child

Speaker 4 in high school.

Speaker 4 I started programming

Speaker 4 11th grade. I started programming professionally and kept doing that.

Speaker 4 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 these sorts of efforts.

Speaker 4 And I knew that ultimately I 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

Speaker 4 technical classmates unfortunately went into consulting and banking. You know, there's nothing wrong with it, but it's not the same thing as creating.

Speaker 4 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 their life's mission.

Speaker 4 So within two months of being at Stanford, I had a full-time job as the fifth employee at a startup called Zoom with an X that did international money transfer.

Speaker 4 It was seed funded by Peter Thiel and my interviews were with Roloff Botha and Keith Raboy, who are founding members of the PayPal Mafia. And that's how I kind of got started in that world.

Speaker 6 Man, that's it seems like all you guys know each other pretty well. You and

Speaker 6 how did you meet Joe?

Speaker 4 So

Speaker 4 I had been working at Zoom for almost three years. And one of the colleagues I was working with said, you know, there's this company that just sounds perfect for you.
It's a small group of people.

Speaker 4 At the time, it was 12 people.

Speaker 4 And my freshman room dorm mate at Stanford is one of the co-founders.

Speaker 4 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.

Speaker 6 Wow.

Speaker 6 I love talking to him, man.

Speaker 6 He's like such a fascinating guy. But

Speaker 6 so what was Palantir

Speaker 6 at the start, at the beginning?

Speaker 4 It was honestly something much smaller.

Speaker 4 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.

Speaker 4 And we had this idea that in the, you know, the discourse, if we can remember what it was like immediately post 9-11, it was really the political discourse was something like, what matters more, security or privacy?

Speaker 4 And it's like, to us as engineers, that sounded stupid. Like, don't those both thing, don't both of those things matter?

Speaker 4 And so, you know, politicians, they debate where should you be on the efficient frontier? Should we trade off this to have more of this or whatever?

Speaker 4 But engineers, they build things so you can have more of both. And so who's going to build the actual technology that allows us to protect the data?

Speaker 4 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.

Speaker 4 And recognizing that a solution that was really going to do that would have to span countries.

Speaker 4 you know one of the proudest operations that we were involved in was defeating an isis cell in uh in iraq that had a downed u.s drone that they were going to load with explosives and bring to a hospital explode it and then blame it on the coalition

Speaker 4 and to solve that problem it required intel from the danes the Americans and the Brits.

Speaker 4 And how does that work historically?

Speaker 4 Hopefully you have friends at each of these services, and you're all going to share information, and it gets through the foreign disclosure process.

Speaker 4 And, you know, everything in that methodology is set up so that we lose. You're not going to be able to do it fast enough to intervene.

Speaker 4 But, you know, our technology enabled that to happen machine to machine in a way that

Speaker 4 before they could get the drone out of their garage, they were gone.

Speaker 6 Wow. I mean, so what

Speaker 6 even after interviewing Joe,

Speaker 6 I'm still trying to figure out what, I mean, what Palantir does does and

Speaker 6 how it deciphers all that information. I mean, just a couple.
You guys are in anti-money laundering, rail, energy, defense, insurance, semiconductors, utilities, retail.

Speaker 6 I mean, there's got to be a list of at least 30 things.

Speaker 4 Yeah.

Speaker 4 Well, 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.

Speaker 6 Okay.

Speaker 4 So, and it's about 50-50,

Speaker 4 which is unusual, I think, for reasons we'll maybe get into later. But the commercial side, it's 50 different industries, energy and mining, insurance, pharmaceuticals.

Speaker 4 And the government side, most of what we're well known for is defense and intelligence. Absolutely.
That's two-thirds of the business. But also health, the IRS, tax fraud, Justice Department,

Speaker 4 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.

Speaker 4 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?

Speaker 4 I, as the principal, not just the human, but I as the principal. Like, what's my model for this? What are the questions I want to ask? Simple example.

Speaker 4 When Rocketman 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 three-week data call.

Speaker 6 Are you serious? It takes three weeks to get an inventory.

Speaker 4 So we got involved. It took three 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?

Speaker 4 So the way you would do it is you would send down the data call to all of the units. They'd go check out the motor pool.
They'd come back with the answer.

Speaker 4 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.

Speaker 4 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...
extant reality. We have to deal with this messiness.

Speaker 4 Sometimes, you know, the cynical way to think about Palantir is it took something as sexy as James Bond to motivate engineers to work on a problem as boring as data integration.

Speaker 4 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.

Speaker 4 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.

Speaker 4 People have been running around saying, data is a new oil, data is a new oil. I think data is the new snake oil.
There's nothing inherently valuable about data.

Speaker 4 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?

Speaker 4 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.

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Speaker 6 So, I mean, just for example, the downdrone that ISIS was going to move into a hospital and blow it up and blame it on us. I mean, what kind of data are you guys

Speaker 6 feeding

Speaker 6 Valentir to make those type of decisions and to speed the process up.

Speaker 6 Like just for example, so

Speaker 6 I'm a former SEAL. I hear that and I think, okay, well, let's go raid the compound while they're doing that, kill all the bad guys and recover the drone.

Speaker 6 And so the decision seems fairly, I mean, obvious, in my opinion.

Speaker 4 The decision is leading up to the point where you realize that's what they're trying to do.

Speaker 4 How do I integrate the human reporting that I have that tells me what might be going on?

Speaker 4 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?

Speaker 4 Who even knows that sharing it is going to lead to a mission-critical outcome that saves lives? So how do you start to automate more of that? How do you help them piece those things together?

Speaker 4 How do you combine the technical collection you have with this too?

Speaker 4 So maybe you have SIGINT 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.

Speaker 4 How do I use my historic FMV footage, observations of that compound that help me piece together more things that lead to the conclusion we've got a problem here and we've got a tight timeline to address?

Speaker 6 Holy shit. So it's so basic.
So am I right if I say

Speaker 6 contractor for the agency,

Speaker 6 operator for the Navy SEALs, I saw how inefficient government communication is just within U.S. stuff.

Speaker 6 CIA, FBI, DA, MIL, 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

Speaker 6 entities are feeding Palantir the information. And then Palantir basically, what, what,

Speaker 6 disseminates, or not disseminate, but processes the information and gives you the probability of what is likely going to happen.

Speaker 4 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.

Speaker 4 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.
Okay.

Speaker 4 The government has the data, great, but it's just sitting there. It's in the dark.
It's hard to see all of this information. It's overwhelming.
Great.

Speaker 4 How do we get the spotlight to highlight the things that actually matter? How do I get to ask the next question? So

Speaker 4 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?

Speaker 4 If it takes you 10 weeks, you're not even going to bother answering those questions. So can I make that fast enough that you get to why does this matter? And is this a threat or is this irrelevant?

Speaker 4 That's the first part of it. The 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.

Speaker 4 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.

Speaker 4 We replace that enforcement with software. The software ensures no one can see anything they're not allowed to see.

Speaker 4 The software ensures, under the right conditions for information sharing, the right pieces of information flow from one agency to the other.

Speaker 4 So, by automating that flow, it means that you kind of have a hive mind.

Speaker 4 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.

Speaker 4 You know, it's not,

Speaker 4 the mission gets obfuscated by, well, we do this job, they do that job, and the interpersonal factors get in the way.

Speaker 6 Wow. So, what was it at the beginning you guys were doing back when you were employee number,

Speaker 6 when you came on as employee number 13?

Speaker 4 Well, you know, it was really hard because none of us had worked in government. None of us had clearances.

Speaker 4 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 congressman.

Speaker 4 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 from them.

Speaker 4 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.

Speaker 4 And we had to do all this kind of notionally to begin with on low-side synthetic data until we got to a threshold of conviction. And that threshold of conviction, I mean, almost to the point,

Speaker 4 it started because of a renegade analyst. And I think she's been a prior guest of yours, actually, Sarah Adams.
No kidding.

Speaker 4 Yes, so Sarah Adams, so Incutel brought a fresh, bright-eyed, bushy-tailed cohort of CIA analysts out to the West Coast. We were maybe 20 people at the time.
We were one of the stops along the way.

Speaker 4 And she saw the demo and she's like,

Speaker 4 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 WordPerfect and Lotus Notes, you know?

Speaker 4 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.

Speaker 4 At some point, the

Speaker 4 deep state, the I.T. 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.

Speaker 4 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 probably did

Speaker 4 300 demonstrations and meetings trying to get a single pilot. And that one day, she made it all happen.

Speaker 6 I'm going to have to talk to her about that. She's been holding out on me.

Speaker 6 Wow. So you guys were in defense tech at the very beginning and then it grew into all these other.

Speaker 4 It was always about defense. I mean, I'm very happy we have a commercial business.
It powers a lot of innovation.

Speaker 4 And frankly, a lot of the things we learn in commercial, we're able to bring over to give the government decisive advantages. You know, we're able to amortize the R ⁇ D.

Speaker 4 Ideas that BP or ABIS have make the Army better. That's one way of thinking about it.
But we really started because we cared about the government mission.

Speaker 4 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.

Speaker 6 Wow. What was the, I mean, what was the pushback from when you're saying the deep state was trying to pipe it down a little bit?

Speaker 4 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

Speaker 4 I recently met someone who was in Kwajalane in, I think it was 2014 when SpaceX was launching their early rockets. You know, Elon was one launch.

Speaker 4 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.

Speaker 4 And you go to the SpaceX facility 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.

Speaker 4 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.

Speaker 4 But you fundamentally misunderstood what was happening there. It's not where are they today.
It's

Speaker 4 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?

Speaker 4 Like 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.

Speaker 4 With Starship heavy reuse, it'll be 10 to 20 bucks.

Speaker 4 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.

Speaker 4 Who are these kids running around in shorts? You know,

Speaker 4 I remember one early meeting I had in the Pentagon, I didn't wear a tie. I mean, I wore a suit, everything except for a tie.

Speaker 4 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 lost the plot.

Speaker 4 Like, the substance is the code, not the quality of my tie. It's the quality of the code.

Speaker 6 Wow. Do you guys,

Speaker 6 even still to this day,

Speaker 6 let's stick at the beginning right now? I mean,

Speaker 6 you've really disrupted, I feel like you've really disrupted the military-industrial complex, the legacy companies, Lockheed Martin, Boeing, Braitheon,

Speaker 6 Insert, whoever. You know, I mean, was there a lot of pushback from them?

Speaker 4 There was.

Speaker 4 There's a lot of pushback. There's a lot of

Speaker 4 kind of fake partnerships, you know, like, hey,

Speaker 4 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.

Speaker 4 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.

Speaker 4 You know, when the way that the government structured,

Speaker 4 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.

Speaker 4 Instead of adopting us, you know, they wanted to reject us. And so, if you really look at the early days of Palantir, all of our adoption was driven from the field back.

Speaker 4 You know, so all of our attempts to get people in DC really interested in what we're doing

Speaker 4 in benefit of hindsight was wasted time.

Speaker 4 Our first deployment was with 10th Group as they took over Siege of Sotif AP in Balad.

Speaker 4 And it's because the commander, the colonel, it's just like three days before deploying, he called us up. We had been showing him our software.
He's like, Well, I don't know. Like, I don't buy things.

Speaker 4 I'm a war fighter. I don't buy things.
And three days before you're going, he just had that feeling, like, I need this.

Speaker 4 Like, if you guys come, drive to Fort Carson, palletize your, I'll palletize your servers and I'll I'll give you four seats.

Speaker 4 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?

Speaker 4 You know, two weeks. But after that, we earned our keep.
They're like, I know why they're here. You were over there?

Speaker 4 I didn't go on that trip, but Matt Grimm, who is one of the co-founders of Andrew, was working for me at the time. He went over on that trip.

Speaker 4 Greg Barbachia, who's now the federal government CIO, he was one of their first guys guys on the ground in balad

Speaker 4 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 yeah i've been there dicey spot

Speaker 4 but

Speaker 4 that was 2012 my or 2011 2011.

Speaker 6 no i was there around that time

Speaker 6 interesting

Speaker 6 What was so tell me about it? How did that experience go for you?

Speaker 4 I mean, we would have these,

Speaker 4 it's like a cup of motivation undersells it. It's like a water tank of motivation.

Speaker 4 You know, you have these people, they come back from mission, they tell you what happened, they tell you their ideas, their feature requests, and you just have unbounded energy to code right there.

Speaker 4 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 whole product development life cycle.

Speaker 4 That was really, I was the first forward deployed engineer at Palantir, which investors hated because they thought it was a service business, not how you're supposed to do software.

Speaker 4 Everything about it was wrong to them, but it was so clearly right for our users.

Speaker 4 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 that you can observe not what people in headquarters think.

Speaker 4 the software 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.

Speaker 4 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.

Speaker 4 And it's also, by the way, how you say, you know,

Speaker 4 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.

Speaker 6 Man, I love that way of thinking. I mean, I think like that

Speaker 6 just doing the podcast, which,

Speaker 6 but, you know, I just, and I find whatever, whatever sector I'm operating in,

Speaker 6 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?

Speaker 6 There is no box to think of. And so I'm always looking for ways to innovate this and

Speaker 6 to not go by the typical roadmap that everybody expects you and wants you to follow. And

Speaker 6 you guys like

Speaker 6 nailed it.

Speaker 4 Nailed it. Well,

Speaker 4 to take credit away from us and give it to our customers, I think, you know, first of all, this kernel 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.

Speaker 4 And that was the beginning of a much longer fight. As that became successful, more and more people,

Speaker 4 you know, the first thing they do when they they would deploy would put in an urgent operational need statement to get Palantir because what they had wasn't working. And,

Speaker 4 you know, some of those people did suffer career consequences for doing the right thing and doing that. And you knew you had to deliver for them.

Speaker 4 But the other part of it is really without their partnership. It's like the good ideas don't come eating strawberries in Palo Alto, right?

Speaker 4 They come on the fire cells of Djibouti and the factory floor of Detroit where you can see firsthand what's happening and not. And that's all of the inspiration, all of the creativity.

Speaker 4 It comes from that environment.

Speaker 4 And, you know, I think now this methodology has become more commonplace. People talk about forward-deployed engineering.
Companies are building around it.

Speaker 4 And I think it's great because 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?

Speaker 4 Why is there so much fraud in our government system?

Speaker 4 We should be looking really hard at this.

Speaker 4 And I think it's because we've just been doing it wrong. We haven't been holding ourselves accountable to the primacy of Wing.

Speaker 4 It doesn't matter what box of software you thought you were going to make. Everyone living inside that box

Speaker 4 does it work?

Speaker 6 Does it matter?

Speaker 4 What could you change that it worked better tomorrow?

Speaker 4 And are you impatient enough to go drive that change? And a lot of that comes down to

Speaker 4 institutionalizing rebellion.

Speaker 4 There was nothing that headquarters was going to tell our engineers in the field that would make them better at coming up with the next feature.

Speaker 4 That was going to to come out of their own crazy creative ideas being really right next to the problem.

Speaker 4 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.

Speaker 4 And that's led to this philosophy at Palantir that we are not a factory, we're an artist colony.

Speaker 4 Like my job is to find Dali and Monet and don't do stupid things like yell at Monet to paint more like Dali. Like each of these people are unique artists.

Speaker 4 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 help them, you know, just like an artist.

Speaker 4 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 best work.

Speaker 6 Interesting.

Speaker 6 You guys,

Speaker 6 Palantir sued the government towards the beginning, correct?

Speaker 4 Yeah, in 2016, we sued the Army. Because we were unable to compete on their Army Intel program.
So

Speaker 4 the story is like all these units, as they would deploy, they would request Palantir.

Speaker 4 The reason they had to request Palantir is there was an Army program of record, as the government calls it, called D-SIGS.

Speaker 4 And D-SIGS A was, you know, it was the blessed system that was supposed to do Army Intel, except it didn't really work. $26 billion, many years of development.

Speaker 4 And you would honestly find it, you know, when the generals came, people would turn it on and pretend like it worked, but it was a paperweight to them.

Speaker 4 They would just, you know, store, it was just sitting there collecting dust.

Speaker 4 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 recompete and we wanted to compete to win it.

Speaker 4 The way the army structured it precluded us from competing. 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.

Speaker 4 Which is illegal, it turns out, which is why we sued.

Speaker 4 There's a law from 1994 called the commercial item preference that if a commercial product exists, the government is not allowed to go custom develop something because that's risky, probably going to cost you a lot more.

Speaker 4 And as a philosophy, we'd rather tie our investments to things the commercial world has adopted because it means it probably works. It's been de-risked.

Speaker 4 The hyper-competitive free markets are voting on and providing the stimulus to keep making it better. It's going to be cheaper.

Speaker 4 So we sued them.

Speaker 4 It went to appeal. We won on appeal.
So it's a very, very strong precedent. But I think the key lesson from that really is like how hard it is to change just the momentum in the bureaucracy.

Speaker 4 And one of my favorite anecdotes is there was a contractor working on this legacy D6A system in his civilian job, but he was a reservist. He got flipped to active duty and deployed to Afghanistan.

Speaker 4 The first thing he did when he hit the ground was put in an ons for Palantir. So when his life was on the line, he knew what he wanted to back.

Speaker 6 wow wow what are some other

Speaker 4 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

Speaker 4 other places philippines djibouti

Speaker 4 supporting you know ODAs. We'd get on the on the little,

Speaker 4 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,

Speaker 4 make sure that their Ford laptop, like they would take their laptops to do key leader engagements, where like all of the intel was really coming back.

Speaker 4 And when you were alone and unafraid and disconnected, like this was, this was your brain. This is how you were coordinating things.

Speaker 4 A lot of the value was doing our part.

Speaker 4 You can't do it all, but doing our part to change the nature of the conflict from being 17 one-year-long wars to really creating continuity.

Speaker 4 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 shit.

Speaker 4 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, we as the current team.

Speaker 4 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.

Speaker 6 Any close calls when you were over there?

Speaker 4 Not for me personally. Some of our teams definitely were under mortar attack and

Speaker 4 a few convoys that took some fire, but fortunately for us, no one got hurt.

Speaker 6 Right on, man. Right on.
You know, Poluntier sounds like

Speaker 6 one of the main philosophies is founders first or

Speaker 6 founder-driven. What does that mean?

Speaker 4 Yeah.

Speaker 4 I think one of the,

Speaker 4 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?

Speaker 4 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.

Speaker 4 And if you just follow the process,

Speaker 4 everything will work. Everything will be well managed.
My experience is it's all well managed into the ground.

Speaker 4 Whether it's a company or a country, there is no playbook. You know, it really comes down to human discretion, human decision-making, bold leadership, people with the right ideas.

Speaker 4 And so certainly in our history,

Speaker 4 it comes from one of our founders, Peter.

Speaker 4 It's called the Founders Fund. The whole idea is that really the value creation engine comes from the founder personality.

Speaker 4 And the most dynamic parts of our economy are led by founders. You could look at this by in Europe.

Speaker 4 Europe has created zero companies in the last 50 years from scratch that are worth more than $100 billion. Zero.

Speaker 4 We've created all of our trillion-dollar companies in America from scratch in the last 50 years because of founders.

Speaker 4 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.

Speaker 4 You know, this is a unique legacy of America that we should really be leaning into and embracing. And

Speaker 4 it's more than just, did you found a company? It's really a mentality, a personality.

Speaker 4 When you think about Bill Knudsen and how he mobilized us for World War II and built the Arsenal of Democracy, he's got a founder personality, or Admiral Rickover.

Speaker 4 You know, this guy, born in a Polish shuttle, came here when he was six years old.

Speaker 4 Short man, short stature, feisty. He was so hated at the U.S.
Naval Academy, they've actually torn his picture out of the yearbook.

Speaker 4 Zumwalt said when he was CNO, the Navy has three enemies, Soviet Union, the Air Force, and Hyman Rickover, one of his own. But he built the nuclear Navy.

Speaker 4 And that was really,

Speaker 4 by total happenstance after World War II, he went to visit Oak Ridge and he realized, holy crap,

Speaker 4 this could power an entirely different regime of sea power here and could give us the ability to keep our subs underwater more than an hour.

Speaker 4 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.

Speaker 4 And we kept him in place and he built one of our last remaining asymmetric advantages. That's a founder personality.

Speaker 4 Gene Krantz, who built the Apollo program, Kelly Johnson, who built 41 airframes in his life, including the U-2, which we still fly, and the oxcart, then the SR-71.

Speaker 4 These people did incredible things. And that's the promise of America.
We have these people who do incredible things.

Speaker 4 Don't squash them. Don't crush them.
Let their innovation thrive.

Speaker 4 And those people are in government. I think the reason JSOC was one of the first places to adopt us is you got a lot of founder personalities in JSOC.

Speaker 4 That's how that institution works. That's what happens on the ground.
They are entrepreneurs in a different domain.

Speaker 4 And so then for us, it's like, great, when you have someone who has the creativity and the vision, I can build a software Ironman suit around them.

Speaker 4 I know how to make them 100 times more lethal or effective in the business context than otherwise. When you have a manager who's just trying to follow the rules,

Speaker 4 maybe you can make them 10% better.

Speaker 4 And 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.

Speaker 4 And it's these founder personalities that push that reinvention, who see what could be and see what is broken and close that gap.

Speaker 6 So it's enabling that.

Speaker 4 Yeah.

Speaker 6 Love that. You know, you, you brought up the nuclear program in World War II.
And I heard you downstairs talking a little bit about Operation Paperclip.

Speaker 6 That's something I've just been fascinated to hear about, and I haven't had the time to dive into.

Speaker 6 What was that?

Speaker 4 So Operation Paperclip was our covert action to bring the very best scientists from Nazi Germany to the U.S. to enable our defense program, in particular our rocket and space program.

Speaker 4 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.

Speaker 4 But they were without exception the world leaders in this capability.

Speaker 4 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.

Speaker 4 And we did that. But I think what's really instructive about Operation Paperclip is there was two competing programs.
One was Operation Paperclip, and the other one was called Fiat.

Speaker 4 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.

Speaker 4 It was a catastrophic failure.

Speaker 4 It turns out there is something special about the human, separate and apart from just what they wrote down on a piece of of paper, that there's more to replicating these things than

Speaker 4 math. There is something about the human mind that's really relevant here.
And it underscores this point around the founders and the primacy of people,

Speaker 4 which I think is one of our greatest national resources as a country, the primacy of our people.

Speaker 6 How did we get them?

Speaker 6 Do you know anything about that?

Speaker 4 CIA operation.

Speaker 4 The reason it was called paperclip 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.

Speaker 4 So you had to have some sort of cover, some sort of ability to do it. Um, and we would have these files and we would resettle them.

Speaker 4 This is how Huntsville got started: hey, where can we put these people where it'll be a little low-viz, low-profile?

Speaker 4 And you know, we built a whole space industry in Huntsville, Alabama, uh, around Verner von Braun and uh, and his colleagues.

Speaker 6 Wow, wow,

Speaker 6 that's awesome.

Speaker 6 Well, you know, I had something that I ran across across that I think a lot of people are fearful of.

Speaker 6 What is it? It's predictive policing software.

Speaker 6 You guys are involved in that.

Speaker 4 We don't do predictive policing.

Speaker 4 It's widely believed publicly we do. We don't.
And it has probably the most scary name possible.

Speaker 4 I think a better way of thinking about it is

Speaker 4 the projects I've seen and been close to, it's about resource allocation. So where should I pre-position preposition police to deter violence?

Speaker 4 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.

Speaker 4 on weekends when the temperature is pleasant enough for people to be outside roaming around.

Speaker 4 Okay, it might be nice to have a cop on that block make the presence known, deter any bad actors and behavior. And that's been that's been effective where it's been possible.

Speaker 4 I think the branding of it has been really detrimental, but there is a clear correlation between the presence of policing and deterring violence.

Speaker 4 The other aspect of it, too, is just understanding, particularly with gang violence, it's usually a cycle of retribution.

Speaker 4 This person got killed. Okay, well,

Speaker 4 the family of the person that got killed, their gang knows who did it. There's going to be retaliation.

Speaker 4 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.

Speaker 6 Okay, so this is this is kind of similar to what you guys are doing, just in a different outfit. And it's, once again,

Speaker 6 it's sifting through data and telling you where to allocate resources.

Speaker 4 Yeah.

Speaker 6 Interesting. Interesting.

Speaker 6 Well, let's get into, you talked a lot about the bureaucracy in America and the challenges that

Speaker 6 it caused

Speaker 6 you guys to overcome.

Speaker 6 What do you think is wrong in America today?

Speaker 4 What I think is wrong writ large with the world is that

Speaker 4 let's just steel man it. The C-suite, 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.

Speaker 4 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.

Speaker 4 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?

Speaker 4 And then you have all the layers in between.

Speaker 4 Part of their job is to make sure the steering wheel doesn't actually work. And

Speaker 4 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 have this sort of nihilism.

Speaker 4 It breeds this nihilism. Like nothing works.
We should tear it all down.

Speaker 4 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 c-suite 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?

Speaker 4 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 three seconds. And that lets me know, do I need more or not?

Speaker 4 And I can move on to the next problem, the next problem. If I have to wait three weeks to answer that, you can just see how the whole system just gets gunked up.
Nothing actually works.

Speaker 4 You don't understand that the quality on assembly of doors is not working. And therefore, we're going to have problems.
And

Speaker 4 small problems that can be solved become big problems that people will struggle to solve.

Speaker 4 This breeds a legitimation crisis. Like the legitimacy of our institutions is based on the fact that they work.

Speaker 4 How do you spend $11 billion on high-speed rail in California and have 1,600 feet of track that goes nowhere with a government institution that's really proud about how many jobs they created by doing this?

Speaker 4 You compare that to SpaceX. They've only spent $9.6 billion and they put more than 300 rockets into orbit.
Or

Speaker 4 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.

Speaker 4 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.

Speaker 4 You know, money enables the founder personalities. Money enables people to do the work.

Speaker 4 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.

Speaker 4 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 that and our efficacy in doing that.

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Speaker 4 You know, you think about

Speaker 4 these,

Speaker 4 like, I think the counterfactual, if you just say, like, we didn't have Hyman Rickover, we had someone else, or we had DOTMA 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.

Speaker 4 And so when we look at so many of the things, why does the F-35, we conceived of it in the mid-90s and it's just kind of working now.

Speaker 4 Why should it take 30 years when Kelly Johnson could build as a single human at Skunk Works? He's the founder of Skunk Works. He could build 41 airframes in his career.

Speaker 4 He could build the U-2 in 13 months.

Speaker 6 Do you see this changing?

Speaker 4 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.

Speaker 4 You know, 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.

Speaker 4 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, look at Europe, nothing's actually working over there.

Speaker 4 So like the parts of the world economy that are working look like this. The parts that don't, you see it with when Doge goes to DC.

Speaker 4 Like there's a lot of noise, certainly from the other side around Doge.

Speaker 4 But it's been amazing. You know, 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.

Speaker 4 And, you know, people who can call balls and strikes. And conversely, you can be like, that person in government is a genius.
Like, they're not empowered.

Speaker 4 We need to empower, this is the person who actually knows the right answers. We pull that, you know, Doge has the ability to make those calls and to do so with taste, right? And that realignment is

Speaker 4 profoundly needed.

Speaker 6 Why do you, I mean, why do you think there is so much pushback on that? What are they scared of? I mean, this sounds, it just, I mean, we're going to save money.

Speaker 6 Things are going to become more efficient.

Speaker 6 I don't understand. I do not understand the pushback.

Speaker 4 It's not supposed to work this way. We were following the playbook.
We had a playbook. You know, there's a system.

Speaker 4 It's this belief in process over outcomes. You know, it's like, and it's, it's

Speaker 4 profane to have to blow up all the process and to believe that everything that we believed in the past.

Speaker 4 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 subconscious undertone of the pushback.

Speaker 4 And then people, this, you know, it's like the best engineers are, like I said with Hyman Rick Obert, he was hated by the Navy, but he was a national treasure.

Speaker 4 And can you hold that contradiction that, okay, yes, the engineer said something that hurt your feelings, but they're right.

Speaker 4 Can you hold that contradiction? Like, are you optimizing the outcome? Because if you care about the outcome, that's easy to get over. It's like, yeah, you're right.

Speaker 6 So it's ego. It's all ego.

Speaker 6 What a shame, man.

Speaker 4 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,

Speaker 4 you can often solve these problems inside of 30 days.

Speaker 4 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.

Speaker 4 And, you know, I think it's they're a national treasure.

Speaker 6 How long ago could we have done this, do you think?

Speaker 4 From a technical perspective, we could have done it 30 years ago. I think from a

Speaker 4 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 pushback that there is.

Speaker 6 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.

Speaker 6 And there's just, I mean, people are just screaming on the rooftops about it.

Speaker 4 And to tie it back to founder mode, my own support for President Trump is, you know, when I had a three-hour dinner with him in the presence of a few other folks, and what I felt profoundly was a founder personality.

Speaker 4 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, who's going to make contrarian calls and actually cares about the outcome.

Speaker 6 I mean,

Speaker 6 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?

Speaker 6 Are you worried about that at all?

Speaker 6 I'm not.

Speaker 4 I think there will be some volatility.

Speaker 4 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.

Speaker 4 Before the pain is even felt, they're like, but we take as an axiomatic given

Speaker 4 from our economic theory that this is a bad thing versus empirically, it's already resulted in badness.

Speaker 4 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.

Speaker 4 And so there's you have to decide:

Speaker 4 is the rebuttable presumption going to be we're going to lean in and try what the founder is saying? Or are we going to resist every step?

Speaker 4 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.

Speaker 4 The OODA loop's too long. It takes too long to bring everyone along.
So I'm in a suspension of disbelief mode.

Speaker 6 A lot of people worry the price. I'm worried the prices are going to go up on everything.
I mean,

Speaker 6 but.

Speaker 4 And I would say Scott Basant is a very smart human, very smart macro trader, you know,

Speaker 4 part of an elite world.

Speaker 4 There's probably like on the order of 10 people in the world like him or a current Treasury Secretary. And, you know, I basically, it comes down to confidence in the team.

Speaker 4 I have a lot of confidence in the team. Okay.

Speaker 6 You know, back to Palantir.

Speaker 6 What other countries are you guys working with?

Speaker 4 Well, the U.S. and our allies is really our focus.
So, you know, we have most of Western European intelligence organizations use our software.

Speaker 4 You know, some of that is, look, they're sub-scale in many ways. So I don't want to call it philanthropy, but it's the right thing to do.

Speaker 4 After the Baticlan massacre, we volunteered to help the French out massively.

Speaker 4 And they took, I think that was actually kind of a mark-to-market moment of we need the help.

Speaker 4 A lot of these European countries have their own indigenous industrial base, which they're very proud of, but is not at the level of the U.S. industrial base.
And so there's a, you know,

Speaker 4 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.

Speaker 4 And so I think we're really happy with that level of work here.

Speaker 4 Australia,

Speaker 4 Japan, you know, the U.S. and our allies.

Speaker 6 What do you think about, I mean, a lot of stuff going on in Taiwan right now.

Speaker 6 How important is it?

Speaker 6 Should we even get involved in that?

Speaker 4 I think the way I think about it is that we want to make

Speaker 4 any sort of

Speaker 4 kinetic

Speaker 4 or even non-kinetic economic action against Taiwan

Speaker 4 too risky for our counterparts in China.

Speaker 4 We want to push out. If the Davidson window ends at 27, our goal is to make that 28, then make that 29 and 30 and just keep making it harder and harder and too risky for the CCP to do anything.

Speaker 4 That's the optimality. And I think it plays to a sort of, you need that, that's the primacy of winning.
It's a mindset that's like, we're not trying to solve the problem.

Speaker 4 We're trying to make sure they can't move on Taiwan.

Speaker 6 And how exact, could you be a little more descriptive on how would we do that?

Speaker 4 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

Speaker 4 is pretty high for 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.

Speaker 4 They're the best at long-range planning. They have a 50-year plan and it's actually really well thought through and they're good at that.

Speaker 4 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 do.

Speaker 4 When we get punched in the face, we don't even know what we're going to do. So how could they?

Speaker 4 And so I think we have to kind of bring that craziness

Speaker 4 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.

Speaker 4 How, I mean,

Speaker 6 how dependent are we on Taiwan for semiconductors and chips and all these type of things?

Speaker 4 Where the leading edge vary. And I think that's the important part of our head strategy.
We have to, you know, I heard that Intel and TSMC are announcing a new joint venture.

Speaker 4 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.

Speaker 4 Most of these pharmaceuticals are made in the upstream ingredients, the APIs, are made in China.

Speaker 4 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.

Speaker 6 Yeah. I mean, China is a topic that we just continuously discuss here.
So, I mean,

Speaker 6 how worried do we need to be about China?

Speaker 6 It seems like they just have us in all these different areas.

Speaker 6 They're manufacturing. You mentioned pharmaceuticals.
Damn near, it seems like.

Speaker 6 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.

Speaker 4 The first opium war, is like that. Yeah.

Speaker 6 I mean,

Speaker 6 they're buying up all our land. They're investing in our country.
I mean,

Speaker 6 where are they? How far are we behind China?

Speaker 4 I think we are, we do not yet have clarity of the threat amongst the American people. The national security community

Speaker 4 is not confused. They understand it is the priority threat.

Speaker 4 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?

Speaker 4 You know, when I was a child, even the World Wide Wrestling Federation had the Iron Shake. We had the Iranians as the back.
That was the heel, right? There was a USSR heel.

Speaker 4 We had a very clear sense of who our adversaries were and that we were competing every day.

Speaker 4 If you look at the essential Chinese propaganda, which we kind of imposed on ourselves with their ascendancy into the World Trade Organization,

Speaker 4 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.

Speaker 4 There's nothing to worry about here because you've already lost the competition.

Speaker 4 But I think these two lines of propaganda, even though they seem contradictory, they have one thing in common, which is saying we're not competing.

Speaker 4 Because either we're irrelevant or we've already won. But it was designed to obfuscate the fact that we are competing every single day and viciously.

Speaker 4 And that's the clarity that we need as the American people to realize we're in a competition. Today it's an economic competition.

Speaker 4 Let's do everything we can to make sure it remains only an economic competition that requires us to invest in deterrence.

Speaker 4 You know, the Chinese were kind of surprised that we did nothing when they militarized the Spratly Islands after telling us to our face that they were not going to do it.

Speaker 4 And so, and this is the part where I think their miscalculus comes in because the sort of Midwestern, we positive sum, we're fair people. You know, we seek peace.

Speaker 4 So we'll take you at your word and we'll treat you well. But at some point, you'll break that.
And then,

Speaker 4 you know, as one admiral once told me, then the American OODA loop comes out. You know, observe, overreact, destroy, apologize.
And so how do we

Speaker 4 manage this so that we are actually conveying and managing the threat appropriately?

Speaker 6 I mean,

Speaker 6 where do we even start? I mean, with all these politicians that have businesses over there, I've rattled off a bunch of other stuff that we're involved in. I mean,

Speaker 6 what would happen?

Speaker 6 Where do we start? What would happen if they just cut our supply chain? I mean,

Speaker 6 well, right now it would be really bad. It would be very bad.

Speaker 4 And I mean,

Speaker 4 Right now, it would also be very bad for them.

Speaker 4 And so

Speaker 4 what are they doing? They're trying to produce their own indigenous chips, their own GPUs. They want their own NVIDIA.
We've curtailed their access. Of course, they're getting around sanction evasion.

Speaker 4 They're buying it from Malaysia, buying it from Singapore. But we've made it hard for them.
We're creating dilemmas and problems. So they're trying to make themselves self-sufficient.

Speaker 4 We need to be investing in the same things along strategic areas.

Speaker 4 It can include our allies. Sometimes I worry that friend shoring is like a half measure.
It's kind of an easy out.

Speaker 4 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.

Speaker 4 Now, the pathing really matters.

Speaker 4 When we were mobilizing for World War II, we took Bill Knudsen, a Danish emigration, direct commissioned him, a three-star general, and he was in charge of war mobilization.

Speaker 4 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.

Speaker 4 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,

Speaker 4 we should be isolationist here. There's conflicting views.

Speaker 4 But what FDR realized is it takes time to build factories. Like I need an option.
Like maybe we should be isolationist.

Speaker 4 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?

Speaker 4 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 re-industrialization. And that was kind of a term.

Speaker 4 I've been talking about this for five 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.

Speaker 4 You will see it on Fox News. Reindustrialization is a theme.
There are serious people who are investing serious capital to do this.

Speaker 4 When we get the American private capital markets behind this, which is starting to happen, it's going to be unstoppable.

Speaker 6 I mean, how

Speaker 6 there's just so many sectors, though, to

Speaker 6 build. I mean, pharmaceuticals, chips,

Speaker 6 all these, I mean, just everyday products. I mean,

Speaker 6 how are we or are we incentivizing entrepreneurs to start to build these factories?

Speaker 4 And to the point of confidence in the new team, they're thinking about that. I've heard proposals that are around changing the depreciation and amortization schedule for factories and investment.

Speaker 4 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?

Speaker 4 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 I or cross the right T, but four minutes to get the approval to go?

Speaker 4 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?

Speaker 4 It is the first input into all of 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.

Speaker 4 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.

Speaker 4 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

Speaker 4 I feel like that's not a contrarian thing to say anymore.

Speaker 4 You would have had pitchforks and protests if you said that five years ago. And now people are like, yeah, well, obviously that's true.
How do we get after that?

Speaker 4 You see the tech community investing in things like fusion and fission and small modular reactors, and people who recognize the reason to be super optimistic, particularly on energy,

Speaker 4 is that 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.

Speaker 4 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.

Speaker 4 It's like captive energy for their data center. And a lot of that is just the bureaucratic BS of how long does it take? You know,

Speaker 4 Oracle was just talking about how one state utility company was saying, oh, we could get you this energy in the 2030s. 2030s?

Speaker 4 You know, it's like, we should be talking, we need to measure everything in months. This is really the

Speaker 4 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.
And that's what I love.

Speaker 4 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.

Speaker 4 It forces you to realize that the playbook and the process is totally screwed. It's never going to get there.

Speaker 4 It was never going to work anyways, but now it's just clear it's not going to live on the time. How do we reinvent ourselves in this moment to go make it work?

Speaker 6 What kind of energy should we be looking at?

Speaker 4 All types. Like, I mean, if you really look at,

Speaker 4 you know, we need more natural gas. We need to make investments in nuclear.
It's going to take longer.

Speaker 4 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.

Speaker 4 So I'm not trying to favor one type over the other, but we're going to need more of all of these types of energy.

Speaker 6 Would you like to see more nuclear?

Speaker 4 Yes, I would. Why?

Speaker 4 I think turning our back on the atom

Speaker 4 was one of the gravest mistakes for our rate of progress.

Speaker 4 Nuclear is largely expensive right now because we've regulated ourselves to death.

Speaker 4 The designs that we have are very safe. Hyman Rickover, when he was building the nuclear navy, his safety standards were set so high, higher than civilian safety standards, because

Speaker 4 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?

Speaker 4 If you compare that to the Soviet sub-mariners, they had to, for every every six months they served, they had six months of rest in Sochi to regenerate their bone marrow because they were irradiated to all hell.

Speaker 4 You know, so there's a way of doing it. You get the right people, the right design, the right founder mode leadership.

Speaker 4 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.

Speaker 4 And we have to be thinking about this from a competitive advantage perspective.

Speaker 4 I'm not sure it's a perfectly linear extrapolation, but in order for our shipbuilding to be competitive, you need more than just building government warships.

Speaker 4 Because to this point of a diversified R ⁇ D base, a workforce that knows how to do these things, you need scale, right?

Speaker 4 As we all know, the one shipyard in China alone has more than all the shipbuilding capacity of all the U.S. combined, right? They have 250 times the shipbuilding capacity that we do.

Speaker 6 250 times. Yeah.

Speaker 4 I'm not sure that we need to match them, but we need to be able to produce ships. When we say we're going to have two subs a year, we need to have two subs a year, not 1.1.

Speaker 6 You know, Palmer Lucky talked about this when I interviewed him. He said 250 times as well.

Speaker 6 But I am curious,

Speaker 6 what do those ships look like?

Speaker 6 Are they an equivalent to

Speaker 6 something that we make? Or is it a shell that's basically a cargo ship?

Speaker 6 Do you have any insight on that?

Speaker 4 I think it's all of the above.

Speaker 4 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.

Speaker 4 And so I think we should be thinking about how, what would be required, this is a thought experiment, but what would be required for commercial shipping, ship construction in America to be competitive on the world stage?

Speaker 4 I think we have have to take an asymmetric approach because, you know, if we're just doing labor versus labor, we're going to lose that.

Speaker 4 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. It's going to be able to be in service much longer.

Speaker 4 And we're going to leverage the Navy's unique knowledge of how to do this in order to power this American prosperity. That's going to then

Speaker 4 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

Speaker 4 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?

Speaker 4 The answer is always more, but we're getting less for our money every single time.

Speaker 4 And the way out of this problem is to realize that monopsony, the government as a sole buyer, is actually the problem. It's how we got into this problem to begin with.

Speaker 4 The world used to be very different. When the Berlin Wall still stood, just came down.
Only 6% of major weapons system spending went to defense specialists.

Speaker 4 The other 94% went to what I call as dual-purpose companies. Too much is said about dual use.
You know, a missile is single-use.

Speaker 4 You know, you need Palmer to build lethal effects that only the government is the buyer of.

Speaker 6 But dual purpose.

Speaker 4 Chrysler used to build cars and missiles. Ford built satellites until 1990.
General Mills, the cereal company, built torpedoes and inertial guidance systems in their mechanics division. Oh, shit.

Speaker 4 Everything they learned about building machinery to process cereal, they were able to leverage in the service of national security to make our warfighters more lethal.

Speaker 4 And what happened was that over time,

Speaker 4 the government became such a difficult buyer to work with.

Speaker 4 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.

Speaker 4 And 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.

Speaker 4 We used to have 51 major defense primes.

Speaker 4 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.

Speaker 4 So for every dollar we used to spend, we're going to spend 33 cents and it's going to happen all at once.

Speaker 4 You guys are not all going to survive. You have our permission to consolidate, to merge, to try to find commercial lines of business.
like do what you need to do.

Speaker 4 And we let that happen until 1999 when we blocked the merger of Lockheed and Northrop. That was the last, we said, okay, this is too much.
So we went from 51 down to five.

Speaker 4 The popular narrative is...

Speaker 6 What are the five?

Speaker 4 Northrop, Lockheed,

Speaker 6 GD,

Speaker 4 Boeing, and Raytheon.

Speaker 4 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.

Speaker 4 That definitely happened, but I don't think it's the dominant problem. The dominant problem is you lost that is really that the consolidation bred conformity.

Speaker 4 You had companies that were, you know, almost like test tube babies, artificial mergers, no single unified culture.

Speaker 4 They became essentially like almost like state-owned enterprises, extensions of the government, just doing the government's bidding.

Speaker 4 And there was not enough heresy, not enough crazy ideas that pushed the envelope, you know, not enough Kelly Johnsons of the world. Like it drove out the founders.

Speaker 4 Founders cannot work in a conformist environment. They are heretics by their very nature.
And it drove the founders to other industries like tech.

Speaker 4 The reason for immense optimism in this moment. So 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.

Speaker 4 So these companies have very little commercial business. They are kind of on the Galapagos Islands.
They've built specialist entities that only know how to sell and interact with the government.

Speaker 4 And this is part of our, and this is

Speaker 6 the key. The key is to learn how to sell and go through

Speaker 6 all the red tape to sell to the government.

Speaker 4 You compare that to China. So in China,

Speaker 4 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

Speaker 4 they're selling. Unfortunately, to us, so that cheap crap we're buying on Amazon is subsidizing lethality against potential lethality against future U.S.
service members.

Speaker 6 Wow.

Speaker 6 Wow.

Speaker 6 That's just

Speaker 6 enraging.

Speaker 4 So let me give you a cause for optimism. More than $120 billion of private capital has been deployed in the last three years in the service of national security, in the national interest.

Speaker 4 You know, the founders are back. Palmer Lucky is an archetypal example of this.
You talk about a heretic, right?

Speaker 4 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.

Speaker 4 They have a vision of what they're trying to create in the world, and there are hundreds of them.

Speaker 4 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.
And so we're starting to embrace that.

Speaker 4 I think we should, to the point of the ketchup bottle, it is coming out all at once right now. It is the moment for us to seize the opportunity to fix ourselves.

Speaker 6 What are some of the other companies we should be looking at other than Valentir and Dural?

Speaker 4 Sauronic and their unmanned,

Speaker 4 their USVs,

Speaker 4 the surface vessels. You have Epirus with anti-drone technology, Counter-CUAS, S.H.I.E.L.D.
AI.

Speaker 6 What's Shield AI?

Speaker 4 Shield builds

Speaker 4 autonomy for fighter pilots. They flew the F-16 autonomously.
They built the V-BAT, which is a drone that so far seems like the primary U.S.

Speaker 4 made drone that is able to survive in the contested Russian EW environment in Ukraine.

Speaker 4 And to the point of just getting out of our own way, how do the Ukrainians decide what drones to buy?

Speaker 4 Once a quarter, they have a field test. They create a test range.
They jam the crap out of the environment. Anyone who wants can show up, fly your stuff.

Speaker 4 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.

Speaker 6 No kidding.

Speaker 4 No requirements document, no red tape. You know, the facts to the, this is the equivalent of four deployed engineering.
You, you go to where the problem is and it either works or it doesn't work.

Speaker 4 You know, you taste the steak, you either like it or you don't.

Speaker 4 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 either it's great or it's not yeah do you want to talk about epirus 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.

Speaker 4 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.

Speaker 4 It's going to have the efficacy of being able to stop them and block them.

Speaker 6 Oh, so it's one wave. I thought these, I thought it was like simultaneously shooting out EMT pulses or whatever it is.

Speaker 4 No, 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.

Speaker 4 I think we're going to need defense in depth with an approach like this when you think about the UAS problem. It is a massive offset that our adversaries have against us.

Speaker 4 You know, how many million dollar missiles can you shoot at $200 drones, even $2,000 drones? You're going to lose that equation.

Speaker 4 And so

Speaker 4 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?

Speaker 4 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.

Speaker 4 And that's the greatest threat. So like when I look at Ukraine, there are really three lessons I take away.

Speaker 4 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?

Speaker 4 And I say, no, no, no, it's because they didn't have a navy. That's how they could conceive of an entirely different force structure that had sea-dews, essentially, you know,

Speaker 4 these cheap

Speaker 4 explosive munition drones that were guidable with a Starlink.

Speaker 4 It's an entirely different conception of the problem that I think a big surface Navy would have,

Speaker 4 would, could get there eventually, but it's not going to get there as quickly or as dynamically. That's one lesson.

Speaker 4 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.

Speaker 4 And, 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

Speaker 4 roughly one-tenth that, 65,000 or so. You know, and we've had some time.
Ukraine didn't happen last week. We've had some time.

Speaker 4 So what lessons can we take about what it's going to take to actually ramp up the industrial base as a consequence? And the lesson from that is that we got it wrong.

Speaker 4 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.

Speaker 4 The deterrent is your ability to produce the stockpile.

Speaker 6 How fast you can make them.

Speaker 4 Yeah. And so we should never have cut down to 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.

Speaker 4 Look, I think it's reasonable for a democracy to debate like how much do we want to spend, but to believe you're not trading off security.

Speaker 4 Like we have to just account for all the trade-offs appropriately.

Speaker 4 And I think 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.

Speaker 4 So we shouldn't, you know, that is a hard-earned lesson that the production, not the stockpile is deterrent. We shouldn't forget forget it.
And it should shape everything.

Speaker 4 That's why you need something like an Android. You need to be able to make 10,000 of these things, not 100.
And

Speaker 4 when you think in your mind, oh, I'm only going to need 100, 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.

Speaker 4 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.

Speaker 4 And they're ungodly expensive. And then in the moment of need, you realize I actually need a 10,000 of these.

Speaker 4 And so, and when you start realizing those trade-offs, like, how can we cut production time by a fit down to one fifth? Like, it should take 20% as long to build these things.

Speaker 4 They should be affordable so we can be able to build 100 times as many as we would historically have built.

Speaker 4 And now we have, now we're back to deterrent.

Speaker 6 Palantir is down in, you guys are working with the border too, right?

Speaker 4 That's right.

Speaker 6 What are you guys doing down there?

Speaker 4 Yeah. So the work like that 10th Mountain is doing out of Fort Wachuca, the work that NORAD Northcom does and supporting border operations Southcom.

Speaker 4 So all of that is our MAVEN, our AI-driven operating system for the Defense Department.

Speaker 4 In addition to that, we have a long-standing relationship with ICE, which actually started in 2011 when, I think it was 2011, maybe 2010, when Jamie Zabata was assassinated in Mexico.

Speaker 4 He was an ICE agent.

Speaker 4 young 32-year-old American.

Speaker 4 And we surged in to help them after.

Speaker 4 We had been talking, to the point of bureaucracy and these crises, providing clarity, we We had been talking to ICE for 12 months before that about starting to work with them.

Speaker 4 We were stuck 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.

Speaker 4 We were up and running in 11 hours. Wow.
And we were a big part of responding to Operation Fallen Hero is what that's called, and a long-standing relationship with them born out of

Speaker 4 doing right by these service members after that.

Speaker 4 And now I think there's a much bigger role. There's of course border, there's immigration.
These are two sides. A lot has happened.
I think a lot has improved on the border.

Speaker 4 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.

Speaker 4 And I think the bulk of the effort will turn to an immigration problem of how do we manage the illegals who are here and the deportation operations around that.

Speaker 6 What do you think we should do about that?

Speaker 4 Well, I think we're starting in the right place. Anyone who is a violent offender,

Speaker 4 it's hard to understand. I saw a clip from JD that I thought was pretty good, which is it's hard to even understand what's on the other side of this.
So

Speaker 4 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?

Speaker 4 Now, I think it's a large-scale operation, just given what's actually happened here. Like, how are we going to do it?

Speaker 4 You know, if you think the numbers are between 10 and and 20 million illegals, there's a question of how you actually are going to do that. How much treasure can you spend?

Speaker 4 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.

Speaker 4 You know, it's a value chain optimization. You know, okay, where do I have detention capacity? Where do I have logistics on flights?

Speaker 4 Like, how do I do this as efficiently as possible in a way that provides the most incremental lift to the American people? And I think that clearly starts with violent offenders and areas that matter.

Speaker 6 What's working down there? I mean, getting into the nitty-gritty down on the border, I mean,

Speaker 6 how did we seal it off so fast?

Speaker 4 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.

Speaker 4 So what do you think is going to happen on the other side? If the subtle messaging was nothing actually just come,

Speaker 4 like you basically have an open border so now like oh you it's gonna 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 or there's a supply chain behind helping people get here designating them 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 i'll 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.

Speaker 6 Let's take a quick break. Sure.
I'm going to come back. I want to talk about the future of warfare.

Speaker 4 Okay.

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Speaker 6 All right, we're back from the break. We're going to talk about the future of warfare, but I want to dive a little bit more into the reverse opium war.
Can you go into that?

Speaker 4 Yeah.

Speaker 4 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

Speaker 4 fentanyl precursors to be shipped to Mexico to then be funneled into our country.

Speaker 4 We lose at least 100,000 Americans to this war every year.

Speaker 4 It is

Speaker 4 an ungodly casualty rate.

Speaker 4 And it's not just happening on its own. And

Speaker 4 if we were losing even a fraction of this number of people to kinetic attacks, we would have a radically different posture.

Speaker 4 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?

Speaker 4 But you have to really step back and recognize the environment that's what is enabling all of this to happen.

Speaker 4 It's a tragedy at a big scale. And I think obviously the cartels bear a lot of responsibility, but

Speaker 4 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.

Speaker 4 And I think they view it as part of their national interest to undermine us from the inside.

Speaker 6 Wow. So how long ago was the Opium War?

Speaker 4 Was that the 1800s?

Speaker 6 Was that long ago?

Speaker 4 Yeah.

Speaker 6 And

Speaker 6 why were we doing it?

Speaker 4 It was just

Speaker 4 expansion. You know, it was economic expansion where people were trying to trade with...

Speaker 4 with China at the time. You had the collapse of the historic dynasty, the beginning of the century of humiliation.

Speaker 4 And

Speaker 4 it 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.

Speaker 4 Maybe it was coming up from Afghanistan, as I recall.

Speaker 4 And it undermined

Speaker 4 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.

Speaker 6 And we were pushing that.

Speaker 4 I think largely the British, but I think we were a minor part of it. Why?

Speaker 6 Why were we pushing it?

Speaker 4 I don't know.

Speaker 6 And so

Speaker 6 this long later, I mean,

Speaker 6 this is because of that.

Speaker 4 Yeah. Well, is it because of that, or I think more

Speaker 4 asymmetric way of

Speaker 4 weakening us? You know, it's an asymmetric way of doing it. It's pretty cheap.
If you think about it, like if you thought about cost per kill, it's pretty cheap. It disintegrates society.

Speaker 4 It weakens families. It causes a lot of trauma.
It weakens our will.

Speaker 4 it distracts us from doing the things we need to do around our economic prosperity, around reindustrialization, around taking them seriously as a threat.

Speaker 6 One other thing I want to get to before we go into the future of warfare is we were talking about Operation Paperclip later. And so just downstairs, I just had a thought.

Speaker 6 I mean, should we be doing that today?

Speaker 4 We should. I've been

Speaker 4 trying to socialize this idea. And I think, I don't know if we're at a point of having having the political will.

Speaker 4 Operation Paperclip 2 should really be around reindustrialization. If you think about German Mittelstein companies, that's like these

Speaker 4 middle-tier, high-skilled manufacturing companies.

Speaker 4 I think they're kind of somewhat lost in Germany today. If you look at what happened in Germany, the big companies sold out the German economy to the Chinese.

Speaker 4 BASF, big chemical company, most of their factories now are in China, not in Germany.

Speaker 4 Volkswagen and the investments they've made in China. But that was never the perspective of the middle-tier German manufacturer.
Most of these companies are family-owned.

Speaker 4 They're hundreds of years old and been in the family consistently. They're high-skilled.
It's not commodity stuff.

Speaker 4 High art, high trade.

Speaker 4 You know, maybe some of them want to move their manufacturing to America. Maybe we should enable that.

Speaker 4 Maybe there are,

Speaker 4 we should be basically, 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.

Speaker 4 And we can marry them up with the deepest, richest capital markets in the world, which exist in America.

Speaker 4 How do we help them build their business, create employment, and drive our national security by reindustrializing America?

Speaker 6 Damn, I mean,

Speaker 6 who all should we be targeting? Other than the, is there anybody that's making defense tech or anything that we should be snagging up and bringing here?

Speaker 4 I would, you know, you'd have to heavily vet them, but I think we should be thinking pretty seriously about disaffected Chinese that we can be pulling over.

Speaker 4 You get a little twofer for that, you know, weakening them and strengthening us. And then the surrounding areas, like Taiwanese entrepreneurs, Japanese entrepreneurs, manufacturers, really.

Speaker 4 And then you have a belt of these folks in Europe, some in France, a lot in Germany, maybe even a few of them, a little bit in Eastern Europe.

Speaker 4 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 area around El Segundo, where we have this revival of American manufacturing happening, doing it in different ways.

Speaker 4 And I think it's worth double-clicking into that because, you know, the conventional

Speaker 4 view of efficient manufacturing is that you have this very distributed supply chain. Everyone makes one part and these supply chains go really deep.

Speaker 4 But what that's done is it's hauled out the knowledge from the buyer.

Speaker 4 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.

Speaker 4 We've like we've kind of retarded your mind in terms of how deeply you understand the product that you're building. You're just ordering parts and essentially assembling them.

Speaker 4 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.

Speaker 4 He can say, hey, you know, these three parts should be combined combined because it'll be more efficient.

Speaker 4 And that's how you get the asymmetric advantage and the leaps, the ability to innovate on these things.

Speaker 4 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.

Speaker 4 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

Speaker 4 these are thought of as two totally different things. You have people who design the

Speaker 4 parts, you have people who assemble the parts.

Speaker 4 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.

Speaker 4 And so, how are they going to observe that if they're not physically sitting together?

Speaker 4 It sounds so simple, but it speaks to the cultural thing, and it's resonant with forward-deployed engineering, right?

Speaker 4 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

Speaker 6 you're starting this conversation. How are you doing that?

Speaker 4 Well, I'm talking to colleagues in the national security community about it to see if there's a way of doing it. I'm also trying to just do it through the front door.

Speaker 4 Are there companies in particular where we can provide capital to reinvigorate it? The easy place to start is in the U.S. You have a lot of these mid-tier suppliers.

Speaker 4 They are actually family-owned. The next generation maybe doesn't want to continue the business.
Because the government has been such a...

Speaker 4 promiscuous buyer, so unpredictable in demand, they haven't had the economic reason to invest in capitalizing their facilities to do much more.

Speaker 4 You know, there have been boom and bust cycles around this.

Speaker 4 But 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, and I could deliver the part more cheaply, generate more value.

Speaker 4 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.

Speaker 6 Yeah, you know, I mean,

Speaker 6 there was a lot of, a lot of blowback, was it the H-1B visas, a lot of blowback?

Speaker 6 That was something I was scratching my head on for a long time, going like, I don't, I don't, I don't see what the problem is if we take the world's best and consolidate them here in our country.

Speaker 6 And I mean, I mean, and

Speaker 6 I mean, to be honest, you're an example of that, you know?

Speaker 4 I'll take both sides of that because I feel like I really do.

Speaker 4 I have a view of it, which is

Speaker 4 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

Speaker 4 average.

Speaker 4 Right. And so then that kind of, you lose the moral high ground on the entirety of the program.

Speaker 6 Gotcha.

Speaker 4 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.

Speaker 4 But we have to do so in a way that also is clear-eyed about our economic prosperity, that we're doing this in the service of the American people.

Speaker 4 It's not just that we want them to come here and be prosperous. As a consequence of them being prosperous, they're creating jobs, they're creating innovation, they're creating economic security.
And

Speaker 4 I think large swaths of the program are used by certain companies to essentially hire cheap labor they probably could have been hiring here and should be hiring here. And so,

Speaker 4 you know, both things can be true. There have been abuses and we want the very best to be here

Speaker 4 and then

Speaker 6 something else that you touched on that i wanted to dive in fusion what is fusion

Speaker 4 well fusion so fission is how do you split the atom

Speaker 4 excuse me so so fission nuclear fission 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.

Speaker 4 We don't have commercial grade fusion yet. That's more RD.

Speaker 4 But fission is a tried and true technology.

Speaker 4 All the nuclear that when we think about nuclear, we're really talking about fission.

Speaker 4 And

Speaker 4 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?

Speaker 4 They're essentially pre-assembled so you can put them where you need them.

Speaker 4 They require less infrastructure, substantially less time to build. And the designs are modern in a way that it's default safe.

Speaker 4 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 a while, but because of our,

Speaker 4 I mean, understandable fear around it, we backed away from the atom. And it became politically, we just started investing in other things.

Speaker 6 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

Speaker 6 that

Speaker 6 communities or even

Speaker 6 households will have their own power supply eventually?

Speaker 4 I think it'll be harder for households to do.

Speaker 4 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 clear-eyed and focused on the cost of power, the time it takes to build these things.

Speaker 4 But you're going to need, you know, talk about another industry that lacks founders. Like these public utilities are basically also run like state-owned enterprises, right?

Speaker 4 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.

Speaker 4 That means that they're just providing their power directly to

Speaker 4 this data center.

Speaker 4 They're not trying to put it on the grid for everyone else to use. So there's less regulation, less bureaucratic coordination as a consequence of doing that.

Speaker 4 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.

Speaker 4 So 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.

Speaker 4 of investment we need to make, but we haven't been able, it's been this chicken or egg thing.

Speaker 4 As we get economic value out of being hopefully the world leader in the application of AI, I think it will make the other side of the equation clear of why these, why the modernization needs to happen.

Speaker 6 I mean,

Speaker 6 I would love to see that happen, but I mean, what do you think the,

Speaker 6 I mean, you're going up against a big machine with the utilities and

Speaker 6 how, I mean, with all the lobbying that goes on and all that kind of stuff, I mean, how, how is that even possible?

Speaker 4 Step one is competition. You know, I like to quit, but at some fundamental level, you either believe in free markets or you don't.

Speaker 4 And especially when you look at the government having, you know, post-Cold War, like everyone has given up on communism, including the Russians and the Chinese, except for Cuba and the U.S.

Speaker 4 government, essentially. Like we have five-year centralized plans.
And DOD, we call it the FIDEP.

Speaker 4 Like literally, we have a five-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.

Speaker 4 So if we can start building stuff behind the grid,

Speaker 4 behind the meter,

Speaker 4 and if we can do the permitting reform that's necessary that this administration is focused on, it's going to enable new entrants 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.

Speaker 4 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 the first movers and we can do it.

Speaker 4 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, founder-driven institutions, really innovative.

Speaker 4 They set the pace, they define what's possible. And the other companies in the economy are sort of mimetically copying.
They're imitating them.

Speaker 4 And that's okay because it provides the necessary stimulus for the whole thing to kind of work.

Speaker 4 And I think the problem we found ourselves in in the, let's say, the last 20 years is outside of tech, largely, there have been no live players.

Speaker 4 These parts of the economy have kind of shrunk and shriveled and become, they're only dead players. And so the re-injection of some live players is how we'll reinvigorate this.

Speaker 4 Andrel is a live player for hardware defense primes, right? And the other primes have to respond to that. And that, if you're going to have hope in them,

Speaker 4 some of them may not.

Speaker 4 But the ones who want to survive are going to respond to that. Similarly, in utilities, the small modular reactor companies, the upstarts are going to be the live players that drive the change.

Speaker 4 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.

Speaker 4 And you can point to things that are worth investing in. The capital markets are starting to see that.
They're starting to put capital behind these founders.

Speaker 4 It's a great time for the American revival.

Speaker 6 I mean,

Speaker 6 wouldn't the utility companies just buy the smaller companies and bury them?

Speaker 4 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.

Speaker 4 The fish doesn't understand what could possibly be outside the water.

Speaker 4 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.

Speaker 4 They couldn't do it today, you know, but these guys are throwing away the rule book.

Speaker 4 They're not going to follow the same rules and subject themselves to the same bureaucracy and have the same slow decision-making process. They're going to do it differently.

Speaker 4 And once this starts working,

Speaker 4 they're going to have to respond.

Speaker 4 So, you know, three of the five Andrew co-founders worked for me, you know, and they are world-class talent.

Speaker 4 And my interaction with some of the primes, you know,

Speaker 4 the thing they love to say is something like, Andrew's like the Toranos of defense. Andrew's a fraud.
And I was really scratching my head. It's like,

Speaker 4 why do they believe this? It's so obviously not true, just to be 100% clear. It's like, obviously not true.
These guys are crushing it.

Speaker 4 And

Speaker 4 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.

Speaker 4 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.

Speaker 4 They'll have to respond to these things. And that's the reinvention stimulus that the economy needs.

Speaker 6 Makes sense. Makes sense.
All right, let's move into the future of warfare. What's it look like?

Speaker 4 I think it both looks exactly like the past and completely different.

Speaker 4 So the part that's exactly like the past is I think that the kind of fundamentals of the OODA loop, that it is about decision advantage and speed is the same thing. Those principles are not changing.

Speaker 4 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.

Speaker 4 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.

Speaker 4 That sounds like autonomy to me. And then when you release, when you press the fire control there,

Speaker 4 the kind of terminal guidance is happening through an autonomous system, through the computer on the projectile.

Speaker 4 Okay, so now we're talking about...

Speaker 4 Let's just start there. It's a difference of kind.
I'm sorry, it's not a difference of kind. It's a difference of degree.
We already have systems like this.

Speaker 4 We're just talking about supercharging it, doing substantially more with it. And what is the more? The more is a much shorter decision-making life cycle at much greater scale.

Speaker 4 And you start to see that with these first, first-player FPV drones. I think the Russians are losing roughly 1,500 people a day to these little

Speaker 4 drones that Ukrainians are flying. So at a time.

Speaker 6 1,500 people a day?

Speaker 6 Wow. It's tough.
That's effective.

Speaker 4 So if you start thinking about that, it's like, well, that's the equivalent of small arms, really.

Speaker 4 It's like part of the innovation now is, okay, this drone has become the equivalent of small arms, but doctrinally, and that's how the Ukrainians treat it. It's like, it's like the E3, E4,

Speaker 4 who has fire control on that weapon, right? But for us, you know, we're not at war. We haven't changed our doctrine.

Speaker 4 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.

Speaker 4 And of course, 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?

Speaker 4 Because

Speaker 4 it's not just your M4.

Speaker 4 So that's one piece of it. And then I think that also implies that the fighting force is going to have to be more technical.

Speaker 4 They're not going to have to be coders, but the responsibility, just like, you know, if you're going through green beret qualification, you learn everything about the gun, you know how to assemble it, disassemble it.

Speaker 4 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.

Speaker 4 You know, and that it's going to extend to electronic warfare and cyber attacks and space-based access and communication all the way through to the end lethal effects.

Speaker 4 I do think we're going to have to invest in, and this is where you need the outside tech mentality in kind of an Apple-like experience here. You know, yesterday when I was at Bragg,

Speaker 4 part of this capability exercise that General Praga put on talking to the different MOSs, you know, the special ops medic was like, my job is the best job.

Speaker 4 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.

Speaker 4 And the second thing stop working, you know, it's all my fault. And what I saw in that was cognitive burden.
Basically, like we,

Speaker 4 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 iPhone just kind of works.

Speaker 4 And we are doing a great disservice to these combo officers or NCOs by the burden we place on them to have to manage these things versus what our technology could actually be doing.

Speaker 4 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.

Speaker 6 You know, I talked to Palmer a lot about this too, and I'm just curious your thoughts.

Speaker 6 How much of the military right now is obsolete with all the new tech and all the autonomous vehicles and weaponry?

Speaker 4 I think there's no doubt that

Speaker 4 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.

Speaker 4 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.

Speaker 4 You know, 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?

Speaker 4 I view that as a productive competitive stimulus. Everyone who owns this platform should be thinking about why is my platform still relevant?

Speaker 4 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.

Speaker 4 I need to protect this rice bowl that I have. 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.

Speaker 4 But that's something that you have to earn that opinion. You have to prove that out.

Speaker 4 We don't have enough competing force structures.

Speaker 4 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.

Speaker 4 And that's what I saw with the Ukrainians not having a Navy, which is they could conceive of this completely differently.

Speaker 4 Maybe we should have a Navy one and a Navy two. 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.

Speaker 4 There's a reason the tank was invented by the UK Royal Navy, not by the UK's land forces.

Speaker 4 The tank was anathema to them. It was 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?

Speaker 6 What about personnel?

Speaker 4 I think that's probably one of the most important reforms.

Speaker 4 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?

Speaker 4 And by the way, once you get the right human, don't let them leave.

Speaker 4 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.

Speaker 4 As you well know, most gigs in the military, they're like two to three years.

Speaker 4 There's a reason we made it an eight-year gig because there's 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 at Pound Trail I have screwed so many things up and have had you know I've had the ability to learn from all those things to make it better and better and better it's just compounded over time if you somehow had someone do my role where we were just swapping every two to three years,

Speaker 4 I can't even imagine how much further behind we would have been.

Speaker 4 So that's one aspect of personnel. The second aspect is

Speaker 4 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.

Speaker 4 And so in a lethal context, in 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?

Speaker 4 And that then, as a consequence, you have to think about who are your best people.

Speaker 4 I'll tell you, one of the combatant commands, I won't get into all the details, but one of the combatant commands, there is a major, prior police officer, joined the service late,

Speaker 4 army major.

Speaker 4 He does the work of 100 people. No shit, 100 people, kinetic strikes around the world that are being driven by his work.

Speaker 4 I don't think the military has ever been in a position where it's that asymmetric.

Speaker 4 And so that has a lot of consequences for your force structure and how you think about who should be in what role, what are you going to lose when that person rotates out.

Speaker 4 And then our ability,

Speaker 4 because the more we took, when I said earlier, Palestry thinks of itself as an artist colony as opposed to a factory, we didn't talk about what is a factory.

Speaker 4 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 roles.
Here are the experiences. Everything's mapped out.

Speaker 4 And that gives the human a lot of comfort. It gives the institution comfort.
It's It's easy to understand what to do.

Speaker 4 You don't have to really think that hard about what comes next or answer hard questions like, am I growing? Or any of these things that people have legitimate questions around.

Speaker 4 But what it does is deprives 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 use for lethality?

Speaker 4 You can see that sort of thinking in JSOC. Smaller community,

Speaker 4 more primacy to the outcomes that need to be driven, higher stakes.

Speaker 4 But the big machine loses that qualitative sense. And so I think that's going to be really important.
When I think about the most important projects we've been involved with,

Speaker 4 there are really a handful of commanders who were so insightful.

Speaker 4 I think they might be offended to hear me describe them this way, but they are what we would call in Silicon Valley product managers.

Speaker 4 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.

Speaker 4 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.

Speaker 4 I need it to be like this because they recognize that what they're getting is an Ironman suit, a software Ironman suit that allows them to control the battle space. It's got to fit them perfectly.

Speaker 4 It's got to be, it's got to fit their mind.

Speaker 4 This is, they are, in this context, founder personalities, right? And as a consequence, they can get so much done.

Speaker 4 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 principal, the founder.

Speaker 4 You know,

Speaker 6 I understand all that.

Speaker 6 But what I want to dive into as well is, I mean, with all these new autonomous vehicles, and like I said, 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.

Speaker 6 And so, I mean, just for a tank, for example,

Speaker 6 I don't know a lot about tanks, but I mean, I would imagine I think it takes, what, right, three to five people to operate one.

Speaker 6 And so, when we put these AI brains in all of these vehicles and turn them into autonomous vehicles, I mean,

Speaker 6 how much of the military personnel is that going to cut out?

Speaker 4 I think it's

Speaker 4 one example of that, it'll cut out. It'll make you a much smaller, leaner fighting force for sure.
So let's just call it half. You can get.
you know, you can, you can probably make everything

Speaker 4 half as big and as lethal or more lethal than before.

Speaker 4 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.

Speaker 4 They have to somehow get on 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 should all be software.

Speaker 4 No one should be picking up a phone. The tank should be able to communicate to the other tanks.

Speaker 4 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.

Speaker 4 And

Speaker 4 in fact,

Speaker 4 the humans are doing it slow. We're doing it at the speed that humans can do it.
And we make mistakes when we're doing it. And it has a huge training burden to do it.

Speaker 4 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 have to kind of ship these innovations.

Speaker 4 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.

Speaker 4 There was one project we did

Speaker 4 at NTC at Fort Irwin.

Speaker 4 The division was roaming around the desert, 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.

Speaker 4 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.

Speaker 4 You're going to be blown to smithereens. 26 people, the red team could not find them in the desert.

Speaker 6 No kidding.

Speaker 6 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

Speaker 6 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

Speaker 6 Would you need anybody in any of these vehicles?

Speaker 4 Well, you definitely want first contact to be made by entities that have no blood in their system, right?

Speaker 4 Like the front line of troops, but there's also the front line of robots, and that should be further front.

Speaker 4 And we need to be thinking about how we have less risk to force as a consequence and have improved mission outcomes by doing this.

Speaker 4 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.

Speaker 4 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.

Speaker 4 It obfuscates indirectly just because humans are touching and massaging the data, like what's actually going on.

Speaker 4 And we need to integrate that.

Speaker 4 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.

Speaker 4 And by that, I really mean, let's articulate the threats we care about under the timelines we correct. These are the foxhole scenarios that matter to us.
This is the national defense strategy.

Speaker 4 This is who we're trying to deter and when.

Speaker 4 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?

Speaker 4 And I think the Department of Defense is the only institution I know of that has divided up supply and demand.

Speaker 4 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.

Speaker 4 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 warfighting. That's the demand side.

Speaker 4 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.

Speaker 4 We have ideas about the scenarios in the world we care about making sure don't happen.

Speaker 4 How do we integrate these things 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?

Speaker 4 It's just running headless by doing this.

Speaker 4 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?

Speaker 4 We are going to lose over 100 jobs in your district. And I think that becomes, now you've turned the tables on what is politically survivable.

Speaker 6 With Palantir, Palantir, you guys aren't only in software. You also have vehicles you're making, the Titan, Tenebrus.
I mean, could you go into those a little bit?

Speaker 4 Yeah, the Titan truck is a satellite ground station on a wheel that's really wheels that's really about enabling long-range precision fires.

Speaker 4 So, how can we do deep sensing of the battle space to enable precision fires of the enemy deep in their territory?

Speaker 4 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.

Speaker 4 We still don't think of ourselves as a hardware company.

Speaker 4 We've built a team of super friends, of power horses, Andrew, Northrop Grumman, L3 Harris, Sierra Nevada.

Speaker 4 They're helping us build this thing. But what makes the truck in some sense is a commodity.

Speaker 4 What's in the shelter is what's doing 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 two-man crew so very very efficient and enabling then the transmission to the gun line to actually go destroy and close with the enemy and building this around the software first.

Speaker 4 What does the software need to do? That is our lethal capability. Then how do I make it as amazing for the warfighter as possible? It's a consequence.

Speaker 4 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.

Speaker 4 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.

Speaker 4 So 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.

Speaker 4 You are entirely limited by the foundation.

Speaker 4 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.

Speaker 4 And now we're starting to see that culture enter into defense. That's what Tesla does, right? That's what SpaceX does.
So

Speaker 4 in defense, we're starting to see that happen where people are taking very sophisticated

Speaker 4 the next generation of platforms and they're starting with a software first approach. What does this platform need to do? What are the threats? What do I need to be able to sense?

Speaker 4 What do I need to be able to affect? Can I even build that compute first, which by the way, goes pretty quickly. You can measure that in months, not years, not certainly not decades.

Speaker 4 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.

Speaker 4 And you don't end up in these situations like with the frigate, where you buy the frigate, you make a bunch of changes along the way, and you realize it won't float.

Speaker 4 You know, it's like the whole thing is for not because you didn't start with the software-based approach.

Speaker 6 What about the boat?

Speaker 4 Yeah, so

Speaker 4 the same concepts apply to

Speaker 4 surface vessels and submersibles and to airframes, actually, where you're really thinking about what do I, you know, our big challenge in the Pacific is how do we get inside the weapon engagement zone?

Speaker 4 You know, the enemy has been able to really build up a lot of air defenses and hypersonics.

Speaker 4 They can threaten and hold us at risk when we're inside of this engagement zone. We don't have sufficient defenses.

Speaker 4 So maybe we need to build a bunch of relatively attritable, but certainly autonomous systems that don't have risk to force, that enable us to do the sensing we need, to create the maneuver space we need.

Speaker 4 And so there with Tennebrus, it's really about using commoditized approaches to building ships so that we're not reliant on an industrial base that can't absorb more capacity, and then adding the mission-specific payloads that are highly exquisite and highly classified and modular at the point of need.

Speaker 4 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,

Speaker 4 air, sea, land, that give you this sort of software-defined approach to warfare.

Speaker 6 Does anybody else have these type of technologies? Any adversaries?

Speaker 4 This is, you know, I think software is a unique American strength, and it really comes down to culture. Because it's not about, look, there are smart people everywhere in the world, right?

Speaker 4 But think about it this way. There are zero Indian enterprise software companies that are competitive on the world stage.

Speaker 4 There are zero Chinese enterprise software companies. Europe only has a handful and they're pretty legacy.
So what is it about America that we have all this software expertise? And it's cultural.

Speaker 4 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.

Speaker 4 It came from Bob Noyce, who is the co-founder of Intel, the co-inventor of the transistor.

Speaker 4 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.

Speaker 4 The word open door policy, Noyce coined that. It's a noisism.
There's a way in which this Silicon Valley doesn't even understand how much we are the progeny of this noise and this Neusian culture.

Speaker 4 And that's really permeated so much of how we organize ourselves to be able to build software at a scale that is

Speaker 4 world-beating by a long margin. Like the the second best country in the world is Israel, and they can build canoes, not aircraft gear.

Speaker 4 They can't get the culture of collaboration to scale to the, even close to the level that we can.

Speaker 4 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 just not going to get it.

Speaker 4 You're not going to get the big success that you want otherwise.

Speaker 4 And so then I think we should lean into that. Like 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.

Speaker 4 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.

Speaker 4 Even when you think about DeepSeek, which we have this Chinese AI model, you can see two things from it. One,

Speaker 4 they couldn't have built that model without essentially distilling or stealing this from Open AI. So you needed the requisite Open AI investment.

Speaker 4 And then two, 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.

Speaker 4 But it is a refinement that as a precondition required, it's not a coincidence that all the frontier AI labs are within 50 miles, a 50-mile radius in San Francisco, right?

Speaker 4 That density of talent and the culture that's required to organize around it is

Speaker 4 an American superiority.

Speaker 6 What could go wrong with this stuff? I mean, could an adversary potentially hack into

Speaker 6 our hardware and software?

Speaker 4 As much as they could today. You know,

Speaker 4 I don't think it changes the nature of the risks. The risks are the same.

Speaker 4 You know, we still have to care about cyber vulnerability and protecting ourselves, and the adversaries will have those vulnerabilities as well.

Speaker 4 I think the biggest risk is really of inaction. This is why I was very frustrated around the constant AI safety conversations.
Because one, I think it was grossly overdone.

Speaker 4 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.

Speaker 4 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.

Speaker 4 These models, they took billions of dollars to build. They can write poetry, they can do all these things, but who cares?

Speaker 4 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?

Speaker 4 AIG just discussed at their Investor Day earlier this week how they've used used 85 AI agents built in Palantir to automate their insurance underwriting.

Speaker 4 So when you look at a solution like that, you can say, okay, it used to take three weeks, very manual. Now it takes one hour.
There's a huge labor savings there.

Speaker 4 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.

Speaker 4 Now they can price 100%.

Speaker 4 They can take the best and least risky assets and underwrite that business and leave the rest for their competitors.

Speaker 4 So you're actually saddling your competitors with risks they probably shouldn't be taking because you have a decision advantage in doing that.

Speaker 4 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 think there's a lot of promise in doing that right now.

Speaker 4 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 feel it in the American commercial sector.

Speaker 4 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.

Speaker 4 It's something you have to have a lot of experience and

Speaker 4 as a consequence, develop expertise in.

Speaker 6 Who else should we be watching out for other than China and the cartels?

Speaker 4 I think we should be thinking about the coalition China is able to build. You know, could Iran be nearly as successful as they are if the Chinese were not buying oil from them? You know,

Speaker 4 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?

Speaker 4 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.

Speaker 4 You know, we have to make sure that there isn't proliferation of certain technologies that are going to make them harder to see that it might be sort of the deal, the trade that's happening behind the scenes here.

Speaker 4 So we have this this kind of coalition of adversaries.

Speaker 4 Might be a weak coalition. They might have their own frictions between them.
But I think at the root of it is the CCP trying to be the sole superpower in the world and undermine Western prosperity.

Speaker 4 And then they're going to have a coalition of folks who share that interest as well.

Speaker 6 Are you worried about BRICS at all? Are you familiar with BRICS? Yeah.

Speaker 4 Yeah, I view that as an economic threat to our prosperity.

Speaker 4 Of course, you know, we have the exorbitant privilege, as sometimes it's called, of the dollar as a reserve currency, and we need to fight to maintain that.

Speaker 4 And

Speaker 4 the economic alliances that enable people to undermine that will weaken us.

Speaker 6 Let's talk about, wrapping up the interview here, the premise of winning.

Speaker 6 Defense Reformation thesis number five. Only requirement is winning.

Speaker 4 We have come up with the most Byzantine acquisition process you can possibly imagine where

Speaker 4 you have to somehow generate a requirement of what it is that you want to buy.

Speaker 4 You were sharing with me that you bought a $10 skateboard helmet as your combat helmet when you went to war because the other one was too heavy and uncomfortable and it didn't work. It didn't work.

Speaker 4 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.

Speaker 4 And actually, yesterday at Bragg, soldiers were telling me they'd go out on a mission, come back with marks on their head, helmets uncomfortable, it's crushing them.

Speaker 4 Well, one of the requirements for the legacy combat helmet was that it must be able to withstand a Humvee, one wheel of a Humvee being on top of it. Who decided that was the requirement?

Speaker 4 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 missions happen.

Speaker 4 So this requirements process is divorced from the actual application. And I think we need to just remember this requirements process is an approximation of what we think we need.

Speaker 4 The only thing that matters is winning. So can we work backwards from what it is that is actually winning and where the requirements get in the way, recognize that was a suggestion.

Speaker 4 Get rid of that shit.

Speaker 4 Don't be so wedded to the playbook that you don't have the common sense God gave a goat.

Speaker 4 When you you need to bend the rule to do the right thing, you got to do that.

Speaker 4 We've wrapped ourselves up around this stuff, and

Speaker 4 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.

Speaker 4 You know, this is where I feel like if you integrate the person as the program, you know, Hyman Rickover could decide his own requirements as he's building the sub.

Speaker 4 Gene Krantz could change what he thought he needed for Apollo as getting done. Or John Boyd on the F-16.
Like the original requirements document for the F-16 was seven pages.

Speaker 4 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.

Speaker 4 When you get these 2,000-page requirements document, almost rebuttably, you should think this is, this is crap.

Speaker 4 You know, why is this going to work? No one's had the clarity of thought of what we really need and what's essential to getting this done.

Speaker 6 You know, I love that you are going to brag and

Speaker 6 sounds like you guys are kind of integrating in all over the place. and and um

Speaker 6 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

Speaker 4 i mean i don't know i don't know if you guys are dealing i'm sure you are how open is uh secretary hegseth 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 dual-purpose companies.

Speaker 4 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.

Speaker 4 Like, but yeah, that's how American industry works. You show up, you invest, you build things, you lean in, you have conviction.

Speaker 4 And 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.

Speaker 4 The idea that things should get cheaper over time, not more expensive over time.

Speaker 4 It's an opportunity to reimagine the industrial base. And I think there's a tremendous amount of support.

Speaker 6 Are you guys integrating in with law enforcement at all?

Speaker 4 Maybe on the border,

Speaker 4 you know,

Speaker 4 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.

Speaker 4 So Justice Department, so federal law enforcement will be a focus for us as we turn to the next kind of couple years here.

Speaker 4 Probably not state and locals.

Speaker 6 Well, Sean,

Speaker 6 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 ton of fun fascinating so thank you

Speaker 4 guys

Speaker 4 absolutely