World events remind us that there is actually evil out there.
Just horrendous barbarism is still possible.
When a country goes to war, it's not enough to just have the Department of War fight these wars.
It is actually the whole country.
The idea that somehow the American people are not capable is a beggar's belief.
I think our biggest risk as a country is suicide, not homicide.
How do we win the AI race, particularly as it moves towards more physical AI and robotics, etc.?
The things that we did to win in the past, we accidentally turned our back on.
And there's an opportunity to reclaim that with bigger.
In the moment right now, you could say, we need to build more weapons.
We need to do this.
Yes.
But the most important thing we need to do is The companies that won World War II weren't built to win wars.
Chrysler made minivans.
Every cereal box an American consumer bought was quietly subsidizing national security.
In 1989, only 6% of spending on major weapons systems went to dedicated defense contractors.
Today, it's 86%.
The heretics who built the arsenal of democracy left for Silicon Valley, and the Pentagon lost its front door.
Now, some of them want to come back.
Shyam Sankar has spent more than two decades at Palantir, building technology for national security.
He was commissioned into the U.S.
Army and published Mobilize, arguing that America's real risk isn't China.
It's losing the will to compete.
I speak with Shyam Sankar, Chief Technology Officer at Palantir Technologies, alongside E16Z General Partner, Catherine Boyle.
So Catherine, when we were talking about guests that we had to add on, Sean was at the top of your list.
Why was that?
You know, after the Jeremy Stern profile and Colossus and a lot of, I think, stories that have come out recently or podcasts that have come out about Sham, he's one of these people that if you were in the know several years ago, you knew.
He was the OG, like, fixer for everyone.
You know, I think Trey Stevens, who's the co-founder of Anduril, came out on Twitter and said he's single-handedly responsible for my career.
John Doyle.
So many of our founders have pointed to Sham as the person who made their career and introduced them to Palantir, supported them in Palantir but also sort of gave them wings to fly away from Palantir and to start something new.
And you hear that story time and time and time again.
And Eric, you and I were talking about this.
It wasn't until a couple years ago that I think Sham actually became more of a public figure.
He was sort of the behind-the-scenes guy, the behind-the-scenes fixture.
And I think the thing that really changed it was Shyam and I'd love to talk to you about, kind of what was the inspiration for this.
You sort of wrote this seminal piece about First Breakfast, about defense reformation, and were the first person to really start talking about it.
But again, this was like 17 years into the journey of Palantir that you decided I'm going to be a strident voice for what needs to happen in America.
So I'd love to talk to you about this going from the behind-the-scenes person, the guy behind the guy in so many of our companies, to saying I need to come out and be a voice for this movement.
What was the kind of impetus for that?
It was kind of equal parts an act of desperation and an act of optimism.
I felt like after years of just seeing the building the Pentagon from the inside, seeing how defense was operating, I felt this frog boil that continued to happen.
Set in a historical context,
But the reason to say something is actually i thought this was the moment that it could all be fixed that, alongside of that happening, seeing what was happening outside of the building, that the founders were re-emerging there was a huge amount of energy people wanted to build in the national interest, and it was a moment to kind of crystallize what at least put forth what i thought the fundamental diagnosis was that really the things that we did to win in the past we accidentally turned our back on, and there's an opportunity to reclaim that with vigor, And we needed to do so quickly.
That time was running out.
There was a shot clock here that we have frog-boiled our way to a place where we've lost deterrence.
Any one of these items in isolation, you can write off.
You could say, okay, the Russians annexed Crimea in 2014.
That's just one thing.
Then you have the militarization of the Spratly Islands in 15.
You have the failure of JCPOA to keep the Iranians from getting a bomb.
You have Pogrom in Israel.
And certainly after October 7th.
It was kind of a radicalizing moment that like what is going on here.
We need to act.
And I think we've only had more things since then.
Now I think the good news is in the last year more has changed in the department than I've seen change in the prior 19 years.
And people are seizing that moment for reformation.
And it's been rewarding to kind of get it out there, get people to rally behind it and all of us building the national interest.
Yeah.
I think you get this question probably all the time.
What is it about the last?
I mean, as you said, it wasn't a single moment, but there is some change in the culture and the zeitgeist.
And I think you have a unique understanding too of culture and kind of how these mimetic shifts happen.
But what was it about 18 months ago, where it's like everyone seems to agree on the thing that was so contrarian for many years, where you were sort of banging your head against a wall saying this needs to happen?
Well, maybe unsurprising from my worldview, it all comes down to leadership.
We call them the founding fathers for a reason.
There is something special about the American spirit.
Every founding story is equal parts heresy and heroism.
And we had the right people who kind of saw, hey, this is not working.
And the shot clock is running out and we have to do something.
And we had those people both inside the building and outside the building.
So it's kind of a conspiracy coalition of the willing, coalition of the capable to go do that.
So it's hard to point to any one single moment.
I think the election is a big part of it.
Not to make it political, but just being able to get in leadership that viewed it with clarity and set the conditions to make this change happen.
Yeah.
So you've been busy.
You've joined the Army.
You've written a book that's coming out.
I'd love to get in to mobilize.
But first, why did you decide now's the time to sort of write the canonical book of what needs to happen in America?
And then maybe we can talk about this sort of fundamental thesis too.
But why now?
Why write a book, join the Army, and also be a leading Palantir?
There's a cogent kind of thread through that which is like how do we mobilize to prevent a bigger conflict?
And if you're really paying attention, it's hard not to think that we're kind of in the late 30s here, that things are brewing.
They've been brewing for a while.
People talk about great power competition.
And I think we're kind of coming out of the malaise of having won the Cold War or the Soviets having lost it, perhaps more accurately.
And that kind of led to a lot of bad behaviors that allowed us to believe a lot of lies about the future that we're kind of now marking to market.
And so we will not have the luxury that we really had in World War II of letting the adversary attack us first and then deciding to mobilize.
And I think a more clear-eyed view of what actually happened in World War II is that's not it.
It's not this facile thing that we just flipped a switch and the automotive industry decided okay, after Pearl Harbor we're going to make all this war materiel.
What really happened is that leadership from FDR realized in the 30s, in the late 30s, that we needed to mobilize, but there was not yet a national will or popular mandate to do so.
And Lend-Lease provided the mechanism to do that.
It took us 18 months to build factories and retool them, and we were able to create capability deterrence that we sold to the Brits and to the Soviets, such that when World War II really kicked off for us, when Pearl Harbor happened, we were at full-rate production.
And the way that we mobilize.
You know, when a country goes to war, it's the whole country that goes to war.
It's not enough.
I think part of the legacy of having won the Cold War is thinking like it's enough to just have a defense industrial base.
It's enough to just have the Department of War fight these wars.
It is actually the whole country.
And I think that's the most stark thing is like we all, as American citizens, need to be invested in both the prosperity the country gives us, but also the freedom that underwrites that prosperity.
And we have come a very far away from that world.
You know, in 1989 only 6 of spending on major weapons systems went to defense specialists, ie companies that were exclusively in the business of defense.
That's not that long ago.
That's when the Berlin Wall still stood.
Hmm.
Now that number is 86%.
So really what we think of as normal is an aberration from the past.
And Mobilize seeks to set that story in context of one.
Hey, this is the industrial base what I like to call the American industrial base that won World War II.
Chrysler built Minuteman missiles and minivans.
And every camera car, cereal box that an American consumer bought was actually also subsidizing our national security.
And that's really important.
We see this with the hyperscalers.
We see this with technology.
The amount that our private sector spends on R&D dwarfs what the government is capable of spending.
And you want to get on that price.
Performance curve as a way of delivering capabilities to our brave men and women in uniform.
Yeah.
So how do we get back to that?
And so the second part of it.
Yeah, so we had the American industrial base, but who was the American industrial base?
Today, we think of it as Northrop Grumman.
We think of it as Lockheed Martin.
But actually, it was Glenn Martin.
It was Jack Northrop.
It was Leroy Grumman.
They were people.
They were founders.
They were kind of not thinking about, hey, what's the performance going to be next quarter?
They were building something way bigger than themselves, way bigger than their companies.
And those founders weren't just outside of government.
They were inside of government.
It was the Hyman Rickovers, against the will of the Navy, building the nuclear Navy.
And I love that story, too, because it takes a lot of—
Oppenheimer, the father of the bomb, said the nuclear navy wasn't going to work.
He told Hyman he was going to fail.
And he still proceeded.
And that's something I think in the Valley we recognize as the classic founder personality.
And a big part of what happened After the end of the Cold War, we wanted a peace dividend.
We started spending less in defense.
We had this famous dinner, the Last Supper.
We went from 51 prime contractors down to five.
I think the conventional explanation of what happened is wrong.
People think, hey, we had consolidation.
Consolidation means we lost competition.
That's not, yeah, okay, maybe at the margin.
But first of all, it's always been a monopsony.
The nature of the competition is not what people think.
It's not these companies competing against each other.
The competition's always been the services competing.
It's been competition inside of government that drove innovation, not competition from industry.
What really happened from the last supper is that consolidation bred conformity.
It was the beginning of true financialization of defense.
These companies really could no longer think about growth.
They thought about financial metrics, dividends, buybacks, cash flow.
And it kind of became very narrow.
And that conformity is not an environment that founders can thrive in.
You know, the heretics were expunged.
They left.
They went to other parts of the American economy, like tech.
Mm-hmm.
But those heretics are required.
In fact, if you look at part of the book, we catalog all these amazing defense innovations almost to a T.
Every single one of them was a heretical idea.
You know, the institution was against it.
The bureaucracy was against it.
The process tried to kill it.
And these determinative outcomes.
You can think about the Higgins boat, the boat that won World War II.
The Navy didn't want to buy the boat.
The Navy tried to steal the designs for the boat.
In the end, 92% of all boats in World War II were Higgins boats.
Think about where we'd be if this Scots-Irishman wasn't just willing to just almost pathologically commit himself to making this happen.
The boys would not have landed at Normandy.
Yeah.
No, I mean, and that's super interesting.
Yeah, because I think that, as you said, it's always been, you know, this sort of forced consolidation, that we've picked the winners.
You know, we're post-history now.
Like, we don't actually need to build for wartime.
So it's your view that really that just expunged all of the talent that used to go to defense.
And it's interesting because it's also I mean, in some ways it's sort of serendipitous that that's exactly when the internet's rising.
So it's like if you're this kind of weird personality, you're going to go work on this new thing.
That's so exciting.
You know, I think of like, you know, Marc Andreessen, right?
Like he could have been in the defense industry maybe 20 years earlier, but it's like.
You know, the people who were building the internet in the 90s, they wanted to build the new thing.
So I guess, like is that sort of?
The fundamental problem?
Is that like it just became a place where anyone who was interesting or anyone who had a different view just could not thrive?
Yeah, exactly.
And then we compounded on that problem by, you know, the nature of the monopsony.
So, unlike a monopoly, where you have one seller of a thing, a monopsony is where you have one buyer of a thing.
The Department of War is a monopsony.
The nature of the monopsony is it forgets, It starts imposing all sorts of constraints on its suppliers and how they behave and what they need to look like.
And that led to – it's like we put all of these companies on the Galapagos Islands.
They're not on the mainland anymore.
And so what do you get on the Galapagos?
You get these exquisite giant tortoises.
They're really amazing.
It's like alien life.
It's very cool.
Except when you take the tortoise back to the mainland, they're not competitive.
They're going to get eaten alive by the wolves.
And so we started – creating a huge number of barriers for these people who, even when they had ideas, could those ideas come back into defense?
I like to say, like, when we started Palantir, there was no front door in the Department of Defense.
You know you had to the only front door.
There was exactly one.
It was in the intelligence community, it was In-Q-Tel.
If you were an outsider, there was no other way in.
The only people that worked here were insiders.
Mm-hmm.
Of course, now that's part of the sea change that happened, starting really in 2015, but that means putting forth the 18 theses, and the defense reformation in 2024 makes a lot of sense because we have 10 years of heretics who have been knocking at the gate, ready to come help the department.
Yeah.
And so much of the book.
I mean you talk about these sort of heretical heroes.
You know, in doing the research
And I mean, you're now sort of like the walking encyclopedia for the defense industry in tech.
Who are the most exciting heroes?
Like who's the person you look at and you say, like gosh, that is the person that people don't know about.
They need to know.
Well, I think it's hard to pick only one.
A new profile that we put out there, so some of these figures are historical figures Menard Shriver, Edward Hall, Hyman Rickover, James Boyd, John Boyd sorry,
But the one that's new is Colonel Drew Cukor.
And Cukor is the father of Mabin.
And here you have this Marine colonel born, raised by a single mother, Southern California, very modest background.
His only way of going to college was ROTC.
Joined the Marines.
Lots of incredible experiences there.
But he had a seminal experience where he was trying to evacuate Yazadi refugees who were fleeing ISIS.
And a young Marine looking at ISR made a call that he thought he saw RPGs.
And that would have made it unsafe for the Marines to land and exfil these people.
And there actually wasn't one.
As a consequence, you have order of thousands of people who were tortured, enslaved and raped because of this failure of operation.
And it just changed this man.
And so when he had an opportunity in the basement of the Pentagon on a project with no resources to go after bringing AI to the department, he leaned all the way in.
And you can see the journey of the heretic here where Everyone hated him.
Everyone tried to kill him.
Every service thought they were doing AI.
People tried to throw IG investigations in.
It's like.
One of the details we document is that someone said that Colonel Kukor is housing Iranians in his basement.
So they actually sent out criminal investigators to his house to look at this.
And here's a Mormon, devout Mormon, four daughters, 1400 square foot home that doesn't have a basement, by the way.
And, you know, the investigators were just completely dumbfounded.
But it shows you sometimes that what, you know, are you willing to put it all on the line?
Are you so committed, so incorruptible in what you're trying to deliver?
Or is this just a career?
And that's one of the things I think I draw a lot of inspiration from these folks is just seeing you know.
If they can do this, we can too.
Seeing that these people exist inside of government.
They exist outside of government.
And I think that's, in the moment right now, you could say, we need to build more weapons.
We need to do this.
Yes, but the most important thing we need to do is inspire the latent heretics to actually step up.
This is the moment your country really needs you.
What's been exciting over the last year or so is I'm seeing those people.
I'm seeing them inside the building.
I'm seeing outside the building.
And that is what is driving the change.
The leadership is setting the conditions to empower the heretics.
They're protecting them.
John Boyd, who was a famously difficult fighter pilot.
His own service, the Air Force, hated him, but the Marines learned everything they could from him.
And all of his heresy.
He was really the father of the F-16.
All of his heresy was proven correct in Gulf War I, where we destroyed the fourth largest army in the world in days.
It just, everything came to bear.
His high-low mix, his OODA loop.
Um, But, you know, John Boyd said, to be or to do.
You can be somebody or you can do something.
But you can't have both.
And, you know, how committed are you to this?
But he was so difficult.
He gets a lot of credit.
I think the other person who deserves credit, who I don't even know the name of, is a three-star Air Force general who protected him.
Because people like that do not survive in these bureaucracies on their own.
It's not like, hey, he's difficult and we somehow tolerated him.
It's, no, someone realized there's something special here, and despite that, we tolerate him.
You see that, with the dynamic between Bernard Shriver, who built our intercontinental ballistic missiles, and Edward Hall, who specifically built the Minuteman,
Schriever fired Hull once and then hired him back, realizing there was no way we were going to get to solid-fueled intercontinental ballistic missiles without this notoriously difficult human.
And I think that's great leadership.
Yeah.
Yeah.
And you just said something interesting, which is that it really takes leaders inside the building to model the change, to encourage it, to protect the people who are those heretics.
And you've joined the Army, and it's a program from General George and Secretary Driscoll.
Maybe tell us a little bit about the origin of that and then what you're doing specifically inside the Army now to support that change.
Well, the origin story of this is really so.
I've worked with the Israelis in some capacity since roughly 2014.
This is a very technical country.
And they're proud of how technical they are.
After October 7th, I mean, October 8th, they mobilized roughly 360,000 reservists.
By definition, all these reservists are prior service through national conscription.
And most of them had now had 20 years of experience in industry.
And when they got back to the IDF, they were horrified at the state of technology in the IDF, which is actually an implicit self-critique, which is, hey.
When I was 20, I was really good at coding, but I didn't know what I was doing.
Now I have 20 years of experience building internet-scaled things and I actually know how to do these things correctly.
So I saw them modernize more in the four months after October 7th than I did in the prior 10 years of working with them.
Okay.
And that was just, I couldn't unsee that.
So of all countries in the world, we are drowning with that talent.
You know the skills we have at building things in the Valley, the companies that A16Z backs like.
We know how to do this as a nation.
Mm-hmm.
The 20 year old version of our green suitors maybe did it.
You know, there's the will, there's the intelligence, the capability, but there's also then the trade, craft and know how, the experience, all the dead ends that I've run into in my career, the mistakes I've made.
If you're going to make mistakes, please make new ones.
Don't make the same ones I already have done.
You know, how can you stand on the shoulders of American industry to go faster and do this?
And so I'm not sure I really had a lot to give the army at, you know 24, but I think at 44.
Uh, There's a lot I can do to accelerate certain things.
And that's not just a narrow statement about me.
I think that's a whole statement about the Valley, this whole statement about American manufacturing.
Everyone in El Segundo.
You know how do we make sure.
If the Chinese make civil military fusion compulsory, why do we make voluntary civil military fusion impossible?
And when I look back at history, we didn't used to make it impossible.
In World War II we direct commissioned 100000 people that look like what we now consider Detachment 201 into the military.
And we should be doing that again.
The authorities exist.
They're just laying there dormant and we're basically underutilized.
So I was proud to join the Army with three other colleagues.
We have Bob McGrew, former chief research officer at OpenAI Boz, the CTO of Meta, and Andrew Weil, the former chief product officer of OpenAI, head of science now.
And I think we've been able to work on different projects that really we act as senior advisors to Army senior leaders, and there's different projects that we kind of get our hands dirty and then help.
But I think it's been a really, I've learned a lot by doing it.
Hopefully the Army's benefiting from it.
But I think more broadly we would like to catalyze this across all of the services and a broader call for folks who are listening to this now in industry.
What's been the biggest surprise?
Like, I mean, you've obviously worked with the department for years, but being on the inside now, what surprised you?
So my focus is really two things.
I'm helping them think through how to plan force structure over long periods of time.
So how do I generate the force I want for all the different military occupation specialties?
So that's been one.
But the second part of it is thinking through how do we want to employ software as almost like a malleable weapon system, as something that our commanders can wield to drive advancement?
And they call these the operational data teams.
What's been hugely impressive to me is the quality of talent in our green suitors.
People who are not formally trained computer scientists, people who have just learned these things.
The most compelling AI applications I'm seeing across commercial or, you know so, private sector or public sector are being built by these green suitors.
Hmm.
And I think there's something about the existential stakes.
You know, you're not doing this for fun.
You're not doing this for 10% efficiency.
It's a binary outcome, win or lose.
The other thing about this moment that I think is really interesting with AI is it's massively empowering to people with specific skills.
So, you know, it is the Intel warrant officer who really knows their domain.
And I was wondering, you know, as someone who's been doing this for 20 years like where was this person 10 years ago?
And the conclusion I came to is they were always there.
10 years ago, what would they have done, though, with their idea?
Make a PowerPoint slide?
Brief some program bureaucrat who would tell them how bad their idea is?
No, because they're smarter than that.
They wouldn't have wasted their time.
Now they spend two weeks.
They build it themselves.
Now they're having an empirical conversation about how what they've built actually drives the Army forward.
And everyone is quick to adopt it because everyone wants to win.
So it's been really exciting to see that.
The other part of it, I think, is big institutions.
It's conserved across private sector as well.
Struggle with zero to one.
Everyone wants to get you know if you have some sort of innovation.
They almost want to rush innovation to get to N as quickly as possible.
How do I scale this across the formation?
Well, the Army's a very big place and thinking very critically about the pathing of what is the journey and cycle of getting an innovative idea to scale.
That's literally what we do as an industry all day long, right.
And how do they take and vibe those lessons rather than cargo culting their way there, which is frankly what I think the private sector, you know large Fortune 100s do as well?
So they have more to learn from startups in this capacity than they do from you know, big Fortune 100 companies.
And that's so interesting too about just you know, that is something I hear time and time again like the level of technical ability of someone very junior in the Army or the Navy today.
It's like they came up tinkering.
And yes, as you said, like now, the tools are there.
They can just build something where it's.
You're not only learning from startups, you're literally learning from individuals who are enlisted, who have a great idea.
Which is it does feel like, as you said, like this is a revolutionary time for the military, where they can actually learn from their, you know, junior people who have a great idea and that can be deployed very quickly.
Which plays to the American military strengths of bottoms up innovation mission command type control.
It's really something that our military can uniquely do that no one else can.
Let's get into the SaaSpocalypse.
You know, there's a line of thinking that says hey, now that the switching costs, or now that AI is here, the switching costs are very low.
You know, there's no code moat.
There's no data moat.
There's no UI moat.
And there's a set of SaaS companies that are on the conveyor belt on the way to the guilty.
And you know, maybe it's mondaycom first and maybe it's Atlassian, and you know companies that aren't systems record, and then maybe it's coming for them too.
Um, there are other people who say Hey, you're not going to vibe code, you know Atlassian, you're not going to vibe code.
These these, you know incredible products with all these integrations and all these.
You know distribution, et cetera.
What say you and the SaaS apocalypse?
How do you make sense of it?
I think both things are true.
So I have a I would give you a different rubric to think about it, which is um what software is really fundamentally about beta and what software is about alpha?
And I think that the software that's about beta is going to really struggle.
This is software that made you more similar to everyone else.
And this has been my historical critique of the software industrial complex, which is that the feedback loop for the people building the software is can I sell it?
Not, did it add value?
Which is downstream of, can you sell it?
And so the you can think of almost like vibe coding, the advent of AI.
It allows you to make software that's specific to you.
It's inherently alpha focused.
If you do it right.
But so I think that the platforms that are already focused on alpha are going to continue to have an advantage.
It's like actually going to be a win that fills their sale up.
On the other side, the stuff that's all beta is really going to struggle.
And you can almost argue like maybe the beta wasn't that valuable to begin with.
One of the jarring moments for me was in COVID.
If you really look back at what were CEOs talking about in their earnings calls?
About software.
No one talked about the 5 billion ERP implementation they did.
That saved their supply chain, because all of them fell over like paper tigers in two weeks.
And what they were talking about was Zoom and Teams and how that enabled them to go remote.
And you cannot think of, like, that's crazy.
That should have been a Sputnik moment for the software industry to say wow, we haven't built shit that's valuable.
How depressing.
And on the flip side, for us at least, COVID was a huge tailwind, because it's specifically because we were able to help our customers adapt to this reality at the speed of the disruption.
I think it kind of separated the wheat from the chaff.
And I think we'll kind of see that.
You know, maybe there's a lot of things we've been spending on almost memetically, like well, other people use it for this.
This is a standard industry solution for X. Those things are going to feel a lot of pressure.
And on the flip side, there are going to be software.
It's almost like a toolkit, an approach that allows you to express how you're more different than other companies.
It's almost become software that allows you to express your competitive advantage.
Your strategy is going to be a premium.
On the day two stuff, like vibe coding, you can't do it.
I think that's actually true.
Like, I think it's actually true that day two is much harder.
A lot of it's unsolved and you have to figure that out.
But I don't think that's going to preclude the pressure on the beta, on the beta software.
Yeah. in terms of accruing value.
Right now, it seems like the hardware layer has the highest margins, whereas in the internet economy the applications have the highest margins.
I'm curious if you think AI will be like the internet, where sort of the entities that control the end-user relationships accrue the most value, or if you think it'll be more like the cloud, where the infrastructure layer accrues the most value or has the highest margins.
How do you think about how it'll play out?
If you thought about the stack as like chips models, AI infrastructure, AI applications, what I see happening empirically is the models are being commoditized and we're always under pressure.
So the model companies are expanding up.
Sometimes they almost call it in a diminutive way a harness, but it's actually they're building software around it.
That is AI infrastructure to do something like code.
And then the people who started as narrow vertical AI solutions are kind of earning their way down the stack to realize like oh, I need this actual AI infrastructure to be able to scale to my customer base and handle more use cases.
So our theory has always been the value is going to accrue in two places at the chips layer and at the AI infrastructure layer, what we would call ontology.
But those two layers, I think, are going to be pretty defensible.
There's this funny chart in The Economist the other day about what's going to happen to the economy and it gives three predictions.
Either everything goes vertical AGI, either we're all dead or we're all economically dead.
Everything collapses or 2 growth.
And so, you know, The Economist is hedging just like many others.
I'm curious how you, what's your sort of mental model for what AI is going to do to the economy in terms of, you know, the productivity stats and GDP growth, but then also the job market?
And I mean AI as it achieves its goals over the medium term, and we sort of you know start to reach the potential that people have been talking about.
You know, people say AI 2027, even if it's 2030.
How do you think it's going to impact the economy?
I have a lot of thoughts here, so hopefully we'll hit them all and I won't forget them as we go through this.
So the first bit is what always irks me about how we talk about AI is as if somehow we have no human agency.
AI is going to do X.
No, that's not right.
Humans are going to use AI to do X. There's a choice here.
Do we want to invest in AI slop and essentially, AI slot?
To borrow an expression from John Coulson, Patrick Coulson.
No, I think that these things are, I don't want to invest in that at least.
So what is our normative view of why AI is valuable?
How does it result in American prosperity?
How does it make our society better, not worse?
And restoring the fact that we have agency and therefore an obligation to steer this in a specific way.
So that's the first part of it.
Then if, okay, if we have agency, what is that?
You know, my view of this is We have a historic opportunity to fix the fundamental breakdown that happened in the 70s between wage growth and GDP growth that this should be.
If we look at just the example we have about the Intel warrant officer who's suddenly able to do so much well, I see that playing out on the ICU floor.
I see that playing out on the factory floor.
There is an opportunity to give the American workers superpowers with AI.
It's David's slingshot in a world where the Chinese Goliath has been this giant sucking sound of American prosperity.
If we do that, it's a basis for underwriting the reindustrialization of the country.
And we're not going to do this symmetrically.
That's why it's a slingshot.
It's not like, hey, this is how they do it there.
We're going to do this here.
It's actually, we're going to do this in entirely new ways.
Like Hadrian is a perfect example of that, right?
We are re-industrializing using technology, making these people 50 100 times more productive than it could be otherwise.
And it's going to lead to all sorts of new possibilities, in particular, because I think the great lie of globalization is that we can do the innovation over here And we're going to have the production go over there.
But guess what?
Innovation is a consequence of productivity.
If you don't make the thing, you can't innovate on how you make the thing and what the thing is.
You see that with SpaceX.
There's a reason the R&D engineers are co-located on the production floor.
What is the feedback loop and cycle time they expect to come out of that?
And you see that in the negative, where we used to think Wuxi was just some cheap set of pipetting arms for contract manufacturers, pharmaceutical research and now 50 of all clinical trials are being done in China.
And so I think we should view this as a national emergency and a national opportunity around AI.
And what concerns me a bit, these technology revolutions are usually by, like the vast vast majority are tool revolutions, not concept revolutions.
It was not Galileo who invented the telescope.
He used it to discover planetary motion.
It was the future of these technologies the microscope, the power loom, the telescope, the personal computer.
They are determined not by the inventor of the technology, but by the people who wield the technology.
Today, when we listen to the AI doomerism, we're listening to the inventors who are incredibly smart but, just like their creations, they have their own jagged intelligence.
Just because they were smart at building the model doesn't mean they're going to be right about the implications of it.
And then we are implicitly giving up our own human agency and how to steer it.
It is us as the wielders of it that are gonna determine the future course of this technology.
And I see you know, maybe the most authentic thing about that economist graph is those range of outcomes are exactly what's possible.
And it's up to us to pick which one we wanna be on.
It's a choice we're making.
It's not something that's being done to us.
You just said something so interesting that I think is underexplored, which is the co-location of RD and production, which is something we very much understood.
That was sort of, you know, that's the Henry Ford style, right?
Like that's how we used to build things in the physical world.
And then, of course, globalization led to this sort of separation of them.
And even you still see it in companies, right?
It's like the engineering team in many companies is not the same as the production team.
You can be a production company or an engineering company.
We see this a lot in our American dynamism portfolio.
What was the impetus for sort of that philosophical division?
You know, I think a lot of people point to policy changes in the 90s, but what was like the real impetus from your research that sort of led to this sort of divorce between production and engineering?
And how are you seeing it come back together again in companies today?
Europe has created exactly zero companies from scratch in the last 50 years, worth more than 100 billion euros.
We have created all of our trillion dollar companies from scratch in America in the last 50 years.
The difference is founders.
You know, you have really good companies over there, but they're like 300 years old, 100 years old, whatever it is.
We kind of had the Europeanization of our mega cap companies until recently.
You know Intel.
At some point there was this fork in the road where they could have promoted their CFO to be the CEO or Pat Gelsinger as CTO back then.
This is before he came back later to be CEO.
Who did they pick?
They picked the CFO, the person that Wall Street would understand, not the person who could actually determine the future roadmap.
And by the way, it really looked like it was working for 10 years until it fell off a cliff.
But that was all financial engineering, not real engineering.
You know, when was the last Boeing CEO to be an engineer?
I think it was 2004.
You know there was a way.
So you think about.
There's a period of time in our economy where we understood that the engineering was leading these things.
Elon says the pathway to the CEO is through the CTO, which sounds like a crazy, heretical statement because, like certainly for my generation, the way we grew up, that's not true.
That's not how, that's not what we were taught.
Now, I'm not saying that because I'm the CTO here.
Don't read anything into that.
I just, I just mean that like.
Yeah, we won't infer that you're breaking news today.
Thank you.
Andy Grove, who was the president of Intel, used to start his annual sales and marketing kickoff meeting by reminding all the salespeople just remember, it's the engineers who create all the value.
You guys just move it around.
You know it doesn't mean the salespeople aren't important or aren't necessary, but there is kind of a sequencing here.
And I think we kind of got very confused about that, that we became very good at financial engineering and forgot about engineering.
One thing one of our portfolio CEOs said is that maybe salespeople are the least AI-able in terms of being able to be automated or replace something.
I'm curious how you think about sort of the jobs at tech companies.
You know, leverage with AI how you're using in your own company, you know in Palantir.
How do you think about that?
Yeah.
So one part I was going to say from earlier that I think is relevant to this is You know, Pascal said every human has a God-shaped hole in their heart.
And part of the potential pathology from the labs is that they have filled that hole with AGI.
And so there are things that they assert as empirical that are actually articles of faith.
They may be true, they may not be true.
I don't know, but they get confused between what's an article of faith and what is actually an empirical reality.
And so, if you view this through a very pragmatic, clear-eyed view say, the salespeople, I'm not sure why the goal is replacing people to begin with.
Isn't the goal to win?
Isn't the goal to be dominant in your industry?
You want to be better.
And so maybe being better is about a mixed mammal AI teaming.
It's, you know, how do I build the Ironman suit for the salespeople I do have?
How do I make the best salespeople more productive and systematized?
What is it that makes them good for everyone else?
Like, there's all sorts of other ways of thinking about the problem if your goal is winning.
But if your goal is AGI, it's the aesthetic of the fact that you couldn't replace the person with this model is offensive.
And you're just going to keep driving at that.
And I think it could be a distraction.
This is one way in which I think the Chinese do have a little bit of an advantage, which is, first of all, just to be clear, I'd bet on us 100 times out of 100.
But they have a pragmatic approach.
Like the whole point of AI is to win.
It's not AGI.
It's how do I improve my productive forces, as they would call it.
Now I think that the good news is, if you look at the people who wield the technology in America, that's what they're focused on.
You know, the CEOs I deal with, None of them have asked me, hey, I want to fire a bunch of people.
Or how do I get rid of these people?
Maybe because we're too expensive for that sort of bullshit use case.
But they come to me and say, I want to dominate my industry.
Like, I want to destroy my competition.
Okay, great.
So the ambition is there.
And maybe you get more efficient by doing it.
But actually, the whole point is to grow massively.
So that ambition sets the frame of how you're going to apply the technology and what sort of solutions you find valuable.
Speaking of China, how do we win the AI race, particularly as it moves towards more physical AI and robotics, etc.
What are the things to make sure we get right or the things we need to we need to fix?
I think our biggest risk as a country is suicide, not homicide.
Anyone who knows me knows I'm a big China hawk and I think part of the challenge with China is it's not enough for the CCP to prosper.
America must also fall.
Look, if you want to buy our soybeans or not, I don't begrudge you.
That's a business decision.
That's free trade.
Great.
But when you're trying to smuggle in agricultural funguses so that we can't grow soybeans, that's a different ballgame altogether.
And that offends my kind of American Calvinist sensibilities of fair play.
But, so all that said, that would make it seem like I care a lot about homicide, but I think our problem is actually one of national will and focus.
And like, are we actually addressing the problems that we face here?
Are we encouraging the agency and our people to believe the world can be better?
You know, this manifests in a sense of just kind of like nihilism and polarization, that we forget what makes us, what unites us, and we focus on what divides us.
And there's this kind of sense like, hey, Nothing really works.
It doesn't really matter.
So let's just burn it all down.
And a big part of how I think of what Palantir does in the world is.
It is about the legitimacy of our institutions.
Like whether it's doors falling off planes or basic government services working.
These institutions should all work excellently.
In the absence of them working, it breeds this nihilism.
And then you get the wrong reaction to it.
So that's what I think we should focus on addressing.
So now to physical AI.
The point of having an ambition like let's re-industrialize, let's be maximalist about this, not some sort of half measure, that's like a little bit of friend shoring here or there or whatever.
It's like, no, we invented all of these technologies.
We invented mass production.
We invented nuclear power.
Thing after thing after thing.
It's like the idea that somehow the American people are not capable of this thing.
How is that beggar's belief, right?
So I think it's actually about will and motivation and leadership.
Yeah, no.
I think that that is such a good segue into what you're doing in terms of building culture.
Because I think this is something that is overlooked.
A lot of people think it's a technical problem or a production problem.
And I agree with you that I think it's a seriousness and a will problem.
And you have now been investing in film which is totally different than what you do at Palantir.
So I would love to understand, you know, why did you start a film production company?
And how do you think that's ultimately going to change the culture around having more will about doing these hard things?
Well, it really starts with my own assimilation journey.
I came to the U.S. as a young child.
I settled in Orlando.
And my assimilation journey as a four-year-old.
Five-year-old was watching movies with dad on the couch.
And what were the movies of the 80s and 90s?
It was Hunt for Red October, Red Dawn, and Rambo 2 and 3.
And you know, I like to say, as a five-year-old, I knew what it felt like to be an American before I knew civics.
That was way, way down the line.
And I think a lot of people experience that again after a long period of time when they watch Top Gun Maverick.
And so, you know, we sometimes over-intellectualize these things.
Like, there's a feeling to it.
Even subtle things, like I heard from the guy who made the movie 300 that after 300 came out, Navy SEAL recruitment went through the roof.
And he was kind of perplexed.
Obviously, it's a movie about Spartans.
What does this have to do with Navy SEALs?
But it clearly inspired so many people to be like, I want to look like that.
I want to be that strong.
I want to be that heroic.
And so the virtue of entertainment as, first of all, it's got to be entertaining.
It's not Pravda here.
But then it lets us reflect on ourselves and who do we want to be and what do we want to be like?
And if our entertainment is all entertainment AI ruins the world.
Technology is a force of evil.
It's all dystopic future scenarios.
That sets a sort of condition which I would juxtapose to my youth in Orlando, growing up in the shadow of the Space Coast, which was just like science and technology is amazing.
And we're going to be living on other planets.
And you know as a sixth grader, write a report on how are you going to get to Mars and everything.
It just inculcates a fundamental belief that the future will be better and that science technology, the will to invest in these hard problems is worth it.
It's worth it.
And so I think we have a moment to reclaim storytelling in a way that's both entertaining and inspiring.
Yeah, no, I love that you point out that you grew up in Orlando.
It's funny.
I also grew up in Florida in the 80s and 90s.
And it was like, you know, people made fun of Florida, right?
Like they didn't understand there was anything good there.
But Orlando, I mean, you say it's the shadow of the Space Coast.
It's also Disney World.
Right?
It's the best stories of a century.
It's American culture.
And so I'd love to, I mean, were you a Disney kid?
I mean like, was that something that like also spoke to you of?
Like these stories of good and evil that are passed down through cartoons?
Absolutely.
So also, I mean, there's a part of the story, which is the business.
Like, why did we end up in Orlando?
You know, after we fled violence in Nigeria, my dad had a childhood friend who was living in LA who sold knickknacks at theme parks.
And he's like, hey, look, I know this horrible thing just happened to you.
There's this up and coming place with theme parks.
I don't live there.
I need someone I trust there.
Why don't you go to Orlando?
So literally, it's not just that, was I a Disney kid?
My parents... job was to provide knickknacks in the theme park stores.
So, like after school, they would take me to SeaWorld and I would pet the stingrays while they restocked the shelves, you know.
And so I grew up very much imbibing the storytelling, the Asperger, I mean, Epcot.
Epcot was all about painting an optimistic vision of the future and what technology was going to be like and the stories of heroes and you know that there was both.
There was both evil and bad in the world and there were clearly heroic actions that you could take and it was all super inspiring.
And do you?
I mean, that's what's so interesting too is like I feel like the height of the sort of good and evil battle inside of Disney film was sort of the you know, Lion King 90s right.
Like, I mean, they were different films then.
How do we get back?
I mean, maybe it's not back, maybe it's forward, but how do we get back to those stories today for children, for people to feel optimistic again?
I mean, you know, in some ways you don't hear.
Oh, I grew up in this city and it's the height of optimism.
You don't hear that about California anymore.
What will it take for movies to transform that?
Well, you know, this is kind of a personal opinion, but I'm really excited that David Ellison is going to have Warner Brothers.
Because, you know, if you think about Hollywood, the original studio heads, they were founders.
Like Jack Warner in the 30s, Germany was the third largest export market for American entertainment.
And the Nazis actually deployed censors into Hollywood to control what was being made.
And every studio capitulated except for Warner Brothers.
Jack Warner is the only person willing to stand up and speak truth.
And only a founder can do that.
Because if you're a professional CEO who's employed, you can't survive that.
And so I think in some ways there's a mirror to the present day Hollywood and the defense industrial base.
It's conformity.
It's kind of lack of opinion.
It's lack of a normative view of what is it trying to communicate.
Then if you go a little bit further down the line, you look at the Vietnam era.
Like we had very cynical Hollywood content in Vietnam as a reflection of how we felt about ourselves.
Yes.
In 73, George Lucas made American Graffiti because he was tired of it.
He's like, I'm tired of it.
I just want to make a movie about boys driving cars chasing girls.
Mm-hmm.
And it was a palate cleanser, that kind of like.
Yeah, the American people remembered like okay, we went through our period, our cycle of grief and cynicism, and we're ready.
And it set the conditions for the movies of the 80s and 90s that we all love.
I think we're also kind of tired of it right now.
We're tired of the cynicism that everything's going to be worse.
And you see that in the performance of stories.
Top Gun Maverick's the easy one to point to, but the content that's doing well right now is american-oriented it's there are inspirational figures.
The heroes aren't anti-heroes that are drug addicts that you wouldn't want your kids to grow up to be.
There's actually some sense of inspiration in it and some pride and in terms of uh, who we are and how that reflects in the entertainment itself.
So i think i think we're.
You know, if you think about the next uh two to ten years, we're going to see a lot of content like that.
That's what i see in the development pipeline from these studios themselves.
That's exciting.
So maybe talk to us about some of your projects or things you're working on and what you're most excited about.
But then also, yeah, that's so interesting.
We've had these conversations, Eric and I, with Mark and others about how you know, the pipeline for the last 10 years has been dour.
We're sort of getting the end of the pipeline.
You're seeing it in sort of the Oscar nominees this year.
You know, it's like they're not optimistic.
But, as you said, like maybe 10 years from now we're going to see this pipeline of just like pro-America exciting optimistic enthusiastic, golden age sort of content.
What are you seeing and what most excites you?
Well, you know, I don't want to give away too much of my own development pipeline here, but I would say, like you see, like Call of Duty is being made right now by Pete Berg and Taylor Sheridan.
You see the entire Taylor Sheridan universe.
I mean, and talk about Sicario.
It was like 2014 Sicario basically came to life with the new, the Jalisco new generation cartel right.
Like there's a sense in which The storytellers have exactly the frame that we're kind of excited about.
I think there's recent events are very interesting to tell stories about right now.
Even a movie like War Machine, which just came out.
From watching the trailers, it was not yet clear.
You could imagine, like five years ago, that the storyline would have been something more like the US government built evil robots that the human soldiers had to defeat.
In this case, it was more like aliens, basically.
Sorry to give away the plot if you haven't seen it.
But you know, you have an alien robot and brave American rangers have to defeat them and do through their own ingenuity.
That that itself is, i think, showing you it's belies the shift in the narrative and storytelling that's happening.
I think world events remind us that there are actually, there is actually evil out there.
Russian tanks can just roll across the border, you know, october 7th just horrendous barbarism.
Is still possible that these things don't maintain themselves?
Um So what would I say?
Like I think.
So putting this back in a geopolitical lens, you know as much as I've been saying we shouldn't call China near peer, we should call them peer.
Because calling them near peer is like a shibboleth that lets us off the hook.
When you look at operations like Maduro or Midnight Hammer, it's hard to think of more you have done to restore deterrence in the world.
A reminder that we do have the will.
Maybe because we didn't have the will.
You forgot that we had the capability, but we have both the capability and the will to do things that are quite amazing.
At the same time, it signals a very obvious truth, which is somehow none of the Russian and Chinese shit worked.
So if you're a third-party country and you're thinking about what is the future of the world and how do you want to be allied, and maybe you've been hedging because you've been seeing America in retreat it's also a reminder that the Chinese did not come to save Maduro, and none of the equipment they provided actually seemed to do anything.
So is that really an option for you?
So I give you the geopolitical answer, but I think okay, here are some projects I think I can share.
So Oppenheimer was hugely successful and complicated, right?
Where it's like, it's three-dimensional to the point of entertainment.
It's not Pravda.
I think there's a very powerful story in Hyman Rickover and the birth of the nuclear navy.
We talked a little bit about him, but what I love about Rickover is he was born in a shuttle in Poland, came over at the age of six.
One of these near, almost near missed stories where they were on Ellis Island.
When you get to Ellis Island, you have 10 days for someone to come pick you up.
And so his mother sent a telegram.
It gave someone money to send a telegram to the father who was already here to come get them.
The guy pocketed the money for the telegram.
On day 10, someone happens to arrive that they know from the old world, who then runs out, gets the father to claim them, buys them one extra day.
So on day 11, they get picked up.
But you had this near miss where we almost didn't have Rick over.
But Rick Ogre was a notoriously difficult personality.
He was a 5'2", short guy.
In World War II, he drove a coal ship.
It was not a prestigious post.
But after World War II, he was sent to Oak Ridge, the vestiges of the Manhattan Project.
And he was inspired.
He had this idea of putting nuclear power inside of the submarines.
Because before then, submarines sucked.
They could go underwater for like an hour.
They were diesel powered.
They were loud.
They were basically surface ships that could occasionally submerge.
And after that, they became really exquisite.
And I think he built the first one in like five years, six years, the Nautilus.
But the Navy didn't want him to succeed.
Not only did Oppenheimer think it was a stupid idea, the Navy did too.
His first office was a women's restroom.
I kid you not, you know, it's like, how can we humiliate this guy to quit?
And he just kept going.
And what I think is interesting, when you look at his memoirs, like it's not that he was immune to the humiliation.
He felt every slight and insult.
He documented them.
But somehow he was able to channel that into something he was going to push through and still succeed despite that.
Zumwalt, who was the chief of naval operations, the senior, most uniformed person in the Navy said the Navy has three enemies the Soviet Union, the Air Force and Hyman Rickover, his own admiral.
The other thing that I think fits very closely with 18 Theses.
Like Hyman, Rickover was a four-star admiral for 30 years.
That is something we can't even contemplate today.
We almost view our officers as as cogs to keep moving around every two to three years.
You have to keep moving.
As the first director of the nuclear navy, of naval reactors um, you know he was in that role for a very long time, but that role, even today, is an eight-year stint, which shows you the primacy of people that we understand.
With something this exquisite, something where this much knowledge and continuity matters, you don't just keep pulling people out every two or three years.
Uh, And our ships, our subs, are the safest in the world by a long shot.
So every six months the Soviet submariners would get six months of respite at Sochi to recover their white blood cell count because they were getting irradiated.
Okay.
We've had no deaths due to radiation.
You know, he built it with the specification, this has to be safe enough for my son.
He built it to a specification that is 100 times safer than the minimum safety standard.
And that is the sort of aspiration only a founder could have.
Yeah.
This is going to be a great movie.
What else is there to do?
You're doing everything.
So what else is on the radar for you?
Well, you know, I...
In some sense, maybe it's enough.
But all of these things have a through line where it's really about American greatness and inspiring the next generation.
And it's driven home to me when I think about my kids and recognizing that the America I grew up in is something that every generation has had to fight for.
And I'm in that phase now where I'm fighting for the prosperity that the next generation ought to have.
And so, whether it's soft power and inspiration and movies, or hard power and deterrence of adversaries and preventing World War III, it's all about American greatness and the prosperity of the American people.
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Thanks again for listening, and I'll see you in the next episode.
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