MP and DoD split risks they can and cannot control

Transcript

Transcribed by machine (Whisper) from the episode’s audio, so a word may be off here and there.

1. 10:23

   Give us other areas of either physical AI or software AI or other markets where you think these public-private partnerships are really necessary to embellish U.S. supremacy. Yeah. There are some major categories. is obviously we've all heard about shipbuilding and advanced pharmaceutical ingredients. I mean, I think those are important ones. And then there are a number of sort of niche areas like industrial diamonds that are important for quantum computing.

2. 10:53

   And some of these things that you never would have thought of where it's a vertical where there might not be a market large enough to need five players, but a good public-private partnership can just solve that problem. And then there's some other verticals and critical minerals. Is it straightforward for you to find the right person within the Trump administration that said, of course, this is obvious, let's sit down and hash this out?

3. 11:14

   Well, and I think that's, you know, our particular deal was led by DOD. And so I have to say that the Pentagon leadership is extraordinary. And, you know, this was a mandate, though, directly from the president to solve this problem. And so, again, they deserve a lot of credit for being, you know, bold here. And to be clear, because this story is not out there, our process, this was, I've never worked so hard in my life.

4. 11:38

   I mean, this was like a true, aggressive, private equity style investment and negotiation. The transaction documents are public. You can look at that. That's what you're saying about. They're tough. Yeah, they are. This was as tough as it gets. Tougher than, you know, think of any, you know, blue chip private equity or distress lender. type negotiation. That's what this was. And the key thing was they were going to hold our feet to the fire to execute on an aggressive timeline. They were going to hold our feet to the fire on the costs. And so we're exposed. If we get the costs wrong, we're making this investment.

5. 12:17

   And so the key piece of this, which I think is a good model for all of us and is actually will be really effective, is the goal, I don't speak for them, ask them, but I think their goal was we're going to take the things off the table that you can't control. Mercantilism, certain customer issues. We're going to be held to account for the things that we can control. Our ability to execute, our ability to execute on a good timeline, and our ability to control costs.

6. 12:46

   So when we think about a lot of these historically, the government sort of investing in a sector and quote, picking a winner, usually there's sort of money given to someone, and it's sort of public risk, private upside, right? This is not that. This is private risk, public risk, public upside, private upside. It's a true shared win-win-win. And again, like I said, hold me to these words. I hope I'm right on this, but I think to the credit to the Trump administration, I think they will make money on this and have solved the national security problem.

7. 13:23

   All right. We appreciate you coming, Steve. Yeah. Oh, thanks. Thanks so much. Thanks, brother. Yeah, it's great. All right. Take care, Steve.