The State of Modern War: Palantir & Anduril Execs on Drones, AI, and the End of Traditional Warfare

of Palantir, but just kind of like the early standup of Palantir and how things got going during that era with that small group, how you guys kind of figured out how to build the business. Yeah, it was one of these things that was kind of a slow start. There was a real idea amongst the five co-founders, including Peter, that, you know, it's kind of insane to live in a world post 9-11 where people are arguing about what's more important, privacy or security. Like, aren't they both really important? And who is actually spending time pushing out the efficient frontier? For any amount of given security, you should have more privacy than you had before. Or any amount of given privacy, you should have more security.

and this sort of changing the dialectic there was really the entire impetus of what we started with. And now there's a technical approach that follows from that. There's an approach to privacy and celebrities that are around that. But really, we started as a business that was pretty myopically focused on solving a handful of problems and counterterrorism for a handful of institutions in the world. Let me start by asking a question that I think is important to ask, particularly for a broad audience and for the two of you to frame your personal philosophical views. Is war good? There's a lot of conversation about there is a military industrial complex that has an incentive for war. What's your view, your philosophical motivation for why you do what you do? What your view is of war and defense and the work that your business is kind of pursue?

Well, anyone who's been to war would tell you that war is awful. War is bad, categorically bad. That doesn't mean it's always avoidable. And that, you know, there are people who will want to use might to make right, to define a set of rules. And you have to be in a position to protect your people and your interests accordingly. At the end of the day, it's all about deterrence. You don't want to go to war, but you want to be prepared so that if you do have to go to war, that you will win decisively and quickly. I've never met a general that has said, you know what I really want to do today? I want to make phone calls letting parents know that their children have died in combat. Nobody wants to do that. And I think that that's really the goal of everything we were working on at Palantir is what we're working on at Anduril, which is make it unthinkable to your adversaries that they should ever challenge you.

Why do you think it became taboo and became so negative, particularly in Silicon Valley, that building a defense company or a company building technology to service the defense sector was viewed with such disdain and was an untouchable sector for so long? I think it's a beautiful consequence, and I mean it unironically, of kind of the peaceful world that we lived in. The origin story of Silicon Valley is actually defense. You know, Lockheed was the largest employer in Silicon Valley in the 1950s. The Corona spy satellites were built there. So in a world that was gripped by the threat of the Soviet Union, you know, you had a very different posture in Silicon Valley.

But in a world post the end of the Cold War, the end of history, kind of a view of globalism, that it's all going to be great that we exist beyond the confines of our country. These things were viewed much more cynically and the threats didn't seem very real. And I think you could even backtest this through the moment where Silicon Valley kind of really woke up and realized, hey, maybe these things are real. are when the Russian tanks rolled across the Ukraine border, you know, is when they realize there are a lot of Ukrainian, Eastern Europeans, a lot of people who are affected by that in Silicon Valley, who started to realize that maybe there's a more nuanced issue here than just simple, the simple Eisenhower quote of the military industrial complex.

I think many of the people who were protesting Silicon Valley's involvement in working on national security priorities were the exact same people that had Ukraine flag in bio. So there's clearly just like a policy mismatch or an understanding mismatch. The other thing that I would mention is that these large tech companies, unlike many epics prior, were global technology companies. They didn't necessarily view themselves as American. And so if you go and you look at where these protests came from, you have to keep in mind that a lot of the signatures that they had on these protests were not coming from U.S. citizens.

And so there's like a global character to those companies that probably was not the case during the Cold War. Do you think that's changed recently? I mean, to Shams' point, I think that there's just an increased awareness of the complexity of the geopolitical situation. And I think it's certainly a lot less controversial work on these topics than it was in 2017, 2018. You know, it's a 20-year overnight success, right? And Anderle's now reportedly raising money at a $60 billion dollar valuation, just landed a $20 billion army contract. Palantir today is worth $400 billion. The flip side of what I just said is that some people are saying that Silicon Valley is taking over defense and Silicon Valley is the next story of the American war machine.

This has become sort of a popular narrative. Can you just respond a little bit to kind of where we were coming out of World War II from a defense industry perspective, where we find ourselves, where Silicon Valley seems to be at the center of this today? You know, the industrial base that won World War II and the early Cold War was not a defense industrial base. It was an American industrial base. You know, Chrysler made the Minuteman ICBM. They were the prime contract on it and they make minivans. So missiles and minivans. General Mills, the cereal company, had a mechanics division. Everything they learned doing R&D to process grains, they actually used to build torpedoes and inertial guidance systems. Ford built satellites until 1990. So the entire economy was invested not only in economic prosperity, but also underwriting the freedom that allowed us to have economic prosperity. It's really a consequence of the end of the Cold War. So when the Berlin Wall still stood in 1989, only 6% of spending on major weapon systems went to pure play defense specialists. 94% of it went to what I call as dual-purpose companies.

You know, yeah, a missile is single-use. It's not a dual-use product. You're not going to buy it at Walmart, but that actually these companies were invested in both parts of this. That figure today is 86% goes to defense specialists. So we have a very different structure of the U.S. economy as a result, and I think it leads to very perverse narratives of what would it be like to mobilize? If things got really bad, we'll just flip a switch and our auto factories will magically turn into enabling us to provide for our defense and security. And I think a cold eyed look at history is it took 18 months to do that. We actually started ramping up to provide this stuff for our allies, for the Brits and the Soviets in the context of World War II, and that we've actually missed some of those signals today. When Ukraine went through 10 years of production and 10 weeks of fighting, that probably should have been a five alarm fire that we got the fundamental calculus on deterrence wrong. We thought the stockpile was going to to our adversaries, it was always the factory. It was the ability to generate and regenerate

directly from their customer. So they're not really investing a whole lot forward of the capability. Anduril, on the other hand, we're doing all of this as private R&D investment, and then we're selling the outcome, the output of that as a product. So this is fundamentally a different business model. But I do think that there's a tremendous amount of capital that's required to pull this off as a new entrant to the space. I don't think that the market is going to

support 100 new primes or something like that. I'm hopeful that it's not just Anduril. I think it would be healthy if there was more competition in the space. But being able to raise that amount of capital, hire the people that you need to actually pull it off, it's not like building a normal tech company. It's not just the development of a product. There's a lot that goes into this. Dre's point might seem kind of... obvious or simple, particularly to an audience that's largely coming from tech or Silicon Valley, but that's not how defense works. People don't build products. People build to a spec that the government says, this is what I want to buy. And then you kind of say, yes, you know, you have to think about defense as a monopsony where there's a single buyer for the thing. And that concentrates an enormous amount of power in the buyer, whether they're right or wrong. And if you look at the history of defense innovation, typically the monopsony is wrong. You know, it was Churchill as the head of the Royal Navy who built the tank because the British army was not smart enough to realize that in the next battle, having horses was not going to work. So every one of these innovations is kind of an act of heresy. There's a founder-like figure who is so committed

pathologically to a different heretical concept, they see it through and only in combat or only when it meets the moment is it actually validated. Now, a grave threat like the Soviet Union is a sort of forcing function that allows you to innovate. When we were building ICBMs, we had eight competing programs. Today, in peacetime, that would be viewed fastly as wasteful. Why should you have eight competing things? Why can't you just pick the right one and spend less or put all your wood behind one arrow? And of course, that kind of turns its back on our fundamental belief in America on the free market, that there's a competition of ideas, there's fundamental uncertainty, there's quality, like variance in the quality of the execution, and that you need this competition. And it's not just principally competition amongst the primes or new entrants, it's also competition inside of government. And there were originally, I think, or at one point, 51 major defense contractors. And just for the audience to understand, they reduced down to roughly five or six primes. That's the term prime is one of these prime contractors and then make subcontract out to other companies to develop componentary parts. My understanding in Anduril

was to do exactly this, build a product, show up with something that's cheaper, better, faster, and actually competes on the merits rather than be caught in this kind of prime landscape. And that worked clearly. But over time, there seems to be a lot of capital concentrating into the new primes. You guys, you guys, SpaceX, OpenAI, maybe one or two others. Is the landscape going to emerge that we're going to just look like the same old way of operating where we have a handful of primes that all have these trusted relationships with the government agencies? Or how do we kind of create that competitive environment to continue to drive innovation and make things affordable for the US government and the taxpayer going forward?

Well, just like, and I interviewed Trey in my new book on this, like just like venture, there's going to be a power law here. So one of the grave mistakes we've made as we think about innovation, which has resulted in essentially innovation theater, is this idea that you're going to just peanut butter spread around the capital you have for innovation that, you know, every company is going to get roughly the same amount. It's not enough to hit scale. It doesn't reflect actually the relative performance differences because there's an authentic power law curve. Like any venture capitalist would realize that, you know, your biggest winners are going to return your whole fund. There's something authentic here as well, which is like, yeah, you may have 10 bets, but at some point you're going to have to get smart about concentrating down on the things that are actually working. Yeah. I mean, this is a kind of a great point about any category. It's like if you're a space tech investor and you didn't invest in SpaceX, you probably lost money. If you're a crypto infrastructure investor, you didn't invest in Coinbase, you probably lost money. If you're a social media investor and you didn't invest in

Facebook, you probably lost money. And yet, for some reason, capital allocators have a very short memory. They don't have the ability to go back to the prior boom cycle and say, oh, wait, I remember what happened that last time. We had to concentrate capital down to the winner. And I think that this isn't any different. So what was the motivator then for change in the construction of the landscape of defense contracting, was it software that takes us from the old primes to the new primes? Is that really what kind of triggered this? The consolidation. So in 93, having won the Cold War in 91, or I think more accurately, the Soviets lost the Cold War, you know, by 93, we expected as a nation, a kind of peace dividend. We don't have an adversary now, we should be able to spend.

less on defense. And the department had this famous dinner where they brought 15 of the 51 primes together and said, this is going to happen. The budget's going to get slashed. We're not going to save you guys. You have our permission to consolidate. Some of you are going to go out of business. Some of you should try to make a commercial business, which didn't really work. And that's what led down to five. It was actually, there was going to be, we were going to go from five to four in 99. The justice department put their foot down and said, we're not going to let Lockheed and Northrop consolidate. Right. And then today, so the changeover, what gave you guys the window? What gave you guys the window to build the business that you've built? I mean, what did you see early on 20 years ago and continued forward in the hardware side that made you say, this is the moment? Is it software that enabled this?

that you put into software, like the marginal price you're paying is a small fraction of the R&D we're amortizing across commercial and government customers. And I think maybe,

costs costing down, they were in the same position as Palantir was in the early days. Yeah. Let's go back to the venture capital. At this conference that we're at,

a big market that's growing aggressively, you've got a $200 billion TAM to go after now, shouldn't that justify the venture capital coming in, maybe even justify going at a higher price? Is this Department of War investment activity really going to kind of change the landscape and increase more venture capital flow? I think it's going to help out tremendously. First of all, I love the nickname that this team has, which is Deal Team Six.

So, you know, I'd be honored to be part of that team. But I think even if you look back at the titanium supply chain in the 50s, 60s, it was bootstrapped by the Air Force in a similar way where they strategically injected capital down the supply chain to enable the aerospace industry to be created. So I think there's a tremendous opportunity with the Office of Strategic Capital to think about what are the structural bottlenecks in the production. You can have a lot of drone companies, and they're all going to bottleneck on brushless motors. There's going to be certain key parts of the supply chain that we don't have enough capacity to produce here in the US, and they're going to need a bolus of investment.

And just like integrated circuits, the first customer is going to be less economical than the end customer. So I think that's one part. Then the other story I love is where we really screwed this up. The drone is an American birthright. Abe Kareem and the Predator. We built a general atomics. But of course, then the government got in the way. The government said, hey, a drone is a flying missile. This thing needs to be ITAR controlled. Also, the FAA got in the way and said, no beyond line of sight operations. So you basically killed the domestic drone market. There is a counterfactual. world where General Atomics had a consumer subsidiary called DJI and the consumer drone market was entirely owned by the US and it provided for economic prosperity for America and wrote us down the price production curve that we could be using these things in innovation for national security as well. What's the next market where you're worried that's going to happen?

I have a lot of markets. So, I mean, we're talking a lot about weapons of war here. I'm worried about things that go beyond weapons of war that affect our will to fight. Pharmaceuticals is one that's close to my heart. My father was a pharmacist, and one of the things he always wanted me to work on was bringing pharmaceutical production back home. 80% of APIs for generic drugs are produced by China. What do you think the American people are going to think when they have to choose between defending the free world, defending American sovereignty, and their five-year-old dying of an ear infection that we would have thought of as trivially curable? So I think there are these things where we've just imbibed the globalist vision that, hey, we'll do the innovation, they'll do the production, without realizing that innovation is a consequence of productivity.

Probably to put it in terms that the tech community would really understand is like, what motivated Google to do the research in 2017 behind the paper attention is all you need? A desire for a 3% incremental improvement in Google Translate. You cannot think of something more banal leading to something more revolutionary. And we've seeded all of those opportunities to realize and harness that innovation. Now, if we stick with pharmaceuticals, there's a reason 50% of all clinical trials, new clinical trials are happening in China and not in the US. Do you have a view on a technology or product that's developed in the US that we're at risk of getting regulated out and we're, or we kind of go in the right direction at this moment?

I would say that semiconductors is actually a really interesting one. Back to your point about Fairchild is that, you know, we were the home of the semiconductor industry for many, many years. And, you know, once TSMC got, you know, ahead of steam in Taiwan, they kind of ran away with it. And we didn't, rather than investing in a domestic competitor, there are all sorts of reasons for this that we could spend hours talking about. We basically just allowed that to happen somewhere else. And now we're in a position where almost no amount of money is going to fix this problem for us, certainly on a timeline of relevance as it pertains to the risk that Taiwan has in 2027.

So I would say that's like another really big one. Getting back to defense, how does the hardware and software fit together in this, you know, kind of emerging war technology landscape? You guys are building software, you're building hardware, like help us understand a little bit about what the systems of war look like in the decades ahead. Well, I think the starting premise would be where does it give us an advantage? And, you know, we had the first offset, which was nuclear weapons. The second offset, precision guided munitions and stealth. Really, the third offset is decision advantage. How can we outthink and out execute the adversary? That's where these things fit together. That's like the thesis of even having them to begin with.

And I think the reality is that there's kind of a messy overlap of these things. Like all innovation is messy and chaotic. And maybe the department suffers at times because it tries to have a framework-based approach. Like we're going to have MOSA, modular open standards architecture, something like that. You know, it's like we're going to avoid all of the pain and messiness by having some sort of process. But in reality, the process always destroys all of the innovation. And so, there's obviously a very tight theses where these things need to coexist and build off one another. They need to be interoperable. But you have to earn that. You have to earn that opinion in the exercises, in the tests, in the evaluation, in combat would be my humble suggestion.

and mow the lawn and make the right decisions. Now, you know, this administration's blown up JASIDs, which is kind of one of these insane bureaucratic processes. Like, can you just take a, forget a scalpel, take a machete and start clearing the jungle and re-earn some of these lessons as you go through it? If you look at Kelly Johnson, who was the founder of Skunk Works, He built 41 airframes in his career, including the SR-71, still the fastest-buying manned aircraft, and the U-2, which we still fly.

You look at his rules. One of his rules was he had to play defense to keep the government bureaucrats out of his program. And I think you could, you know, okay, it's not a critique of government. You could think of big corporations. Like, you know, these companies trade at like less than two times revenue. The problem is it's not profitable enough, actually. But Trey, Shom said in the past, we have eight days of munitions on hand for a major conflict with China versus 800 days needed. How far away do you think we are to having the supply chain built and the production capacity built to meet that objective?

Well, I mean, one of the other things Shom just said in this conversation is that there's a high-low mix question as well. There are exquisite systems that are like the multi-million dollar interceptor missiles. And then you have, you know, dumb munitions, things like bombs that are being dropped and things like that. And it's not the same across that entire stack. You know, there are some munitions that are woefully undersupplied and we have very low readiness on. And there are others where I actually feel pretty good. From an Anduril perspective, you know, we're looking at ramping as fast as we can.

We just opened Arsenal yesterday to start producing Furies and, you know, looking out over the next 18 months, we're not taking our foot off the gas. And yet there's still a run rate capacity that we're running into as we ramp. Like it just takes time to get all these lines stood up. So, you know, if we were to start today with unlimited cash, I think over the next 18 months as a country, we could get to the point where we were on track for having a sustainable industrial base. But we're not going to do that. We're going to trickle it out over time. And I think that unless there's real political leadership that steps up to drive this forward, we will likely be in a similar situation for a long time.

And so I think we really need to take advantage of this specific moment where there's clearly urgency that is understood by leadership across the administration. How much of the spear is autonomous systems? Is everything going autonomous? Is it just drones or is there on the ground autonomous? Right now. Well, I would actually argue that like if you were to build for the 18 month out. I mean, the wars of today are fought with the weapons of yesterday. That's like just a fundamental truth. And some of our weapons of yesterday are awesome. Like B-2s are incredible. The bombs that we dropped last summer in Iran, incredible.

Like these are very high-tech, exquisite systems. Patriot missiles, incredible. They're very performant. They hit their targets almost every time. I mean, these are great systems. The problem is, is that they're incredibly expensive and we can't resupply. Like we're just, we're way behind the eight ball on that. And so, you know, thinking about the wars of the future, it means that we need to start building these attritable mass systems today so that they're in inventory to be used for those conflicts. There are a number of andrel systems that are at a readiness level, at a level of deployment, that they're active and being used in combat today. But it's still a very small percentage of the way that the wars are being waged. Over the next five to 10 years, that HILO mix is going to have to shift massively. I mean, this is just clearly evident in Ukraine.

It's clearly evident in Iran. And I think the department is making steps to ensuring that they have a better divide of low-cost, attributable systems and those high-cost, exquisite systems. But, you know, as I said, it's going to take political leadership to get there. But we have the ability to do it.

All-In Summit in September, Alex Karp, your CEO spoke, and there was a protest group outside protesting Palantir powering a surveillance state. I just want to give you a chance to respond to that, number one. And number two, if you saw that Palantir's tools were being used in an illegal way, where's the responsibility for Palantir as a technology vendor in addressing those concerns? It's almost hard to respond to because it's very unclear what surveillance people think we're doing. You know, there's just like a broad, almost maybe an outgrowth of Terminator fear around technology. And I want to get into that cultural question next. I think it's like very important to understand.

We don't collect data. We don't have any data. It'd be like accusing Excel of being a surveillance tool, right? It's like, this is a way of bringing your own data that you have lawful authorities to collect together to make decisions. Sounds a lot like Excel. But it's, you know, because we are unabashedly patriotic and serve the U.S. military, I think people have a kind of colored view of these things. I would argue that it's actually Excel with cell-by-cell security. With much more security, with all security. You know, as Karp says, it's the most insane platform in the world to try to do something illegal in because you are going to be caught. You know, like that was part of the idea of how do you enhance privacy and security? It's how do you build more civil liberties protections in it? How do you have a normative?

view that enables a democracy to say, these are laws and rules. The system will enforce it. We're not just relying on people happening to do the correct thing. So that's one piece of it. The other piece of it, to come back to this broader point, is that the need for epistemic humility, like one of the, to the point of we have elected officials, they are accountable for these policy decisions. I think at the limit, it's actually kind of indefensible to have a perspective other than lawful use. Because if you are salami slicing the policy, that's actually tyranny by tech, bro. You know, a small number of people are constraining the maneuver space of a democracy with no accountability to the populace. So I think that's a pretty challenging perspective. And we've been in this perspective, if you go back to how did the Soviets get the nuclear bomb? You know, there's really there's two sources of treason. One was committed communists like Klaus Fuchs, who was he's always a spy. But the other were people like Theodore Hall. He was one of the youngest scientists in the Manhattan Project at 18 years old. His brother, Edward Hall, built the Minuteman missile. His brother was, you know, kind of a heretic and hero in my terms. But Theodore said,

you know, I'm one of the best physicists in the world. I'm probably also one of the best geopolitical strategists in the world. And I think the only way to have world peace is if two countries have the bomb. So in 1944, Theodore Hall walked into the Soviet trade mission in New York and gave them critical secrets to the bomb. Now, Theodore thought he was going to deliver world peace. Instead, every death from communism since 1949 is actually on his hands. And there's no accountability for that. Yeah, I think one of the other things that comes up in these conversations about powering the surveillance state is this belief that we have policies, but we don't actually want our civil servants to have the best technology to enforce those policies.

And it's almost like a lack of belief in the institution of democracy. It's like, you know, traffic cameras, for example, it's like, man, I'm sort of libertarian in some ways. I don't love traffic cameras. But if traffic cameras say, I'm going to send a ticket to every single person that blows through this red light, I don't know. Maybe we have to change the policy around red lights if you don't like that. I've gotten three speeding tickets in San Francisco from autonomous cameras in the last month. Well, they did ramp it up significantly, which is incredible that they're enforcing laws at all, if we're being honest.

I mean, like, here's my ticket. And then I'm literally watching the guy while I'm doing three miles over the speed limit, you know, take heroin needles out of his arm and put it on the floor next to elementary school. And I'm like, probably fine. Yeah. But it's the same thing with like, you know, using using tech for better enforcement of tax law or something like that. Like, do you is what we're saying by criticizing what Palantir is doing is what we're saying that we don't want our civil servants to have the best tools possible because you can have that position. I tend to think that that position is pretty morally bankrupt, but I guess you could have that position. But ultimately, I think that's what it is.

So scenario play this for me, because there's a public perception, I don't know how far reaching it is, that there's some tied corruption between government officials that use technology that's super advanced, that's hard for people to understand, and the technology vendors. If you saw government agencies using your technology, either of you, in an illegal way that you knew broke the law, do you report it? 100%. Yeah, to the IG. There's an entire mechanism to that. there is an ig in every agency right so can just just explain that for a second the inspector general maybe so every agency has an inspector general who's an independent organization that you can provide anonymous or non-anonymous complaints to that then have the ability the statutory ability to do an investigation in an unfettered way inside of that organization whether it's the department of war or um housing and urban development like literally every single agency. And this mechanism is used. I actually, you know, in this case, it was weaponized against one of my favorite heretics and heroes, Colonel Drew Cukor, who invented Maven, the founder of Maven, really. But, you know, people would file complaints claiming that he was hiding illegal

immigrants in his basement, a basement that he doesn't really have, you know, but all of those things were investigated. Naval Criminal Investigative Services went out to his house

Are there influences on social media, in mainstream media? And maybe just talk about destabilization and the attack vectors. I've seen it in other areas of science. I don't want to spend time on this show talking about it, but there have been traces that I found on external folks that want to destabilize American science and industry progress, and they create fear, and they put out articles, and then they go social, and they become viral, and suddenly everyone believes it, even though it's not true.

Do you see that? And have you actually kind of seen that in the sense of like, attacking the tech companies that are now supporting American defense? 100%. Even if you go back to it, let's stick with Vietnam. The Soviets spent $7 billion in 2026 dollars funding the peace movement the anti-war protests now there's obviously some there is an organic element to it but this is just dumping gasoline on the fire to sow division and discord uh and i think in the present day i i think you know certainly we see it against where there's ccp money flowing to organizations that are protesting us for various domestic issues here that it's not isolated it's it's broadly a successful strategy for our adversaries to sow division no one will believe it because no one wants to believe that they're being influenced right but but i think sean's point is exactly right it's like it's actually a brilliant strategy like good for them they are they are not our friends they're our adversaries what would you do if you were in their shoes it makes a ton of sense do we do that i mean look we we have all sorts of counterintelligence operations operating around the world. The modern art movement was really funded by the CIA to

undermine the kind of Soviet control of art, you know, and it was broadly funded and it wasn't directed by CIA, but you can see how we have cultural values that we want to inculcate and spread. Do you think we have a shot at recasting the defense industry, the tech industry that's addressing defense and aligning it with a notion of patriotism? And what is it going to take to make that happen? I don't know, maybe writing a book. Oh, yeah, you have a book. That's right. That's right. I'm trying to do exactly that. You know, look, if we look at a clear eyed sense of the world and how much deterrence we've lost, you know, you could you could really say, like, maybe World War Three is already started. And 10 years from now, we'll look back and be able to perceive that. Right. And I think you don't need literally everyone to view this. But if you can create a more clear eyed view of what's at stake here, not only for you, but for your children and their future, I think you can get people to show up and participate. And this has been America's story all the time. And usually when we start these things, we are the underdog. All periods of American greatness have started when we realized that we're the underdog. We were the 17th largest

army in the world at the beginning of World War II. And what did a ragtag bunch of farmers and random tradesmen have taking on the world's largest army in the British during the Revolutionary War? You know, and I think having some clarity about what's at stake, what the counterfactual is. It's so easy when you're successful to kind of let the nihilism grow and say, like, look how imperfect we are. There's like the self-loathing creeps in. And this is where I take coming back to your point on the legitimacy of our institutions. Like, should these institutions work? Do they deserve the best software? I mean, look, if they're public or private, you can't have doors falling off planes.

You know, our government organizations need to provide the basic services they've signed up to do without fraud, without corruption in an efficient way. And the reason is not just an aesthetic. It's like in the absence of that, it breeds nihilism. And the younger generations look at that and say, you know, we should just tear all this down. And things will absolutely get worse in a world that looks like that. So it's incumbent on us to wake up every day and fight for the legitimacy of these institutions to make them more functioning. America's story is never written. Every chapter seems to be a whole new arc.

And we're in one right now. There's a rising socialist movement in the United States. Can you guys just comment on how much you think that that socialist movement cast with whatever term they want to use is going to affect our capacity for defense and resiliency going into the next decade, particularly as our adversaries are rising? Well, the argument I've always made is I think our greatest threat as a nation is not homicide, it's suicide. And it's in this vein. It's the internal discord. It's the division. It's the self-loathing. It's things like the socialist movement, which I think are symptomatic of this internal discord and ensuring opportunity for our people to the point of a functioning elite.

If you were to go backwards and think about the root cause, like maybe we don't have an elite that cares enough about the prosperity of the American people. And we've made decisions through globalization. We were told NAFTA was going to be a great thing, that actually, if you lost your job in manufacturing, why don't you just learn how to code? You know, there's a certain sort of callousness in that. And, you know, I'm not an unabashed free marketer. I'm clearly not a communist, but there's a sense of where the decision on the margin actually really does matter. And that comes down to leadership.

I think one thing that makes me a little hopeful is that socialism literally doesn't work. And so, you know, you look at, you know, what happened in San. Francisco even, where, you know, we elect Chesa Bedeen as the district attorney, and then we're like, oh, wow, this is not going well. Recall him. We have the Board of Education. Rooted in a selling point of empathy, right? Yeah, exactly. Fundamentally. Yeah. What happened with the Board of Education getting recalled? You know, Daniel Lurie coming in as the mayor. You know, we felt like we kind of went into this valley and sort of hit rock bottom. But I do think that people eventually realize that it doesn't, it just fundamentally doesn't work. Seattle and Washington in state are likely going to lose a large number of their biggest employers. And as that happens, they'll come through on the other side, probably might take them seven to 10 years to get there.

It might be painful and it might take them a long time, but I think they'll eventually come to their senses. What do you two disagree on? That's a great question. Yeah. Um, we actually, I'll be honest, we bickered with each other quite a bit at Palantir. Um, and usually it was Sean being right about something and me taking a long time to come, come along to his point of view. But yeah, I think, you know, any of these cultures that are like well-functioning are rooted in debate. And, you know, eventually... But you're avoiding my question. Well, whether it's actions or outlooks. Whether you should show up to your interview at a tech company in a suit.

Yeah, well, no, I will say this because it actually is part of the story of Anduril. I thought that it was a bad decision at Palantir to be as quiet as we were. I thought that we needed to get out there and tell the story so that there would be data that says things like what Shyam said about, like, we don't have any data. We are Excel. And we had a very kind of quiet, reserved comms strategy. And we went back and forth on that a lot. And when I started Andrel, I was like, you know, all the positive things we learned about doing business with the government from Palantir, the one lesson that I learned that we didn't implement at Palantir is we're going to go out there and tell our story.

And I think that's worked for us incredibly well. And I'll be honest, I think Palantir has come along to my side of that debate. And last question, if we don't do things right, what does 2040 look like? And if we do do things right, what does 2040 look like? Economic and defense. Well, the economic part is, I think, the critical one, because national security is not an end unto itself. It's a means to an end. And that end is economic prosperity, the prosperity of the American people. You know, I think no country has done more to develop the world. Like, how did integrated circuits and microelectronics get to Southeast Asia?

We sent them there. Yeah, we benefited in terms of trade there. But, you know, like which other winner in a war spent their own capital to rebuild the Concord, you know, in Japan and Germany? And now you have the stability as a result of it. So when I think about what could go wrong is you actually have a Chinese century that we never recover from, that literally everyone in the world is a vassal state to China and might makes right in their sort of world, you know, and we shouldn't forget. It's like it's very clear, even in the present moment, that for the CCP, it's not enough for China to prosper.

America must fall. That's an explicit part of the strategy. Look, it is a business decision. If you want to buy American or Brazilian soybeans, I actually don't begrudge you one iota which decision you make there. It's an entirely different decision when you're smuggling agricultural funguses into the U.S. so that we can't grow soybeans. That's the sort of zero-sum frame that I think 2040 will look like if we get this wrong. And if we get it right, I think what we actually see is a massive re-industrialization of America, followed by the West. We see a thriving middle class, which I define qualitatively as a middle class that believes their children's future will be better than their future, which is something that I feel is a fundamental promise that's broken down over the last 30 years or so.

and a belief in our institutions, once again. Yeah, no, completely agree with all those points. I think there's a big component here around education that we haven't talked about as well, where we figured out a way to educate and successfully enter our young people into a marketplace that needs them and that benefits from their services. And I think that we haven't quite nailed that. But I do think that the re-industrialization point of this is going to be... can kind of the central point of making sure that China's many, many decade belt and road strategy is not going to put us in a position where we literally just can't do anything.

Do we need military and industrial primacy? Or can we operate in a multipolar world where the US can share influence and economic prosperity with China, perhaps Russia, perhaps one or two other nation states? Well, the challenge with not being the leader is that you don't get to set the terms of engagement. And so I think the benefit that we have had since really the end of World War II is that we've had the primary seat at the table to say, this is how we're going to do semiconductors. This is how we're going to do supply chain. This is how we're going to protect trade lanes. And I think the moment that you step back from that and someone else has all those incentives, you start playing the rules of their game and it doesn't stay multipolar for long. Well, I really appreciate the two of you being here. Trey, Sean, thank you guys. This has been great. Thank you. Thank you guys.