Speaker 1: I'm Emily Chang, and this is the circuit. If you
Speaker 1: told me that one day I'd be driving a warship
Speaker 1: in the Pacific with Palmer Lucky, I probably wouldn't believe you.
Speaker 1: Are you sure I'm not gonna put the boat?
Speaker 2: Yeah, You're gonna be fought.
Speaker 1: For the uninitiated. Lucky is the flip flop wearing Hawaiian
Speaker 1: shirt sporting creator of the Oculus VR headset. After selling
Speaker 1: his company to Meta and then getting ousted from Silicon
Speaker 1: Valley over issues we'll get into later, Lucky switched gears
Speaker 1: to the defense industry.
Speaker 2: Some of the United States technology is very bad. Some
Speaker 2: of it is actually very very good, but it's also
Speaker 2: extremely expensive and not necessarily adapted to the types of
Speaker 2: conflicts we're going to see in the future. The United
Speaker 2: States has a lot of investment in legacy weapons systems
Speaker 2: that are not necessarily having China quaking in their boots.
Speaker 1: Modernizing the battlefield is key here because the steaks have
Speaker 1: never been higher Ukraine tensions between China and Taiwan. Lucky
Speaker 1: is hoping company Anderil's smart bets on modern weapons infused
Speaker 1: with ai can take a slice of the Pentagon's massive
Speaker 1: budget and play a critical role as the paradigm of
Speaker 1: war evolves. Joining me on this edition of the Circuit
Speaker 1: Anderil Industry's founder, Palmer Lucky. What are you building here?
Speaker 1: What's the mission?
Speaker 2: Ultimately? Anderil is trying to build radical new defense technologies
Speaker 2: that allow the United States to better deter violence against US,
Speaker 2: to stop conflicts that would drag us in, drag our
Speaker 2: partners in, drag our allies in. We're building tools that
Speaker 2: allow our partners and allies around the world to make
Speaker 2: themselves a lot more prickly so that people don't want
Speaker 2: to step on them.
Speaker 1: Paint a picture for me just how bad is the
Speaker 1: technology that the US government is using right now.
Speaker 2: Well, some of the United States technology is very bad.
Speaker 2: Some of it is actually very very good, but it's
Speaker 2: also extremely expensive and not necessarily adapted to the types
Speaker 2: of conflicts we're going to see in the future. The
Speaker 2: United States has a lot of investment in legacy weapons
Speaker 2: systems that are not necess necessarily having China quaking in
Speaker 2: their boots.
Speaker 1: So historically military technology, weapons, vehicles super expensive. Now that's changing.
Speaker 2: If you look at this in terms of the history
Speaker 2: of the United States, We've always had our most innovative
Speaker 2: companies working hand in hand with the duty and we've
Speaker 2: actually won a lot of wars by being better at
Speaker 2: the other guy than cheaply manufacturing large numbers of very
Speaker 2: good weapons systems. It's actually quite recent that it's gotten
Speaker 2: so out of whag. It's very recent that these weapons
Speaker 2: systems have become extraordinarily expensive for what they are as
Speaker 2: in within living memory. And that's really one of the
Speaker 2: problems anerals trying to solve. We're trying to use not
Speaker 2: just the right product decisions, but also modern manufacturing techniques
Speaker 2: and leveraging a lot of the technology that's come out
Speaker 2: of Silicon Valley over the last few decades to get
Speaker 2: back to building cost effective and combat effective weapons that
Speaker 2: are going to protect the United States.
Speaker 1: So explain the state of play on the battlefield and
Speaker 1: where unduraal.
Speaker 2: Fits in well. Interplays across basically every domain. We have
Speaker 2: things that are underwater, on the surface of the water,
Speaker 2: in air, in space, on land. Our goal is not
Speaker 2: to go really deep on one particular area and be,
Speaker 2: you know, the AI Torpedo Company or the AI small
Speaker 2: quad copter company. It's to become one of the major
Speaker 2: defense primes, one of the ones that is large enough
Speaker 2: to have an impact not just within their own company,
Speaker 2: but externally to change the way that the government does procurement.
Speaker 2: I want to be in a position where I can
Speaker 2: have that impact, make those changes to the way the
Speaker 2: government develops and buys weapons.
Speaker 1: How'd you get interested in defense technology?
Speaker 2: I've been interested in it for a really long time,
Speaker 2: probably my whole life. I briefly was able to work
Speaker 2: as a lab technician on an army project called Brave Mind,
Speaker 2: which was treating veterans with PTSD using virtuality exposure therapy.
Speaker 2: And that was actually before I started Oculus. But even
Speaker 2: as I ran my company Oculus, I kept in touch
Speaker 2: with a lot of friends in the defense industry, and
Speaker 2: what I heard over and over again is that it
Speaker 2: was broken. The incentives were wrong. They were being punished
Speaker 2: for doing the right thing rewarded for doing the wrong thing.
Speaker 2: They made more money through these cost plus con tracks
Speaker 2: when they took longer than they were supposed to, They
Speaker 2: made more money when they were over budget, and that
Speaker 2: really got me worried.
Speaker 1: You're trying to run a defense tech company like a startup,
Speaker 1: How does that compare to like Locky Martin and Boeing,
Speaker 1: and how do you get Washington to accept that?
Speaker 2: And Roll thinks of ourselves as a defense product company
Speaker 2: more than a defense contractor. What that means is that
Speaker 2: we build products using our own money, and then we
Speaker 2: sell them to the customer. This is not a radical
Speaker 2: business model in most industries, it's actually quite common, but
Speaker 2: in the defense space it's not the way that things
Speaker 2: are done. Most major weapons procurement is down on a
Speaker 2: cost plus basis. Most new R and D is don
Speaker 2: on a cost plus basis, meaning the contractor gets paid
Speaker 2: for their time, their materials, and then a fixed percentage
Speaker 2: of profit on top. Of course, that incentivizes you to
Speaker 2: come up with expensive solutions, to build them using expensive parts,
Speaker 2: and to drag it out as long as you can.
Speaker 2: Not necessarily consciously, people aren't waking up and saying, ah,
Speaker 2: another day, another chance to screw the US tax pair.
Speaker 2: But the system naturally wards people who run programs in
Speaker 2: these slower ways and these more expensive ways and or all.
Speaker 2: We're the opposite, because we're a defense products company that
Speaker 2: makes things that work and sell them rather than getting
Speaker 2: paid to do work. It means that when we do
Speaker 2: something faster, it helps our profit margins. When I spend
Speaker 2: less time developing a product, I'm going to make more money.
Speaker 2: It means that when I can reuse technological building blocks
Speaker 2: that we've built for other programs, sometimes worth hundreds of
Speaker 2: millions or billions of dollars in investment, it means that
Speaker 2: I'm able to make more money rather than losing out
Speaker 2: on money that otherwise would have been paid to me
Speaker 2: to redevelop those capabilities from scratch for a given program
Speaker 2: as a spoke building block. And those are really all
Speaker 2: the incentives you need to be a fast moving modern
Speaker 2: tech company style defence company.
Speaker 1: You're not the typical Silicon Valley founder wearing a black turtleneck,
Speaker 1: nor are you walking around and talking like a buttoned
Speaker 1: up defense contractor CEO, Like, how does that play well?
Speaker 2: I don't know. I am a little bit of a careture,
Speaker 2: but it's because I just haven't changed. I'm wearing the
Speaker 2: same stuff I was wearing a decade ago, and I'm
Speaker 2: doing the same stuff I was doing the decade ago.
Speaker 2: I'm blessed with success to do whatever I want, and
Speaker 2: I think that's probably what's behind a lot of them
Speaker 2: more esoteric figures in Silicon Valley They're people who have
Speaker 2: done well enough for themselves that they can afford to
Speaker 2: do whatever they want and have whatever image they want
Speaker 2: and don't necessarily have to adapt.
Speaker 1: Do you wear a suit when you go to Washington?
Speaker 2: Absolutely? You do.
Speaker 1: Okay, So that's like there's a line.
Speaker 2: So funerals, weddings in Washington, d C. They all get suits. Okay.
Speaker 1: How often are you in DC all the time? And
Speaker 1: what are you doing? Is it relationship building? Is it
Speaker 1: trying to win contracts and talking to lawmakers?
Speaker 2: It's all the above. A lot of the core of
Speaker 2: what we do is kind of centralized in DC, so
Speaker 2: not just the lawmakers who have the power of the purse,
Speaker 2: who fund new R and D, who decide how things
Speaker 2: are going to be procured, but also the decision makers
Speaker 2: on individual product sides. It's very different from my last job.
Speaker 2: My last job at Oculus, we're trying to sell Virtual
Speaker 2: REAC had set to millions of people. We had to
Speaker 2: convince them one by one that VR was something they
Speaker 2: needed in their lives. And the military is a little
Speaker 2: bit different. For a lot of these major programs, the
Speaker 2: number of people that you need to convince in order
Speaker 2: to make a major sale right, it's actually very very small.
Speaker 2: It's a small number of people.
Speaker 1: You also overcame some serious obstacles to get and ural
Speaker 1: to this point, right, like, oh, SpaceX, Impalaner. How did
Speaker 1: they pave the way?
Speaker 2: First of all, they proved that it was possible for
Speaker 2: a new company to win significant contracts with the government
Speaker 2: and to use the competitive process to kind of force
Speaker 2: themselves into niches that they normally would not have been
Speaker 2: able to get into. It It wasn't an easy thing.
Speaker 2: I mean, they were literally suing their customers in court saying,
Speaker 2: you have to take our proposals seriously. You have to
Speaker 2: give them a fair shake, and you have to compare
Speaker 2: them against what other people are doing in a good way.
Speaker 2: You can't pay other people billions of dollars to make
Speaker 2: what we literally already have made for you to buy
Speaker 2: as an off the shelf product. That was a really
Speaker 2: big deal. Palataer and SpaceX also really paved the way
Speaker 2: for ADDERL in that in the last thirty five years,
Speaker 2: they were the only defence unicorns. They were only the
Speaker 2: only new defense companies that were worth over a billion
Speaker 2: dollars that were really at any kind of scale. I
Speaker 2: don't want to sound like a rich guy. A billion
Speaker 2: dollars is not actually that much money. It's a lot
Speaker 2: for a person, but it's not a lot for a
Speaker 2: company to be worth. You only need low hundreds of
Speaker 2: millions in revenue to be worth that. You're talking at
Speaker 2: that point about a fraction of a fraction of a
Speaker 2: tiny percentage of the Department of Defense budget. The other
Speaker 2: thing that Palataron SpaceX proved is that you could definitely
Speaker 2: start a defense company if you bring in really significant resources.
Speaker 2: It's no coincidence that the only two companies to break
Speaker 2: through in the last thirty five years since the winding
Speaker 2: down of the Cold War really were both founded by billionaires.
Speaker 2: It's unfortunate, but it reflects the reality that we've created
Speaker 2: where this muscle we used to have as a country
Speaker 2: of turning small, innovative defense companies into large scale providers
Speaker 2: of weapons, we lost it. And the only way to
Speaker 2: bypass that was to already have made billions of dollars
Speaker 2: somewhere else. But as a country, we need to do better.
Speaker 1: Right, And you've raised over two billion dollars.
Speaker 2: I don't know if I say the exact number, but
Speaker 2: a lot of money. Raising money was not easy in
Speaker 2: the beginning. I mean investing in weapons was actually explicitly
Speaker 2: against the rules and partner agreements for most venture capital firms,
Speaker 2: even ones that are quite forward leaning, like my favorite examples,
Speaker 2: Founder's Fund. Not only were they the first institutional investor
Speaker 2: to write a check into Oculus, my first company, but
Speaker 2: even as a forward looking, contrarian, very sometimes controversial ventor
Speaker 2: capital fund, they still had their terms for their fund
Speaker 2: saying they could not invest in weapons companies, and they
Speaker 2: ended up changing that and then investing into Aneral. It
Speaker 2: was really easy for venture capital firms in twenty seventeen
Speaker 2: when we started an ANERL to say, conflict is over.
Speaker 2: We're living at the end of history. This idea of
Speaker 2: putting our best brains towards things that can kill people
Speaker 2: is a waste of talent and a waste of money
Speaker 2: and unethical even and that's not what anyone's saying anymore.
Speaker 1: So what does it take to win?
Speaker 2: What does it take to win? Well? I wish that
Speaker 2: it was just building the best thing, because that's what
Speaker 2: we want to believe that we live in a pure
Speaker 2: meritocracy technocracy where you build it and they will come.
Speaker 2: But it doesn't actually work. That way, we have to
Speaker 2: be very conscious of what the dods problems are, what
Speaker 2: they believe their problems are, and what Congress is willing
Speaker 2: to fund. It's a much more complex set of stakeholders
Speaker 2: than let's say, selling virtual reality headsets. For example. If
Speaker 2: Congress doesn't believe that something is a strategic priority for
Speaker 2: the nation, they're not likely to fund it. We also
Speaker 2: have to work on things that the Pentagon cares about
Speaker 2: because we don't have the luxury of going through a
Speaker 2: ten year or twenty year development cycle and just getting
Speaker 2: paid to develop something for years and years on end.
Speaker 2: We have to build products that we can immediately sell.
Speaker 2: So it's not a priority for the Pentagon, an urgent
Speaker 2: strategic priority. It's not going to go into production and
Speaker 2: purchase fast enough for us. And finally, we want to
Speaker 2: work on things that other people are doing a bad
Speaker 2: job of. ANDROL does not want to be in the
Speaker 2: business generally of building things that have a lot of
Speaker 2: great competent affordable competition. If someone is building a great capability,
Speaker 2: whether it's a robotic system or a weapons system, or
Speaker 2: a sensor system or software system, if they're doing a
Speaker 2: good job of solving some problem, for duty. I don't
Speaker 2: want to compete with them. I don't want to burn
Speaker 2: up my venture capital dollars burning their company down. I
Speaker 2: want those guys to succeed. I want us to have
Speaker 2: a flourishing ecosystem. I want to probably want to work
Speaker 2: with them and partner with them. So typically, where we
Speaker 2: are building things, it's things where we think we can
Speaker 2: do a lot better and a lot cheaper than the
Speaker 2: existing incumbents.
Speaker 1: So let's talk about where the money comes from. ANDROL
Speaker 1: has raised billions of dollars. Yep, how much of it
Speaker 1: is from vcs? Are you using your own money? How
Speaker 1: much is coming from the Pentagon.
Speaker 2: So yeah, we have a lot of money that has
Speaker 2: come from venture capital firms and also other investors. You know,
Speaker 2: we're not only raising from venture capital firms. There's family
Speaker 2: offices that have invested, strategic investors who have invested, but
Speaker 2: certainly a lot of venture capital. I'm a big fan
Speaker 2: of venture capital as a concept. Allowing companies to grow
Speaker 2: at an inorganic rate is a very powerful thing, and
Speaker 2: I learned that during my oculous days. I've seen it
Speaker 2: happen at the companies that many of my friends have started.
Speaker 2: I'm a big fan of it. In general, I'd say
Speaker 2: that we get a little bit of money for development
Speaker 2: from time to time from the deity, but what we
Speaker 2: really look for them is demand signal. We say, listen,
Speaker 2: you don't have to pay us to develop technology, but
Speaker 2: we do need you to tell us if you would
Speaker 2: buy something if we build it. And sometimes it's an obvious,
Speaker 2: oh yeah, we would buy it out of that. Sometimes
Speaker 2: it's I don't understand why I would buy this. You
Speaker 2: have to explain to me why this makes any sense.
Speaker 2: And then it's on us to explain why the thing
Speaker 2: we're going to build is actually the better, cheaper, faster
Speaker 2: way to solve their problem than the thing they're already buying.
Speaker 2: And if we can get that demand signal, then we
Speaker 2: can make the decision to invest our own money, so
Speaker 2: the money of our investors, some of it is my
Speaker 2: own money. When ANDERL started, we started in a warehouse
Speaker 2: that I had already bought for the purposes of doing
Speaker 2: this type of thing, So it allowed us to move
Speaker 2: faster than the company that would have had to start
Speaker 2: day one and then start raising money before they're able
Speaker 2: to even get started.
Speaker 1: Is Intro profitable or are you making products.
Speaker 2: As we are not profitable. Now we have elements of
Speaker 2: the business that are very profitable. Our successful products, our
Speaker 2: mature products, the ones that we've been doing for the longest,
Speaker 2: have followed a very repeatable and reliable path from investment
Speaker 2: losing money, through to selling to the customer, making money,
Speaker 2: paying back the initial investment, and now paying off cash
Speaker 2: that we use in the rest of the business to
Speaker 2: fund new research and development. All of the money that
Speaker 2: we make we put back into new research and development.
Speaker 2: That's another big difference between us and a lot of
Speaker 2: other companies that are kind of at steady state, not
Speaker 2: really growing. We could just stop working on all the
Speaker 2: new stuff, kill all of our research and development, and
Speaker 2: be a profitable company, but that's not what we set
Speaker 2: out to do. We set out to be a major
Speaker 2: defense prime and to do that, we're going to have
Speaker 2: to keep reinvesting the profits. We're going to have to
Speaker 2: keep putting more money into these new things, and I'm
Speaker 2: confident that on some timescale all, or at least most
Speaker 2: of those bets are going to turn into profitable business lines.
Speaker 1: It's like, how do you get there? You want to
Speaker 1: go public? Your future peers potentially are public companies. How
Speaker 1: do you get ready for that.
Speaker 2: The way that you get ready for that is building
Speaker 2: a company that is the right shape to be a
Speaker 2: publicly traded company. And that's a different shape than you
Speaker 2: want to be when you're in the early markets in
Speaker 2: the kind of high growth, high risk venture capital world.
Speaker 2: You need to be a company that has not just
Speaker 2: a history of growth, but a clear path for future growth.
Speaker 2: You want to be a company that shows that you
Speaker 2: can reliably turn investment on our part into a profitable
Speaker 2: product line, and you want to show that the company
Speaker 2: as a whole is profitable. These things sound trite, like
Speaker 2: you gotta make money, you got to be good, But
Speaker 2: I mean that's really what it boils down to, and
Speaker 2: a lot of companies don't get there. There's a lot
Speaker 2: of vc BAT companies that don't meet those requirements. They
Speaker 2: just talk to you. They don't make money, and they're
Speaker 2: not growing. There's a lot of companies that are growing
Speaker 2: but not making money. You have to do both to
Speaker 2: be successful as a public company.
Speaker 1: Well, as you said, the numbers are big. Microsoft got
Speaker 1: a twenty two billion dollar contract to supply the US
Speaker 1: military with HoloLens Boks reality headsets. As the creator of ocuus.
Speaker 1: What do you think of that.
Speaker 2: There's been so many programs over the years to put
Speaker 2: a radio and a head mount to display onto a
Speaker 2: soldier and do really good stuff with it. It's a
Speaker 2: science fiction staple for a reason. The ability to have
Speaker 2: a set of glasses that tells you where the good
Speaker 2: guys are, shows you where the bad guys are, shows
Speaker 2: you where you're safe and where you're in danger. That
Speaker 2: allow you to have visions so you can see through
Speaker 2: buildings by using tracks that are fed by other sensors
Speaker 2: in the air on other soldiers, making so that anything
Speaker 2: that any sensor can see is something that you have
Speaker 2: superhuman perception of. It's obviously the future of kind of
Speaker 2: close combat. So I'm a huge Microsoft A. I actually
Speaker 2: had a launch party for Windows seven at my house.
Speaker 2: That's right, Me and my friends we all got together
Speaker 2: at my house and we installed Windows.
Speaker 1: Seven together with your lightsabers, like I.
Speaker 2: Mean, that's a We have lightsabers, but we didn't bring
Speaker 2: them out for the party specifically and making it even
Speaker 2: nerdier as we were already running the release candidate software.
Speaker 2: So we'd actually already been using Windows seven for the
Speaker 2: better part of a year. At that point, but this
Speaker 2: was officially activating the final release. And of course the
Speaker 2: IVASS program is kind of born of the investments they
Speaker 2: made in HoloLens. It's gone through some hiccups here and there,
Speaker 2: but IVAS is actually one of the coolest programs going
Speaker 2: on in DoD in my opinion. It's one of the
Speaker 2: ones that is truly looking at what the future should be,
Speaker 2: rather than just building an iterative upgrade for a legacy
Speaker 2: system for the army, to say, we are going to
Speaker 2: put tens of billions of dollars of our resources towards
Speaker 2: something that is a radically new capability, you know, like
Speaker 2: transforming soldiers from people who see with their eyes to
Speaker 2: seeing with technology. I think it's as big as inventing
Speaker 2: the aircraft carrier. It's as big as inventing nuclear submarines.
Speaker 2: It's a really big bet that the future is going
Speaker 2: to be different. DoD full of programs that are not
Speaker 2: that that excites me.
Speaker 1: Some tech employees have pushed back on working with the
Speaker 1: US government and the US military. Do you see where
Speaker 1: they're coming from.
Speaker 2: So there's been Microsoft employees who are unhappy about this,
Speaker 2: unhappy about IVAS and HoloLens. There's people at Google who
Speaker 2: have been unhappy about it. There's people even in Amazon
Speaker 2: who have been unhappy about it in terms of the
Speaker 2: cloud services that Amazon's providing for the Department of Defense.
Speaker 2: I think that if you're concerned about ethics and defense,
Speaker 2: then you should be more involved, not less. If these
Speaker 2: are the people who think that their opinions on how
Speaker 2: wars should be fought are so strong, they shouldn't just
Speaker 2: be on the periphery of these programs. They should be fighting.
Speaker 2: Get transferred to the core of these programs. They can
Speaker 2: make a difference fundamentally. I think it's an emotional thing.
Speaker 2: They came to a company to work on consumer tech.
Speaker 2: They weren't told that their work would be used for
Speaker 2: potentially violence, and they don't like that. And I empathize
Speaker 2: with that because to them it feels like a little
Speaker 2: bit of a bait and switch. I came to Google
Speaker 2: to work on advertising, and instead my work is going
Speaker 2: to fight US adversaries and andre all. That's why we're
Speaker 2: so clear with everybody about exactly what we're doing.
Speaker 1: Autonomous weapons powered by AI are now on the battlefield
Speaker 1: more than ever, how advanced are they today?
Speaker 2: Not as advanced as they should be. Autonomous weapons not
Speaker 2: necessarily using modern artificial intelligence techniques, though, have been deployed
Speaker 2: for depending on the way you look at it, decades
Speaker 2: or even longer by the United States. There's a long
Speaker 2: history of autonomous weapons on the battlefield. So it's always
Speaker 2: interesting when people say, oh, Man Panora's boxes being open.
Speaker 2: You know, what are the ethical concerns? Has the deity
Speaker 2: thought about this? The reality is the United States government
Speaker 2: has more thinking on this and more experience with this
Speaker 2: than any nation in the world, certainly than any think
Speaker 2: tank in the world that's just now looking at these
Speaker 2: issues for the first time. You get a lot of
Speaker 2: pushback from people who are like in the United Nations
Speaker 2: and saying, well, can't you agree that AI should never
Speaker 2: pull the trigger, that an AI should never be making
Speaker 2: the decision about when to kill and when to not.
Speaker 2: And I totally reject that premise. It's a SoundBite that
Speaker 2: sounds good in the moment, but then you have to
Speaker 2: answer the question what's the moral hund and making, for example,
Speaker 2: an autonomous land mine that is not allowed to differentiate
Speaker 2: between a school bus of children and a Russian tank.
Speaker 2: I think it should be allowed to make that distinction.
Speaker 2: People say well, what if it's not perfect. Well, that's
Speaker 2: a big problem. We need to make it so that
Speaker 2: it is perfect. But in the meanwhile, I'd rather get
Speaker 2: it right ninety nine percent of the time than zero
Speaker 2: percent of the time with a dumb system that isn't
Speaker 2: able to act in that way. That's why I'm working
Speaker 2: in this space. If other people feel strongly about the
Speaker 2: ethics and weapons, I encourage them to not sit on
Speaker 2: the sidelines and critique, get in the arena and work
Speaker 2: on them yourself, and show that you can make even
Speaker 2: more precise things that are even less damaging to people.
Speaker 1: AI means a lot of things. Silicon Valleys in a
Speaker 1: frenzy right now about LMS and generative AI, But that's
Speaker 1: really different than the artificial intelligence you're using.
Speaker 2: Right anderl is at its core an AI company. We
Speaker 2: have been since the beginning. Our first product we started building,
Speaker 2: and the core product that applies to all of our
Speaker 2: other hardware products is our software platform, which is Lattice,
Speaker 2: an AI that fuses data, moves data. He gets all
Speaker 2: the right information to the right people and the right
Speaker 2: robots at the right time, detecting and classifying targets across
Speaker 2: the battle space. Across every domain.
Speaker 1: Lattice is kind of like the control center right or
Speaker 1: at the bridge between the hardware and a It's.
Speaker 2: Kind of like a distributed brain, and also the control interface,
Speaker 2: and also the processor, and it's a whole bunch of
Speaker 2: different things. It's everything you need to deploy autonomous weapons
Speaker 2: at scale. It's doing target identification, it's doing communication between people,
Speaker 2: communication between robots, deconfliction of good guys with bad guys
Speaker 2: to make sure you're going after the right things. It's
Speaker 2: really an all encompassing solution that powers all of our products. Now,
Speaker 2: when we started as an AI company, it was at
Speaker 2: a time in early twenty seventeen where AI was not
Speaker 2: that hot. It was this weird thing that some of
Speaker 2: the nerds were paying attention to, but there was a
Speaker 2: lot of nasaying, a lot of people who believed it
Speaker 2: was going nowhere, and we invest in it because we
Speaker 2: believe that it was really really important for the future
Speaker 2: of the DD. We believe we would not be able
Speaker 2: to compete as a nation unless we had very cap
Speaker 2: artificial intelligence applied to weapon systems. Now, the AI that's
Speaker 2: going through this explosion is basically large language models as
Speaker 2: kind of the dominant hype. They're very different from what
Speaker 2: we're doing building an AI that is able to, for example,
Speaker 2: look at all the weapon systems that you have in
Speaker 2: an area connected to a mesh network, identify all of
Speaker 2: the targets that you need to destroy in the very
Speaker 2: near future, and then coming up with the optimal matchmaking
Speaker 2: process between targets and weapons. Very different from what a
Speaker 2: large language model is going to be optimized to do.
Speaker 2: Much higher standards for accountability, much higher standards for explainability,
Speaker 2: much higher standards across the boards for auditibility, and so
Speaker 2: it's very different. But I will say the AI boom
Speaker 2: has been very good for ANDROL in terms of convincing
Speaker 2: people on less the technical level and more the spiritual level.
Speaker 2: Like people who didn't believe in AI before are like, oh,
Speaker 2: I've used chat GPT, I was able to make it
Speaker 2: do things that I didn't believe a computer could do.
Speaker 2: I now believe that Androl actually and build AI that
Speaker 2: powers these things. This even goes to politicians. I'll meet
Speaker 2: with people in Congress who have been skeptical for years
Speaker 2: about ANDROIL and about whether we could really build these
Speaker 2: capabilities and have them be useful, and they say, yeah,
Speaker 2: I use chat GPT and I asked it to write
Speaker 2: me a recipe based on the food in my refrigerator,
Speaker 2: and it did it. I think I understand what you
Speaker 2: guys do. Now.
Speaker 1: You're all writing the same wave.
Speaker 2: We're all writing the same way.
Speaker 1: Well, an Androl is a hardware company and a software company.
Speaker 2: That's hard, right, Well, there's the old saying. Hardware is hard.
Speaker 2: Software is where you can build a lot of the
Speaker 2: most durable advantages. The United States used to be able
Speaker 2: to build things that would fly twice as fast as
Speaker 2: our adversaries, and we'd be twice as fast for a decade.
Speaker 2: Those days are gone. Hardware advantages like that are going
Speaker 2: to be quickly copied by our adversaries. So a lot
Speaker 2: of the most durable advantages we build, for example, using
Speaker 2: software to make decisions twice as fast or ten times
Speaker 2: as fast, or using software that allows you to be
Speaker 2: ten percent better in the strategic process than your adversari
Speaker 2: who doesn't have the better software tool is a capability
Speaker 2: that I don't think our adversaries are close to copying.
Speaker 1: There are concerns that AI could deepen the fog of war.
Speaker 1: What do you think about that now?
Speaker 2: I super disagree. I think AI is going to give
Speaker 2: everybody a very clear picture of what's on the battlefield.
Speaker 2: I think that the benefits a crewe to the sensing
Speaker 2: side much more than the fogging side. I think AI
Speaker 2: is going to be a tool to put all the
Speaker 2: cards on the table for everyone, for everyone understand just
Speaker 2: how powerful the US is. My hope is that you're
Speaker 2: going to have dictators who make better decisions because even
Speaker 2: they have better information from AI. Let's use Putin as
Speaker 2: an example. I don't think he would have launched this
Speaker 2: invasion in Ukraine if he would have understood what was
Speaker 2: actually going to happen. Remember, they believe this is like
Speaker 2: a three day special operation. They were going to roll in.
Speaker 2: It was going to be over very very quickly, and
Speaker 2: it was going to be a huge political victory military victory.
Speaker 2: I think that if he had a better understanding of
Speaker 2: what was going to happen, I think he probably would
Speaker 2: not have made the play. And then if he had
Speaker 2: believe that he had the better play, the United States
Speaker 2: could have had greater confidence in that as well, and
Speaker 2: we would have reacted. So I think AI is actually
Speaker 2: going to bring a lot more clarity. I think that
Speaker 2: it's going to make warfare more like chess, and that
Speaker 2: everyone can see what everyone's doing on the board. The
Speaker 2: only unknown is what's in their mind.
Speaker 1: What are the implications of a more transparent battlefield. Does
Speaker 1: it mean fewer faster wars?
Speaker 2: I think making the global stage more like a chessboard,
Speaker 2: where you can see what everyone has and understand the
Speaker 2: capabilities of what you can see quite well, is actually
Speaker 2: a net stabilizing force. We've seen this with nuclear weapons.
Speaker 2: Nuclear weapons and the concept and the doctrine of mutually
Speaker 2: assured destruction worked because it was so easy to model
Speaker 2: out you know, it was actually not that many pieces
Speaker 2: on the board we're going to determine the outcome, and
Speaker 2: it was quite easy to model what would happen in
Speaker 2: these many scenarios. Conventional warfare is too messy for that.
Speaker 2: But I think that artificial intelligence could lead us to
Speaker 2: a world where we have much greater confidence in what
Speaker 2: wars are fightable, which wars are winnable.
Speaker 1: So are you innovating yourself out of a job, like
Speaker 1: if you're trying to If the goal is fewer wars,
Speaker 1: that means fewer countries buying your technology, that means less
Speaker 1: need to make the technology that means less, Well, it's
Speaker 1: money for Anderil.
Speaker 2: I mean, honestly, I think there's a little too much
Speaker 2: money in defense right now. So I'm like, there's a
Speaker 2: world where the defense budget goes down and Anderill goes up.
Speaker 2: I'm not saying that that's necessarily what the United States
Speaker 2: government should be doing, but our whole thing is that
Speaker 2: we build these systems at a much lower cost, and
Speaker 2: we're building also largely defensive systems. Now, if I was
Speaker 2: building defensive systems that lasted forever and were forever better
Speaker 2: than all of our adversaries and could never ever be beat,
Speaker 2: then yeah, I would be putting myself out of a job.
Speaker 2: I have not yet come up with such a system,
Speaker 2: but the second that I do, I'm going to be
Speaker 2: very excited, because I would love to put myself out
Speaker 2: of a job, Like I would love to live in
Speaker 2: that post historical world that everyone thought we were living
Speaker 2: in in the early twenty teens, but we don't. That's
Speaker 2: not the world we live in, and so I have
Speaker 2: to deal with reality, and human nature doesn't seem to
Speaker 2: be changing fast enough. I suspect that I'll be gone
Speaker 2: before war.
Speaker 1: Is there's a lot of fear out there. Have you
Speaker 1: seen the Black Mirror metal Head episode.
Speaker 2: I've seen every episode of Black Mirror.
Speaker 1: The killer robots turning on us? Is that possible?
Speaker 2: The thing about fictional scenarios, like in Black Mirror or
Speaker 2: in science fiction novels, is that they are fundamentally oriented
Speaker 2: around telling a story, sometimes about the technology, but also
Speaker 2: there has to be conflict. There has to be a
Speaker 2: good guy, there has to be a bad guy. I
Speaker 2: know the film nuts are going to say that's not true,
Speaker 2: but that's what most people want the story.
Speaker 1: So, and that's the world we live in, as we
Speaker 1: just discussed, oh it is, But.
Speaker 2: I'll give a specific example. I'm friends with Ernest Klein,
Speaker 2: the author of Ready Player one, and in Ready Player one,
Speaker 2: virtual reality is this technology that has sort of destroyed
Speaker 2: the world economy. Everyone's living in stacks of trailers and slums,
Speaker 2: and because that's the only world that matters, and the
Speaker 2: whole world's kind of falling apart as a result. Another
Speaker 2: one of my favorite books, The Unincorporated Man, has basically
Speaker 2: the same premise. Virtual reality technology is outlawed because it
Speaker 2: destroyed the world's economy by making the market for physical
Speaker 2: goods disappear, among other problems. I've spoken with Ernie and
Speaker 2: I've spoken with lots of other authors, said, hey, do
Speaker 2: you actually think that this is what's gonna happen? They say, oh,
Speaker 2: hell no. I love virtual reality, but I have to
Speaker 2: tell a story, and a story where imagine a story
Speaker 2: in the future. There's no conflict. Tech is very advanced,
Speaker 2: people don't have to work nearly as hard, and there
Speaker 2: are amazing VR games that everyone just plays all the
Speaker 2: time and everything's pretty great. That's not an interesting book.
Speaker 2: Nobody's gonna make a Hollywood adaptation out of that. I
Speaker 2: think that it's the same thing with Black Mirror, Like, yes,
Speaker 2: it can be a useful lens to look at the future,
Speaker 2: but they're not trying to come up with the most
Speaker 2: likely conflicts. They're not even trying to come up with
Speaker 2: likely problems. They're taking really the least likely problems and
Speaker 2: highlighting them as the thing to be concerned about. In
Speaker 2: my mind, it's counterproductive the amount of attention we focus
Speaker 2: on these fiction a lized scenarios when there's actually much
Speaker 2: more threatening things like, for example, artificial intelligence being used
Speaker 2: to generate novel biological warfare agents or chemical warfare agents
Speaker 2: in a garage. That's actually what the problems are gonna
Speaker 2: look like. And so it actually drives me kind of nuts.
Speaker 2: It really grinds my gears when you have people in
Speaker 2: the United Nations putting up pictures from Terminator movies and
Speaker 2: me like, this is what's coming. We have to make
Speaker 2: sure this doesn't happen. What the heck are you talking about?
Speaker 2: That's not even worth talking about. Yes, it could happen theoretically,
Speaker 2: maybe someday, but it's like one hundred on my list
Speaker 2: of things to be concerned about, and there's so many
Speaker 2: more concerning things, like you know what, I'm more concerned
Speaker 2: about bad people with reasonably smart AI doing evil things.
Speaker 2: I'm way more concerned about that than super smart AI
Speaker 2: doing evil things on its own without people involved.
Speaker 1: There are a lot of thorny ethical questions. We're talking
Speaker 1: about a possible future of self guided bombs and killer
Speaker 1: robots and algorithm deciding who to kill, who is liable
Speaker 1: humanism in the loop.
Speaker 2: First of all, I'd say it's not a future of that,
Speaker 2: if it's a present of that and a past of that.
Speaker 2: We have a long history of totally autonomous weapons deciding
Speaker 2: when to kill and when to not. I mean, in Vietnam,
Speaker 2: we deployed radar seeking missiles at scale that would fly
Speaker 2: over the horizon, look for emissions that they believed were
Speaker 2: correlated with a particular target and decide to either go
Speaker 2: after it or fall into the ocean. Land mines are
Speaker 2: fundamentally autonomous systems, and that they're being designed to analyze
Speaker 2: electromagnetic profiles and decide if something is a military asset
Speaker 2: or a civilian asset, decide if they're going to PLoP.
Speaker 2: We actually have a long, long history of autonomous weapons.
Speaker 2: The key is that a person is responsible for the
Speaker 2: deployment of those systems, that a person understands the limitations
Speaker 2: of those systems. The existence of an algorithm, or of
Speaker 2: an automated fusing system or an automated target acquisition system
Speaker 2: cannot replace human responsibility for deploying that weapon system, and
Speaker 2: it has to be a person who deeply understands the
Speaker 2: limitations of that system and who's going to be held
Speaker 2: to account when it goes wrong. There will be people
Speaker 2: who are killed by AI who should not have been killed.
Speaker 2: That is a certainty. If artificial intelligence becomes a core
Speaker 2: part of the way that we fight wars. We need
Speaker 2: to make sure that people remain accountable for that, because
Speaker 2: that's the only thing that will drive us to better
Speaker 2: solutions and fewer inadvertent deaths, fewer civilian casualties. And again
Speaker 2: I don't want AI to do these things, but a
Speaker 2: lot of times the existing technologies.
Speaker 1: Are much worse an AI start a war.
Speaker 2: I think that anything in deody could start a war.
Speaker 2: You could have a single rogue person caused something to
Speaker 2: happen that starts to war. You could have a malfunctioning
Speaker 2: weapons system start a war. You could have a miscalibrated
Speaker 2: weapensess or WEAPENSYSM that's programmed with the wrong target information
Speaker 2: start a war. There's a lot of ways you can
Speaker 2: inavertently start a war. I think AI makes it less
Speaker 2: likely that those things happen, and not more likely. It
Speaker 2: adds another safeguard in the chain. For example, you could
Speaker 2: have a system that is going to confirm not just
Speaker 2: radiation signatures that it's going after, but also other things.
Speaker 2: You could have an onboard AI saying okay, I see
Speaker 2: an electronic signature from that, but I also see it
Speaker 2: in the thermal spectrum, in the visible spectrum. I'm literally
Speaker 2: doing video analysis of it, and it might say, oh, shoot,
Speaker 2: that's not what I'm actually looking for. Despite having a
Speaker 2: similar radar signature, I'm going to wave off. And so
Speaker 2: in almost every case that matters, AI is going to
Speaker 2: be an additional safeguard against problems and increasing accountability.
Speaker 1: Changing tax You started with border security, How is your
Speaker 1: technology being used at the border now?
Speaker 2: Today? Our systems are deployed all along the US southern border,
Speaker 2: our northern border, and in a whole bunch of other places.
Speaker 2: We've actually saved a lot of lives. We've prevented a
Speaker 2: ton of criminal activity, drug trafficking, sex trafficking, things that
Speaker 2: have been going on for decades without enough of a
Speaker 2: technological counter to them. And the common complaint people have is, oh,
Speaker 2: but I don't like Androl working on border security because
Speaker 2: my preferred immigration policy does not align with that of
Speaker 2: the United States government. The point that I would make
Speaker 2: them is a border security and immigration policy are related,
Speaker 2: but very separate issues. Even if you want different immigration policy,
Speaker 2: even if you want every person in the entire world
Speaker 2: to be able to walk across our border, get a passport,
Speaker 2: get citizenship, and you know, get a freehouse and a
Speaker 2: free car, like the most extreme version of a caricature
Speaker 2: of what someone who wants open borders would want. Even
Speaker 2: that person should want border security because even if you
Speaker 2: have full open immigration, you still need to know when
Speaker 2: weapons are being moved back and forth across the border.
Speaker 2: You need to know when people are being trafficked into
Speaker 2: human slavery back and forth across the border. You need
Speaker 2: to know when people are moving fentanyl lace to marijuana
Speaker 2: that is killing people who didn't even know that they
Speaker 2: were getting a laced product. These are things that need
Speaker 2: to be stopped with border security, regardless of immigration policy.
Speaker 1: Well, another thing the critics that you know, critics see
Speaker 1: the technology or building warrior. It could be misused on
Speaker 1: American citizens for example. Are they right to worry?
Speaker 2: Oh, of course anything can be misused. But if you
Speaker 2: want to point to things that can be misused against
Speaker 2: American citizens, I mean, the military has a lot of guns,
Speaker 2: the military has a lot of aircraft. The right place
Speaker 2: to control what our military can do is at the
Speaker 2: policy level, at the elected leader level, not at the
Speaker 2: technological level. We can't say a person might shoot somebody.
Speaker 2: They shouldn't, So the military shouldn't have guns. The military
Speaker 2: might surveil someone they shouldn't have surveilled. They shouldn't have
Speaker 2: surveillance airplanes. It's just not a tenable position. That's what
Speaker 2: leads to NATO being armed with score guns. You have
Speaker 2: to have trust in the system, you have to believe
Speaker 2: that democracy works, and you have to believe that the
Speaker 2: right way to control these is on the policy side,
Speaker 2: not saying you're not allowed to have the capability to
Speaker 2: deter Russia because you might use it against US citizens.
Speaker 2: If that happens, we're broken in ways that holding back
Speaker 2: weapons is not going to solve.
Speaker 1: Speaking of democracy, and Durrell's mission is to strengthen America,
Speaker 1: there's a clear argument to be made that former President
Speaker 1: Trump supercharged polarization in America is another Trump presidency good
Speaker 1: for America.
Speaker 2: It's pretty early to be commenting on what their presidency
Speaker 2: might mean one way or the other. I mean, I'm
Speaker 2: a Republican, so if Trump wins, I'm going to be
Speaker 2: supporting Trump. Now does that mean that I think Trump's perfect? No,
Speaker 2: But in a world where you make compromises and trade offs,
Speaker 2: you select the candidate that is most aligned with what
Speaker 2: you want the world to look like the DoD is
Speaker 2: pretty a political It's not perfect at it, but they
Speaker 2: really do pride themselves in trying to be a political
Speaker 2: because they know that these problems that we face as
Speaker 2: a country they transcend both the politics of the White
Speaker 2: House but also the timelines of the White House. In
Speaker 2: a world where it's flipping back and forth every few
Speaker 2: years and you have weapons programs that need to stay
Speaker 2: on track for decades, you kind of have to have
Speaker 2: an a political organization that's willing to work with both sides.
Speaker 2: It's willing to work with both parties. Andrel made a
Speaker 2: lot of money under President Trump. We've actually made a
Speaker 2: lot more money under President Biden, and we're going to
Speaker 2: make even more money under whoever's president next.
Speaker 1: So even after everything, you still vote for Trump. Do
Speaker 1: you hope he's not the nominee? Do you think there's
Speaker 1: a better candidate.
Speaker 2: I'm actually in decline, not because I don't have an opinion.
Speaker 2: I have an opinion, but I think that going out
Speaker 2: and saying my opinion would be detrimental to my political objectives.
Speaker 2: The thing is, I'm actually not nearly as political of
Speaker 2: a person as people think, Like, yes I am.
Speaker 1: I mean people think you got kicked out of Silicon Valley.
Speaker 2: Well, but here, I mean, let's look at this, like, yeah,
Speaker 2: I got kicked out of Silicon Valley because I made
Speaker 2: a nine thousand dollars political donation. I have an opinion
Speaker 2: as to who should be president. A lot of people
Speaker 2: think that's controversial, but like, let's not forget I supported
Speaker 2: the guy who became president of the United States. And
Speaker 2: for a lot of people, that's the thing they want
Speaker 2: to talk about. Like here we are on TV, talk
Speaker 2: about Palmer. You supported the guy who became president of
Speaker 2: the United States. That's so interesting. Let's talk about it.
Speaker 1: So you'd be in a defense context, it makes more
Speaker 1: sense because it is a political issue.
Speaker 2: It's possible, but I think we would have gotten pasted
Speaker 2: a lot faster. The reason that people pay attention to
Speaker 2: it at the end of the day is because it's
Speaker 2: novel for a person in tech to have supported the
Speaker 2: person who became president that year. I don't think that's
Speaker 2: that controversial. Here in annerl we have a lot of Democrats,
Speaker 2: we have a lot of Republicans, we have a lot
Speaker 2: of libertarians, not very many communists, But generally we have
Speaker 2: a lot of political diversity. Here. That's because what we're
Speaker 2: doing is way more important than the politics of it.
Speaker 1: Which countries are you willing to sell your technology too?
Speaker 1: And who won't you sell to.
Speaker 2: I'm willing to sell more or less to anyone the
Speaker 2: US government wants me to. And this is another one
Speaker 2: of those areas where I have to trust that the
Speaker 2: democratic process is going to come to the right conclusion.
Speaker 2: If I don't believe in it, if I just say no,
Speaker 2: I'm going to decide who ANDERL sells to, it puts
Speaker 2: our country in a pretty bad position, especially if all
Speaker 2: of our weapons sales in the country. That way, What
Speaker 2: if the United States says we need to aid this
Speaker 2: nation for strategic reasons, and then every weapons ceo said no,
Speaker 2: I don't want to. I don't like that country. That'd
Speaker 2: be a disaster. That means the president's not in charge.
Speaker 2: That means Congress isn't in charge. Means a handful of
Speaker 2: billionaires are in charge. I don't think anybody particularly wants
Speaker 2: a handful of billionaires to be directly in charge of
Speaker 2: the military decisions of our nation. There's also a lot
Speaker 2: of situations that seem crazy to people because they don't
Speaker 2: have all the information including to myself. You know, there
Speaker 2: was a big brew haa haa a long while back
Speaker 2: with the US selling certain defensive weapons SEMs to Turkey,
Speaker 2: and people were saying, Oh, we shouldn't sell them those,
Speaker 2: We shouldn't give them those because they might use them
Speaker 2: in bad ways. And then it later came out publicly
Speaker 2: this is not controlled information that we had nuclear armed
Speaker 2: aircraft on that particular airbase in Turkey on standby. Now,
Speaker 2: the US can't go out and announce to the world, Hey,
Speaker 2: the reason that these guys are selling this particular capability
Speaker 2: is because we have an extremely important, tactically relevant reason
Speaker 2: to do so. In that situation, you kind of have
Speaker 2: to trust that people are doing it for a good reason,
Speaker 2: that they're doing it for a reason it's aligned with
Speaker 2: US interests, that's aligned with the interests of our citizens.
Speaker 1: You went to Ukraine a couple months into the war.
Speaker 1: You met with President Zelenski personally. What did you see?
Speaker 1: What did you learn?
Speaker 2: Well, I saw a lot of stuff. This wasn't the
Speaker 2: first time I've met with Zelenski. I had actually talked
Speaker 2: with him prior to the war here in the United
Speaker 2: States about potentially using our border security technology on Ukraine's
Speaker 2: eastern border to help track Russian systems when incursions might
Speaker 2: be happening, when build up might be happening, and unfortunately
Speaker 2: we weren't able to make it. I saw a lot
Speaker 2: of things in Ukraine, some of which I can talk about,
Speaker 2: some of which I can. You know, we've had weapons
Speaker 2: there since the second week of the war, we've been
Speaker 2: involved the entire time. But one of the things that
Speaker 2: really struck me was that the Russians that were going
Speaker 2: into Ukraine really did believe that they were the good guys.
Speaker 2: And they really believed that because they had been fed
Speaker 2: a pack of lies. That made them willing to do
Speaker 2: things that they never would have done had they understood
Speaker 2: the truth. There are people there who came into that
Speaker 2: fight with literally four days of clothes and a parade uniform.
Speaker 2: That's what they thought they were going to need in Ukraine.
Speaker 2: They thought they're needed four days of clothes and food,
Speaker 2: and then they were going to be a parade in
Speaker 2: the streets for them because everyone's going to be all
Speaker 2: over them. And the reason that's made such a big
Speaker 2: impact on me is it made me realize that Russia's
Speaker 2: most powerful weapons system isn't any piece of steel. It's
Speaker 2: actually the control of their media apparatus that allows them
Speaker 2: to raise an entire generation of young Russians who believe
Speaker 2: these crazy things.
Speaker 1: Ukraine has become sort of a testing ground for low cost,
Speaker 1: scalable technologies. How is this changing the nature of war?
Speaker 1: I mean, this is happening as we speak.
Speaker 2: Imagine how different the war in Ukraine would be if
Speaker 2: they could deploy thousands of drones all at once that
Speaker 2: didn't have to have a dedicated pilot. If you could
Speaker 2: have one person managing hundreds or thousands of drones in
Speaker 2: an attack. That's the technology that Nanerl's building, and that's
Speaker 2: the technology that will take what's going on in Ukraine
Speaker 2: and put it on steroids. I think that that's what
Speaker 2: we're going to need to deter conflicts in the future.
Speaker 1: There are reports of drones attacking targets in Ukraine without
Speaker 1: human control. What have you heard about this?
Speaker 2: I know a lot about it, but this isn't the
Speaker 2: right venue to talk about it.
Speaker 1: But that is sort of the fear of the roboca,
Speaker 1: you know, Like right, I can't.
Speaker 2: Talk about operational specifics of how our systems or other
Speaker 2: systems might be used in the specific tactics that are
Speaker 2: going on, but I'm aware of a lot of autonomous
Speaker 2: weapons being used in a lot of different places, not
Speaker 2: just Ukraine, and my thoughts on it are generally big
Speaker 2: thumbs up. I am a big fan, for example, of
Speaker 2: having drones that are taking out a guy who's trying
Speaker 2: to kill me, not being reliant on a direct communications link.
Speaker 2: Because if my drones relying on communications link, all he
Speaker 2: has to do to kill me is jam my communications.
Speaker 2: This is a huge advantage of autonomy. It means that
Speaker 2: my weapons can go over there and get that guy,
Speaker 2: even if he has an electronic warfare system that makes
Speaker 2: it impossible for me to fly my radio controlled drones.
Speaker 2: I don't feel bad about that. I think it's great.
Speaker 2: I think it's fantastic. It means that Russia can't sever
Speaker 2: everything that we make with the push of an electronic
Speaker 2: warfare button.
Speaker 1: China and Taiwan, how does this play out?
Speaker 2: Everything that Anderl is working on on the R and
Speaker 2: D side is oriented towards that fight. The term the
Speaker 2: Dey uses is a great power conflict or a fight
Speaker 2: in the Pacific, and what that means is fighting with
Speaker 2: China over Taiwan or at least being in the area
Speaker 2: to scare China from going after Taiwan. There's a lot
Speaker 2: of ways this could play out. Will they move quickly,
Speaker 2: will they move slowly? Will it be a trade blockade
Speaker 2: that escalate into an invasion. What we do know is
Speaker 2: the only way to win this war is to build
Speaker 2: things that make China have the belief that they cannot
Speaker 2: take Taiwan without a cost that is unacceptable right now.
Speaker 2: China does not believe that. China looks at what we have,
Speaker 2: and they look at what we're willing to do, and
Speaker 2: they look at our posture, they look at what Taiwan has,
Speaker 2: and they say, we will reunite by force if necessary,
Speaker 2: and we're going to be able to do it in
Speaker 2: the next few years. We have to change their mind.
Speaker 1: What is and Urall's role here? Who are you partnering
Speaker 1: with and what are you deploying.
Speaker 2: Or partnered with? Every branch of the United States DoD
Speaker 2: building things that they tell us they desperately need to
Speaker 2: win a great power conflict, a fight in the Pacific
Speaker 2: to deter a fight with China that nobody wants to fight,
Speaker 2: but that we need to be able to win. And
Speaker 2: we work very closely with them on this. We got
Speaker 2: great ideas, we've got great tech, but at the end
Speaker 2: of the day, we are working hand in hand with
Speaker 2: the people who know what we need to build to
Speaker 2: stop this fight, so that we can try to over
Speaker 2: the course of the next few years build it. I'm
Speaker 2: probably going to eat these words, but if China ends
Speaker 2: up invading Taiwan and things go the worst for them,
Speaker 2: I'm going to feel like we've really failed in our mission.
Speaker 2: I'm going to feel like we've failed in what we're
Speaker 2: doing because in the same way China is focused on
Speaker 2: the Taiwan conflict as they're kind of driving force for
Speaker 2: building their military, and Rail is focused on it as well.
Speaker 2: Taiwan is not just strategically important, not just morally important.
Speaker 2: It's economically extraordinarily important, and allowing Taiwan to fall is
Speaker 2: probably the worst signal that we could ever send to
Speaker 2: the rest of the world. There are places in the
Speaker 2: world you can debate whether we should be involved. I'm
Speaker 2: generally a non interventionist. Taiwan is not the place to
Speaker 2: play that game.
Speaker 1: You actually spend a lot of time in China working
Speaker 1: on Oculus headsets. What do you know about China's capabilities
Speaker 1: in AI. What don't you know?
Speaker 2: I mean, I know quite a bit, some of which
Speaker 2: I can say, and someone which I can't. Obviously, I'm
Speaker 2: building things that are designed specifically to go up against
Speaker 2: China's AI systems, So I know more than I can
Speaker 2: let on. But I did. I spent time in China
Speaker 2: back in the Oculus days because that's where we did
Speaker 2: our manufacturing, and we didn't really have a choice. I
Speaker 2: deeply understand how dependent our country has become on Chinese manufacturing,
Speaker 2: Chinese engineering, Chinese supply chain materials. It's really extraordinary how
Speaker 2: they've pulled themselves up from almost nothing to being an
Speaker 2: economic superpower that is on track to surpass the United
Speaker 2: States in such a short period of time. And we
Speaker 2: did this too. We're the ones that gave them the blueprints,
Speaker 2: We're the ones that gave them the tech. We're the
Speaker 2: ones that shipped all overseas, and I'm part of the problem.
Speaker 2: I'm one of the guys who did it. We tried
Speaker 2: to do our manufacturing in Mexico at one point, and
Speaker 2: we actually did do some early Oculus manufacturing in the
Speaker 2: US and Mexico. We just weren't able to make it
Speaker 2: work without China, and so I have sympathy for companies
Speaker 2: that do end up in China. But my strong advice
Speaker 2: to new companies is do not build a company that
Speaker 2: is dependent on China.
Speaker 1: Do you worry that China is outpacing us on technological innovation?
Speaker 1: Could the US military lose its edge to China.
Speaker 2: Well, depending on who you ask, China has between fifty
Speaker 2: times and three hundred times the military shipbuilding capacity of
Speaker 2: the United States. This is a huge problem, especially if
Speaker 2: you're fighting a war where you lose all your ships
Speaker 2: and it takes you decades to rebuild. They lose all
Speaker 2: their ships and they rebuild the same year. This is
Speaker 2: really inarguably an area where China has outpaced the United States.
Speaker 2: Now they have an outpaced us everywhere, but in a
Speaker 2: lot of the areas that matter. For a fight in
Speaker 2: the Pacific, they are kicking our ass, and the United
Speaker 2: States is not going to be able to win by
Speaker 2: following the same strategy they do. We're not going to
Speaker 2: be able to build enough shipyards and train enough welders
Speaker 2: to build three hundred times more ships. That's off the table.
Speaker 2: So we have to win with our brains.
Speaker 1: The stakes are so much higher here than strapping on
Speaker 1: a headset and playing in the metaverse. How do you
Speaker 1: think about the human cost, the human toll of what
Speaker 1: you're building?
Speaker 2: How do you deal with the human toll? You have
Speaker 2: to deal with the dilemma that people have dealt with
Speaker 2: for millennia. War is hell. People die, and our goal
Speaker 2: has to be to try to minimize that. Our goal
Speaker 2: has to be to build the things that prevent it
Speaker 2: to the best extent possible. And some people who have
Speaker 2: a different moral framework internally will say, well, how could
Speaker 2: you live with yourself if somebody got killed by one
Speaker 2: of your systems? And like, I'm not stoked about the
Speaker 2: fact that, you know, let's say an autonomous weapon blows
Speaker 2: up a Russian tank crew, but I also know that
Speaker 2: it's the right thing to happen. I can't say I
Speaker 2: lose much sleep over it, because in a world where
Speaker 2: things like that need to be done for the greater
Speaker 2: good and to save the lives many more lives that
Speaker 2: could stem from not making that decision. It's a really
Speaker 2: easy decision for me.
Speaker 1: What if your technology kills the wrong person? Would you
Speaker 1: take responsibility for that? Would you apologize?
Speaker 2: Well, it would depend on the situation. Didn't kill the
Speaker 2: wrong person because someone in the military shot at the
Speaker 2: wrong person. Is it because it was attacked or hacked
Speaker 2: by an adversary using some components that China implanted in
Speaker 2: their supply chain to make a command and control system.
Speaker 2: It's a hard hypothetical, but like if a system killed
Speaker 2: somebody who should not have died, and it's entirely my
Speaker 2: fault personally, Palmer Lucky it was everyone in the military
Speaker 2: did their job, everyone on the deployment side did their job.
Speaker 2: Everyone in my company that it was my personal flower. Yeah,
Speaker 2: I feel awful about it, but it wouldn't make me say, well,
Speaker 2: I guess we shouldn't build the tools that Taiwan needs
Speaker 2: to save themselves from being taken over from China. I
Speaker 2: don't think that anyone who works in this space can
Speaker 2: afford to have that opinion. Every weapons company has made
Speaker 2: weapon systems that have malfunctioned at some point. Imagine if
Speaker 2: the bar for withdrawing from that duty was getting it
Speaker 2: wrong one time. The stakes are high. That's why we
Speaker 2: have to do it. That's why we have to keep
Speaker 2: doing it.
Speaker 1: So big picture, what does the future of warfare look like?
Speaker 1: And what is Andurrell's role in it.
Speaker 2: The future of warfare is going to be defined by
Speaker 2: large numbers of autonomous systems, managed at a high level
Speaker 2: by people who are able to focus on what people
Speaker 2: do best, leaving to robots what they do best. Every
Speaker 2: sensor is a censor for every weapon. Every weapon is
Speaker 2: an appendage of every person who needs to use them,
Speaker 2: and the enemy will not be able to deny us
Speaker 2: our communications. They will not be able to deny us
Speaker 2: the big picture, we will have full awareness of what
Speaker 2: we are doing, why we are doing it, and confidence
Speaker 2: that is the best way to accomplish our strategic games.
Speaker 2: That's what I think. The future of warfare looks like.
Speaker 2: It's an ambitious future, but we're building the tech that
Speaker 2: can make it happen.
Speaker 1: Thanks so much for listening to this episode of the Circuit.
Speaker 1: You can watch the full episode featuring Palmer Lucky on
Speaker 1: Bloomberg Originals. I'm Emily Chang. Follow me on Twitter and
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Speaker 1: next time.