Invest Like the Best with Patrick O'Shaughnessy - Josh Wolfe and Tony Thomas - The Past, Present, and Future of Defense – [Invest Like the Best, EP. 216]

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Starting point is 00:02:49 Asset Management. All opinions expressed by Patrick and podcast guests are solely their own opinions and do not reflect the opinion of O'Shaunsi asset management. This podcast is for informational purposes only and should not be relied upon as a basis for investment decisions. Clients of Oshonosia asset management may maintain positions and the securities discussed in this podcast. My guests this week are Josh Wolf and Tony Thomas, better known as T2. Josh is the co-founder and general partner at Lux Capital. T2 is now a venture partner alongside Josh at Lux after serving almost 40 years in the U.S. military and becoming a four-star general and the 11th commander of U.S. Special Operations Command. Our conversation focuses on the technology frontier in defense, as well as the geopolitical threats that the U.S. faces.

Starting point is 00:03:37 We talk about everything from semiconductors and autonomous weapons systems to the moral dimensions of investing in defense technology. I hope you enjoy this fascinating conversation with Josh Wolfe and Tony Thomas. So T2, I think since the audience knows Josh very well, we have to begin with you and your fascinating background. Could you begin by giving us sort of the thumbnail sketch of your career up until this point? Thanks, Patrick. And thanks for the opportunity to engage with you here today and with my teammate, Josh. I come from some pretty common formative years, and in fact, I joked. I was probably voted on more occasions than not if we'd had that early balloting of least likely ever to become a four-star general in the DOD. So I'm the oldest of six kids

Starting point is 00:04:21 from the Philadelphia area. Stumbled through 10 years of education before I finally had the opportunity to visit West Point. And for whatever reason, and I still don't understand how I was mature enough on that data, grasped the opportunity, it struck me that I need this place. I need some orientation. I need to go here. So switched out of Catholic school and a public school, got a haircut, started hanging around with the right kids and applying myself. Up to that point, my parents at university, said I was the most underachieving person on the planet. And luckily, by Hooker Crook, got into West Point. Like a lot of guys and gals that go to the military academy, I had no intent of making a military career. I mean, I was interested in serving my country, certainly, and I

Starting point is 00:04:57 knew that there was a five-year commitment. I didn't have a plan past that. I didn't have a plan on where I wanted to go for my initial assignment until I picked it. But I got into the military and immediately just grew incredibly fond and passionate about the people and the shared sense of purpose. That drove me for 39 years through all those ranks from second lieutenant on up to Forest Air General where I ended up culminating as the commander of Special Operations Command. Most Americans don't realize that the Special Operations Command is 75,000 strong. And on any given day operating in 80 different countries around the world. That spooks a lot of Americans on why are we there? Why are we doing these things? I try, when I do engage the public, I try to assuage their concerns by mentioning that

Starting point is 00:05:40 I think it's an insurance policy ahead of time that we are trying to develop partner capacity in countries so they can deal with their own crises when they happen so that we don't have to deploy loads of U.S. service members down the road. My experience over the last couple years really has been seminal. In the context of the 19 years now going on 20 years of continuous combat against Islamic extremism, but also where people don't realize, we were knee-deep in countering Russian activities, especially on the Eastern European front. We were turning, pivoting, as everybody was, towards the challenge that is China, which is massive. And then we were also dealing with some not-so-small contingencies in the form of North Korea and Iran. So incredibly busy command across all

Starting point is 00:06:24 those areas. During my stint, we picked up responsibility for weapons of mass destruction, no small mission from Strategic Command. And at the very end, we were given a mission that I was actually salivating about, and that's information operations to help the DOD, at least, compete in the information space, which is now more challenged than ever. But if you look back over this last 19 years, we've had this living laboratory of a conflation of all things automated. Everybody thinks predators and reapers and things like that, but it's yes, plus. so many other aspects of automating our approach to that kind of combat, but it transcends to other forms of warfare. And of course, teasing the heavy question of if you integrate AI,

Starting point is 00:07:06 do we go automatically to Skynet? And I try to assuage people of that concern if they are even inclined to listen to you. But the other part is this aspect of the miss and disinformation that is really complicating matters. It complicated or matters even in the backwards environments, the less developed environments of Afghanistan, Syria, Iraq, but even more so on the global scheme now with major competitors like Russia and China who are manipulating the information space like nobody's business.

Starting point is 00:07:31 And we in the United States suffer from the thing I harken back to a Stephen Colbertism. It was word of the day one day that he invented was truthiness. We in the Western world suffer from the intent to be factual to our fault. And I'm of the school of thought now that better to be fast, get something out there in the information space and recover off that, adjust off that, then in the pursuit of perfection and truthiness, when the ship is sail, the story's already

Starting point is 00:07:58 out there and you're in the recovery mode. So we've been lucky to have a developmental environment to trot out and work our national security repetitions over the last 20 years. But the next 10 to 15 years are going to present some much more daunting challenges that I hope we're able to pick our game up and be prepared for ultimately to deter war. I'm one of the bigger advocates that we should be the last button you press to press send that you've exhausted every other thing. You should have that big can of whoop ass in the closet that people find a challenge, but it has to be integrated with your diplomatic approaches, your information,

Starting point is 00:08:34 and your economy levers that are keeping things real, short open than can of whoop ass. That balance going forward is tough for any administration. It'll be a huge challenge for the current one, again, as they pick up from where we are now and projects us in the future against them really. daunting adversaries. We might call this episode can of whoopass. I was like naming them early on. I think it's actually the kind of perfect framing. Josh, I'd love you to talk a little bit. One, about how you met T2. I think it's an interesting backstory. But then two, start to lay the groundwork for this inextricable link between government, military, and technology through history.

Starting point is 00:09:06 I don't think maybe many fully appreciate just how important both government and military are at the bleeding edge or frontier of technological innovation. So first tell us, though, how you met T2, and then let's get into that history. I had a former Navy nuclear sub officer who used to work for me, and he went and helped stand up with the Pentagon, this entity called Jakes, which was the Joint AI Center, and he had met T2, Tony Thomas, and said, you know what, he's going to be in New York.

Starting point is 00:09:30 He's starting to look at some of the cutting edge technologies that could help the warfighters, and I recommended that it comes to you. So this was scheduled, I think, for a Friday. Two days earlier, unbeknownst to me on a Wednesday, I'm in my office, which you've been to, and Bibi, who is my partner and assistant runs my life, knocks on the glass window. I sort of wave her off because I'm engaged with an entrepreneur and I'm

Starting point is 00:09:49 really excited by what they're pitching. She's a bit persistent. And so I suddenly get up and I say, okay, what's going on here? She very quietly, but nervously, turns to me and says, there's three federal agents downstairs and they're asking for Josh Wolfe. And I sort of now pause feeling bad that I had waved her off. And I said, okay, she's like, what do you want me to do? And I'm like, well, let them up. I'm not sure if she thought I was going to like repel out the window or I was wanted for something. these three guys come in flack jackets. I am drenched now in sweat, pondering. What could I possibly done that the feds are here? They come out the front elevator, as you know, it opens up into our main space. And they say, we're here for Josh Wolfe. And I said, that's me very nervously and sheepishly.

Starting point is 00:10:26 And they said, we're Tony Thomas's advanced team. And I let out this great exhalation of relief, but they had come to basically scout out every angle and window and entry point to make sure that if somebody was on a rooftop going to take him out, they'd know it ahead of time. But that scared the heck out of me. Anyway, T2 comes, I don't know, we're probably scheduled for half hour, something like that, and maybe two or three hours later, we finish and we had covered everything from cutting edge of technology to science fiction where he was in a fictional. At the end of it, he turned and said, I'd like to take it out to the edge of the formations to actually see some of the men and women in theater. I think in particular, I talked about one of the identifying techniques

Starting point is 00:10:59 that we use at Lux, which is, as you know, asking what sucks. He said, you know, I want you to go out to the edge of the formation and take a look and tell me what sucks. At the end of that trip, which I think was a little under two weeks covering, I don't know, eight countries or so. I'm in the Pentagon. He's in full uniform and I'm in a black t-shirt. I think I was wearing a nice cover shawl, but trying to be as respectful as possible. I don't think I wore my crazy vans that day. He said, what do you think?

Starting point is 00:11:22 And I said, if I was a peer adversary and I wanted to sabotage your systems, I would basically plan a 1980s guy out of office space, a bureaucrat, to put the IT system in that you have now. We are sabotaging ourselves. And I was astounded visiting some of these folks, whether it was Philippines or Thailand or right outside Malaysia, and they could paint a target in five seconds with a laser, but it would take them five minutes to send a classified file. Just listening to the frustrations of people

Starting point is 00:11:54 who wanted to do something like blue dot tracking, the ability to track peers like we do for our families on an iPhone, and they're on these Kluji, basically slightly better than Blackberry phones. And just that cycle of technological innovation, that might happen every six months or a year that we're so adapted to here as civilians. And these six-year plus cycles for adoption into the DoD was just astounding. We hit it off.

Starting point is 00:12:18 We both speak a mile a minute. He's got the Philly jersey thing and I got the Brooklyn thing. And a few years later, he joined Lux as a venture partner and has just been an incredible addition. Tony, I'm curious, just to double click on one of those ideas. It sounds like in the military often the pace of kinetic flow, I'll call it. The ability to paint the laser can be quite cutting edge and fast, but information flow and the system's behind that much slower.

Starting point is 00:12:39 What did that feel like from your felt experience across those three or four decades, watching technology progress and seeing its utility change to you and your teammates? I was actually very lucky to be in units that were decidedly nimble at leveraging modern technology, at least as much they knew about it. I would offer they didn't know everything that was brewing, but the special operators that I work with always had that insatiable desire for an advantage. whatever it might be. And we were able to bring it back at that level, not necessarily to scale. And in fact, part of the problem, when I got up to Socom, I realized that a lot of the leading

Starting point is 00:13:16 edge technology was resident in some of our special mission units, but had not scaled to the entirety of our formation. We had some interoperability issues. At a point in time, we had better interoperability between one of our special mission units and our Kurdish surrogates in Syria than we did with special forces and elements that we inserted later. And that was a terrible shortcoming that we hadn't rectified. But I was lucky, again, to be with those units that had the adaptability early on to bring technological advantages to bear. It diminished the higher I went. And in fact, it was a source of frustration, the higher I went that there was less of that practitioner-driven innovation tied to our tactics, tied to our operations that was enlightening me

Starting point is 00:13:58 to where we needed to invest in the future. When I was out in the Far East, we spent a day with some of the breaches, the people who break down doors and collect information and people. And some of the inventions that they had were straight out of McGiver. They had hacked together these systems, whether it was a saw that was fit into a backpack, explosive tape that was hidden, all these kinds of jerry-rig things that out of necessity, they had very scarce resources that they had to pull together in very creative ways. Just as T2 is saying, it was the exact opposite of a top-down bureaucratic approach to designing something. it was instead this completely, oh, crap, we got a problem.

Starting point is 00:14:35 How do we solve it with the stuff we've got? Almost like that scene out of Apollo 11, when they're like, you've got to make this fit into this. Our luck that we invited Josh to get under our tent, the immediate return was what I took away is so beneficial. Based on the realization, we were chasing technology everywhere. We were literally chasing our tail and mostly trying to ferret and find individual companies. I give Dave Spirk, who's now the chief data officer for DOD credit. we flipped that paradigm and said, let's bring these people under our tent, assume some risk in terms of classification and things we'll have to figure out.

Starting point is 00:15:08 Possibly getting them killed. That's all right. But let them come in with their creative minds and more importantly, just the expanse of their networks to understand our problems and say, geez, I can come up with five or six solutions, that problem. Which one would you like to pick? That changed our approach, at least certainly my approach at the time. And it's something I think the department needs to do at scale.

Starting point is 00:15:29 I appreciate it more now that I'm outside, how very difficult it is for individual companies to get in the department and blossom to any sort of program or record. There's a better way to do this. Josh did so well at the Reagan Library last year, I'm going to try and leverage him to get into the system some way, somehow serving our defense established to help us get across this divide. Josh, I want you to set up for us this background in history of what I'll call everyone talks about B2B or B to C businesses. We're going to talk about B to G, businesses that are selling into the government. And also just working with the government R&D-wise and development-wise to develop new technologies. Can you give us kind of the background of the relationship between government and Silicon Valley and technology innovation?

Starting point is 00:16:12 Like you alluded to in the beginning, it's something that is totally lost from a lot of people. I mean, the roots of Silicon Valley are this myth of vineyards and orchards and brilliant nerds halting and catching fire in garages and humid backward. But Silicon Valley and tech, as we know, it was really rooted in 40 years of electronic warfare. post-World War II, 1940s, 1950s, the U.S. government begins funding universities to basically do weapons research and technology. The dean of Stanford at the time of guy Fred Terman, he's encouraging grad students and professors spin your research out into startups that can sold his products to defense contractors. And a lot of people don't know, the first IPO out of Silicon Valley. It wasn't Google.

Starting point is 00:16:48 It was 1956 for a company called Varian, which sold microwave tubes for military applications. And so there's a symbolic significance that we'll probably return to later, I think when we talk about semiconductors and things that are of geopolitical significance, but the dawn of the computer chip, the soul of the new machine, was all Defense Department funded. A year after that, 1996, very an IPO. So in 1957, we've got Fairchild Semiconductor, which was born out of Shockley and Bell Labs and is really considered the pioneer, the icon of today's Silicon Valley. And it won its first revenue through military contracts, building chips that basically

Starting point is 00:17:19 helped U.S. astronauts get to the moon, helped build missiles to arm the U.S. and the Cold War. You go back to Lockheed, obviously today, a Belway band to a giant defense contractor. It was almost non-existent. It sets up shop in Sunnyvale in California in the Valley, gets a contract to build all the submarine missiles for the U.S. And then employees go from basically zero to 25,000 in four years. You go back before COVID to Sand Hill Road. And if you ever visited Rosewood, sort of the inside joke that on Thursday nights, you see

Starting point is 00:17:47 all these Russian ladies of the night preying on, you know, rich young, techie nerds for both money and Intel and maybe compromise. But from the 1960s to the late 80s and 90s, Silicon Valley was basically crawling with Soviet spies. We've completely forgotten this history. Today, we think tech is Facebook and Google and Instagram and Snap and Clubhouse and Amazon. And it's coincided with this zeitgeist over the past really 15 or 20 years that's been anti-defense, anti-government. Some of that is tech company employees at Google, refusing to work with the DoD or walking out or quitting in protest. And it's one thing to be anti-war. I'm anti-war. I would even argue T2 is probably anti-war, but it's another thing to be pro-defense. I think Microsoft

Starting point is 00:18:26 got this morally right, and I think Google got it morally wrong. Microsoft basically said, we're an American company first. We're going to make sure that the men and women on the front lines in U.S. defense are going to have the best technology and the best advantages and not be disadvantaged, especially when our peer competitors are aligned between industry and government. And I think that was an important stand. It's the zeitgeist that is now starting to change. We're working to change it. The companies were funding are working to change it. But I think it's interesting if you look at why, like what kind of what cause this zeitgeist in the first place? Because it wasn't always like this, right? We just talked about

Starting point is 00:18:55 how 40s, 50, 60s, and beyond, you had this close relationship, one that was even chastised as being a military industrial complex. Some of it, I think, is generational. The past 20 years, you had two main wars, Iraq and Afghanistan, and T2 played a key role in these. And some called it war of choice, a war of necessity. You had jingoistic, American neocon sensibility in Bush for two terms. You had a more internationalist Obama fighting a global war on terror. And then you've got this offensive populist, anti-globalist in Trump that's abandoning allies and bizarrely budding up to North Korea and Russia. So for many, myself included, the politics was gross and demoralizing. But some of it was also the demographic. When you look at the valley over the past 20 years and you look at some of the

Starting point is 00:19:36 brilliant and beautiful people, the influx of immigrants that are populating our companies, many of them did not feel that same feeling that Russian immigrants felt in the 80s when they came to the U.S. They were running to the U.S. They were running from Russia. Instead, a lot of the last 20 years of immigrant entrepreneurs, many were more transient visitors. They get equity, they get rich, they get out with no real roots or loyalty or even sort of an understandable resentment to the growing anti-immigrant sentiment. The second thing, I believe that there have been information operations that have been influencing certain points of views and sowing seeds of dissent. When I grew up in the 80s, we had a very clear and present danger in Russia. We had it in every movie and every TV show and

Starting point is 00:20:15 Saturday Night Wrestling. It was Hulk Hogan waving the flag of America versus Nikolai Volkov, with USSR. It was Red Dawn. It was Rocky in his big American flag shorts versus Russian Drago. It was James Bond versus the KGB. It was the hunt for Red October. It was Red Heat, Red Dawn, Red Scorpion. So I'm visiting Pacific Command, and I'm talking with Brigadier General John Braga, on a T2's guys, who helped lead the war on ISIS. And we noted that where are all the Chinese villains? You can't name one. Some of that is basic economic interest. You've got Hollywood that has this huge incentive to sell to a a huge multi-billion population of moviegoers, so they don't want to upset the country, and so they self-censor content. Some of it is China actually making purchases strategically,

Starting point is 00:20:57 very cleverly. They bought AMC back in 2012 for just under $3 billion. They bought a series of other movie theaters and chains. They bought Dick Clark's production company. They bought legendary pictures. So this was very successful information operation. It could be this mass oversimplification, but if you just observe history, you can see this undulation in the domestic sentiment between peace and war, between unity and domestic strife and division, and that's almost always coming because there's some common foe. You've got the civil war happens, basically right after the U.S. crushes, what's the closest thing to an enemy in 1948 in Mexico? 13 years later, you got the Civil War. World War I, we get unified again. Then you got this crazy division

Starting point is 00:21:37 amongst the Roaring 20s in the Great Depression. You have the rise of the KKK. You had divisions of cities versus towns, wet versus dry with prohibition, reds versus Americans. You go and to World War II, it turns out it wasn't the New Deal so much that started to bond us, but military and our mobilization. You get common bonds between ethnic Italians and Irish and Polish immigrants all now compatriots fighting a common enemy. And then after World War II, you get this peacetime dividend. We get the civil rights movement, but then you get Vietnam. And then we get unified again during the Cold War with this common enemy in Russia and the propaganda that was connected to that. And then you see this huge surge in partisanship since then. And one measure of that,

Starting point is 00:22:15 which I thought was interesting. Since 1988, that was the last time that we had a unanimous confirmation of Supreme Court nominees. The one conclusion, which is sort of this weird one, we want unity. We need higher purpose. That could be from a shared ideology. It could be about some big technological achievement, going to the moon or going to Mars. But what's united us most often has been this us versus them. It's a foe. And a foe typically has to have two big things. It's got to be really big to scare us. And it's got to be really alien and different and weird that we are just like uncomfortable to make it tribal. Nazi Germany was a perfect foe, right? It was big. It was alien ideology. It was unifying. Japan in the 1980s, big, but not really a rival in democracy. It was sort of a common system. Rival in electronic shore. Russia, check. Big, alien, different, weird, perfect foe. Al-Qaeda and ISIS might have been alien to us, but it wasn't big. It was diffuse. It was abstract. It was a war on terror. It wasn't really a war. on territory. China, China is interesting because it's now got the potential to be both big

Starting point is 00:23:19 and sort of scary and threatening with an alien ideology. And so the downside of this rivalry of growing disharmony with China, and ideally it need not be that way. There are big global problems to tackle and doing it as allies would be better. But the upside of it, as cynical as it may be, is that we may end up creating domestic harmony as we get unity that's forged against this foe. There was this quote from some Soviet-era advisor. He said to an American audience, sort of as the cold war was ending. This very chilling quote, he says, we're going to do something terrible to you. We're going to deprive you of an enemy. It's a fascinating idea. Tony, I'm really curious to hear your take on back to the can of whoop-ass. So we'll talk about the cans of

Starting point is 00:23:58 whoop-ass later in terms of what they mean technologically. But in terms of just the felt nature of the threats that we face, I always loved Eric Hoffer's nature of mass movements and his concept that like the most important thing was a common devil. That was the galvanizing force. And Josh just kind of laid out that history. What was your perception of that being in the military and how that evolved? And how would you describe the state of that, the sort of consensus threats today, whether they be kinetic or information based? I'm glad you asked that because I think we don't look back often enough. Your perspective can vary to see how we got to hear and to flash forward. I'll pick a point 30 to 40 years ago, but 40 years ago vis-a-vis rushes, as Josh described,

Starting point is 00:24:37 I can remember the same movie genres. The acknowledgement for me as a military professional was that is an incredible foe, much bigger than us conventionally. We probably will not win in Germany, probably go nuclear, and then against the backdrop of mutually short destruction. That's how we grew up. I'm acknowledging that this is tenuous. And you had the fringe activities against the Soviet Union, the smaller wars that were on the periphery, but it was something that obviously was a focal point, and it drove our national animus. We had our stuff together in terms of Voice of America, our strategic messaging, our economic approaches, and then tried to recover our army from the of Vietnam into a fighting force that might be able to go belly to belly with the Russians.

Starting point is 00:25:22 But you think about the same time frame, some 10 years later, after I got commissioned, the fall of the Berlin Wall, which I think shocked everybody, how quickly the dissolution of the Soviet Union. And I would offer we spike the ball at the one yard line. Conversations at the time where let's not affect too harsh a piece, let's not have the Versailles of our time, so we forced the bear to come out of the closet, let's take advantage of this unexpected development. Let's let them fade to black. Now, the problem is we left a big, fat piece of red meat out there unresolved. And so that was specifically Ukraine. We had Estonia, Latvia, Lithuania, Poland all come into the NATO construct. Russia didn't like that at all. In fact, Putin has leveraged that great advantage back into the Russian population that NATO is now on our front.

Starting point is 00:26:04 We used to have this buffer with the Warsaw Pact. But we left Ukraine out there. And what do you know, the not quite dead yet Soviet Union now in the form of a revisionist Russia stole a march on us. We saw it coming. I think there were every sort of indicators. We slept through those indications. Crimea was a fait accompli and now you had the morass of what's going on in Russia. China, 30 years ago, was Tiananmen Square. I think our universal thought among the Western world was, oh, this has got to be the beginning

Starting point is 00:26:34 of some modification of the hardline Chinese approach. And arguably, they did that economically. amazing kind of economic development from there, but they ratcheted the party system down harder and meanwhile gained steam in terms of an economic juggernaut. But I can remember five or six years ago, the economist among every other publication, disparaging the Chinese economy as, quote, state-sponsored capitalism. They would then go on and say, completely stunned in terms of innovation, can't take off, can't go to scale. They'll have moderate development, but it's not going to be something we have to contend with. Three to five years later, the cover.

Starting point is 00:27:09 of the economy was how the West got China wrong. But I would offer about the same time that that article came out was about the time I joined the four-star club and my very first China tabletop, the chairman and all the other four-stars, about 20-ups in the room, he had a bunch of young bucks in there and we were talking about China as an adversary. And the chairman felt compelled to tell all of us new members, hey, you need to know that the administration policy, the Obama administration policy is to not refer to China as an adversary. We're not picking a fight here. We're dealing with this developmental country, don't want to call them an adversary and don't want to talk about containment or any other generalized approach to it. We're trying to figure out what's the

Starting point is 00:27:48 nature of this thing short of calling it a threat. I think you've seen that transformation in the last three to four years where on a bipartisan basis, people are realizing this is a threat. It could be a really, really substantial threat if they march all the way to taking Taiwan or an inevitable imbalance of power. But it came up on us in a hurry. And we, we, certainly have to acknowledge it. Inside that, you can talk about the failure, just utter failure. It was an underestimation that there's no way, nohow North Korea can get a nuclear bomb. We are now being held nuclear hostage by a totalitarian despot. God help us, if anybody can predict what he's going to do next, I'm intent on finding out. But in just the last three years,

Starting point is 00:28:30 my gallows humor was the good news, as I sit here in Tampa, is he can only reach Topeka. Then he had an apagy test three years ago that shocked everybody, all the intelligence community, and they had to reluctantly acknowledge, nope, he can hit anywhere in the United States. The good news is it's only a Hiroshima-sized bomb. Drop a Hiroshima-sized bomb, and you pick it, state or municipality in the United States and see how it's saying when you are at about that point. I'd love to talk to you both about what you view as the most important competitive frontiers. So against all that backdrop, a couple things stand out in my mind.

Starting point is 00:29:03 One is as a civilian, it just seems as though I'll call it pure weapons technology, like kinetic weapons technology, is, I don't know, less important or less prominent. I hear about it less. I think about it less as somebody that's interested in military history. And obviously, the nuclear arms race was maybe the most profound example of kinetic weapons being developed at an incredible pace and being really important in the balance of power and a competitive frontier that drove global geopolitics. But then I also think about this book that just came out about Russia, cyber warfare against

Starting point is 00:29:32 Ukraine. You mentioned Ukraine earlier. And it seems like there's these twin separate fields, one digital, one physical. And I would just love to hear maybe Josh starting with you, what in your mind the competitive frontiers are, just like we would think about a competitive frontier in business. In the world of the military and governments, what are the most impetive frontiers and how are we doing on those fronts? It's almost the blending of almost every sphere you can imagine. And I'll give you an example from history that I think is sort of poignant on how little things that are totally overlooked can have decisive advantages for one party or the other, and it isn't predictable a priority. But I think every domain, obvious ones that we already categorize, air, land, sea, space,

Starting point is 00:30:10 information, cyber, but it's really the intersection of these things, the ability to influence a population, as you've seen Russia and China do, turning our own tools on us in the same way that terrorists did it with our own domestic airplanes on 9-11, with our own elections, and sowing seeds of dissent and disharmony and civil unrest domestically using Facebook, which we would thought was a benign thing. But hitting on the technologies, Chris Brose, who's had a strategy at one of our company's Andrew, which is a real defense focus company, was sharing that over the past decade in the U.S. when we did war games against China, the U.S., to his surprise, had a near perfect record. And the punchline was we lost almost every single time. And so the Chinese are so far ahead of us

Starting point is 00:30:52 in many of those domains, particularly in space, at a micro-technology level, like to underscore the importance of basic science research and constantly celebrating our scientists, making sure that they're welcomed here. There's a story of a guy, Eugene Hudry or Howdry. I'm not sure how the last name to pronounce. He's a Frenchman. He's a tank commander in World War I. He resettles in the U.S. He goes and sees the Indy 500, okay, and he gets obsessed with cars and then particularly becomes obsessed with fuel. And there's this widespread belief at the time that petroleum is going to be going out of business and you've got to find ways to get gasoline. So he figures out using hundreds of different catalysts. How can we coax out of coal, gasoline, to basically produce a fuel?

Starting point is 00:31:31 This is late 30s now. By the early 40s, a bunch of these plants are actually up and running. He's created effectively a catalytic converter. And what was crazy was the British were using a fuel that was 87 octane. Okay, this is such a trivial thing. They're getting trounced by the Luftwaffe, by the German Air Force over France. A few months later, they start using this fuel, which is 100 octane through 13 difference points just in the chemistry and the pressure that it's being able to produce. And all of a sudden, these Spitfire planes are now going 25 miles an hour faster at sea level, 35 miles an hour faster at 10,000 feet. And that extra speed gave the British the decisive advantage over the German Luftwaffe

Starting point is 00:32:09 because they're able to climb faster. They have better maneuverability. They have better performance at higher altitudes. So over the English Channel, Hitler's looking at this technological superiority and turns away from the attack on the UK, allows the UK time to regroup and probably change the face of history. You could argue that a single chemist played a pivotal role where same planes, different fuel, technological breakthrough, little things lead to big things. So I think in a sense it would almost be arrogant to point to any given technology and say,

Starting point is 00:32:37 this is the thing that's going to matter because it's going to be small things like that that accumulate advantage in a decisive point. One of the amazing trends we've detailed over a pretty long period of time now is that technology tends to evolve between this perennial arms race between deception and detection. You see this everywhere. Day after Pearl Harbor gets bombed, Lockheed Martin has this huge ammunition plant. They've got arguably America's most important military asset at the time, and therefore it's a target. So they scrambled, they create a decoyed California suburb made out of burlap stacks on top so that if there was aerial surveillance of it, all you would see is what looks like this town,

Starting point is 00:33:12 not a military munitions fact. You had audio engineers that were basically making tank sounds. You had people that were literally stagecraft and broadway theatrical artists that were doing inflatable tanks to communicate that we were there when we weren't actually there. Or conversely, you want to let somebody know that we're not here, but we actually are, you know, sort of really evade detection. And it's this infinite game. You had sonar as a technology, nobody would have anticipated that it was super valuable, but it was invented to detect submarines. And then to evade sonar, subs ended up getting built with these silent engines that were basically Navy nuclear. putting nuclear power instead of loud engines. And now China has invented the ability to detect these things from the sky using lasers

Starting point is 00:33:53 to go subsurface in the ocean. So I think that that perennial sort of evolution is just this natural force that then trickles out into the real world, but constantly trying to detect something that is hidden, the smallest signature. Every day, I'm sure you have a pattern of life and when you go to Starbucks and you pick up your kids from school and you go to the gym. And when there's those aberrations, that's a signal that is valuable to somebody that is trying to detect a pattern of life, whether it's, you know, to find a target or

Starting point is 00:34:17 or identify when two people that shouldn't have been meeting at a certain place met, the counter to that is people trying to defend against that detection. We've got satellites up in space in many of our companies that are imaging and revealing all kinds of crazy stuff. We've got revelations of Chinese concentration camps done by Planet Labs. We've got revelations of Iranian nuclear development and testing of weapons. And at the same time, you've got Chinese technology on the ground that are developing lasers to basically be able to take out satellite detection.

Starting point is 00:34:46 and they're probably the most advanced at this because they don't want to seeing 10 centimeter resolution of what's going on. So that constant arms race is playing across, you know, and I just named a bunch of technologies, the solid state chemistry that is going into high powered CO2 lasers to satellite, launch capability, again, it touches everything from air, land, sea space information, and it's just this, you know, aggregation of all of those things. T2, do I have it right in my impression that the kinetic has sort of taken a back seat? And I also want to understand what I view as a, little bit of a strange paradox for me, which is you mentioned, I think when you're done, 75,000 people in special operations, which seems like I certainly would not have guessed such a

Starting point is 00:35:23 high number. So that's grown a lot. Well, at the same time, it seems as though warfare involves individual humans fighting each other face to face less and less. So help me understand from your perspective, the same question, the competitive frontier and the degree to which kinetic warfare has lessened and other forms of it have increased across your career. I think I would challenge weapons being less significant in that they've been relegated to a thought or perception where they're not as significant. But I think it goes back to one of Josh's favorite lines. This is a failure to imagine failure. They're going to matter. And I'll bring this back full circle. And if I get too far off the reservation here, remind me that I want to come back and absolutely emphasize that

Starting point is 00:36:04 the information challenges are paramount. You can have all sorts of kinetic success, but you lose the information fight, you lose, period. And that's at both the tactical and strategic level. On the theme or the topic dejure of deterrence based on the locker or can of whoop-ass, let me first start by saying that none of our adversaries, and this has been consistent for the last several decades and up until the current time, that none of our adversaries, anybody we've mentioned so far, wants to go toe-to-to-toe with the United States. That's a good thing. They all know that we are incredibly capable. We've got a lot of reps. We train our tails off. We've got extraordinary people. So none of those adversaries want to go toe to toe to with us. The China

Starting point is 00:36:44 war game piece is interesting. I would offer, when you play the same set of hey little dittle dittle up the middle into the South China Sea with aircraft carriers and things like that that the Chinese have planned on for years, you're going to lose that fight every time. Come up with a new strategy. That's a failure to really innovate in terms of strategy, strategic approach. And it does beg the question, do you want to own the South China Seas? Do you want to be on the Asian mainland? or is there another way to push your national interest further forward? This does go back to, and weapons, as you brought up the topic, ain't cheap. Right now, the Department of Defense is flushed with the biggest budget we've ever had.

Starting point is 00:37:20 Three straight years of $700 billion a year equip ourselves to Advantage USA. And against the backdrop of, it's almost like they feel compelled to remind us, but actually it had me thinking, oh, my God, this is 2020. We are hearing Putin rattle, a nuclear capability in the form of nuclear. torpedoes, the non-strategic nuclear weapons. There's no such thing in the U.S. inventory as a non-strategic nuclear weapon. I hope we never lose sight of that. That we go nuke, it's strategic. There's nothing tactical about a nuclear weapon. But Putin likes to play in that space there that, here you go, I'm moving pieces around. I think partly to force us to recommit.

Starting point is 00:37:58 A good chunk of our $750 billion budget over the last three years has been to rebuild the nuclear triad, because at the end of the day, if you at least don't have that to maintain ourselves, you're probably on a wing in a prayer. China is building up their nuclear capability. So one of the less publicized aspects for years, China has been way behind. They could trade nukes with us, but not at the scale. They're seeking nuclear parity.

Starting point is 00:38:21 I would imagine for the same reason we do that you don't want to go here. I will belly up to whatever you have to offer and it'll just be ugly and mankind ceases to exist. So you've got those big brewing issues on the background. Again, who would have thought in this day and age we'd had it? You've got the fascinating aspect of the unbelievable empowerment of individuals, whether it's off-the-shelf stuff or the ability,

Starting point is 00:38:43 just like we had here in Florida recently, where somebody tried to poison the water system over in St. Pete, not too far from me. It's almost a menu for miscreants to do bad things time now, much less empowered by more technology coming their way. But back to the information space. Again, we, the U.S. are not even competing in the information space right now. We're watching Russia disrupts. I think Russia is more about disinformation than. then driving the narrative. And then you've got China, interestingly, inside DoD. They have a daily product that pushes out the daily news stories that are pertinent to DOD. Then once a week, they give you the Chinese version, playing it back at us. And it's amazing how they manipulate the information

Starting point is 00:39:21 space to a growing global audience as we go forward. Josh likes the one story to tell about empowerment of individuals. But in Mosul, Iraq, which was my hometown from 0709, I was back out there in about the 15 time frame. We were retaking Mosul. I saw the one. I saw the one. I saw a some pictures recently of a historic town, a pre-biblical town of amazing history that's been laid to waste, just raised the ground thanks to the nihilists of ISIS. But on the day I was out there in 15, here is ISIS leveraging DJI technology, and the Iraqis referred to it as the day of the drones. In that 24-hour period, they had floated 70-plus drones above friendly forces, armed with little 40-millimeter grenades, just a very ad hoc attachment to the underbelly of a DJI.

Starting point is 00:40:06 drone that they could release once they loitered over your target. Imagine we had air superiority above this with every pointy nose fighter in the inventory. Nothing could come at us that way, but underneath that you had swarms of drones that were wreaking havoc among the Allied forces. All we had was small arms to deal with these things, but that was just a day in the life. And that problem, and I don't like to talk about this too much in public, but I certainly have talked about it with law enforcement folks. That problem is coming to a theater near you, if it's New York City, L.A. or whatever, where anybody who wants to do bad things with enabled by unmanned aerial vehicles, they could bring it to you tomorrow. It could be just worse than a freeway

Starting point is 00:40:45 shooter in terms of disabling economies and paralyzing the kind of security apparatus. So all of that is happening in around this current environment. And again, we are badly suffering from a failure or imagine failure and not taking a leap ahead to really safeguard our interests, both domestically and overseas. mentioned the cost of some of these programs historically, and that used to be an advantage. When something was multi-billion dollars, the average person or a small non-state actor could not put together the funds or the resources or the talent to be able to do that. As more and more technology has become democratized, we lose that advantage. And so, you know, the stay of the drones

Starting point is 00:41:21 is this great example. Even when you think about the origin of the drone itself and its current incarnation, there's this amazing story of one of our other venture partners, Jim Woolsey, who used to run the CIA. It was 1993. He's looking at genocide that's happening. Bosnia with Milosevic in Serbia. He's trying to get eyes on the ground beneath cloud cover. He remember seeing in Israel a drone that was able to lace to laser target something. And he said to the Pentagon, hey, can you get me one of these things? And they said, it'll take six years, $500 million. He reaches out to this contact he had, this guy, Abe Karim, was this Israeli engineer. He says, Abe was developing this thing called Amber, which was a basically 30-hour loitering

Starting point is 00:41:56 glider. He said, could you make a more sophisticated version for me? He said, yes. How much would it cost. Remember, the Pentagon said six years, $500 million. Abe, who's basically an entrepreneur, says six months, five million bucks. So Woolsey hustles, he goes to Charlie Wilson, the congressman who's Wildcat, gets the money sort of secretively, puts it together, ends up getting a few of these things made, takes one, sends it out to Albania, where they get an airfield that he traded two truckloads of alpaca blankets for use of an air strip. And from Langley, he's got eyes on the famous bridge, most our bridge, in, in Boxer. Bosnia. And then the Pentagon jumps on this. General Atomics gets this huge win as a result when they get the

Starting point is 00:42:37 contract to make this stuff. And then Jim turns to Abe and says, this thing's pretty successful. What do you want to call it? And he says, why don't we call it predator? And that was the birth of that program. But that used to be really expensive. Those things were $30, 40 million a piece or more. And the cost of these things to put some sort of payload on a DJI, like T2 said, is quite scary. I can springboard out that because I think, Patrick, your audience would find it fascinating. Thankfully, America puts its money where its mouth is and has written a check, consistent year on year to resource our department. The frustrating part is we're stuck on old school approaches.

Starting point is 00:43:12 And the glaring example I tried out, my Navy brethren hate me for bringing it up, the primes don't like me. I'll never sit on a prime board. That's not my worry. That's not what I want to do. But on two occasions, we were having dinner with the President of the United States, the previous guy. And on two occasions, he tried it out.

Starting point is 00:43:28 asked the Chief of Naval Operations. John, tell me that $13 billion I just spent on the Gerald Ford is the best thing money can buy. That's state of the art, right? Our carriers are without any parallels. John would look at me usually when he'd say that because I would start smiling because the $13 billion that we spent on the Gerald Ford was my annual budget. It's Apple oranges, but it was out of a $700 billion annual budget. 13 bill gets you so calm. 13 bill gets you a keel in the water. It builds an aircraft carrier. It's not. not the operating costs for that thing year on the end. It's what bills it.

Starting point is 00:44:02 The president went on to say, John, actually the thing cost me $18 billion because it went $5 billion over, correct? And the thing that would hang his head and go, yes, Mr. President, you got that right. He goes, well, I've been reading, this was four years ago, mind you. And it showed that he did, he was at least adhering to some of the intelligence that was passed his way. He said, I've been reading that in two years' time, the Chinese will have a mix of weapon systems, hypersonic glide, etc.

Starting point is 00:44:27 that can defeat any one of our gray holes east of the second island chain. The room got kind of quiet because he was just loading you up for the follow on. He said, why would I ever buy another aircraft carrier? And you could hear a pin drop in the room. Right now, the U.S. taxpayer has funded in this last NDAA two more carriers that you won't see for another decade that you wonder are going to be applied against what. Aircraft carriers have been the best power projection platform that we've had for the the last 75 years, but they arguably have gone the way of the dodo with a little more shelf

Starting point is 00:45:02 life to go, and we should be spending our $700 billion on something else to have advantage U.S. and not put 5,000 kids in the strait of Taiwan to hope that a reign of DF21s isn't going to just smoke them out of the water. But we're still stuck on that, and it's as much stuck on what congressmen represent the carrier building communities and constituencies and what crimes are working our government to say, hey, don't lose sight of the potency of this platform. It's not done yet. So you could go on F-35s. You could go on any number of topics. I told Josh, the one that had a brief moment in time six months ago or less, to me, oh, should be driving daily conversation right now was the DARPA dog fight, which I'd commend any of your viewers to cut to the chase. It's a four-hour

Starting point is 00:45:46 YouTube thing. Go to the last 20 minutes, five-zip AI beats. These are guys from the weapons school, and actually felt for them because they looked so pathetic in their chairs trying to keep up with these drones. To me, most frustrating was the after-action comments. The good news is we still drilled down on things in very vigorous fashion and after-action reviews on what went right, what went wrong, what's this mean for the future? And in almost every case, people were discounting the results of this thing because the AI was doing suicidal-like tactics. Well, no kidding. The AI knows no fear. It actually may do a suicidal event to. You kill you and it'll be machine one, human zero.

Starting point is 00:46:26 You can write it off. The machine knows no fear, no fatigue. There's so many advantages. Yet the fighter community wants to hold on to the advantage of a guy in a cockpit, a guy or gal in a cockpit. To me, I don't want my kids going up against some AI-enabled fighter capability in the future. We need a leap ahead right now. Make the sky black with automated AI-enabled capabilities and get your check,

Starting point is 00:46:47 if not checkmate for the next 20, 30 years. You've raised two fascinating examples. the gray holes and the F-35s as the iconic projections of power and military technology and excellence, and then raise the point that, well, yeah, for fighting the last war, perhaps, but for fighting the next war, there may be a basket, four or five things that we should be investing in, and that's going to be what matters. I'd love to talk through those things now. So I'm thinking here of, I'd like to talk more about drones, about space, about simulation as a technology. I think that's going to be really important about semiconductors and onshoreing.

Starting point is 00:47:22 Maybe we can start with drones and just wrap that up. I would be curious what the state of that technology is. So you talked about the story of the predator drone. What has happened since then? What is important in this frontier that the audience might find interesting? There's broadly more imaging capabilities, ISR, things that are able to measure very different things and pick up sound signatures and conversations that you'd be shocked by. But by and large, that is something that I think is increasingly becoming democratized and noisy. And the key thing is really, can you give deterrence by denial? can you create these anti-drone systems, which you basically want to be able to rapidly detect, intercept a projectile that's moving, in some cases, 80 to 100 miles an hour and half a second, and be able to basically destroy it? So companies like Anderil, performance drone works, others that we've invested in are basically focused on.

Starting point is 00:48:07 How do you find this thing that basically is flying faster than any bird intercepted and destroy it before it can do damage? Even if you look at something that was hailed like Israel's Iron Dome, it's still a very crude mapping projection analysis. analysis, mathematical calculations. So I think that that will evolve more on the actual defense side than the offensive side. And I think that you'll see bad actors basically take off the shelf stuff. The one drone that is causing utter havoc is the Turkish drone. But these are basically like six foot or eight foot wingspans that are basically dive bombing. They're almost on these suicide missions. And so they can hover and loiter for a very long period of time. And then once the target comes, they just basically are like a missile diving down and destroying the material. That's something

Starting point is 00:48:51 that people are trying to contend with right now. I think in the Azerbaijan conflict, that was one of the things that was absolutely destroying people, tanks and vehicles. T2, anything you'd add on drones is important. I think, unfortunately, most people automatically go to the sky. I'd highlight one of our portfolio company's sail drone. And this is interesting. When I first met them, I'd just come on board with Lux. I was touring different companies. And someone recommended I stopped by this great company out in Alameda. Here's automated maritime capability with on unlimited range, unlimited duration, out there. It's just extraordinary technology. But the founders had no intent of any military application for it. And so as I talked through all the possibilities,

Starting point is 00:49:33 I could tell I was making them a little uncomfortable. And they got together afterwards and their internal discussion was, why wouldn't we be interested in this space? We hope to do very well in the private sector. But if our technology is applicable to national security or even local security, think of New York Harbor or L.A. Harbor or anything like that, why wouldn't we consider to a to adapt ourselves to the space. Just the prevalence of unmanned capability, maritime, land, air, space. I'm more inclined to ask, in every case,

Starting point is 00:50:01 why can't it go unmanned? What is the advantage of being manned at this point in time? I had a very celebrated helicopter pilot, who was my operations officer here at Socom, a two-star commanded the night stalkers, the 160th aviation, best helicopter organization on the planet, still phenomenally head and shoulders above any other capability like that.

Starting point is 00:50:20 But I came in one day and I said, I just read an article about the biggest quadcopter experiment in the world ongoing right now. It's actually in the form of a UH60 alpha out on the Nellus range somewhere that they have tricked up with all sorts of sensors. And on average, competing against and think of drone racing league and some of these other things, but competing with a man crew, it's winning on average by two seconds per event. You pick the courses that they're throwing them into. And I intentionally laid this out to my friend, my counterpart, and said, when are we? going to an unmanned cockpit in the front of these helicopters. And naturally, he took it as a personal affront and came back very testy fashion and said, when are you going to put your skinny ass in the back of that helicopter?

Starting point is 00:51:02 Actually, I was prepared for that response. I said, I am comfortable. I think I'm there now, as long as you are sitting in some ground control station somewhere with enough Cheetos and Mountain Dews or whatever it is that keeps you, you know, so that you can go to override if and when helicopter, the AI-enabled platform fails me. But you think of the pucker factor events of a helicopter coming in and flaring over a target and fast drooping, making gun runs and things like that, where the incredible pressure on an individual pilot can be removed just by getting them out of the cockpit, putting them back somewhere. The Air Force now is going to the loyal wingman concept where you'll have one man guy up there with some drones along with them. It has me asking, why is that guy even up there?

Starting point is 00:51:43 Is it just an individual can throw a scarf back and say I'm still up in the blue? or is he or she better off on the ground without that inherent pressure managing the entire fleet? It does assume a command and control structure, a far-reaching command and control structure that I honestly don't think is going to be there. It requires AI at the edge, compute at the edge, enablement where things can function when they're not tethered back to an elaborate command and control structure. But I think it's all very feasible. By the way, I think one big innovation is something that we're funding. We haven't yet announced. but very quiet, almost secretive rotor motors and sounds that have a signature that is almost

Starting point is 00:52:21 completely undetectable is something that will probably find its way first in military applications and then ultimately in consumer, probably very high-end consumer. So all the Hamptonites or whatever, you know, we're not going to be about the blade copters flying overhead. But that's something where we listen to the sound of our arguably crude machines and engines, and I think that those will basically be eliminated in the same way that today you hear an electric car or have to actually put a sound signature on it because you otherwise can't hear it. And we'll see the same thing in the air.

Starting point is 00:52:48 On the sail drone, as T2 mentioned, truly stunning achievements. I'm sure you've read the leadership books about Shackleton. These were the guys with pure just good intentions. No interest in being involved in defensive military. But they did the first autonomous circumnavigation of Antarctica. And that was just for scientific data collection. They map the Arctic. Now, both of those things very geopolitically relevant.

Starting point is 00:53:08 Russia does not want us mapping the Arctic. They do not want us circumnavigating Antarctica. These guys did 196 days, 12,000 nautical miles, 50-foot rogue waves, 80-mile-an-hour winds, collisions with icebergs, sea lions that hijacked this thing. Video footage imagery is pretty crazy. They navigated the Bering Strait, talking about Russia, five-month, 8,000 nautical mile mission leaving from San Francisco, going to the Bering Sea, totally autonomous and almost perilously coming close.

Starting point is 00:53:38 The fastest Atlantic crossing by an autonomous vehicle and the first ever in both directions, that was 3,400 nautical miles in just under 68 days. And you think about having a fleet of these. Today they're bright red, but tomorrow they won't be, helping with some of the geopolitically sensitive things. You think about China, whether it's their Coast Guard becoming more militarized, building islands off their coast, cutting off sea lanes, territorial disputes, illegal fishing and pollution concerns that are affecting another 200 million Asian

Starting point is 00:54:07 population, their own growing Navy presence. You're going to have these things for both peacetime and wartime mode. Peace time, they're going to be more geared towards scientific observation, detecting and looking for signals and patterns. And then wartime, it's going to be trying to anticipate signals for hypersonics and cruise missiles and seabed sabotage. We've got a lot of fiber optic cables in that vicinity that needs to be protected along with some critical comms infrastructure. So on the drone front, I agree with you two, it's not just air, it's sea. And of course, space, right? I mean, satellites are effectively autonomous systems. systems, space is a stunning frontier. You've got this amazing phenomenon, if you wanted

Starting point is 00:54:43 to the historic analogy in space, to the railroads. We did it 130, 150 years ago, where if you were to take the tracks horizontally laid down in our pioneering spirit going west and just flip those vertically and make them disappear, that's the first leg of this. The first is the launch capabilities. When the space shuttle was in operation, it could launch a payload of 27,000 kilograms, give or take, billion and a half dollars, okay, 50K per kilogram. Now you got SpaceX Falcon 9 doing a rocket to the ISS, and it's about 3K per kilogram. And so that's just going to keep directional hour of progress. It's going to keep getting cheaper and cheaper. We've got relativity in our portfolio. You've got Rocket Lab. You've got Blue Origin. You got SpaceX.

Starting point is 00:55:21 So those are the railroads. Flip those things vertically, boom, we're going up to space. Then the second is, what's the infrastructure that follows that? It's going to be communications. Same ways like you have the telecommunication, replacing the Pony Express all along the lines of the railroad because it was easy to get the infrastructure and the maintenance along those same routes. And so you're going to have the same sort of thing, but instead now again, invisible satellite communication going to low Earth orbit, launching thousands upon thousands of competing constellations. That, of course, means on the defense side, you're going to have people that are developing both kinetic interference, RF, laser weapons to be able to take these things out. Some already have those

Starting point is 00:55:53 capabilities. Right now there's about 6,000 satellites above that are at least known. 60% of them are defunct. They don't serve any purpose. They're space junk. A lot of people, including China, that have been showing that they could remove space junk, which is really a euphemism for we can blow your stuff out of the space. 40% of those are operational, so maybe we got 2,500 operational satellites. We talked earlier about laser capability from the ground to be able to disrupt those things, whether it's a communication signal or an imaging capability. China, interestingly in space wasn't really talked about a year ago or so, maybe it was sooner.

Starting point is 00:56:26 They visited the dark side of the moon. It was like a pink-flood phenomenon. There will be lunar bases. The ability to have assets refueling material listening bases. It's like something straight out of a James Bond, moon raker kind of thing. It's very real. The next thing after that is thinking about privatization of space stations. So you had Mir one, Mir 2, which was planned ISS today, modular units that basically go on

Starting point is 00:56:50 and create the physical platform literally for research, observation, different missions that people have. You're going to see private companies launching things like that. And then it's going to be jurisdictional questions. over who gets to govern those things. We just funded a company with Founders Fund some tremendous people out of SpaceX that were responsible for Dragon One and Falcon that are basically focused on one of the craziest things, which is manufacturing things in space. This is Varda.

Starting point is 00:57:15 Yes. And so Delian had the vision of this, pulled together an incredible team, really fascinating people, very high risk. And it's really thinking about what kinds of things would you want to manufacture off earth that have very high dollar per value or per mass or kilogram, value in a market, but are very low mass. It's much more aligned with the Bezos model of why don't we take the dull, dirty, dangerous stuff off planet and send it up into space as opposed to let's go populate

Starting point is 00:57:42 Mars, which to me feels like Fire Festival 2025. Mars is not that attractive. Lots of cool things will come in our pursuit to go to Mars. It's stunning watching what NASA has done and what Elon even is doing. But I think low Earth orbit and just everything that's happening around our own planet is going to produce some incredible innovations in the entire space ecosystem. system. So every aspect of that, if you have a factory in space that's making something, and that could be pharmaceuticals, it could be fiber optic cables, it could be novel materials

Starting point is 00:58:09 that only can be made cheaply in low-earth, low-gravity or no-gravity space, then you want to think about other means of transporting that stuff. And you're going to have propulsion systems and positioning systems. You're going to have satellite repair robotics, which today you can on the ground watch some of these companies that are able to basically lock on visually using computer vision and machine learning to find an object, lock onto it, and then basically do some small repair mission. And so whether that's replacing a solar cell or a panel, whether that's refueling, that entire ecosystem is going to evolve very much like the railroad industry, classic sort of Carlotta Perez. Tony, what's your take through your unique lens on everything

Starting point is 00:58:47 that's happening in space, especially both from a military standpoint and also based on what you've seen through the portfolio at Lux. Patrick, I've actually been public when people say, what keeps you up at night. Space is the one domain that I am very concerned how far behind we are. And without getting into classified levels of discussion, Josh touched on some of the anecdotal things that have trotted out for public consumption. That's the tip of the iceberg. Meanwhile, we debate whether or not we want to weaponize space. Jeannie's out of the bottle, ship is sailed, use whatever analogy you want to. So we're in a little bit of dreamy land there that we need to catch up. If I could come back to reattack, though, I don't want your audience to wander away

Starting point is 00:59:24 muttering that when I say I think unmanned everything, challenge me what shouldn't be unmanned. I can imagine some of them will immediately go to the Skynet discussion. Here we go. Borg's taken over and we've lost all control. That discussion has to happen. But I think you have to press all the way up to the very tenuous edge of that where we may have complete disagreement. We've had the luxury the last 20 years operating an environment where we haven't had a lot of compelling imminent threat type of situations. But the future adversaries that decision making is going to be so much more impressed and challenged than it is right now that I think we humans need that assistance. We need to sort through the madness and the disinformation, misinformation,

Starting point is 01:00:03 misinformation, target identification, et cetera, et cetera. We need to function in conjunction with the laws of armed warfare, which is necessity, distinction, proportionality, all those things that we could sit back and have a nice leisurely conversation or I could talk about situations where that's going to be several decisions a minute that you're going to have to make. We absolutely need to be enabled from an AI standpoint. Here's the interesting discussion that when I'm allowed, I'll press into this environment, that if you acknowledge that guys like Putin are saying, he who gets AI first is, with the most is wins, he's absolutely intent on gaining the advantage here,

Starting point is 01:00:38 but tied to nuclear deterrence, if the day comes when the lights are out, the satellites are out, the communications is out, I think you want a capability that is still in the foot locker that is AI enabled, I can still come find you and kill you, don't do this. It is the deterrence. It's that mutually assured destruction aspect that will, again, mitigate command and control infrastructure being knocked out as probably the first couple shots fired. By the way, just to put a fine point to this, if you take the best of science fiction, where you think about EMP pulse and powers gone, you know, what survived like Ghostfleet was the analog ship, the one that was disconnected from the network, that was

Starting point is 01:01:19 advantaged in a sense by being previously disadvantaged. But what T2 is talking about here is if you have a perfect simulation, a perfect model of a target, where you need to go in a total GPS-digned environment. The GPS, remember, triangulation satellites, you've got no GPS. But if you have something that whether it's visually identifying the real world, having run and been trained off of the simulation, and you can then go from point A to point B, and that your adversary knows that you can do that and you have that capability, even if the power is out, that's a really powerful mutually true destruction deterrent. To that point, I need to work on being more eloquent in this discussion, because if folks can hang with me to the bitter end, what I'm arguing for

Starting point is 01:02:00 is this might be the ultimate deterrence. It actually might prove out the futility of future nation-on-nation, state-on-state warfare. Let's stop doing this. Let's stop pursuing this madness that you don't know what I have, but it's not human. It's AI-enabled, and it'll come get retribution down the road. It almost borders on deeply philosophical, but it's a practical discussion we need to have sooner rather than later because there's too many arguments already coming up on why we should never go down this road. And I think it's full hardy. You both have mentioned simulation a few different times. It seems like kind of an interesting weird side piece that fits into a lot of these different technologies. It certainly fits into running games or whatever the case may be. What is the cutting

Starting point is 01:02:41 edge of simulation that the audience may find interesting? What's the technology look like there? I'll give you a few and then T2, maybe you can give a few, including even the actual practical simulation of something like a bin Laden read. But the cutting edge started with autonomous vehicles and basically repurposing GPUs and gaming engines so that you can model the real world. That has since evolved in a very serious way to really do first principles physics to be able to not just say we're going to have the static rectilinear world, but we're going to be able to actually intuit whatever shape, shadows, surfaces we're encountering that we may never encounter. That is paired with a big movement in something that we're calling synthetic data,

Starting point is 01:03:15 which is you don't need to actually train the model on data that you're collecting from sensors, but you can actually generate all kinds of variations of that data. Now for a drone or for a satellite or even for a ship, it might be an aqueous simulation. It might be a topographic or geographic simulation, but you're basically generating examples of a world that doesn't really exist, totally fictional world, training it so that when it does encounter that, it's encountered more possible edge cases. The philosophical point here is if you think about where most of the system, have failed historically when they were trained on video games. It was quite literally on the edge cases. It was the unusual fat-tail far thing that was improbable to happen. Here, if you're basically

Starting point is 01:03:53 training for the edge cases, it flips the value for the simulation. So companies like applied intuition, which is us and Andreessen and a handful of others have funded run by an incredible guy, Kasser Yunis, is really taking that approach. He's starting with automotive, but I suspect they'll go into other fields like we're talking about here. And I think that that's important because philosophically also, I'm obsessed at the moment with this combination of sensors that can capture the real world with ever higher fidelity, with ever higher resolution, whether that's inside the body, from space, on ground, at sea, whatever it is, and then basically ingest that compared to a model that is forecasting what it's going to see. And as soon as model encounters what's been

Starting point is 01:04:32 sensed, it's then at this compute layer where it's either updating its model in sort of this Bayesian way, the same way that we encounter each other and change our beliefs, or it's moving the system to that state of the world. And I just think the speed at which that is happening is going to blow people away. And I think it ties very nicely into what T2 is talking about, ultimately having this as a system of deterrence, because the system will be that good to be able to, in the absence of power and connectivity, be able to find a target. From my experience, when we've had the opportunity, every time we've had the opportunity, we rehearse to non-technical term a nats-ass detail, what might happen on target. We'll throw all sort of permanent.

Starting point is 01:05:10 mutations at it, but it'll be a full-up rehearsal. It'll be everything live fire, nothing chalked off to simulation. Everything as realistically rehearsed as possible. The inside advantage, I think, simulation and the simulation capabilities that are developed now and you think of gaming and all is when you don't have the time to build out a full-scale mock-up and do all these things, you literally could have all the members of a team up on simulation going through reps at the speed of failure, at the speed of, okay, re-cock it, go again, again, again, again. again, okay, throw this variation into it. And the level, the degree, the sophistication of the simulation, I'm not a gamer.

Starting point is 01:05:48 I wish I had more time in my life to get into gaming. I can understand the fascination with it. But one time in my office, just as an example, one of our SEALs had taken a program, a gaming program, brought in some AR aspects to it, let me put on the sites and play with it. I would have played with that for the next 20 hours of giving the advantage because it was so realistic of directing combat operations and oh no I screwed it up recock let's do it again play it from the beginning it's just incredibly powerful for again anything i could conceive of doing either from a national security or from a law enforcement standpoint but it's that crossover from

Starting point is 01:06:23 gaming that too many of my people my age disparage as a total waste of time to actually some huge applications if you can bring it into practical application t two and i were talking about this the the other day, but he knows my love for science fiction. He was invoking the Tom Cruise movie, Edge of Tomorrow. The practitioner who's basically at war is almost like a video game player where he does it. He dies. He starts over again. And in a sense, that's what you get to do in this simulated environment, but without dying. So our last topic is semiconductors. I've left it for last because I think it is sort of a unifier here that we've talked a lot about machine learning and automation and all these information warfare, cyber warfare, etc. Underneath all of these,

Starting point is 01:07:01 I spent a lot of my time in machine learning is chips, where we began the conversation with Fairchild and Shockley and the origins of the intersection of military and Silicon Valley. Semiconductors are at a fascinating point because so much of their fabrication happens overseas in Taiwan. Intel has very visibly and famously sort of lagged behind. What is the cutting edge here, Josh? What do you think the most important thing for us to know about and consider as we look to the future of semiconductors? I'll give you the punchline, which is chippless. And there's a bunch of winners, I think, in the interstitial period in software and hardware as this competitive, basically reshoring of semiconductors happens.

Starting point is 01:07:42 But you're right, 75% of chips are made in Asia. There's basically two companies, TSM and Samsung, that can manufacture with a 7 nanometer or below node and do it in high volume, both those companies, obviously Asia. You've got a huge risk that companies have basically automated away and gone entirely fabulous, So they've turned what would have been an internally CAPEX decision into an OPEX one and shifted that over 40 years, more or less. TSM's got 30% of the market share in everything below 40 nanometers, 50 billion in revenue. And then you've got UMC and SMIC and Samsung and global foundries that are all sort of high single digit or low double digit market share. But you have probably with TSM, as you noted, the most geographically or geopolitically important company in the most geopolitically sensitive place that you can imagine.

Starting point is 01:08:27 And we think about it as a low possibility, but it's certainly a probability of China making a move on Taiwan. They've been pretty overt that they believe it's theirs. And so, yeah, Intel, I think that they've got to get in the game. I think you could see a combination of activism pushing them to manufacture other people's chips and possibly government or U.S. industry consortium that pushes for it because the U.S. needs the capacity. Sure, TSMC, Intel wrote a note to the government. TSM said we're going to do a plant. The government said we'll give you money for it in Arizona.

Starting point is 01:08:54 but that at best will produce about 20,000 waivers a month. And you compare that to 12 million. It quite literally is analogous to like a piece of dust on a chip, you know, in one of their fab facilities. Congress passed chips, which is, you know, creating helpful incentives to produce semis, $15 billion. And then you've got the American Foundries program. That's another 25 billion. We have today one pure play semi-foundary, which is in Minnesota. It basically produces next to nothing and strictly dedicated to defense. So I think there's going to be winners, losers, and disruptors. when you have a new fab that costs $15 to $20 billion to build because of the semi-cap equipment and the scientific instrument, the metrology, the process handling, the clean rooms that have to be done

Starting point is 01:09:33 so that you can't even have a speck of dust in a square meter of space. Upgrading the facilities cost another few billion dollars. Designing the chips themselves is now hitting close to half a billion dollars. So who are the beneficiaries and are likely to be the beneficiaries as you have renewed demand, you're going to have on the software side, cadence and synopsis, both today, $40 billion market companies, they'll continue to crush it. On the hardware side, you've got A, SML, that's now $250 billion. You've got lamb research that's going to be really at the forefront of doing 3D chip stacking, which I think is important. KLA 10-Core applied, basically all the semi-cap equipment companies that are going to continue to crush it. You've got a German company, interestingly,

Starting point is 01:10:08 called Trump, Trump with an F at the end, that is the sole manufacturer of one of the key lasers that's used in the EUV machines that ASML makes. And so even when you think about supply chain vulnerability for these things, it's very, very concentrated industry, and that's got to change. My partner, Sheen, has had the view and he's been pounding on the table that we revisit basically the obsession that we have with cheap transistors and instead think about how do you make them cheap to design and deliver? So these two curves, if you look at the transistor cost and accessibility, are diverging. And we love creating new codes. There's areas that other people think aren't that sexy. He's convinced, and he's convinced me, that the key is going to be instead of having a monolithic system on a chip, which is basically what's done today.

Starting point is 01:10:49 And then the other extreme where you have an integrated circuit that's on a PCB, on a printed circuit board, you're going to have this middle ground, which is basically going to be these chiplets, just like everything else we're talking about, from drones to chip themselves, everything became modular and distributed. These chiplets are basically going to be higher yield, lower quality than some complete integrated circuit on a monolithic system on a chip, but are basically going to allow people to more cheaply design and manufacture chips. Today, Intel in Oregon and Arizona really is only one of three companies, TSM and Samsung being the other, that can do these high-end chipwits, I think you're going to see a handful of companies that basically become the next TSMC but in this chipwet technology. So that's something that I think could be quite disruptive. It's going to take time, but it could be like what TSMC was 20 years ago. One thing felt important to talk about was just the moral dimension of defense. Because this was something that is probably for our partnership, which is a very ethnically and cognitively diverse firm, is something that was very controversial, getting involved in the idea

Starting point is 01:11:49 of funding defense. And even though a lot of people have forgotten that the history of Silicon Valley started with these roots in defense, if you look around and say, one of my favorite questions, of course, that you know I love to ask is what sucks. Often what sucks is human nature. It's the grudges. It's the hostilities. It's the humiliations. The delusions of grandeur, the maligned ambitions, the tribal red lines that create an us versus them, irreconcilable differences, the injustices, the atrocities, the conflicts, the rivalries, the revanchus China and Russia, all of which have the sad reality, which is that in reality there are bad actors. Bad actors do bad actions and they cause human suffering. And if you have indifference to that, as they say, indifference to injustice,

Starting point is 01:12:28 is this paves the road to hell. You've got North Korea, China, Russia, Iran, all with close societies, information suppression, human rights atrocities, corruption, and they're aggressively using technology to take territory, to interfere in elections, to sow seeds of civil unrest, to build islands, transform, terraform the ocean, to censor, surveil, suppress, murder, dissidents, and minorities. Ideally, in a beautiful world, sanctions and diplomacy and economic and international pressure affect the outcome to get these people to act well and kind and benevolent. But when that fails, as Klausowitz said, that forces politics by other means, or is one of the special operators that was hosting me, T2's,

Starting point is 01:13:10 push was said, in God we trust, all others we recon. I think there are two moral things that give me comfort that we're on the side of good in investing in technologies and people who are developing and delivering technologies. One is about precision, technological precision and moral precision. I think the greater your technological precision, the greater your moral precision. We went from hand-to-hand combat, which was one-to-one, to a nuclear bomb at the other extreme, which was from one to many. And I think we've returned to this precision targeting where it's a moral good if you can discriminate between a good guy with a pickax that is going home from the farm to his family and a bad guy with an AK-47 that's going to a schoolhouse to shoot it up.

Starting point is 01:13:50 So this idea of like deterrence by denial, a year ago, you had the Iranian military leader Soleimani who was targeted with precision. I think 10 people in that immediate vicinity were killed or less. I think there were 55 people that were killed at his funeral a week later in a stampede. But the second thing, in addition to the technological precision that I think gives us, the greater moral precision, is a sense of moral leadership, that technologies get invented often before the standards that govern them do. This was true of nuclear, it was true of chemical, biological, satellites, missiles. And so the powers that produce them, they are the ones that ultimately get to lead and define as others follow behind. And you've got a situation now

Starting point is 01:14:29 where it's observable. China is lobbying the UN to define standards for facial recognition, which they have already shipped to dozens of countries. You have to make a moral decision. And is it better to act with indifference and just let that kind of stuff happen? Or do you want to take a moral leadership position at being in the forefront of helping to develop these technologies, but also lead the very public discussion so that they're used in the best way possible? T2, you've mentioned already very anti-war, yet in favor of creating the can of whip bass as a deterrent to ensure that people that don't need to die don't.

Starting point is 01:15:00 What's your view on this moral lens through which to view the investment in and development of military technologies? I'd like to think I'm practical. was a military professional for four decades. My sons have both served. I know the anxiety of having your kids in combat, so I've got skin in the game. That's really what drives my logic, my rationale for, I hope we know what we're getting into. I hope when we're applying this, it's the last resort. But I do think practically you need to have that capability to avoid war for ultimately, and then if necessary to deal with it. Josh mentioned on the morality of this,

Starting point is 01:15:35 I think the missed opportunity with the whole Google episode, I remember being in Pentagon, talking to the Secretary of Defense at the time, and he was giving a big handway for state of affairs with the private sector. And I said, well, this Google thing just happened. What do you think of that? Oh, no, no worries there. And while Google now has come back fully in the game and said, hey, we had our epiphany internally. We want to be players here, specifically with Eric Schmidt and others. The missed opportunity I think we had was to Josh's point that, hey, America and new companies that are associated with this. Here's what we're in pursuit of. The most pristine, precise application of military power ever envisioned, zero collateral damage. And oh, by the way,

Starting point is 01:16:14 we've been trying to do that all long. We don't get a lot of credit for it, but we kept a very rigorous log of our successes and failures. And we were succeeding 99 plus percent of the time in terms of the target identified, the individual we were searching for, and zero collateral damage. on a couple of occasions we had misplays and we would take them as failures that we had collateral damage or we missed target for whatever reason. But we're pursuing this extraordinary objective inside this idea of sometimes you have to go to war. And so to have the technology that pertains to that is critical. Or we could just go back to carpet bombing or other techniques that people advocated for that we were in the military profession. We were absolutely opposed.

Starting point is 01:16:55 We don't need carpet bombing. Much like we didn't need harsh interrogation techniques. We had better ways to crack that than going old school and techniques that are not in keeping with our moral standards. When I was in these theaters looking in some of these operations centers, there was something in there that I was shocked to see. Totally surprised. And it was like my naivete, like the scale is falling from my eyes. It wasn't the cutting edge lasers or the drones or, you know, the straight out of the movie Operation Center with all the screens. It was lawyers.

Starting point is 01:17:25 And I'm sitting there watching as one guy is flying drones. and there's lawyers looking over basically documenting and authorizing and making sure that he or she is doing what they ought to be doing. And I do think that that's one of the great technologies that we have, which is the sort of rule of law, the rules of engagement, the democracy that has built that. And I think it's not celebrated enough. If I could expand on that, when I'd call those situation God calls, much like a surgeon, cracking a chest and all, when people have asked me the toughest decisions I had to make in the military, one was putting people in harm's way. And too often that led to casualties and sometimes to folks being killed in action,

Starting point is 01:18:02 that will weigh on me to the end of my days. And I have presented flags to wives and mothers where I made that decision. I literally sought those opportunities to say, okay, if you want to look for who decided to send that element into combat for that raid, that operation, I did this. This is what we were thinking. This is what we're trying to do. Blame me. And they never do. The amazing part is they never rear up and blame you. They knew that their husband or spouse, was doing what they love to do in the profession that they just relished. But the other one, the toughest decision, are what I call God calls. And I probably have made a couple thousand God calls, where from a remote location,

Starting point is 01:18:38 sometimes halfway around the world, I have said, take that shot. That is, whoever we've been looking for, we've been watching him for the last 5, 10, 15, 30, sometimes months to make sure it was the right guy, take that shot. And every time I had that little gremlin on my shoulder thinking, And Thomas, I hope you're making the right call. And I would tell our commanders, the day you lose that gremlin, a little creeping doubt, you probably should check out of the community because you're a soulless bastard who's lack a little bit of humanity.

Starting point is 01:19:07 But interestingly, inside those calls, and I don't know that I've ever spoken about this publicly, but to the lawyer point that Josh mentioned, at the height of ISIS, when literally I had the FBI director James calling me saying, can you take out Abu X, who is calling back to New Jersey actively right now, fomenting more plots that we can't keep up with, and he knew we had him in our sites that we were watching him move around some environment. We were going after a whole network. We weren't just going after individuals. Inside that scenario, I was given by our lawyers.

Starting point is 01:19:36 And this is, it's hard to describe the discussions for a raptness. But I had what was called an NCV, a non-combatant value of 10. And that meant when I thought the time was right that we had the individual that we were targeting, I could accept a non-combatant valuation of 10 people in that shot group. I could accept the death of 10 people. I waived that one time out of thousands of shots. And it was for an individual who was particularly bad and we needed him gone. He was causing a lot of problems.

Starting point is 01:20:06 But he would go from his high-rise apartment, a lot of people, to a marketplace every day. That was his pattern of life. And the only opportunity to kill him was in his taxi ride between the two locations. And so for five days or so, we watched him take that ride. And I couldn't tell if the taxi driver was one of his teammates, confidence or just a hapless taxi driver who he happened to hook up with. And on a fateful day, because we just couldn't get a better opportunity, I said take that shot. And I'll live with that forever. I mean, I hope that that wasn't an innocent soul. I hope that was one of his contemporaries,

Starting point is 01:20:38 no way known. But that's the kind of warfare that we do for two decades now. Patrick, that trivializes almost every consequential decision that we make on a daily or weekly or monthly or yearly basis. It's incredible, right? The opportunity I've had to talk to Josh means, Tony, that I get to ask you my two traditional closing questions. I'll tailor one to you specifically and then ask you the one I ask of everybody. The first is for me to point out, like, clearly none of this is easy. It's incredibly far from easy. It's incredibly hard. You've had the opportunity to work with, I'm sure, some of the most exceptional, not just soldiers, but also leaders. What do the most exceptional of those that you've worked with share in common? As you think about

Starting point is 01:21:20 a great soldier, generically speaking, or the average of the great soldiers that you work with, what are the qualities that allow them to stand apart that made you proud as their leader? Every leadership venue, every book, all the professional attempts to categorize leaders, usually harps on the ability to listen. I don't think people still listen to that, one of the most critical characteristics of really, really good leaders. And more important, to listen and adjust. And I usually cite Bill McCraven as just an incredible mentor, but an example in that regard where you literally could walk into his office, shut the door. And I was his deputy for Osama bin Laden raid.

Starting point is 01:21:56 I worked with him for years, a tremendous professional and always very positive. But you could walk in the office, shut the door and essentially say the emperor has no clothes on right now. You're not seeing this or you're missing something or your message is being missing through, whatever. And you might get a little pushback. He was a human being after all. but invariably he would digest the constructive criticism you were giving him. And amazingly, here's a guy at the height of his game now as an international celebrity, he often would come out, whether it was me or somebody else who'd come talk to him and say,

Starting point is 01:22:28 hey, I'm seeing things differently now. So-and-so talked to me. I was missing this. I was a little bit blinded by my own biases. I'm going to acknowledge we were on the wrong path and we're going to change it. And to me, that was just incredibly self-actualized, self-aware, and certainly he lived that. The mantra that I try, again, James Comey before he had his implosion to me was an incredible public servant. And the FBI really, I sense, they really loved his leadership because he was a very humble guy.

Starting point is 01:22:55 He talked about your organizational humility one day. And he said, the longer I've been at this, the harder it is for me to come into a room and not think I had the answer before the question is even asked. But he said, I check that. I try and block that preexisting condition out when I come in the room. And I don't know if it was him or somebody else that came up with the. this mantra that I try to play to myself because I suffer from the same challenge. Are you listening or are you just waiting to talk? And even today, while we're going, one of you would go down tangent, I'd be scribbling to say, oh, I want to pick up on that. But the problem with that is, are you listening

Starting point is 01:23:26 or are you so damn self-important that you think I've got the ultimate nugget that must get out here? So how you really wrestle through listening intently to understand the other guy's optic, the other guy, other gal's optic is to me the mark of a real leader. an incredibly hard skill that's very hard to cultivate, but very, very valuable. T2, this has been so much fun, Josh. Thanks for doing this with us. I've learned so, so much as I always do, a very unique conversation. I asked the same closing question of everybody as I referenced. That question, T2, is what is the kindest thing that anyone's ever done for you? I hate to admit that Josh might have worn me ahead of time. And I've been struggling with it ever since. That was the kindest thing. The kindest thing was Josh giving you the heads up. I've wrestled with it ever. since he said be prepared for this. I have been blessed by so many incredible mentors and my parents all the way up to countless mentors and teammates. So I was going down that tangent,

Starting point is 01:24:21 but actually the more I thought about the kindest thing I would chalk up and not attributable to one individual are the number of folks who forgave my transgressions, forgave my passion, my temperament, and allowed me to make mistakes and recover from them and move on. So it's a broader kind of handwave for the kindest thing, I feel so very grateful that I was able to fumble through a lot of situations and figured out ultimately, I hope, to a successful level. But that didn't happen without people saying, oh, boy, give him a little more rope.

Starting point is 01:24:53 Andor, they pulled me in and said, you could have screwed that up a little harder, but you might have had to try. But they then allowed me to recock and get back at it. Well, guys, my favorite discussions explore complicated topics and leave open 20 threads to go pull on. This one has done that in spades. I'm so appreciative of your time. Thanks so much. If you enjoy this episode, check out join colossus.com. There you'll find every episode of this podcast complete with transcripts, show notes, and resources to keep learning. You can also sign up for our newsletter, Colossus Weekly, where we condense episodes to the big ideas, quotations, and more, as well as share the best content we find on the internet every week.

Invest Like the Best with Patrick O'Shaughnessy - Josh Wolfe and Tony Thomas - The Past, Present, and Future of Defense – [Invest Like the Best, EP. 216]

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