On with Kara Swisher - Welcome to AI Warfare

Episode Date: February 20, 2023

AI isn’t just changing search. It’s changing national security, too. Today, Kara talks to Trae’ Stephens, the co-founder and Executive Chairman of Anduril, about how the growing defense tech industry is using the power of AI and the speed of Silicon Valley to challenge “beltway bandits” like Lockheed Martin and Raytheon. They discuss drones in Ukraine, the ethics of “smart walls” along the US-Mexico border and, yes, those balloons.  Thoughts? Questions? Email us [e-mail] or find us Kara and Nayeema on Twitter @karaswisher and @nayeema. Learn more about your ad choices. Visit podcastchoices.com/adchoices

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set, grow. Go to ConstantContact.ca and start your free trial today. Go to ConstantContact.ca for your free trial. ConstantContact.ca Hi, everyone. From New York Magazine and the Vox Media Podcast Network, this is a woman past her prime. Sorry, Don Lemon, but that was pretty bad. Just kidding. I'm not really kidding. That was bad. This is On with Kara Swisher, and I'm Kara Swisher, and I am in my prime. And I'm Naima Razan. I'm in my prime, too. I cannot believe he made those remarks about Nikki Haley. I can't. We rarely have to rush to Nikki Haley's defense.

And yet here we are. You know, it was really something. And then over on Fox, the five, whatever they were saying, even worse things that women are in their prime in their teens. The whole thing, like literally, do I want to hear men say when women are in their prime? I do not. Speaking of Fox News, by the way, I've been pouring over these documents, these redacted documents from the Dominion and Fox News lawsuit. They all lie. The only one that comes off well is when we've interviewed Brett Baer, who's trying very hard. Yeah. There's interesting texts from Tucker and his producer where his

producer is kind of talking about this hard needle to thread in the coverage. And then Tucker is saying that Trump is really good at destroying things. And he says, quote, he's the undisputed world champion of that. He could easily destroy us if we play it wrong. What a cynical fuck. Yes. One of the most cynical fucks on the planet. Thank you. But today we're talking about defense tech. Yeah. Not about unidentified aerial objects. Were you sad they were neither spy balloons nor aliens, Kara? I thought it was ridiculous. We're sending a sidewinder missiles to shoot down like what are essentially weather balloons or something. Hobbyist devices, they seem to be at this point.

Oh my God. We're so embarrassing on so many levels. You know, they should pay a lot of attention to what's floating over our skies, but at the same time know what they actually are. The White House has said they just recently increased the capacity for those sensors. So they have greater sensitivity, but yes, they can't discern exactly what they are yet. Doesn't make me feel safe. I mean, poor hobbyists. They're so earnest. They're just sending these, you know, balloons in to research the weather and they get shot down. Yeah. Oh, well, sorry, hobbyists.

Anyway, our guest today is Trey Stevens. He's a co-founder and the executive chairman of Andral Industries, a defense tech company that's building autonomous systems that operate in the air, sea, and land. In some way, it's kind of artificial intelligence warfare. Yeah, they're trying to modernize defense, essentially. That's their marketing pitch, essentially. Our defense is pretty crude, as we can see from the balloon situation debacle. You know why?

If you're a balloon, don't go up against us. Yeah. So I should disclose that Trey and I were classmates at Georgetown and we're friends, but that does not mean he gets a pass. You're going to ask him some hard questions, including about Andrew surveillance wall at the border with Mexico. But I didn't even pitch him for the show. You did. You reached out. I did. I did. I reached out to him because I had read a story of his. I think he wrote a piece and I thought it was really smart, the idea of where we are in defense. And defense sort of is stuck in just the way healthcare,

it hasn't been as affected by technology as it could be. And I was very interested in learning about autonomous drones, unmanned submarines. You know, it's just a new kind of defense company. After we graduated, I remember Trey went to the Intelligence Apparatus. I think his biography says an unnamed intelligence agency, but he quickly left for Palantir. And then from there, he joined forces with Peter Thiel, someone you've reported on for a long time at Founders Fund. And this company, Anduril, is backed by Thiel. It was founded by Palmer Luckey of Oculus fame, someone you've interviewed

before. So Thiel, Palmer, many people you know, do you want to regal us with any stories? I mean, you know, Oculus was bought by Facebook and then he left. It was unclear why he left. Some say it was because of his Trump support. I don't know if that's the case, but nonetheless, he sold his company. There was a big lawsuit, if you recall, around how they made Oculus. And he left and he started this other thing. He's a very inventive entrepreneur, Palmer Luckey is.

And so I've been very interested in the things he's making. He's obviously in that group of Peter Thiel. And they create all these companies. And despite disagreements with them, they are very entrepreneurial. Trey is the chairman. He's looking after a lot of the operations of the company and kind of grown up like Eric Schmidty. And there seems to be this big Silicon Valley DOD love fest that's as old as time. Yeah, it's for a long time, actually.

Eric Schmidty, in fact, has been very involved in defense. There's a committee that the Defense Department had that I think Ash Carter got him to be on. And there's always been an interest in Silicon Valley, largely because it's a big moneymaker. And a lot of companies that you think of as consumer companies are actually quite involved. Amazon, around border stuff, Salesforce, and Google. Until there was some pushback internally, that's where the big money is.

And so they're eyeing, trying to figure out how to do defense better. And of course, they say they're trying to save money, et cetera, et cetera. And the most famous of all, obviously, is SpaceX, which does an enormous amount of work for the government around NASA and putting up rockets and putting up satellites, et cetera. Yeah. And Eric Schmidt is backing a, quote, perfect AI warfighting machine, a company called Astari that he's working on these days. AI war fighting machine, a company called Astari that he's working on these days. And I think there's this like lore of him visiting the Pentagon and the aughts and looking around and saying, hey, everything you guys are doing is from 70s and 80s internet. And you have to learn from Silicon Valley. And so do you think that's true? Like there's a need for DC to be so reliant on the Valley for tech? Well, they've been reliant on lots of big companies.

It's Beltway Bandits, they used to be called. You know, I just think they're there for the money. And most of government is very antiquated compared to consumers. And so defense, where all the money is, as I said, is an area of great interest. And that's why they're here. It's a healthy way to build your business

if you can have a single buyer at very high margin and prices to subsidize your R&D. That's true. Andrel is definitely swimming in government contracts and we have lots of questions for Trey. So let's take a quick break and come back with that interview. Fox Creative. This is advertiser content from Zelle. When you picture an online scammer, what do you see? For the longest time, we have these images of somebody sitting crouched over their computer with a hoodie on, just kind of typing away in the middle of the night. And honestly, that's not what it is anymore.

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and makes writing blogs, creating videos, and posting on social a breeze. So now, it's easier than ever to be a marketer. Get started at HubSpot.com slash marketers. It is on. at HubSpot.com slash marketers. Welcome, Trey. I'm so glad you agreed to talk to me. And so I want to get started with Andoril. It comes from Lord of the Rings. It's a sword.

Is that correct? Totally. Andoril is a great word that is co-located in Lord of the Rings. It refers to the flame of the West. So it's this idea of defender of the free people. And we thought that was a really cool kind of overlap. And the company is really a defense technology company focused on building oftentimes software-defined,

hardware-enabled capabilities for the United States and our allies and partners, largely focused on autonomy. So how do we get... Sure. So more modern, the technification of defense. So you're trying to create the modern defense firm, correct? I mean, is that the idea is that defense had not been updated, essentially, even though it's, again, highly technical in many ways? Yeah. You know, we had this kind of like a 50-year era where the defense community was leading research and development in the United States. And a lot of those technologies ended up flowing into the commercial space, whether it's, you know, the Internet or GPS or, you know, radar technologies.

And, you know, when the Cold War ended, we lost a lot of that urgency, rightly so. And one of the results of that is that the technologies that matter largely for our future are software problems. However, a lot of the people that you need to build those technologies had gone into the tech world. They'd gone into the internet, they had gone into the big tech companies, and the DoD lost access to the people that they needed to work on those missions. Right. So it's the consumer products going towards defense rather than vice versa. Yeah. I mean, in an ideal world, you would have a lot of shared crossover between those two things. However, in the last really 25, 30 years, there hasn't been a whole lot of crossover

from commercial into defense. It's been largely defense doing defense things, the commercial world moving much, much faster, and defense as a byproduct of that falling behind very rapidly. And that's the gap that Anduril is really trying to solve, is how do we figure out what those core problem sets are, those core gaps, and then build technology that we can actually transition into service. It's also good business. This is where so much money is spent, right? And often, very much like the rocket industry when SpaceX moved in, it's sort of a honeypot of money for people.

Yeah, I mean, if you can figure out how to do it. I think that, unfortunately, the highway of doing business with defense is littered with bodies of dead companies that didn't survive. I think we're really in a position at Anduril where we have two kind of value adds. One value add is we're building tech, oftentimes that software-defined tech that matters. But we also have a team of people

who have a great deal of experience doing work with the DoD and have figured out the pathways that are required to actually get in and be in service to the warfighter. So those two things are really necessary, and they usually don't exist in the startup ecosystem. So you focus on autonomous systems. Are we talking about military drones, surveillance, autonomous systems? How would you explain it? Yeah, there are a lot of drones that have existed since even the Cold War.

The plane that ended up being the Predator was actually developed in the 80s. And these are really remotely piloted systems. So they're manned in actuality by a person with a joystick, you know, even if they're thousands of miles away. And these are incredibly expensive to manage and maintain. This isn't like, you know, one pilot can control dozens of aircraft. And so when we talk about autonomy, we're talking about real autonomy. Like, how do we get kind of a mission manager to control a bunch of assets in a battle space and be able to make decisions very efficiently and effectively? Ideally, where those end effectors, the drones, whether they're planes or ground vehicles or underwater vehicles, are low cost enough as to be attritable. So you're not putting people in harm's way. You're

lowering the cost of the taxpayer if those systems are lost, which gives you a very different strategic approach to engaging in conflict. And ideally, you know, you're creating an ethical good by making it much less likely that humans lose life when some activity is necessary. And less complex, presumably. And using technologies that consumers use regularly, like a lot of things which hasn't moved into defense. So your first piece of tech was Lattice OS. Talk about that. Gathering data, targets, what was it doing? So Lattice is the software that sits behind all of our products. You can kind of think of it as a computer vision command and control platform that has flight controls for aircraft.

It has ground vehicle controls for ground vehicles. And it does all of the taking the sensors, fusing that data, and then helping the system make decisions about that data with a human kind of guiding that interaction over time. So Lattice is present in everything that we build. And how much is the tech doing versus a person? You said you had one person running a drone. And again, we've seen that, whether it's depicted in movies or whatever. What is the role of the person when you're thinking of these things? It's minimizing the person, right? Correct? I wouldn't put it that way. I think the person is still a critical element in all of the activity that we're engaged in in the Defense Department and in our other national security apparatus. I think the key thing is that you're enabling people to do what

people are really, really good at, and you're enabling machines to do what machines are really, really good at. And that's what we're trying to optimize. We're trying to create the most efficient pathway for optimizing the skill set of the people who are responsible for those systems. But the goal would be to remove people as much as possible, correct? I think it's optimizing people differently. Or the inefficient use of people. Yeah, yeah. That's probably a fair way to put it. It's getting people out of doing things that people shouldn't be doing.

Because either they're bad at it or they could get hurt, correct? Yeah, I think those are probably the two biggest things. What we usually call this internally is dull, dirty, dangerous. We want people to be removed from those to the extent possible. Dirty meaning munitions, right? Dirty could mean a lot of things. It could mean putting people in a position where they have to make decisions that you don't want them making. It could be putting them in really bad spaces for their mental health.

You don't want a person to be cleaning up a toxic waste problem. You really want that handled by robots or machines. So there's a number of different definitions you could apply there. Last fall, you announced a first weapon, the Altius drone, into a loitering munition. Talk about that. Is that when these drones pick their targets, or how does that work? Because one of the issues I remember when they were having people man drones and doing bombing is the mental effect of doing that from afar, which has been an issue since they had bombs dropping out of planes, I'm presuming. But talk about this drone, this loitering munition.

Yeah. So I'm assuming that when you're using the word weapon, you're referring to like things that explode. Is that kind of the direction you're taking it? Yes, yes. But this Altius drone, this was your first weapon that you announced. Yeah. I mean, we've built a lot of systems in the past that have been used for tactical purposes. I think the Altius announcement is the first that we've made where something explodes. But those two things aren't necessarily the way that I would define weapon, right? There are a lot of weapons that don't explode, but this one does happen to explode. So yeah, we are working on this platform called Altius. There are different versions of it. These are used oftentimes as air launch effects. So yeah, we are working on this platform called Altius. There are different versions of it.

These are used oftentimes as air launch effects. So it's like you have a helicopter, it can shoot a drone out of a tube, and that drone can be used to extend its range. It could be used to do surveillance reconnaissance to make sure that the helicopter or whatever aircraft is launching it isn't putting itself in danger. And the you know, the loading munition part of this is making it possible for an operator to be more precise and, and discriminant with a strike where a strike is needed. So one of the things you might have seen, you might be seeing in Ukraine is the use of dumb artillery. So you're shooting mortars, you know, these things are like pocking farmland, they're killing civilians. We want to put munitions on target where we know that the

target is the adversary and it's not going to lead to unnecessary casualties. And so it allows you, as an operator, to see what it is that you're going after and then convert that air launch effect from its surveillance purposes into something that can be used to deliver an impact in a way that you would normally be doing in a much less precise way. So this is a person doing it using a drone, precisely, not that AI has to be trained to say this is a dangerous thing. It's something that a person at the other end decides, correct? Yeah, absolutely. You want a human in the loop on these decisions. I think the conversation around autonomous weapons is obviously very complicated. Absolutely. And I think the technologies that we're building are

making it possible for humans to make the right decisions about these things so that there is an accountable, responsible party in the loop for all decisions that could involve lethality, obviously. Well, the fear being that AI will make a mistake, just the way there's the controversies around AI in judging or in court cases or things like that. Human judgment is incredibly important. We don't want to remove that. Or justice flawed. If you listen to Daniel Kahneman,

he's like, well, AI is a little better than humans because humans can make 60 different decisions based on almost no information. The place where people get hung up on that, though, is that they want someone to be responsible. And so humans might make mistakes, but we believe in the concept of being able to hold humans responsible for those mistakes. If a machine makes a mistake, who do you blame for the mistake? Do you blame the people that manufacture the system? There's all sorts of questions that come up there.

Is there a deadening when you put AI in charge of so much stuff? I mean, you just build these things, presumably, but is there a thought in the defense community if you start to really make it into a game or feel like a game in some way that there's a problem with that? Or is it, whoa, we're going to save lives by doing this? No, I think there's a great deal of thought that goes into this. And it's certainly something that I don't feel absolved from personally, even. Like, it's really important to have responsible conversations and dialogue about ethics and, you know, how the things that we're building impact what other people are building and how that impacts our adversaries. And, you know, one of the core reasons why we started Andral is we believe that, you know that you can lean very heavily into just war theory

to conduct conflict in the most ethical way possible. Is that St. Augustine, just war? Is it St. Augustine? St. Augustine was a lot of the early writings on just war. I remember my Georgetown courses. There you go. You got it. One great example of this is the Zawahiri raid in Kabul a few months back.

That was done with what's called a Gensu missile. It's non-explosive. It's completely dull kinetic, but we were able to take out Zawahiri and no one else was even injured in that attack with a completely non-explosive guided munition. And I think once you get to the point where you can be incredibly accurate, you can be incredibly precise, you get more of a deterrent impact on the conventional side of the equation. We all understand nuclear deterrence and how that works from a strategic perspective. But if you can get to the point where you can conventionally deliver outcomes on the battlefield at very low cost, you can deter the adversary from engaging in conflict to begin with.

And that's the sort of advantage that I think is important for us to try to build. All right, St. Augustine aside, one of the things that happened, though, these AI, especially technologies, become very powerful. We can see how it revolutionizes search. Talk about how it does that with defense and how we fight wars. That's your goal. You had written last year, today there's more AI in a Tesla than in any U.S. military vehicle.

Agreed. A better computer vision in your Snapchat app than any system the Defense Department owns. What's the problem? Is it they just don't want to use Snapchat in the Defense Department or what? I definitely don't think they should be using Snapchat in the Defense Department. They should be using TikTok, but go ahead. Obviously, yeah. Yeah, so I think, you know, there's a lot of problems here.

Part of it is just the incentive structure. So if you look at, you know, when the Cold War ended, the Secretary of Defense got together the defense industry on what became colloquially known as the Last Supper. And he effectively said, like, look, defense spending is going down. Everybody needs to consolidate or die. And so he encouraged all these companies to do exactly what they did, which is they paired themselves down. And they built an incentive structure that made it possible to maintain nearly perfect competition between the large primes, which is what we call the big defense contractors. They're called primes. And so we got in this situation where everything was an exquisite, bespoke system. Everything was built from scratch. And then you had companies like SpaceX that come up and they say, we built a commercial launch system that is a fraction of the cost of what is being offered by the United Launch Alliance, the group of the primes that do this together.

this together. And they don't get access to the contracts because the DOD has sort of tacitly agreed with the primes that they won't allow new entrants as long as this nearly perfect competition where it's basically an index fund of US GDP. These companies grow very slowly over time, tracking GDP. They're going to distribute revenue as evenly as they possibly can, but we get no innovation as a result. And so we're kind of stuck in the middle of this right now. So you worked in Washington. I want to step back for a while in intelligence. What pushed you into the private sector? You know, the primary thing for me was being incredibly frustrated with bureaucracy. I am not well built for bureaucracy, unfortunately. And I think I got to the point where I thought that I could better utilize my skills working at a tech company. So my first job out of the DoD was working for Palantir.

At the time, I had no idea how a startup worked. I had no idea that there were things... Why Palantir? Why did you pick Palantir? I actually saw a demo while I was working with the government and I started pushing that we should get this software because it was really incredible. And just kind of ran into a brick wall on this and ended up talking to the Palantir team and saying, hey, I hope you're not pushing too hard because it's not going anywhere. And they kind of laughed and said, you should just come join us. So I didn't know anything about startups at the time and really kind of got a front row seat to how you do innovation in the

defense world, you know, through all of the challenges that we're now working through again at Anduril. Palantir did different things, software around all kinds of different things. Different technology approach, similar problem set. Although I would argue it's even harder to sell software as software to the DoD than it is to sell software inside of hardware. They love hardware. They love hardware. It's like Gavin Belfson's box from HBO's Silicon Valley. But to talk about that idea of pretty significant disadvantages that come with AI is facial recognition software. It's been found to discriminate against people of color. It's

better at recognizing male faces and female faces. ChatGPT came up with answers that reflect ethnic and racial bias around it, largely because of the data. When it goes from the private sector to the public sector, is that an issue? Are there problems translated to defense tech? And how do you think about solving those? Yeah, I would say there are two answers to this. First is that there are a lot of ethical challenges in this.

I happen to not believe that you can deploy facial recognition ethically. So we don't do it. We won't do it. It doesn't really make sense. And so I think that's the first answer. The second answer is that I'm actually not certain that working, like building things custom inside of the government leads to more ethical outcomes. Imagine, like, you're basically asking people who aren't good at these things to do something, and the belief is somehow that they're going to be better and more ethical with it. I'm not sure. I think they're probably just going to be worse.

But they do have the public interest at heart versus a profit interest or a carelessness that I think infects Silicon Valley in some ways. How are you going to be better and more ethical at it, and what systems do you have in place in Andoril if you're designing it for the government? First and foremost, companies with a mission orientation towards the DoD are oftentimes made up of government people. So of course, there's a profit motive and that all exists. But I also think that no one would be at Andoril if they didn't believe in the mission. We make that very clear to employees, and they are motivated to do the right things. Does that make us invincible and, you know, immune to critique? Of course not.

Like, I feel, as I said before, I feel a deep responsibility towards getting the ethical piece of this right, being open to feedback, making changes as needed. And so what makes me think that we'd be better at it? I trust the people that I work with, and I believe that we have a open and frequent dialogue about this. And I think there are probably other places that do that as well. One of your first big projects with the U.S. was at the U.S.-Mexico border, creating a virtual wall. The physical walls, ladders tend to work on them. Anderle uses these things called sentry towers. tend to work on them. Anderle uses these things called sentry towers. It's essentially a camera on a pole, a smart wall aimed south, essentially, to seal the border through innovation. Talk a

little bit about this, because everyone's looked, not to say that anything that's happened before has worked, because it hasn't. Talk about what this project and how you think it's different. So, you know, border security is a really important bipartisan issue. And I think this is something that, you know, President Biden talked about after his election. You know, it's important because you need to know what's happening. And there's a big bifurcation between the concepts of border security and the concepts of immigration policy. And, you know, I think that from a technology perspective, again, this goes to, like, how can we most efficiently use people? perspective, again, this goes to like, how can we most efficiently use people? It's been well reported that CBP, the Customs and Border Protection, is massively underserved. Like,

they cannot hire agents fast enough. They're, you know, they have thousands and thousands of job postings that they haven't filled. And we need them to be able to respond to humanitarian crises, to apprehensions of criminal activity that's happening, to, you know, just provide them with the data they need to do that. And that's what, you know, Biden is talking about when he talks about the smart wall. It's advanced technologies that are used to give our limited number of agents the information they need to do their jobs as effectively as possible. Well, you presumably would want less agents and better detection, right?

Yeah. You want to tell them, you know, this is what we see, not to the level of like facial ID, but we want to tell them like, there are people, this is how many people are crossing. This is where they're crossing. This is their trajectory. This is where you need to go in order to do something about it. And it goes directly to these agents, correct? Rather than through the system of where you have 24-7 agents watching cameras, essentially? Yeah, totally. No one is watching the camera feeds. They're just getting notifications on their,

you know, their laptops, their mobile devices, whatever, that tells them there's something happening. You can make a decision about whether or not you want to do something about that. Some critics say you only push migrants to different, more potentially dangerous spot along the border. Is it a full border solution or a somewhere border solution? Because it's a long border. Yeah, it is a long border. The southwest border in particular is a long border. And by the way, Mexico still is not going to pay for it. But go ahead. That's right. Mexico is not paying for the towers. That is correct.

We don't have complete coverage, for sure. There's still a lot that needs to be filled. coverage, for sure. There's still a lot that needs to be filled. And so, you know, the goal is, like, we need to shut down the corridors so we know what's going on and do that in the most ethical way possible. You wouldn't put a tower, like, next to an urban environment. You don't get any information. It's like, yeah, there are people, right, because it's an urban environment. It doesn't make sense in that world. It probably also doesn't make sense in a world in which the viewshed is incredibly limited. Maybe it's, like, widely forested or there's huge, like, mountains and valleys that are really hard to see through. And so is it practical to, like, get entire border coverage with Anduril's century towers? Probably not.

There are probably other technologies you would want to mix in to do that. But we are certainly very happy about our partnership with the Biden administration, with Customs and Border Protection, and the agents there that are leveraging our technology where they can as effectively as possible. So it's whatever that is. There aren't any special problems when you have a digital solution. No. And you know, a lot of this is just like, you know, when we started the company in 2017, a lot of the stuff that we did was like only recently possible, like getting solar power to where it could be efficient enough to do a lot of very remote deployments of tech. The NVIDIA GPUs, like getting edge processing good enough, low power enough, inexpensive enough to be able to deploy at volume. And so the ability to build these at very, very low costs rather than doing like a, you know, one and a half billion dollar SBI net program, which was the prior effort, was really only possible because, again, commercial technology got to the point where you were able to leverage that very efficiently. But the fear is spending too much money, as usual, on defense, like the $1,000 toilet seat, correct?

Yeah, I mean, it's a guarantee, more or less, that if left to our own devices, we will spend way more money than we should. You know, oftentimes it's interesting in government in general, as you're probably aware, Cara, is that there are people who think that we should do more with more, like we should have more money and do more things. There are people that think we should do less with less. We should have less budget and do less things. The definition of technology is literally doing more with less. Like, why are we not talking about that? We should be more efficient, more effective, and spend a lot less money. That seems like that's worth working on. Or better is what you really should be. Better is better. Someone's like, more is not better. Better is better. Yeah, better is better. Exactly. So you, speaking of better, you've been growing a lot lately. You landed a $1 billion contract

with the U.S. Special Operations Command last year. And a few months ago, the company reported raising $1.48 billion, a new round of funding, which almost doubled your valuation to $8.48 billion. What has changed? Is it Ukraine? Because that's kind of a basic land war. Kind of. Ukraine is an interesting kind of like learning space because it is really the first modern unmanned versus unmanned war. And you could look back at like Armenia and Azerbaijan and how some of that played out, but it was at a much smaller scale than Ukraine. But do I think that has a whole lot to do with Anduril's growth and success? Not really, no. I think, you know, we're growing really well.

Things are working. I think it's largely because we're building products that are responsive to the needs of the department. And the government, you know, for all of its ills, is recession immune. You know, budgets don't collapse in economic decline. The DOD budget has gone up every year for the last, I don't know, five years or more. And I think our customer is still very interested in engaging with us on the things that we're building. Are more techies more in wanting to get involved in that? And we'll get into people who have objections to that. Do you find more techies moving that way,

because especially with the contraction in other areas, I feel like metaverse might not work as well as people thought. For example, this is a perfect place to move if you're in that zone. Yeah, I mean, I certainly think that there are a lot of people who might have been on the fence where they were like, I want to do something important. I want to do something that matters. I'm not really sure that working on defense is the thing.

And now that there's all of this geopolitical stuff that's going on, of which Ukraine is one, the competition with China is another, I think people are starting to think a little bit more about like, man, maybe this would be an interesting area for me to spend time. That said, I don't actually think there were that many people that had a huge aversion to working in defense historically. You thought it was just a noisy group of people at Maven, for example, and Google, they didn't want to work on stuff.

Certainly, there were people at Salesforce around the contracts they had with the Border Patrol people, Amazon, though I think Amazon could hardly care. They didn't seem to respond. They're like, we're doing whatever we want. Yeah, Amazon and Microsoft historically had a lot less pushback. I mean, look, the Google protests

was like a single-digit percentage of their workforce that signed the letter. And by the way, I think it's awesome. I'm like, I'm really happy that Google leadership sat back and said, we live in a democracy. If we don't want to work with the DoD, we don't have to. So I'm really happy that Google leadership sat back and said, we live in a democracy. If we don't want to work with the DoD, we don't have to. So I'm really glad that Google had the ability to pull out. I don't think it was a meaningful chunk of their workforce, but it's on them.

Yeah, it was 4,000 employees. I think it was definitely not a tiny thing. But talk about Ukraine. I literally was approached by some Ukrainians at an embassy recently saying, how can we convince Elon not to geofence us? And I was like, because you're asking me, we know we have a problem. It was weird. I was like, I have no idea. And I moved away as quickly as possible. But talk about that idea of, do you lease it to the governments? And can that be problematic? There are a lot of different business models that, you know, could evolve to be part of our business. The way that Elon did this was direct. I mean, it wasn't even leased through the government.

He just, you know, directly provided it. And they took it. And they took it. And, you know, it has made a huge difference in their ability to deter and survive. And, you know, I think, again, this goes back to the point that I was making about Google. Like, SpaceX is a private business that operates in a democratic country. Like, he doesn't have to do anything he doesn't want to do. And I think there are positives and negatives to this.

You know, the obvious positive is that, man, I love transparent democratic societies. The negative to it is that it's a lot harder to muster the resources of the state to go after things. it's a lot harder to muster the resources of the state to go after things. And so, you know, in our work in Ukraine, we are selling through ally and partner nations, which is the way that almost all the technology is being inserted into the country. And, you know, I think the opportunity for the Ukrainians is to get access to tech that they're not getting through the, like, big pipe main channels from the U.S. So to do it directly, you mean, to do it directly like Elon with Starlink? Yeah, I mean, there are probably other examples. I don't know all the specifics, but by and large,

almost everything of import to Ukraine is being provided through allied and partner governments. It's not being provided on direct sales. Yes. No, I get that. I get that. I think, just put a pin in the Elon thing, is that I think the issue is, it's like, you just can't have one person decide, like, if he doesn't like war, okay, then whatever. It's difficult. They shouldn't be buying that way. That's, I think, the problem. But what Anduril tech is being used there? We have some autonomous systems, aerial systems that are being used in-country. Palmer, our founder of the company, was just out late last year doing trainings and learning more about characterizing the environment. It's a really difficult airspace. As you might be

aware, the Russians have spent a lot of time and money in the past decades developing electronic warfare capabilities to do things like interfere with radio communications, deny GPS. And so we've been dedicated to sending team out to characterize that environment and better harden our technology against Russian interference. We'll be back in a minute. Support for this show comes from Indeed. If you need to hire, you may need Indeed. Indeed is a matching and hiring platform with over 350 million global monthly visitors, according to Indeed data, and a matching engine that helps you find quality

candidates fast. Listeners of this show can get a $75 sponsored job credit to get your jobs more visibility at Indeed.com slash podcast. Just go to Indeed.com slash podcast right now and say you heard about Indeed on this podcast. Indeed.com slash podcast. Terms and conditions apply. Need to hire? You need Indeed. Support for this show comes from Grammarly. 88% of the work week is spent communicating, typing, talking, and going back and forth on topics until everyone is on the same page. It's time for a change. It's time for Grammarly. Grammarly's AI ensures your team gets their points across the first time, eliminating misunderstandings and streamlining collaboration. It goes beyond basic grammar to help tailor writing to specific audiences.

It goes beyond basic grammar to help tailor writing to specific audiences, whether that means adding an executive summary, fine-tuning tone, or cutting out jargon in just one click. Plus, it surfaces relevant information as employees type, so they don't waste time digging through documents. Four out of five professionals say Grammarly's AI boosts buy-in and moves work forward. It integrates seamlessly with over 500,000 apps and websites. It's implemented in just days and it's IT approved. Join the 70,000 teams and 30 million people who trust Grammarly to elevate their communication. Visit grammarly.com slash enterprise to learn more. Grammarly. Enterprise ready AI. Let's move to China. We have just a few more things to talk about. One of our biggest adversaries, no question, a lot of tech the world relies on is made in Chinese factory,

probably and or all things possibly, I don't know. Talk about them as an adversary and where they stand right now. Yeah. Going back to some of the earlier points, like, you know, civil-military fusion is a challenge that we are going to face in the future. You know, the tech that they have access to is the tech that their entire technology industry is building. And they do have massive advantages with critical natural resources, not only manufacturing, but access to critical materials, which has been a big part of their Belt and Road strategy. And there are a lot of manufactured parts, electronics, mechanical parts that you can basically only get in China. And we've gone through a detailed scrub of our entire supply chain at Anduril. scrub of our entire supply chain at Anduril, we are almost completely certain that we're approaching zero reliance on Chinese parts. But the fact that as a defense contractor,

as a company that's dedicated to this, it is very, very hard to figure out the subcomponents of subcomponents of subcomponents that you're relying on is a statement to just how enmeshed we are across our entire technology industry. And this is certainly very, very concerning. And it's something that gives them a tremendous advantage, regardless of the end result of the technology, like the weapons platform development that happens at the end of that. But what does the U.S. need to make up? Because on one hand, you have the argument that we need national heroes, right? And Mark Zuckerberg has made this argument of why he needs to be so big and unfettered, because China's doing this. I interviewed John Cantor recently. He said,

you know what we need to be? Not like them, not top-down, tight. We need to do from innovation. Talk about what we need to make up the ground and what can be done to do so. Totally. Yeah, I think this goes to the common argument that you make, Cara, around she or me. I think it's a bad argument. Mark Zuckerberg said essentially she or me to me, which he said it's either me or him. And I'm like, I don't like either of them. I don't like him more.

I definitely don't like him more. But yeah, I'm not so thrilled with you either. Yeah, we should hold ourselves to a different standard for sure. But yeah, I'm not so thrilled with you either. Yeah, we should hold ourselves to a different standard, for sure. And, you know, they're spending a lot of time and money basically indebting the entire developing world to their authoritarian whims. And, you know, not only are they building advanced strategic capabilities like ballistic missiles and, you know, space lasers and EW, command and control, but they're also building up massive conventional forces. They're ground forces. They have the world's largest Navy, huge Coast Guard. I think our approach should be fundamentally different. We should have more accountability. We should have more transparency. We should be willing to admit that we're not beyond reproach.

We're going to make mistakes. I think that part of that is leveraging our innovation ecosystem to do things that are, again, advancing ethics rather than deteriorating privacy and, you know, having a domestic surveillance state. What do we need to do then? Because there should be some public-private togetherness on this. Because, you know, there's a lot of saber-rattling, but it's more noise than actual. What if you could do something? You're still in the intelligence agencies, you're still in the government. What should they be doing? And then what should a technology company be doing? Yeah, I mean, I'm not sure it's entirely saber rattling. I do think there's more

beneath the surface than the American people are aware of. But I also think free market competition is really good. And that's probably the thing that I would encourage the DoD to do is we're going to get more innovative products. We're going to get the involvement of the right people to work on these things if people believe that there's a path

to actually doing the work. And so I think it's all about competition. So I cannot ask about the Chinese balloon that the US shot down over the Atlantic on a few weeks ago, and then these multiple unidentified objects. Is this a good example of defense tech? Is this good for your business? You know, I think the hardest thing about this balloon conversation that I've been having kind of ad nauseum for the last four days is that- I know, it's ridiculous. CNN is the ancient aliens network now. Go ahead.

I hope that it's aliens. We both do. Man, I would be so happy if it was. But no, I think the reality is we don't know. And there are certainly people that have more information than us, and maybe we will eventually know. But it's really hard to say we did the right thing, we did the wrong thing, because I don't know. I don't have access to all that information. no, I don't have access to all that information. That said, I think understanding and characterizing a potential threat is what you need to be able to defend and deter against that threat. And it's obvious that we don't have like a great practice for doing this right now. You know,

in 1998, there was a balloon that flew over Canada and they eventually shot it down. But before they fired a missile to shoot it down, they shot a thousand rounds of ammunition and couldn't hit it. And so, you know, we learned from that and we said, next time we do it, we're going to send up an F-22 and we're going to shoot, you know, an AIM-9 to shoot it down. And, you know, there's like a cost-benefit analysis that you need to go through there, especially for like the flight time for, you know, putting multiple F-22s up in the air. Honestly, Trey, I think I could have shot it down, but go ahead. I would love to see you standing out of your house. I wanted to be in the military, and I couldn't be. I wanted to be in the military. I am gay.

I could not be. It's a sad, sad loss for American military, but go ahead. It is a sad loss for America. I'd be a fucking sad loss for American military, but go ahead. It is a sad loss for America. I'd be a fucking admiral general right now, but go ahead. You would be amazing, for sure. I know I would be. I would be. So good. So yeah, I think, is it good for our business? I mean, not right now. We're not building tech to shoot down balloons, but- Right. But it's about defense. It's defense. It's the same thing you're talking about.

Characterizing a threat, figuring out if there's a really efficient and inexpensive way to do something, and then deterring. You know, this is part of it is like you want, you don't want China to believe that they can do it. So if you have a very easy way of eliminating the threat, it's going to stop the activity. That's the whole purpose of deterrence. Had you all sat like, oh, this is a business opportunity. Here we are. Because I think we look like dumbasses at this point, but that's just me. Yeah. I mean, I haven't had a clear conversation about how it gets done. By the way, this is Palmer's favorite thing is sitting around and talking about how to solve for a very, very specific, potentially very niche problem. And so, yeah, it seems like something that I should jam with Palmer on this week and see if

he has any good ideas. You really should. You should. All right. I have some, if you'd like to call me. But speaking of Palmer, you know, the politics has dragged Palmer into the supporting of Donald Trump. He should support anyone he wants, by the way. Obviously, Peter Thiel has been a supporter of Donald Trump and served on a transition team, has been very active. How much does that affect running a company like yours? Because you are cooperating with the Biden administration. You have very tight ties to them, too. So how do you manage that yourself and the company?

Because presumably you don't want to be dragged into we're the right wing defense company or whatever. Yeah, I mean, look, Anderle isn't just Palmer. It's, you know, over a thousand people. Even across the founding team, there's like, there are Democrats, there are Republicans. It doesn't really matter. Defense is, unbeknownst to many people, particularly as you pointed out in Silicon Valley, defense is a really bipartisan topic area. You know, we certainly don't lack for support on both sides of the aisle, which is great. You know, I think on the like dialogue side of things, I one of like my core personal values is that I care deeply about discussion and debate. And I think, you know, that's why I, you know, was open to coming here and talking with you on your podcast. And I think that, like, you know, what you see sometimes is, like, you know, Joe Biden, like, refusing to do the interview with Fox ahead of the Super Bowl.

Trump did this during his administration as well. I think it leads to, like, a really unhealthy acceleration into tribalism. And I think this is both, like, it's a responsibility of people that are engaging with the world, but it's also a responsibility of media. Like, we should be building trust, not building walls between each other. Well, only smart walls, but go ahead. Right. Smart walls between each other may be okay. But no, there has to be trust. And, you know, I think it would be awesome to get back to the point where it was a healthier relationship, for sure. Yeah. When you think about that, does it affect your business, though, when you get dragged into this?

How do you solve from that problem besides talk to Kara Swisher, for example? Yeah. I mean, to the point that you just made, like, actually, I am not a Trump supporter either. But a lot of the points that Biden made in his State of the Union were just Trump points. Like he talked about Made in America, the CHIPS Act, resource insecurity, competition with China. It's like these things have actually become bipartisan since they were Trump points. But does the politics affect us? No, not at all. Like we are – I don't think anyone in the company sees this as being a right-wing company.

We have investors that are super far left. We have investors that are on the right. As I said, our founding team is not even politically united. And I think that's really important, especially in an area like defense, is that you want that tension. And I think that's made us better, actually, not worse. All right, so you got no answers on the balloons, Cara. No, he doesn't know. None of us know. I know, he doesn't know.

Nobody knows. It is a business opportunity, though, I'll tell you that. He's very diplomatic in your questions about what it was like to be in U.S. government. Yeah. In the bureaucracy. They're his clients now. Nobody knows. It is a business opportunity though, I'll tell you that. He's very diplomatic in your questions about what it was like to be in U.S. government. Yeah. In the bureaucracy. They're his clients now, so he can't really tell us. Yeah. But I mean, anyone who's, you know, I knew Ash Carter who just died recently, unfortunately, very early. And I talked to a lot of people and they do understand the bureaucracy of what it's become. And it's because there isn't competition. He's 100% right. These primes that take over everything, Lockheed Martin, et cetera, they quash competition. And the same thing at the top of technology. It's the same thing. It's where the startups have the best

ideas and they're not part of it. And that's what makes our nation great is startups and innovation. And so- But you know what the thing is, is that these startups become primes. I mean, Elon was a guy just doing innovation with the government and getting a little loan, and now he's Elon Musk and he's running SpaceX, Tesla, et cetera. We should be giving more money to more Elon Musks who aren't quite so crazy. Yeah, and we should be taxing well on the other side. That's a whole other story. But I mean, we need to be thinking more.

And I get that these are complex systems and they need to be locked down. And you don't want all these points of weakness where people can take care of it, but there is nothing better than innovation, which is startups doing things and coming up with great new ideas. Listen, I have a real problem with Elon Musk right now, but what he did at SpaceX was critically important to space travel. It was. We need 10 of those. We don't need just him. And if there's not as smart people on this planet all over as Elon Musk just him. And if there's not as smart people on this planet all over as Elon Musk, I would eat my hat. There are smart people everywhere, and we've got to push them into it. Don't eat it just yet, Carol. We will find some. I won't. I won't. There are. The other interesting thing to me was this whole conversation about

kind of efficient warfare, because I had studied international law, and it's a conundrum. Because if you make war more efficient and you can kill people with drone strikes, it becomes very asymmetric, right? And so the cost of Father Brian Ayer, who was a professor of mine at the Kennedy School, who I think used to counsel intelligence officers on killing and— Yeah, the ethics of war. In war, yeah, and ethics of war. If you can take out individuals with technology, all of a sudden the costs of war become very little, and that creates grave consequences for the calculation of when and how you strike. And so there is this other kind of moral question, this bigger moral question. It could be better for U.S. soldiers, but is it actually better for the world?

Well, you know, right now we're just like spraying and praying kind of thing. I think they're the kind of things you saw. Well, we just throw it down and we just hope we don't hit too many people. I mean, really, yes, there are better ways. And, you know, if there's going to be war, there are people, there's going to be war. And I'm so sorry to say that, but it's true. And you don't like to discuss it, but boy, it's better if it's more precise as possible. I think what is interesting about what Andrew is doing is the deterrent quality of it.

And I think that the future of warfare is going to be a lot of deterrence and surveillance and that already you see that in parts of the world. And then hopefully, you know, minimal skirmishes, but a lot of targeted strikes. Yeah. But more deterrence, not just physical deterrence,

is that we're going to take out all your internet. We're going to take out all your this. We're going to... Yeah, targeted strikes. That's right. Like there's more ways to pressure people than just killing them. There's all kinds of ways.

And so it's interesting. All right. Well, this gives our audience a lot to think about. And while they do, do you want to read us the credits, Cara? Yeah. Today's show is produced by Naeem Araza, Blake Neshek, Christian Castro-Rossell,

and Raffaella Seaworth. Our engineers are Fernando Arruda and Rick Kwan. Our theme music is by Trackademics. If you're already following the show, you get a smart wall. If not, you get a stick with a camera on it. Go wherever you listen to podcasts, search for On with Kara Swisher and hit follow. Thanks for listening to On with Kara Swisher from New York Magazine, the Vox Media Podcast Network, and us. We'll be back on Thursday with more. to your customers every time. Klaviyo turns your customer data into real-time connections

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