Inside the Iran War and the Pentagon's Feud with Anthropic with Under Secretary of War Emil Michael

16:22Chamath Palihapitiya:I'd say no, it wasn't only a technology maturation from five years ago. It's the rules of engagement. The rules of engagement that we used to have, I mean, if you read about them, some of them are insane. Like if in Afghanistan, if the guy had a small gun, you had to have a small gun. And, you know, there was this parody in weird ways. And when you're like, well, but is the objective to have like a fair fight or an unfair fight? Well, if you're on our side, you want it to be unfair. So the rules of engagement were relaxed to be.

16:57Jason Calacanis:Who writes those, Emil? Who sits in an office and says you can't shoot back if a combatant is shooting at you if you aren't matched gun for gun? Yeah.

17:06Chamath Palihapitiya:I mean, crazy policies that are written into military departments. And that's why when Secretary Hicks talks about this kind of thing and what was happening with him when he was in Afghanistan, if you ever read his book in Iraq, he's like the rules of engagement were so punishing that we were we were at risk all the time because you had to have like a legal understanding of what was happening in every minute in the battlefield. field, as opposed to, well, your job is to take out these guys and protect these guys. Here's your munitions. Here's the red lines. And then in the middle of that, go. Use your judgment.

17:43Chamath Palihapitiya:Your commanding officer, use your judgment on how to win. And we've kind of gone back to that. Use your judgment. Push responsibility field. Still have your red lines. But other than that, the objective is the objective. It's more of a Colin Powell approach. It's like, go all in, have a clear objective, come out, use overwhelming force. And we were not doing that for the last four years.

18:05David Sacks:And then going back to the face of war going forward, my understanding is that there have been more drones deployed by the United States this past week than we've done in the history of military activity. Is that right? And like, how does that really change things going forward here?

18:20Chamath Palihapitiya:It changes it big to well. So the Predator drone was the first big drone program like 10, 15 years ago. It was this big honking drone. And then if you remember, Obama would take out some of these Al-Qaeda leaders with drones on their balcony and things like that. I think President Trump took out Soleimani with a drone near his car. That was the beginning. And then the Russia-Ukraine war happened where it's like drone on drone, 70 % of the casualties are because of drones. So drone on drone warfare, robot on robot warfare, those things are the future for sure. And that's why companies like Anderil are companies like Anderil is because they're making unmanned systems.

19:04Bill Friedberg:And this has been something you've specifically been very focused on. And you tweeted today a little bit about a competition. will play a little video here and this lucas low-cost unmanned combat attack systems it used to take a lot of time it certainly wasn't startup time to get new product into the channel for our military to use explain what program you're running here feels like the darpa self-driving challenge all over again and what these drones cost i know there's a company making them for i

19:34Chamath Palihapitiya:think 35 000 am i correct i mean the small drones like i'm holding right there and that are way cheaper than that. The Lucas one-way attack drone, which can go five, six, 700 miles at the speed of an airplane, carry a big warhead. Those are like$50 ,000,$80 ,000, depending on what kind of equipment you put on it. But we have a drone dominance program and we basically have to build an arsenal for drones. Now, are we likely to have a territorial conflict like Russia, Ukraine with Canada and Mexico? No. But we do want to take out drug drones at the border. And we want, but long, one-way attack drones are important for, you know, any kind of major conflict like you're seeing in Iran, but also to protect military bases for America 250, World Cup, Olympics in 28.

20:28Chamath Palihapitiya:Like there's other, there's a lot more uses of drones for surveillance, not just for, you know, for combat.

20:34Jason Calacanis:There you're showing drones that are sort of human operated, but how much of this should basically be AI so that it's just some computer vision? And again, back to what you said before, a model understands the rules and the red lines, but otherwise is be on task and accomplish your mission. How much of it is one versus the other?

20:53Chamath Palihapitiya:I mean, I believe that a sophisticated drone war is going to be drone swarms controlled by AI to some degree or another, right? to what degree the control matters. Like, for example, drones have decoys. They could spit out, you know, they could dazzle. They could put out things. So how do you discriminate what's a drone and how to hit it? You know, you can use AI for that because it's learned, you know, how to do automatic target recognition, for example. And then also, could it identify a person? And does that make it safer? So it's going after actually someone you want to get and not someone you don't want to get.

21:30Chamath Palihapitiya:So there's a lot of uses for AI at the edge, if you will, in the future here. The Ukrainians and Russians do something called like a kill box where they lose comms because it's jammed for this drone. And then it just starts going in a box and looking for, you know, the person they're trying to get. And they're trying to starting to use AI to do that.

21:51Bill Friedberg:And China has this ability already probably times some magnitude. Yeah.

21:58Chamath Palihapitiya:They have drone swarms because they can force the companies that make them, not just DGI, to interoperate. So interoperating drones called heterogeneous autonomy, right? You take different kinds of drones and how they communicate with one another and then make sure they're not going after the same target is like a pretty complex thing that they're definitely working on.

22:21Bill Friedberg:And let's talk about the fidelity of these. obviously, AI is a new technology. It can make mistakes. Anybody who uses it on a day-to-day basis might experience a hallucination. How confident are you in the AI? Ukraine and Russia conflict, they obviously are not going to be as thoughtful maybe as we are in putting this together. They're in a hot war right now. But we as the United States have to be very thoughtful about this. So how confident are you that this isn't going to make a mistake? I think that's the key to a lot of this debate and when will it be you know perfect to find as much better and i guess this dovetails with the self-driving you know thoughts it has to be a magnitude better than a human so when will this be a magnitude more accurate than you know when we have uh make a mistake as a as a military and we kill a civilian yeah no it's it's a good question and

23:15Chamath Palihapitiya:And I don't know when that moment hits, that FSD moment where it kind of gets better. It's certainly not there. And you wouldn't want to take huge risk with that. There's a gradation of when you would use that and what kind of risk you're trying to take or not.

23:30Emil Michael:If you were trying to take out a drone using AI, using a laser or something, you'd be pretty okay making mistakes because you just missed the drone. Whatever, with the laser and the laser goes off, it's all over.

23:44Chamath Palihapitiya:if you were doing something more sophisticated in the population area have a densely populated area you'd take less risk so we're developing procedures tactics for each scenario and this is part of the debate i had with anthropic which is we need ai for things like golden dome

24:00Emil Michael:chinese hypersonic mixel comes up you've got 90 seconds before it separates and all kinds of decoys and you don't know where the actual payload is and you want to get it hit it from space

24:13Chamath Palihapitiya:and a human can't, doesn't have the reaction time, doesn't have the, may not be able to discriminate with their own eyes what they're going after, that's a pretty low risk thing because it's in space and you're just trying to hit something that's trying to hit you. So I think in the next 10 years, you're going to see a lot of these applications develop AI to one degree or another, so long as we think it's safe and it's not going to do the, you know, make mistakes.

24:36Bill Friedberg:Before we get onto the anthropic discussion, and we really appreciate you coming here. And my Lord, this has been so informative. So thank you, Emil, for coming here and explaining to the American public and to us what you're working on. It really makes us, I think, speak for everybody, really confident in what you're doing. It's so great that you've, you know, left the private sector to do this.

24:55Jason Calacanis:What I would say just very quickly, Emil, is I think that not enough people understand that the American military has had to fight with one hand tied behind their back. Just that little insight that you just gave about Afghanistan, to me seems so scary because the men and women that sign up for the American military, they're doing this to fight on behalf of this country. They deserve a lot more than being sent there and all of a sudden being given this rule book and say, do your best. And it's like, oh, wait, you violated 19 rules trying to protect America, do your job. That's insane. Let's just.

25:30Chamath Palihapitiya:It's really insane in some cases. And my belief is that's what the frustration for those soldiers who are out there in those wars had more than anything. There was the broader frustration, like, what are we doing here? And then the secondary frustration is, while I'm here, why can't I do my job? Yeah.

25:47David Sacks:Is there much of a debate internally, Emil? I'm sorry, Jake, before we move forward on this. Regarding this idea of full autonomy in military action, I don't want to speak ahead to the anthropic point, but it was something that the media seemed to say was part of Dario's concern, is that when you press the button and hand over complete autonomy, and there's a kill action that you're now giving to a robot or to some autonomous system, do we then kind of have a moral issue at hand? And is that something that's kind of debated or discussed? And is that the right way to think about the framing of what goes on?

26:22Chamath Palihapitiya:I mean, we're not even close to there yet, right? The systems are not, we wouldn't feel that a system that would have sort of like real risk for a civilian is ready to launch yet. So we're not even debating that. We're just trying to get basic autonomy in drones, basic autonomy in underwater unmanned vehicles, basic autonomy that, you know, you've heard of this collaborative aircraft that fly along with the jet craft so that it has more firepower. but it's still tethered to what the jet does. So we're just at the very beginning of this stuff. But for Golden Dome is a good example of like, yeah, who can oppose that?

27:02Chamath Palihapitiya:Like it's the only way to get out of threat like that. So who could oppose if you have a military base, you have a bunch of soldiers sleeping, that you have a laser that can take down drones autonomously on that. So it's pretty scenario by scenario, but we're not having a lot of debate because the Skynet thing is so not a realistic thing at this moment, right? Except if one thing I did tell the Anthropic guys, I was like, you know, or I'd tell this any company, your models are getting stolen by the Chinese. They're going to un-guard rail them and use them against us. And then you want our models to be less capable against your models.

27:41Chamath Palihapitiya:It's sort of -

27:41Bill Friedberg:They're not going to be thoughtful in other words. They're going to go for it. And, you know, if we just benchmark this against where we were at, you know, but 10, 15 years ago, there was the WikiLeak of collateral murder, I think they called it, where we tragically had an Apache take out some journalists. And this technology, even applied today, probably would have avoided that in my mind, yeah? Like, we have enough that when you're targeting, not drones, but, you know, people on the ground with an Apache, this would have probably avoided that. Yeah.

28:15Chamath Palihapitiya:Or, you know, the Kuwaiti aircraft hitting, you know, an American aircraft making a mistake because it doesn't have the identification. I mean, it's the same self-driving argument to a degree. Like self-driving could save lives, even though it's scary to look at a car without a human behind the wheel. But there's tons of scenarios where it's a way better, safer option, more precise than the alternative.

28:39Bill Friedberg:All right, before we move on to the Dario thing and anthropic and that rouhaha, there was one piece that we haven't addressed with this interaction, Freeberg, Chamath, which is the Israeli government and their desire to take out this regime. and us, according to Tucker Carlson and a large contingent of the MAGA base, they feel that we are captured by this group. Does Israel have too much influence over the United States with regard to these actions in the Middle East? This is, you know, a big debate within the party, within the Republican Party, within the MAGA constituent. Hey, we, number one, we don't want these wars.

29:19Bill Friedberg:Number two, is Israel driving this thing to the point of Rubio's quotes that, hey, we're doing this because Israel is going anyway. I think we should address it here. Not that I have a personal stake in this. I'll give my personal opinion at the end. I don't think the president is captured

29:32Jason Calacanis:by Israel in the least. I think he decides what is in the best interest of the United States. And if Israel can be a part of that, then they're a part of it. And look, let's be clear, they're incredibly capable. And so in something like this, to be able to incorporate the intelligence of Mossad. What you're seeing today in this Operation Epic Fury, we're four days in. Iran has been 90 % depleted of all of their munitions, it looks like. They're just firing no more missiles out from Iran to anywhere else. There's fleets of drones and planes just waiting. Everybody knew where the Iranians were. It's great that when we make a decision on something that we need to do, we can rely on our allies.

30:17Jason Calacanis:I think the opposite question should also be asked, It's like, what was the UK doing? Why is Spain pontificating? Why was Europe taking the weekend off before they could even issue a statement? Why don't you ask that question?

30:27Bill Friedberg:Yeah, no, it's an equally valid question. You know, and Freiberg, do you want to get in on this or no?

30:34David Sacks:No, I'm a Jew. No one's going to care what I have to say. They're either going to be like, totally like, or they're going to say, this guy's a Jew. We shouldn't listen to him. So like, let's move on. Go ahead.

30:44Bill Friedberg:Emil, any thoughts on this?

30:46David Sacks:I do want to know from Emil though, So like, you know, is this Iron Dome working, this laser in Israel system? Is this operational? And if so, is there any success metrics you can share around it?

30:57Emil Michael:I mean, I think the gold, sorry, the gold, no. Iron Beam was the first generation of the Israeli air defense thing. And then they're building Iron Beam. And I think it's still early-ish, but yeah, it works. They're a technologically sophisticated country that's very small that has a reason to invest in these things and have a lot of smart people to do them. So I think it's good.

31:23David Sacks:Does it primarily work on rockets? And I guess I just want to understand the logical evolution of this. Because in the 80s and 90s, there was a lot of conversation about space-based lasers that could shoot ICBMs out of the sky to avoid global nuclear war. and we could always take out every nuclear warhead delivered on an ICBM. Is that technology feasible? Is there a place in the near future where we could see basically maximal global deterrence using these systems, either ground-based or space-based, to take out hypersonic missiles?

31:53Emil Michael:I think the harder but more valuable problem to solve would be the space-based way of doing it because then you could get at almost any kind of threat that hits space. but you still need a ground layer because there's cruise missiles that could come at you. There's drones and so on. So we called it multi-layers. Like how do you get every kind of weapon at every layer? But, you know, directed energy lasers, as they get more powerful, you could take on a bigger weapon farther away, right? So those technologies that as they improve, it gets more and more capable. And I think all these defense systems are going to get more and more capable to get more and more of a variety of weapons that farther and farther standoff, which is what you want.

32:41Emil Michael:You want it to you don't want to shoot it when it's right over Tel Aviv. You want to shoot it, you know, when it's still over there, their land, ideally.

32:48Bill Friedberg:Are the laser interceptors in the field today? There's reports that they are.

32:53Emil Michael:I think there's some. I think they've demonstrated some of them.

32:56Bill Friedberg:Got it. And is this our technology or Israel's technology? Because President Trump said, hey, that's actually our technology. Is there any insight there?

33:04Emil Michael:We have collaborations with Israel on some of this stuff. They have their own. We have our own. So it's not this is. But they're good at tech. We're good at tech. There's certain there's certain ways you get part of our system and part of their system, because it's like it's a quickly evolving part of science right now. How do you cohere beams of light to like get distance? how to use high-powered microwaves to just drop drones in their tracks. There's lots of different ways to get at some of these things. And yeah, a lot of it's ours, and some of it's theirs.

33:41Bill Friedberg:Yeah, and to the earlier question, I am pro-regime change if it can be done thoughtfully. And obviously, isolating a dictator, that's the best thing you can do. We've done that successfully with Putin, Kim Jong-un, etc., keep diplomacy up. But if there is a moment in time where you could free the people of Iran after 50 years of being subjugated by these lunatics and dictators, I'm all for it. And I actually trust President Trump to make that decision. I know this may sound crazy. People think like I'm a libtard or something because of the way my besties frame me on this program, which is completely inaccurate.

34:19Bill Friedberg:I'm an independent. You are. I actually are not independent. I'm completely independent. You're not. And I am just based on my voting. Okay. And I'm not on either one of these sides. Fine. I am pro-President Trump and I trust his judgment. I think he has more information than us. I think you have more information. I actually trust you guys to do it thoughtfully. And there obviously was a window here. Israel can have their own motivation. That could be the China motivation, but there's also spreading democracy, which might be the least of people's concerns here. But that's on the top of my list.

34:47Bill Friedberg:I would like to see the people of Iran free.

34:49Jason Calacanis:Just to build on your point, Jason, the thing that Emil said before, which I think is important as well, is we have an enormous amount of learnings about what happened in Iraq. We also have a ton of learnings between the Iran-Iraq war and a ton of learnings in 53 when us and the British deposed Mossadeh or at least fomented that and put the Shah and then the Shah was booted out. Yeah. If you take those three chapters in Iranian history or that regional history, there's a ton to learn. And to your point, there is a way to affect what we need to do without creating some 20-year forever war. There was an incredible tweet.

35:28Jason Calacanis:I don't know if you guys saw this. Somebody said, so every war doesn't have to be three decades and trillions of dollars to your friends in Virginia, Maryland, and DC. Did you guys see that tweet? It's true. These things can be one and done in and out.

35:43Bill Friedberg:and if president trump succeeds here i just want to also give him some flowers here the people of venezuela and the people of iran being free represent about five percent of the people in the world living under an autocracy under a dictator if those both flip back to democracies he'll have done more for the spread of democracy than any president for many decades perhaps in our lifetime this would be incredibly noble incredibly noble incredibly just and would Would you in the human rights set want him to get the Nobel then?

36:16Jason Calacanis:Absolutely.

36:16Bill Friedberg:Give him all the Nobels. Like literally, if you can free people, all of them, give him every prize. Give him an Oscar, a Grammy.

36:29Bill Friedberg:Physics, philosophy.

36:31Emil Michael:Jay Cowles, an independent. When's the last time you voted for a Republican presidential candidate? Just curious. Yeah.

36:39Bill Friedberg:No, no, no, no.

36:41Jason Calacanis:Mondale.

36:42Bill Friedberg:No, no, I didn't. I would have voted for, if I was of age, I would have voted for, I wouldn't have voted for the Bushes. I voted for the moderates. Obviously, Clinton and Obama. Oh, we're playing the woulda, shoulda, coulda game? I would have voted for Reagan in this situation. I would have bought NVIDIA at$4. Well, no, and I didn't vote for Kamala, so I'll leave it at that. But I voted probably 45%. Why are you leaving it at that?

37:06David Sacks:Why don't you say that you voted for President Trump?

37:07Bill Friedberg:Just say you voted for President Trump. I don't want to complicate things here. But you did, so just say it. I didn't vote for comma. I'll leave it at that.

37:14David Sacks:All right. It's so weird that you'll say you're a moderate, but you won't say that you voted for President Trump.

37:18Bill Friedberg:I am supporting President Trump in about 60-70 % of what he does. Let's leave it at that. Three, two. All right, let's talk about economic impact of oil and insurance. Oil has rose to$84 a barrel Wednesday. Straight of Hormuz, here's a video, is basically a standstill at this point. Here's the clip. You can see the traffic slowing down and then hey some of the dots are even going away that could be uh ships were taking out unless the straight opens 3.3 million barrels of daily production would be lost early next week and then there's insurance companies they've all canceled the war risk coverage of vessels in the gulf effective march 5th supertanker traffic dropped 94 % within the first 48 hours.

38:05Bill Friedberg:Trump said the US will provide political risk insurance for all maritime trade through the Gulf, especially energy. Freeberg, your thoughts on the economic second order effects that we're starting to experience here and over the next four weeks could be, you know, intense and acute.

38:21David Sacks:The modern insurance market emerged specifically to solve the risks of maritime trade. So in the 17th century, Lloyd's of London, which was a coffee shop in London, where all the maritime traders would get together and they talk about, hey, what's the safest route so pirates don't get our ship and so you don't run into weather. That's where they would kind of have these conversations. And eventually, they started underwriting the risks of the shipping routes and giving each other guarantees. They said, hey, if you make this route, great, you pay me a certain amount. If you don't make the route, I'll pay you the lost value.

38:53David Sacks:And that's how Lloyd's of London, which is the kind of world's biggest reinsurance market started. Today, Lloyd's of London has 78 what are called syndicate members. These are kind of these pools of reinsurance that underwrite big crazy risks like maritime insurance for folks that are moving oil tankers through the Strait of Hormuz, which the IRGC just announced they're shutting down. When the IRGC announced that they were shutting down the Strait of Hormuz, there's a significant risk of all the mines going in the straight and the ship's getting attacked and blown up, so loss of value, the insurance premium spiked initially from a quarter percent, so 0.25 % of the value of the ship to 1.25%.

39:33David Sacks:So it went up by like 5x. And so folks had to pay a lot more of the value of their ship in order to continue the routes and get guarantees that they'll make it through. And then all of the markets started to shut down. So once the conflict got heavier, everyone said, let's shut this thing down. And that's obviously a massive risk to energy prices globally, which drives inflation and puts US economic security at risk. And so this is a brilliant move, I would say the US government stepped in with the US International Development Finance Corporation, which was actually funny enough started a couple of years ago, like in 2019, or something like that, as a kind of output of one of the agencies that provided credit from USAID, much talked about USAID.

40:14David Sacks:And so they're leveraging the credit capacity of this old USAID agency to go out and say to all the shipping companies, hey, we'll give you insurance on your routes. And the reason they need it is the shipping companies are levered. They take on debt to buy the ships and the debtors require that they have insurance or else they're not allowed to take the routes because the debtors are ultimately going to be out the money. And so the shipping companies themselves need to have insurance. And so this provides a market that has now gone away. Very smart. And ultimately, a lot of people are saying this could actually reshore or onshore maritime insurance back to the United States and create an entirely new insurance industry here in the US that has historically been served almost exclusively by European syndicates and European partners.

41:04David Sacks:And it actually creates a big economic opportunity as this war dies down for American insurance companies and American brokers to basically be the underwriters and the guarantors of this sort of insurance and create a new industry. So that's super, super interesting kind of side story on what's going on here.

41:19Bill Friedberg:All right. Some breaking news here, folks, via Bloomberg. The Pentagon has formally notified Anthropic that it's been deemed a supply chain risk. This has never happened to an American company. It has happened to Russian companies and Chinese companies, Huawei. And for background, the Department of War canceled Anthropik's$200 million contract on Friday and said they would do this. The dispute came down to two clauses, according to sources, and we have one of the principals here. So we will hear directly from him in a moment. Anthropik had two concerns. Number one, fully autonomous weapons, a.k.a.

41:56Bill Friedberg:murder bots, as we previously discussed. dario didn't feel that their technology was reliable yet and wanted some assurances the second thing anthropic said was uh they were concerned about mass surveillance of americans because they believe this technology is uniquely powerful and uh it's can do things beyond what a series of webcams or a network of 7-eleven cameras can do pentagon said they want it all lawful use. Dario, you're welcome to come on the program next week or any time to give your side of the story. But this week we have Emil. Emil, your thoughts and explain to us what happened here and how this broke down.

42:40Chamath Palihapitiya:It's worth a little history, short history. So

42:44Emil Michael:if you remember the Biden executive order on AI, which was this crazy executive order that limited the amount of compute any model company could do and was essentially grandfathered in a small number of AI companies that they were going to designate the winners, and everyone else was out so they could have more control on what they did. Anthropic was one of those winners. And then they were smart, actually it was a good sales strategy, to sell into the most sensitive parts of the US government, like all of our combatant commands, CENTCOM, Central Command that's doing the Iran fight now, the Indo-PACOM Command, which is sort of responsible for China, several of the intelligence agencies.

43:28Emil Michael:And they did forward deployed engineers, Palantir style. So they got very sticky to the workflows and all that. And so I came in and I got the AI portfolio for department in August. And I said, I just want to see the contracts, the old lawyer in me. And I looked at the contracts. I was like, holy cow. They say, you can't use them to plan a kinetic strike. You can't use their AI model to move a satellite. You can't do a war game scenario with it? You could do a scenario, but let's suppose you're writing a plan saying, if this happens, here's what we would do. And it might involve a kinetic strike, which causes harm to a human.

44:10Emil Michael:So what do you think these folks do? This is the Department of War. This is what we do. And so I said, okay, well, I've got to, number one, have direct relationships with these companies, not just through Palantir, because I want to use it more broadly. And then number two, I need to have the terms of service be rational relative to our mission set. So we started these negotiations and took three months and I had to sort of give them scenarios about like these Chinese hypersonic missile example. They're like, okay, we'll give you an exception for that. Well, how about this drone swarm? We'll give you an exception for that.

44:46Emil Michael:And I was like, the exceptions doesn't work. I can't predict for the next 20 years what all the things we might use AI for. And so all lawful use seems like a good thing. If Congress wants to act, great. We have our own internal policies. We'll follow them. We're not knuckle draggers here. We don't want to hurt people unnecessarily. So it's our province to decide how we fight and win wars, so long as they're lawful. And I think at some point,

45:16Chamath Palihapitiya:it turned into a PR game for them because they were not going to win this intellectual battle of,

45:24Emil Michael:well, we're going to stop you. We're going to use our judgment because we think Congress is behind and impose it on the US military. And it became this, like, let's find the issues that are most inflammatory, robot weapons and mass surveillance. And you're like, we're the Department of War. We're not the FBI. We're not Homeland Security. We're not ICE. You're not allowed to legally spy on Americans. Yeah, you're not. So it's, so you're like, and then what it came down to on that issue, just as an anecdote, is they didn't want us to bulk collect public information on people using their AI system.

46:01Emil Michael:And they wrote it in a way that I was like, so you're telling me before we got to bulk, like if someone types in, you know, Shamat's LinkedIn, I'm using public available information that I'd be violating your terms of service. Like, yeah, well, okay, let's rewrite it. So there's months of this like stuff, which was sort of interminable. And then the trigger point was after the Maduro raid, one of their execs called Palantir, who we buy themselves through, and asked them, was our software used in that raid? Which is, by the way, classified information. Anyway, so we're trying to get classified information and implying that if there was use in that raid, that that might violate their terms of service.

46:45Emil Michael:So they wanted to enforce.

46:46Bill Friedberg:This is very important here.

46:48Emil Michael:Yeah.

46:48Bill Friedberg:They wanted to enforce their terms of service. They went behind your back to try to collect information to then maybe pull your license for their technology.

46:59Emil Michael:You know, it wasn't behind my back. I don't want to accuse them of that. Palantir is the prime contractor, their sub. But it raised enough alarm with Palantir, who's got a trusted relationship with the department, to tell me. And I'm like, holy s***, what if this software went down, some guardrail kicked up, some refusal happened for the next fight like this one? and we left our people at risk. So I went to Secretary Hegseth. I said, this would happen, and that was like a whoa moment for the whole leadership at the Pentagon that we're potentially so dependent on a software provider without another alternative that has the right ability to not only shut it off, maybe it's a rogue developer who could poison the model to make it not do what you want at the time or sort of trick you because you have to trick it.

47:46Emil Michael:I mean, all these things that we know, we aware about models or hallucinate purposefully or not follow instructions, like some insider threat stuff. So then that culminated in the Tuesday kind of dramatic meeting with Secretary Hexeth and me and Dario with the Friday deadline that got blown. And I never thought they really wanted to make it.

48:09David Sacks:Is the model entirely hosted by Anthropic? Or just explain to us technically, does this sit in a cloud that Palantir runs for you guys? is there really technically a way that employees at Anthropik could kind of interfere, intervene in the use of the model? Yeah.

48:26Emil Michael:So they put their model in AWS GovCloud.

48:31David Sacks:Like GovCloud. Yeah.

48:32Emil Michael:And then Palantir serves it from there and they refresh it. They held the control plane for the model. So, so yeah, they can change the model weights if they

48:43Jason Calacanis:want. They can do whatever they want.

48:45Emil Michael:Yeah.

48:45Jason Calacanis:The insight into this thing is unbelievable. Not just governments, but now if you're running a company, the reality is that what anthropics showed, which by the way is their right at some level, is that they're going to have a political perspective and a set of terms that reflect their philosophy and that that philosophy can change on a dime. But what the government did was also completely reasonable, which is we can't rely on you if you're going to be completely unreliable and disallow things that are reasonable. I'll give you a different example to make the point. There's a state that wants to run some healthcare program, but they're a pro-life state.

49:32Jason Calacanis:You can't conduct abortions in that state. Does that mean that the anthropic engineers can decide, you know what, we're pro-choice, so we're going to change the access model and the capability of that model inside of that state? Is that allowed? Should that be allowed? At one level, you'd say this is a private company. They're allowed to choose. But what that really means is for the government, for all the states, for any city, for every company, you cannot choose to only use one of these things. because it is just a matter of time until some person inside of one of these companies goes on some lunatic moral tirade and then jeopardizes your business against something that is nothing about law, but is everything about subjectivity.

50:16Jason Calacanis:That is the huge thing that this thing tore open this weekend. So if you're not figuring out how to be multi-model and agnostic across these models, you're taking on enormous business risk after Friday because you can't tolerate that these folks will do that. It's too critical of a technology. By the way, this is deplatforming all over again. Remember what happened when you didn't like what was said? Now, all of a sudden, you were deplatformed. This is that times a thousand, because this is not about posting on social media. This is about using fundamental technology to either advantage or disadvantage your business.

50:49Emil? Yeah, I mean, I think I described it the other day as the leaders of these companies say they're going to cause 50 % white collar unemployment.

51:01Emil Michael:This is as powerful as a nuclear bomb. It's like 50 ,000 geniuses in a data center. So you could have a small country coerce the world into it, whatever. So you're like, holy cow. All right. So this is a general substrate of intelligence, of technology that's applicable to a lot of things. Very generalized. It's not like workday HR software where you could just use a competitor. This is going to be part of our everyday life in so many different ways. And they're controlling whether it has a moral conscience. I mean, Anthropic has its own constitution. It has its own soul. It's not the U.S. Constitution.

51:36Emil Michael:So you're subject to that, plus whatever whims and how that changes. And that's a scary thought for Americans generally. And I think that did come through a little bit today. And in the coming years, it's going to be a bigger and bigger deal.

51:51Bill Friedberg:So take us through OpenAI software, Gemini software, and Grok software. Have they pushed back on any use or are they like Dell or Apple? They sell you a computer and you have the computer and you can use it as you will. Have any of those given you any pushback?

52:09Emil Michael:So Grok's all in for all awful use cases across all classified and unclassified networks, as you'd expect because, you know, Elon's truth-seeking. We want truth in Department of War. We don't want ideology because ideology will mess with operational decisions. Like, you don't want anything to be fake or tilted.

52:28Bill Friedberg:We're surrogating Google and... We have them.

52:31Emil Michael:We have Google for all lawful use cases on classified networks, and we're trying to move them to classified networks. They have to build out infrastructure because this stuff's complicated.

52:40Bill Friedberg:So they're in compliance in terms of what you're looking for as a partner And then I guess the last one is OpenAI. And Sam seems to be just characteristically playing both sides a bit. No, no.

52:53Emil Michael:To his credit, I called him and said, I need a solution. If this thing goes sideways, I need multiple solutions. I'd like you to be one of them. And he's like, OK, well, what can I do for the country? I was like, I need to get you up running as soon as I can. And he was trying to protect Anthropic to his credit. He was like, don't call them a supply chain risk. That's bad for the industry. Maybe I can negotiate terms that they'll find acceptable. But he's in the middle because they compete for the same researchers. So a lot of this comes down to this thousand researchers, like baseball players that get traded between these companies.

53:33Emil Michael:Moneyball, yeah. These are the best of the best. It's a very moneyball-ish sort of thing. and there's not that many of them and you lose 20 % of them and all of a sudden, they launched Claude Code before you launched Codex or something like that. And then the numbers changed pretty dramatically. So he was being a real patriot to his credit and trying to help Anthropik while they were trashing him and recruiting from his company. And I'm not biased. I want all of them. I want to give them all the same exact terms because I need redundancy. I want to see if they diverge or not, or if they converge, maybe I only need two over time.

54:10Emil Michael:But we don't know. It's too early.

54:11David Sacks:But why keep them in the mix, Emil? So if there's clearly a difference of operations and philosophy and how they want to run their business, and there's other models, is their model particularly good at particular applications that make it important to keep it in the mix, given that there are three or four other kind of alternatives here? Anthropic, you mean? Yeah.

54:33Emil Michael:Well, because the number one reason we were having this conversation at all is because they were deeply embedded. So now I have to unentangle them. And the other companies have not gone as heavy enterprise, enterprise sales, forward deployed engineers, government business. So they have to catch up, not necessarily the capability of the model, but just how do you serve the government? And probably because just way ahead on that.

54:58David Sacks:But the models themselves, you don't think are uniquely advantaged? Or do you have a view on that at this point?

55:02Emil Michael:I don't have a view on that. I don't think they're, you know, certainly cloud code was innovative and ahead. That's true. But do I believe in 12 months Codex is not going to be close?

55:16Chamath Palihapitiya:I think it will be.

55:16Jason Calacanis:I think you're right. There's an asymptoting that's happening. If you just look at the confidence interval on how over-performing or under-performing some of the leading models are, the error bars are shrinking, right? The confidence intervals, these things are all kind of becoming the same. Eventually, they're all getting access to enough power, enough compute. They're generating similar results, it turns out, which I think you would expect. So even more important that you have a complexion of models. The other thing, Emil, I don't know if you saw this, but they posted about the revenue ramp of Anthropic.

55:52Jason Calacanis:And I have a small software company called 8090, and I asked the team, let's go look at our OPEX. I posted it because I was so shocked at these numbers. Our costs have more than tripled since November of 25. Between the inference costs that we pay AWS, which is ginormous, between our cost with cursor, between Anthropic.

56:13Emil Michael:anthropic we are just spending millions so now more per unit and more more in aggregate both

56:21Jason Calacanis:but the problem is that my costs are going up 3x every three months my revenues are not token use is very addicting and by the way because everybody has gotten infatuated with what we call these ralph wiggum loops like just like send the thing off and like it'll just go figure something out a it never figures anything out and b you just get this ginormous bill from cursor so one One of the things we had to do was just, we had to say, guys, you got to deprecate cursor because you're just wrapping plot code and charging us way too much for these tokens. But I don't know if you're seeing any of this thing where like the tool usage, it's so great to use these tools.

56:56Jason Calacanis:Let's be honest. It's super fun. It's like you feel like a genius. But then the ROI of these tools are really important. I'm not sure that that's as much of an issue for you or not in the department of work. Not yet, but it will be.

57:08Emil Michael:It will be. For sure. As people find more and more use cases, the use cases get more sophisticated. So the next marginal thing you have to do is likely to be harder and therefore be more consumptive, right? Right, right.

57:24David Sacks:Let me just ask, Emil, the important question that I think triggered a lot of the news this week is why then designate them as supply chain risk? Why not just abandon them, move on, use the other vendors? Like, why take this kind of punitive action? Yeah.

57:39Emil Michael:So I don't view it as punitive and I'll tell you why. It's if their model has this policy bias, let's call it, based on their constitution, their culture, their people, and so on. I don't want Lockheed Martin using their model to design weapons for me. I don't want the people who are designing the things that go into the componentry to come to me. because if you believe the risk of poisoning, yes, it can enter into any part of the defense enterprise. But it's just the defense enterprise. So Boeing wants to use Anthropic to build commercial jets, have at it. Boeing wants to use it to build fighter jets.

58:22Emil Michael:I can't have that because I don't trust what the outputs may be because they're so wedded to their own policy preferences.

58:29Bill Friedberg:I guess a dovetail to that is why couldn't this have been handled quietly? Is this Anthropic who made this a public spat? Or was it the administration that made it a public spat or two to ten?

58:42Emil Michael:I mean, they have a very good, sophisticated press operation and like really good and painting us as doing mass surveillance where where where their issue was like some commercial database thing that someone else could buy. They didn't want us to buy to use it, which I'm not even sure we buy them, except to do recruiting for soldiers. And, you know, we run schools, hospitals. We do a lot of things that do do we don't just fight wars. and the way they were able to characterize these two things, which are genuinely scary to people, but were not the real issues. It was really the, I worried about them shutting off our system at a moment of need or them messing with our system at a moment of need.

59:26Chamath Palihapitiya:Those were, we were scared.

59:27Bill Friedberg:The thing that came to mind is if they are selling you batteries and you need to use the batteries or the laptops, whoever you need to use them lawfully, okay, that should be enough for them unless they are peaceniks and they don't want to be involved in selling weapons, which, by the way, was Google's position for many years. They just didn't want to be involved in it because, to your point, they want to recruit talent that is also aligned with that. So there just seems to be maybe this isn't the right partner for the Department of War.

59:56Emil Michael:Yeah, if you don't want your stuff to be used for Department of War stuff, you shouldn't be selling to the Department of War. Pretty straightforward. It's in the name.

1:00:04Bill Friedberg:It's in the name. name. Well, and then also I have to say, you know, you said, hey, we don't know how we're going to use this thing. Like, it immediately came to mind was like 9-11. You have to go check with them. You know, if you find out there's another 9-11 unique, you know, black swan event that's going to occur and you have to go clear with them. Like, that's speed is important.

1:00:27Emil Michael:That was literally the comment when I was in a room of 20 people. So this is not undeniable if everyone wants to deny it. And I was given these scenarios, these Golden Dome scenarios and so on. And he's like, just call me if you need another exception. And I'm like, but what if the balloon's going up at that moment? And it's like a decisive action we have to take. I'm not going to call you to do something. It's like not rational. And so that was another holy cow moment of like how they think about it.

1:00:58Jason Calacanis:That just means that what he wants to be is the secretary of war. That's right. he wants to be the the god king there i guess yeah you can't do that the thing that shocks me emil i don't know you maybe you can't say anything but make guys you can comment on this it's clear that anthropic just lost all the republicans but i think that if they think that they have the democrats that's fleeting as well because i think progressive democrats fundamentally just hate silicon valley and technology and so there's no way they're going to let some god king over here that they don't control either. And so in both ways, I think they accidentally may have pissed off every constituent.

1:01:36Jason Calacanis:The longer term fallout amongst them and progressives will come home to roost because as the progressives want more control, and these guys push back on them, they're just going to fall into the same situation.

1:01:48Bill Friedberg:Yeah, I mean, it's an interesting perspective. I think if you don't want to be involved in war, that's your right. I think you mentioned this like three times to moth just don't sell bullets if you don't want to be in but

1:02:01Jason Calacanis:you can't call smith and wesson and say can i the other thing is what the hell was the senior management and the board talking about over these last few days because to me it would have sounded insane so then the question is were people just so breathless to buy this revenue curve what is the board doing what is the senior management really doing what do you change guys what do you think you would tell them if you were sitting inside of the board of anthropic

1:02:25Bill Friedberg:If you're an investor, you're on the board, what do you say to Dario when he says, hey, I need to dictate to Emil and Hegseth how they use my tool and everybody else is just saying lawful use as the standard. What's your coaching advice?

1:02:39David Sacks:Well, it's also a very unusual circumstance because I don't think any business in history has grown as fast as they have in the last 90 days. So they've added, what was it, 6 billion of ARR in a month or something? I mean, that's absurd. It's absurd.

1:02:55Bill Friedberg:it's absurd it's a great product open claw has driven a lot of this it's if you're on the board

1:03:00David Sacks:you're closing your eyes yeah you're shutting the f**k up you're just shutting the f**k up because something's working you're selling a secondary i think he's off doing his thing and they're gonna let him do it and i don't think that company's worth 350 billion anymore god knows what

1:03:14Jason Calacanis:it's worth oh that's interesting where do you if you get put a block of stock right now where do you put a bid in i'll tell you where oh my god i had i had this conversation at dinner two nights

1:03:22David Sacks:ago, it's like you have to pick between OpenAI at their current mark, Anthropic at their current mark, or Google. And it's either multiple from here or net market value creation from here, because those are actually two very different conversations. Explain the difference. I think the net market valuation, because Google's already worth$3 trillion. So if they double, they've added$3 trillion. But I think Google is the bet. I think Google is the market value crater bet. But I think Anthropic is the multiple bet. I think Anthropic is a trillion five market cap at the end of the day.

1:03:56Jason Calacanis:Unless this blows them up. You're still buying the 5x versus the 3x kind of thing. You'd buy the 5x instead of the 2x. But if you could put a block of stock now, do you buy it at the last post or do you buy it at a discount? Or do you just say, I just buy it at the last post?

1:04:10David Sacks:Anthropic is worth a lot more than 350. That's for sure. It's undervalued compared to chat. They just added 6 billion in the last month. And I will tell you anecdotally, anecdotally, I am everyone I talked to is on co-work. Everyone is like gone deep on this. Everyone's amazed and shocked and actively using it. And everyone's saying the same thing, which is Anthropic may actually be fulfilling the promise of AI. I will also say that it's only going to take 90 days for Google to flip on a virtual version of co-work. And once Google like has this integrated with G Suite, and you have a virtual hosted version of co-work, I think Google sweeps the market with this same competitor.

1:04:48David Sacks:But right now, Cowork is such an incredible product. And everyone's saying the same thing. It's like giving truth to AI.

1:04:54Jason Calacanis:Elon said something with respect to Grok, which was that he expects it to exceed all of these coding models, probably in the May spin, but for sure by June. So to your point, Freebrook, I guess my question, guys, to you is like, what happens? Okay, what do you guys do? Emil, what do you do when all the models asymptote? Let's just say by October of this year, let's just say I can guarantee you, just for the thought exercise, by October, all the models are the same. Do you just take a complexion of them all and say, great, we're going to build some governance layer around it and now we're indifferent?

1:05:34Jason Calacanis:Yeah, I would love to be indifferent

1:05:36Emil Michael:because then I could compete on price, right? And then I have one main and one redundant or two mains. And I'd need at least two. And Throbic's not going to be one of them if they continue sort of with their sort of posture. So then it would be three. And if one gets wobbly from a policy scenario too, because they all, you know, except for Elon's is based in San Francisco and has that vibe to hit. So you kind of want to have two or three at any given time. And yeah, then you price compete them. I do think Google has a long-term strategic advantage, not only because of their consumer thing, but because they have their own cloud.

1:06:17Emil Michael:So between them, they don't have the margin on top of the cloud that Anthropical will have to pass on. So it's an interesting economic proposition from them.

1:06:29Bill Friedberg:And just to build on your point, Friedberg, after you finish your insightful comments, here, pull this up, Nick. almost on cue, Friedberg. You're such an oracle. Here is the announcement from Google. Google Workspace is now integrated for agents and 40 agent skills were included today. Amir, you've been great today, super honest. Dario's position, I'm going to give you some fastballs here. Dario says, the real reason the Pentagon and Trump admin do not like us is that we haven't donated to trump while open ai greg have donated a lot here's claude's answer to that claim here's nine companies and their activities with the administration from the inauguration to attending the inauguration to the white house ceo dinner to the melania documentary if you go through and you look at these nine companies microsoft apple tim apple nvidia amazon they have all participated there's one company that hasn't participated and that's anthropic are is anthropic being singled out because they are not genuflecting and because they're not paying the cover charge people say this administration is pay for play that's the accusation he's making i'd say maybe there's a cover charge nobody likes to pay it but the other companies have what do you think here

1:07:57Emil Michael:I mean, it's literally one of the dumbest things I've ever heard. Okay. Truly, just because I'm like, I'm in the Department of War. I need to win wars. If you help me win wars and I don't have to waste time transitioning you out, that makes me thrilled. It's a criticism on me because it's not like President Trump dipped in and is like, hey, Emil, by the way, those guys didn't give me any money. You can't use them anymore. Obviously. It's sort of like invention in his own mind. It's like, I don't know if people sleep at night if those thoughts get in there. And I was trying to work with them. Why would I spend three months trying to negotiate with them to get to a simple standard if I would have just said, okay, guys, you're out.

1:08:40Emil Michael:Bye. So I think it's just some internal psychosis. That's the only way I can explain that.

1:08:47David Sacks:Okay. It could be on Dario that he's antagonistic to the administration, both with respect to how he operates commercially. And it's also reflected in the fact that he doesn't want to support the administration.

1:08:57Jason Calacanis:I have a different theory. I think that they have a massive instance of co-work running internally that helps them come up with business strategy. And I bet you there's like some element of AI that says, yeah, you should do it. Do it. It just makes sense. Zig where they zag and get more press. And so now there's some f***ing clodbot telling them to basically tell the Department of War to pound sand. It's going to turn out to be the stupidest decision.

1:09:24Bill Friedberg:Listen, if I was chairman of the board of that company, I'd pull Dario aside. And I'd say, listen, you're obviously a genius. We obviously have the best tool in town. This is not a battle you can win. And it makes no sense. You're going to come across as not being patriotic. And Tim Cook is showing up for the Melania premiere. Would it kill you to support the president? Would it kill you to show up? look what happened when biden excluded elon that ankled him show up for the president show up for america and be a patriot you don't have to donate but be a patriot and show up for

1:09:56Jason Calacanis:the dinners that's terrible advice here's my advice okay here's your advice okay hey dario call a meal back right now and say you know what sorry we f***ed up we're gonna own this and we're going to put out a press release that says we support our customers use of our models to do everything and anything that's lawful number one and number two that our terms of service are written in stone and that you can expect solidity and reliability from us and this was just the

1:10:28Emil Michael:misstep camille how do you respond i mean i would say that's what i've always wanted i need a reliable, steady partner that gives me something that'll work with me on Autonomous because someday it'll be real. And we're starting to see earlier versions of that. And I need someone who's not going to wig out in the middle. And we're just at the early stages and is rational. But then, you know, you called President Trump and your 5 ,000 word essay on Friday, a wannabe dictator. You're going to have to apologize to more people than just me.

1:11:01Bill Friedberg:Yeah, maybe time to re-underwrite the position here. Let's just say, kumbaya, everybody. Kumbaya. We've solved the problem. And look who's on the line. Surprise guest. Dario's here. I thought I would surprise everybody. Nick, pull Dario up. No, he's not here.

1:11:14David Sacks:What's your view on how the industrial supply chain for hardware components and systems is coming along in the United States? Because my understanding is we're trying to reduce dependency on Chinese manufactured components. Where are we with respect to where we need to get to in the US manufacturing supply chain?

1:11:32Emil Michael:We are early days, critical minerals. You've seen the action around that. You'll start to see. So I have the Office of Strategic Capital, which has$200 billion in lending authority. And what we're trying to do is, it's like treasuries plus 100 bps, loan to companies, show them that the department needs their solid rocket motors, their batteries, their fiberglass, like all the things that we're heavily dependent on for our defense industrial base that are completely outsourced to China and domesticate them here. and we've got a bunch of great people running it. But it's early days. It's going to take for the rest of the term to get...

1:12:17Emil Michael:I think we'll get critical minerals done before the rest of the term where we have access to what we need to from us or allied countries. But from batteries, it's like the next problem I'm trying to solve, for example. Batteries are totally outsourced both technologically and from lithium to China. And there's like, you know, kind of call it 20 critical things. If I could get to all of them at some level, but then it'll take a few years for them to like build plants and do that stuff. But it's very important. I hope whatever administration comes next continues it because I'm all free market. But we outsourced so much that, you know, it crippled sort of the kind of assembly part of putting all these things together.

1:13:04David Sacks:Do we have a munitions risk right now? given the conflicts that we're involved in?

1:13:08Emil Michael:We don't have a munitions risk, but we do need a plus up because the Europeans are taking a long time to contribute. Like Ukraine, Russia has consumed a lot of munitions from all over the world. And then obviously these conflicts we've been in and we need to have like the next generation. We're still there's still a large degree. We're fighting with 1980 Cold War weapons. right, and not modern weapons. And so we need to plus up those things that to regenerate them. I mean, our nuclear missiles are 50 years old. Some of the planes are 40 years old. So all that has to be renewed.

1:13:49David Sacks:Do you think it's just speak to the venture capitalists in the audience? Are we in the early stages of this kind of defense tech boom? Is defense tech well funded at this point? Or is it kind of too hypey and bubbly? And that's not really the issue. It's not about funding the companies. It's about funding some of the further upstream issues that we're facing. What's your view on where we are?

1:14:10Emil Michael:There's more defense tech venture capital than ever by, you know, 3x more than last year. So, you know, it's growing. What I need to do and what the department needs to do is have some of these companies win big contracts quick, like whether, you know, Andrel, sure. Saronic, sure. Like a bunch of these companies so that more money flows in, more entrepreneurs do it, and I could buy more. Because generally, I do think warfare is going from big carrier ships that cost$20 billion and a decade and a half to build to mass, attributable, low-cost things. And that's what these new entrants can do. So we need those to succeed so that the flywheel goes with venture capital money, entrepreneurs' capabilities.

1:14:59David Sacks:In that sense, and what I've heard as kind of the explainer for this is we're moving from the old primes to the new primes, that there's going to be a small set of big winners, and then obviously lots of seconds and subs and whatnot. Is that really how this market's going to evolve? So are we going to end up with Anderil, Palantir, maybe three or four others, and that's where most of the value is going to accrue from a market perspective?

1:15:22Emil Michael:I mean, Andrew and Palantir want that, and I joke with them all the time about it, but I definitely want at least a second layer that's innovative and trying to disrupt the first layer all the time. I've had a mom and pop wholly owned company that makes these missiles called ERAMs that we really send to Ukraine, and they do it with like 30 people, and they can do 1 ,000 a year because they've designed and manufactured, and it's awesome. So I want companies like that to continue innovating. Maybe Andrel then buys them. But one of the reasons the primes are such a small number, it's not the only, but it's one, is they learn how to contract with the government.

1:16:00Emil Michael:They learn how to go through the bureaucracy. And that became a competitive advantage. I'm trying to take that competitive advantage away.

1:16:07Jason Calacanis:That's a really important point. How do you disassemble all that bureaucracy so that product innovation can actually get to you?

1:16:15Emil Michael:Yeah. Yeah. So we did a big... So part of it comes down to requirements reform. What used to happen is people are like, oh, we need a new fighter jet. So Army, Navy, Air Force put into the requirements and we needed to be stealthy, to hold a missile, to hold four humans. And it became this unbuildable thing, but the contractor didn't care because they're getting paid cost plus. so like sure i'll fulfill your requirements two years from now you're like that was never engineered properly it'll be another few years late and a couple more billion dollars so we're trying to change that to i tell you my common operational problem i need a bunch of missiles that go 500 miles or more that have this kind of blast come to me with solutions as little requirements as possible on that side and then the contract piece trying to get to as close to commercial contracts as possible and this is going to and this is where the startups are so good They'll do fixed cost pricing.

1:17:13Emil Michael:They'll do, you know, you don't pay me as much if I deliver late. You pay me more if I deliver early.

1:17:20Bill Friedberg:It's very disruptive to the existing system.

1:17:22Emil Michael:Super disruptive. But that's what I'm like waking up every day trying to do.

1:17:27Bill Friedberg:So you could put out as something saying, hey, the straight and four moves is super important. We need to keep it open. We need these type of devices to keep it open. but come to us with your ideas and let them be creative entrepreneurs as opposed to, you know, just trying to goose the profits. Yeah, it's really brilliant.

1:17:44Jason Calacanis:Yeah. Emil, you also oversee DARPA, yeah? Yeah. DARPA is the father of the modern internet and it's created a lot of really critical technologies. Can you talk about what's going on in there? Are there interesting things that you think our audience should know about that you're trying to push forward?

1:18:00Emil Michael:I mean, it's probably my favorite part of my office is like, because there, that's where you, it's sort of like, it's still a very honored profession to be part of DARPA. Like, you know, being in government service for a long time is sort of reduced in its stature since the Manhattan Project. Now, because now if you're a great, you know, someone who wants to do rockets and stuff, you go to SpaceX. DARPA still has the best of the best. and so the most creative ideas happen there one of the things that they're working on that's public is they're trying to use biology to synthesize critical minerals so so how do you so how can you just pull them out of ground use biology to do it so you don't need to do all this crazy messy dirty refining that would like change the game big time on our ability to get the critical minerals we need faster and leapfrog the chinese in terms of tech um so they're doing a lot of that kind of stuff.

1:18:56Emil Michael:They're deep in cyber. Cyber attacks are the next huge threat with AI, right? What we saw with creating all these agents to attack systems, did Anthropik actually happen to them? So they're working on this. There's not a ton I can talk about, kind of DARPA, because it's so classified, but those are a couple of examples for you. All right.

1:19:18Bill Friedberg:Speaking of classified, just two quick questions before we wrap here. Are there aliens, and when are you going to tell us? as a number two in all seriousness. I'm curious, what have you learned about China and where they're at and the threat there and our ability to counter it? Give us some idea of where we're at as a country because we hear a lot of hyperbolic stuff. They're building this incredible mobile, small Navy. They've got hypersonics. They're just way ahead of us. We hear these things, but realistically, are we competitive?

1:19:51Emil Michael:I fought, well, I'll answer your first question, which I fought for the alien portfolio. I didn't get it. All the guys on my team were like, you got to get this for us. Please talk to the secretary. We want to do this. But I was like, as long as I had a hundred percent access to everything, I would do it because that would be, it would be amazing. Right.

1:20:15Bill Friedberg:Lifesamers would be a game changer.

1:20:17Emil Michael:But on the second one, it is true that Chinese have had the greatest military buildup in world history in the last 15 years. And we're asleep at the wheel to some degree because we're focused on global war and terror. So they've advanced without sort of us thinking about threat. That being said, our operational expertise and our space, we have some sophisticated stuff. our subs, our space layer. We still have the best stuff in the world, but we have to make sure that gap doesn't narrow. Right.

1:20:55Bill Friedberg:We can't be complacent. We should sleep well at night knowing you're there, knowing President Trump's allocating money towards this and he's decisive in his actions, but we cannot be complacent.

1:21:05David Sacks:I feel like this week was a true reminder of how fortunate we are to have the defense that we have for the United States. When you look at what happened in Dubai and in Doha and in Tel Aviv, and you see how people in their residential homes are getting attacked and bombed, you realize just how fortunate we are to have all of the layers of protection that we have by our government. And I've actually come around to this quite a lot. I'm a true kind of arguably libertarian at heart, small government, but the one thing that I've realized is so critical for us to have the freedom to do all the things we want to do is defense.

1:21:41David Sacks:And so I think it's an amazing institution, very valuable to the United States. Emil, thank you for what you do. Yeah, thank you, Emil.

1:21:48Bill Friedberg:Really appreciate you coming on and being so candid and thoughtful and insightful. This has been an amazing episode. We'll see you next time. Bye-bye. Love you, boys. Bye-bye. We'll let your winners ride. Rain Man David Sack.

1:22:07David Sacks:We open source it to the fans and they've just gone crazy with it. Love you. I'm the queen of Kenwa. I'm going all in. What your winners lie. What your winners lie. I'm going all in. Besties are gone. That's my dog taking a notice in your driveway. Oh, man. My avatarsher will meet me at once.

1:22:30Jason Calacanis:We should all just get a room and just have one big huge orgy because they're all just useless. It's like this like sexual tension, but they just need to release somehow.

1:22:38David Sacks:Wet your feet. Wet your feet. We need to get merch. I'm doing all in.

1:22:53Bill Friedberg:I'm doing all in.