EP #38 Palmer Luckey's AMA: The Politics of Winning the A.I. Race

0:00At about inch 360 this year after I sat down and had a conversation with Palmer Lucky, I opened it up to the A360 membership. It was a vibrant conversation to say the least. We had people just, you know, on the tip of their seats. One of the things that Palmer mentioned to the audience was don't follow your passion, follow your talent. Something I'm still trying to understand and think about whether I agree with. After this, I'd love to hear what you think of that. So get ready for an intense Q &A with Palmer Lucky, the young entrepreneur revitalizing the defense industry and someone who's changed all of our lives with Oculus.

0:43My massive transformative purpose is to inspire and guide entrepreneurs openers to create a hopeful, compelling and abundant future in humanity. And that's what I'm doing with this podcast, to open up every relationship, every conversation I have with you, to inspire you, to support you in going big, in helping uplift humanity. If that's of interest to you, please subscribe to this podcast, allow me to share with you the wisdom that I'm learning from the most incredible moonshot entrepreneurs on the planet. Alright, let's jump in. First off, I love listening to you. I think you're just hysterical.

1:19You're like a brilliant young guy that has a shit ton of money doing cool stuff in the world, but it could be just like that. So I think it was Winston Churchill. It was about war where we said we stand. We sleep soundly in our beds because of rough men that stand ready in the night willing to visit violence upon those that would do us harm. So this is a moral question about, I think we've been in the middle of a cyber war, a psychcog war for the last three years, probably longer, but it really came to the surface. What is, I think you're a freedom fighter, I think, and I think it's people like you that could maybe perhaps save us from some of the very communist people that many that run tech companies.

2:09And I mean, you have to remember that, you know, they did so far they've won i did get fired from my own company after they bought it so so that's a very very very i i hope that's true but thus far the communists running the tech companies should seem to be plenipalent fast one on me yeah well i think you're doing something about it so what if you could wave a magic wand and have something happen what is it what do you what are you hoping to do with everything that you're doing right now it's a defense company but behind that you know i think you know violences never in option unless it's the only option right?

2:43So what do you hope in to see happen? What would you like to see? I mentioned earlier this idea that there's no moral high ground in leaving problems as important as defense, which is violence, to less competent people. If you believe that it will be used at all, which seems a reasonable belief to have, then you should want really smart people thinking about how to do it in the best and most limited and most precise way. You shouldn't want people to say, You know what? There's going to be collateral damage because we only have bombs with this level of accuracy and this level of damage. I mean, in a perfect world, you could have a grain of rice that goes straight into the head of exactly the ISIS general that you want to kill.

3:26There's no collateral damage. There's nothing bad that happens outside of that very precise strike. And that's also going to limit the potential for humans' rights abuses and for mistakes. It becomes much more accountable. Basically, if you can get violence to the point where it's so precise that it is only acted and acted upon those that you intend it to. It's very easy to today for for someone to say, oh, well, you know, that was just collateral damage based on the limitations of the technology. In the future, you'd say, you have you are countable for every single person that you kill. And you have to be able to answer for why they are dead and why you killed them.

4:01I think that makes it easier for our democratic processes to regulate this. Like, I don't think the right way to limit our ability to to commit human rights violations is to similarly limit our ability to do the right thing. I don't think that we should give NATO square guns. Like the right thing you have to do is give them the powerful tools and rely on democratic institutions to if not be perfect, at least course correct away from the bad decisions that are made. Intelligence and accountability. Exactly. And I'll finish by saying if, I'm more afraid of evil people with pretty good technology than good people with really good technology.

4:38If our democratic institutions fall apart, they are gonna do a lot of harm, whether their technology is great or bad. It'll just be different kinds of harm. Yeah. Thank you. And I hope you use your brilliance to help eradicate a lot of the evil in the world. I hope that our democratic institutions make the decision to use my technology to do that. Thank you. Thank you.

5:02Hey, Jack. Good to see you. Hello? Yeah, we go. Hi, Jack. Good to have you here. Atlas Society. So, Palmer, you mentioned what happened to you at Facebook where you were essentially ousted for not conforming to the dominant political culture. Looking back, there have been some developments. Brian Armstrong, Coinbase, saying we're going to be a mission -focused company. If you don't like it, we'll pay you a very generous severance package. what Elon Musk has done at Twitter exposing some of what happened there. So have things gotten any better? Yeah, I think that things are getting better for two reasons.

5:40Some are in specific companies like mine, where the common mission is what unites people and what brought people in and it's not partisan. So, like, for example, I'm the founder and the CTO of Andoral, our CEO, Brian Schimp, is a Democrat and he does fundraisers for Democrats and I do fundraisers for Republicans. But guess what? We get along perfectly fine because there's so much we have in common on national security. and we tell our employees, that's what we're here to do, that's what we're here to work on, and we can disagree and argue within the realm of what our mission is, but if it's not relevant to our mission, you gotta do that on your own time, because we can't, we cannot afford to be a partisan company when you have to work with the entire country, from administration to administration, from, you know, Congress to Congress.

6:23So for my company, it's pretty easy, like, you know, Coinbase has been doing this. I think the other one is what you're seeing in companies is other companies that are not necessarily required to be ideologically neutral are starting to move that way because of rising interest rates. I think that crazy political monoculturalism was a zero interest rate phenomenon. It is the thing that companies can afford to get away with. They can afford to get away with it when money is cheap and growth is for everybody. You can basically just do lots of dumb things and still succeed. And I think as companies are having to realize, no, we do need to compete for talent.

7:01We do need to actually compete in the marketplace. We need to make money. They realize they can't afford to have these crazy witch hunts going on regularly in their own rank. So I'm actually optimistic that this was kind of like a sort of like a Sodom situation where I was like, oh, it just happened because it became, things got out of control because it was so easy for your business to succeed even as you were bad. So I'm hoping for a return to sanity. That's all. Nice. Great question, Jack. Thank you. Thank you. Harsha. This is for you. So you mentioned about those robots that you need to control remotely.

7:38So I was working at Microsoft Robotics building a lot of human and robots. And then my team went and started doing HoloLens. And I went and built HoloSoot exactly for controlling it's a full body thing. And I couldn't get into Lockheed and all. They kind of really, as you said, the senior US system was not there. So now already Indian Army and Indian spaces is using it. So please come and visit us here, and I would love to talk to you. And I mean, exactly the same kind of problems that start -ups are happening. I started it here at Go to India to get the vision done. Now I've come back to Silicon Valley exactly because of your thing.

8:13So please visit us and we can. That's awesome. My dance tickets pretty full, but send me an email. And if anyone else does, it's just palmeradandro .com. So my name and my website, I'm pretty easy to reach. But I mean the reason you couldn't get into Lockheed, there are cost plus contractor. They make money by making things that they can charge then percentage of profit on top of. They are not incentivized to reuse existing technologies unless they are forced to by the government requirements. And so if they were gonna do what you were doing, they're not gonna wanna license it from you as an existing technology.

8:41They're gonna wanna convince the government, oh, you need this and you're gonna need to pay us for a 15 year research program where you're gonna pay us to design us from scratch and not look at anything that's been done out. By the way, once they've tasted that, they're never going back. No, the funny thing is, it's such a, it's such a, it's a self -reinforcing negative loop, where yes, you know, yes, you can make a lot of money doing that way, but only with tiny margins. And so their business is always terrible. Like, Lockheed is only worth about $100 billion on $67 billion in revenue. Isn't that nuts?

9:12They're worth a one and a half ex multiple of their revenue? And it's because they basically make, they make tons of money, But their margins are so low that they're not actually that good of a business. So it's good on my I'm on my number two. Sorry if anyone's from Lockheed Charles you're up next on zoom Where are you and what's your question? Thank you for What you're doing for our country. I had a question about to get your opinion as to to the relative strength of the United States on the global stage, especially, you know, we read about the hypersonic missiles that Russia and China have, and we evidently were falling behind that technology.

9:55But we also listened yesterday to the fact that, you know, in five years, whoever is winning the AI race may actually win it for the next century. And so I'm just wondering in your involvement in the defense industry, if you have any thoughts on where we stand competently. Thank you. We're in a pretty good position right now. The biggest problem that we have is that China has really pulled themselves up by their bootstraps over the last couple decades, enabled, unfortunately, by a lot of very bad U .S. foreign policy decisions. There's this kind of myth that is unique to America. And I think it's based on our media, our comic books, our movies, our video games, our stories about things that are going bad, and then at the last second, the brilliant guy has the twist of the mind that saves everything with just the exact right idea.

10:44I think we're actually past that point with China. That's not how reality works. In the real world, you can make bad decisions that cannot be undone without decades of work. So I'm talking about like bringing back advanced manufacturing of the United States. It's not about bringing back a few machines. It's about training an entire lost generation of manufacturing process engineers, fabrication engineers. people who didn't get into those degrees because there's no opportunity for them in this country even as China has hugely concentrated the resource there so These are things that are going to be much harder than like one bill one factory It's going to take us literally decades to solve it and so we need to figure out how we're gonna get through the next few decades I think right now we're in a pretty strong military position, but China also gets a lot more for each dollar they spend.

11:32People point out that we spend two or three times as much as them. Well, I'll tell you, as someone who has built millions of virtual reality headsets in China, they get a lot more than two or three dollars worth of value for every dollar they get spent in China. They are very efficient. They know exactly how to most efficiently use that money. And so I get that we've got a few things. We can hope their economy collapses. That's one thing that can happen. And then if their economy collapses, they'll be too focused internally to be able to go on these kind of you know, escapades abroad and try to take over over democratic nations, they'll probably have to stop arming all of these other countries around the world that wish us harm and wish our allies harm.

12:10But at the end of the day, the, I guess for the last thing you said, which is there's this theory that AI is going to, you know, to the winner in AI goes all to two quick things there. One, Russia actually tried to become the leader in military AIs before the US was making it, taking it seriously. one of the quotes that's in the androle pitch deck actually to our investors was a quote from Putin speaking to a bunch of high school students Trying to convince them to work in the defense space and he said The country that leads an artificial intelligence will become the ruler of the entire world I was like wow, that's so honest.

12:45That's like James Bond villain type dialogue We will rule the entire world and he says that because he thought it was a way they could potentially asymmetrically opposed the United States, China believes the same thing. I think that if China gets ahead in AI, we might have to take drastic action on the economic side. People are like, oh, what if they figure out how to make things for a tenth of the price of the United States? Won't we all just buy stuff from China? Isn't that economic collapse for the US? And to which I'd say, history has shown that when situations become that unbalanced, the United States and our allies will just decide, okay, we're just cutting off imports from them.

13:19We're cutting it off. It doesn't matter how cheap it is. It doesn't matter the harm. We have to stop this problem. I think that is that is one of their worst case scenarios because they cannot live without us for Not yet. They they they still need us. They still need the West They still need us to make many of Michael processors. They still need us to make their technology and they still need us to sell stuff to And to sell the agriculture because we grow everything. Thank you for your question Charles George good to see you Hey Palmer over here. Thank you. I loved everything you're doing. Everything you said I was on the edge of my seat.

13:55I'm an emerging VC here in LA on top ventures. And so my question you mentioned your pitch text. So I kind of want to go back to that and pick your brain about what have loved to have been there when you were starting the first VR company. What would you advise on special founders like yourself? What do you think, as you look back, what makes you special, especially when you were just starting out 20 years old, right? And I'm sure you probably have similar friends in your community. What would your advice to me and some of the other VCs be here in being able to work with founders like yourself and help you with your journey?

14:33To be honest, Oculus was very much a case of the right technology in the right place at the right time with very little planning or thought behind it, and I wouldn't model your investments after that. Like, because look, I was working on VR because I loved VR. I truly believed in it. I had decided as a gamer that VR was not just the next thing in gaming, but the final thing in gaming. That's what I wanted to be working on. What science fiction was your most inspirational for that, by the way? Oh, man. We'll probably, of course, Neil Stevenson's Snowcrash. Okay. But, you know, I also like started online.

15:02And, like, as a child, my favorite book was 20 ,000 Leagues Under the Sea, which is a highly technical book. I wish more writing was like that today. But, anyway, the point is, I happened to be working on VR at the time of the year. time when modern rendering technology and display technology and motion tracking technology simultaneously made good VR viable. I could have been just as passionate five years earlier and failed. I could have been just as passionate ten years earlier and failed. Timing is everything. It really was. I don't want to act like I was like this, this who saw the future. I made an irrational insane decision.

15:34I was like, I'm going to drop out of college and work on my VR toys because that's what I want to do. That sounds like a lot of fun. And I would say that is not a good way to start a company. I mean, we've talked about this, but I, one of it when my bits of controversial advice to founders is, don't follow your passion, follow your talents. Because people are told, oh, follow the thing you're passionate about, like, Andrewl was not me following my passion. I did not want to work in defense. I did not want to be building weapons, but I felt like it was something really important, and I felt like I had the talents that I could use to do really good things in that space.

16:06But people say, oh, it must be more fun than VR, right? Nope, VR's way more fun. I had a way better time every single day, but weapons is important. And so I want to work on that. So I think that follow your dreams and follow your passion, that was great advice in the 1970s. When the number one most desired job for children was astronaut. Astronauts were fighter pilots, PhD mathematicians combined. And today, do you know what the number one job that kids want to be is? Contact me later. No, it's a YouTuber. and then the next one is professional gamer. I think it's really dangerous to tell people, follow your dreams when their dreams are so bad.

16:45And so, like what I would advise to you, if you're an emerging VC, I would say, like basically ignore Oculus. That was, we did a lot, right? But it was crazy good luck to. I would look more at Andral. You wanna find somebody who is rationally looking and saying, I have this certain set of skills. And so do my co -founders that's going to let us solve this problem that matters. And that's what here's how we're going to do it. Here's why we're going to do it. Here's why we're mission driven. Not because they say, oh, I just love doing this. I just have this dream. I've always wanted to be that. In my experience, it's the ones who are mission driven, who feel like they're driven by that goal that are going to be the most successful.

17:32also invest in people who are angry and have something to prove. I think it's a big part of why Andrews done so well is because I was fired and I'm enraged by that and I just read a big chip on my shoulder. And I'm serious. It sounds like I'm just making a quip, but there's a lot of founders I see where some of them were wronged by their former employer. Some were wrong. They felt by their industry. Others were wronged. Even directly by their families, inflicting some financial hardship on them. And a lot of there's a lot of good founders out there say I'm going to show them they'll see they'll all see and that's what gets them up In the worst of energy.

18:08It's infinite. Yes, we need nuclear Thank you George. It's good to Roger. Hey Roger Hi, this is a question for everyone I'm Roger Hamilton from Genius Group and this time last year I'll summit the big theme was the Metaverse that was all about the metaverse and Metaverse never had is like mass viral wow moment the way AI has this year. And we know it's open AI and now we see Google Microsoft. While we see also meta, not really talking much about the whole metaverse anymore. So it seems to me that the AI graphics that we're seeing and what's happening in terms of rendering virtual worlds could accelerate the wow moment for the metaverse.

18:49So my question is, do you think it's going to happen soon rather than later, any predictions. Which company would you put your bet on as to who might be the one that craves that well moment for the Metaverse and will it be matter? I mean, you know, okay, the Metaverse, parallel world that exists alongside and among star -owned, merging the digital and the real, you know, I think it's not just virtual, you know, purely virtual space. It's that combination of the two. I, so running backwards in order, I don't think the first big, well -moment that we see is going to be from one of the big players.

19:23Why? Because the big players have to make bets and they can only pick a few of them, right? They can pick one or two things and bring their massive resources to bear on that handful of bets. But that means that they're competing against hundreds, if not thousands, of companies that have a few people that are trying to transfer to the first three little mammals. Exactly. The furry little mammals that are eventually going to turn into people, there's a whole lot of them and they're all trying different things. And maybe none of those companies are - And they're crazy things. And they're big companies we never try.

19:52They're crazy things that we never try. I mean, one of the most powerful things with Oculus, when we launched, we started shipping these development kits. We got about to 55 ,000 people. And 55 ,000, I'd say, most of the game developers made garbage. Maybe a couple hundred made things that were okay, but there were a few dozen that really opened your mind. You saw it said, oh my God, this is the future of gaming. This is the future of computing. I get it even on this primitive hardware. and i think it was because we had so many people working that inevitably one of them would find that magical thing i don't think it's going to be a big company it's going to be one of these many of our why did google video fell and larry spend one point six five billion to buy youtube yeah exactly why this is this exactly why did they fail i awkward score board as well right because the whole mindset of having a big i think there's one reason why they failed was that the lawyers Oh, you can't allow that video to go up on Google video.

20:48This is true even today. So you have things like Horizon World, which is Facebook's Metaverse platform. And like, one of the reasons is bad is the lawyers. You know what the best Metaverse platform is right now? It's VR chat. Why? Because there's no copyright enforcement and mass copyright infringement. And anyone can make anything with no lawyers involved. Because there's not enough money to be even worth suing the people running the company. That's the world that has the most active users, the most world's the most creativity. And last question we're going to go to Josh on Zoom. Josh? Yes, I'll zoom in from Denver.

21:20It's the fascinating chat. I absolutely love the obvious passion in the group here. It's a great reminder for us all to dream bigger. And specifically, as entrepreneurs with these high tech and very detailed concepts, how do we hide them into our simple daily routines or day -to -day living from a simple basis? I mean, I often like to look at problems from the perspective of how I would solve them, if my technology had, it wasn't my technology. I see a lot of problems getting solved where people are trying to find every use case for every shiny new thing, and they're like, oh, we're gonna do VR education.

21:54So is it actually better than anything? Or is this just iPads for education again? Or it's like, oh, we got to buy iPads for every kid, and that's gonna turn every kid in the country into a super genius. No, that's not true. The people are doing it because it was shiny, not because it was the best solution. You know, and like, look, I'm a big believer and for example, the metaverse, broadly. My email signature for 10 years was see you in the metaverse. So you can't accuse me of being a trend jumper. I was crazy my whole career. But nonetheless, there's so many new companies that are like, oh, the metaverse solves this problem.

22:23That problem, I have to look at them and say, does it really, or would this be better with solved with like a pen and paper? Like, well, you're trying to keep track of the things that are going on in your day. So you put on the VR headset and you're visualizing all of the different places. I'm like, God, you literally just need this. That would be better. And also phones, phones are actually better than AR and VR for some things. And so when I'm trying to integrate, when I'm trying to integrate the stick into my daily life, I'm trying to make sure I don't fall into the trap of using tech for the sake of using tech in my everyday life for trying to solve a problem that doesn't need it, that doesn't solve it.

22:55It's hard for me because I'm a gear head. I'm a tech no -hat. I love the technology. But I don't have it. I had a rule of no unintentional gimmicks. Yes. It's going to be a gimmick, make it intentional and lean into it. But other ones, you don't have to. I don't have to. you can tell everyone else that this is incredible as long as it is at the end of the day you say this is so dumb all right guys let's give it up for a stay safe from my and for bomb