Josh Wolfe on America’s Next War and Why It Isn’t Taiwan

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1:10I'm talking, of course, about the group chats. Madeline, what is the state of your group chats? My group chats? I'm not in as many group chats with world leaders and billionaires. Eric, have you ever been out into the group chats? No cabal group chats. Eric Thornburg, who sort of kickstarted some of this conversation, announced some of them on Twitter and I tried to get in. But no, I think I was exactly the type of person they were trying to keep out of the group chats. You know, obviously I have my, what I have a MSM talking point. Seriously, I have a small thread we call MSM talking points, another one, you know, debate club with reporters.

1:46Anyway, let's give the context on the story. You want to give the quick sort of rundown just so people have that. Ben Smith published a story about, you know, know, the group chats that changed America, which was basically group chats kind of really spearheaded, you know, by Aaron Torberg and Mark Andreessen and the Andreessen crew, you know, putting all of these Silicon Valley leaders together with influential people in Washington. And his conclusion is that it really led to this moment that we have now politically with, you know, Trump coming back in Silicon Valley is kind of all gathering in boosterism of Trump and that pitch.

2:21Part of it is that these chats are, you know, behind closed doors with the most powerful people in the world. They're not building in public. And they began because backlash to the woke-ism and the scolding on Twitter. Exactly. I think they would say, oh, cancellations and wokeness started this. And then we got chased off the internet. We created group chats. I mean, I think a key one - How much is being chased off or, you know, like choosing to leave, you know, like I listen, I've been the loudest on say what you can't say. Like, isn't bravery there? This is a class of people who talks about sort of manly virtues, you know, and bravery is a big one.

3:01And then they are not, they don't have the courage to say what they actually want to say. You know, it was such a game of like, Oh, what can I, I don't know what I can say. And then they go to the group chats. I mean, you can talk to your friends in private. And in some ways, people are like, did you know about this? It's like, oh, I knew they had group chats. And certainly we knew when the Silicon Valley bank crisis that some of these group chats were key to passing the message along. And I think we put that either in the podcast or some stories. That was kind of, I mean, that was kind of an open secret at the time, right?

3:30Like how everyone reacted, you know, we kind of knew about them, but we just weren't in them. Yeah. I mean, Ben Smith's story in some ways, you know, you add mystique to these things. It's like, oh, a bunch of people talking in a thread, you know, not that shocking. But then it is it was it was definitely interesting to see. And I didn't know, like, for instance, that it's funny that Mark Cuban ends up being the great advocate for Democrats like he's out there. But he's not like our best policy mind necessarily. I don't know. I do think sometimes he's like conservative led discussion groups sort of pick.

4:06Like, you know, it's like Jason Kalkanis is the best we have to put on the all in podcast to respond to David Sachs. Like often it's not we're not sending our best, you know, they're not they're not picking among the most sophisticated thinkers. They're picking people who are going to play nice. And, you know, a big point from the group chat story was just sort of Mark Andreessen and people like being like this. You need to stay on message like and we're going to leave if you don't like it has this great image of, you know, David Sachs. And I think Joe Lonsdale leaving a group chat. It kind of forms its own group think within the group chat, right?

4:41Like that was the conclusion I got, you know, where it's like you're mad about the group think on your other platform, but joining a group chat of your, you know, people who have intellectual debates but are all kind of within one set parameter. You don't really have the like iconoclastic leftists in this group chat. It's still kind of your network. So how much of that is just furthering the group think you claim to protest? To me, they read as they exist to workshop compelling arguments and reasons that could be used to further a sort of established conclusion that you need to be sort of against the Democrats.

5:18And so then it's like, if you can come up with good arguments for us to use that hit Democrats, like welcome. But if you're really just going back to the sort of core argument of sort of Trump versus the Democrats, then you're wasting our time. It's sort of more evidence that Twitter is not real life, that like people are not sort of sincerely putting their views on Twitter and everything. But, you know, I think we've known that for a while. Do you feel like they have the same level of influence now that the chats are kind of mainstream and that's the whole culture? Like it's broken through now.

5:54They're secret. How are we supposed to know? No, well, I think right after it came out, we're in a brief period of like, oh, you know, follow on VCs. Like I need to get in the chat. So I don't know. There's this spurt of enthusiasm and like people want to be relevant. I mean, Andreessen hired Eric Thornberg, you know, to, I think, create more chats. They'd had Sriram, you know, who's now in the Trump administration making chats too. So I think this sort of community building through private discussion groups. I mean, YC, you know, has always had a book face. So private groups where people are keeping secrets pretty well is not totally new.

6:34So no, I think this continues. I mean, hopefully, if only the Trump people can eradicate cancel culture, then they'll start seeing what they think online. If only we can abolish woke and then real discourse can make it back into the arena. We're obviously, you know, a newcomer and as reporters, fans of building in public. I'd love to either be added to the group chats, but more importantly, I would love the conversations to just be had. Like, I like when people just say what they're doing. And I think that kind of candor and open dialogue, obviously people are afraid of it, but it feels like we've switched to a degree where it's like, who gets to say?

7:12I do think the shortcoming of the media and like our, or not even the media, but sort of the environment is that if you're an important person and you put a take on Twitter, it seems like you're like fully baked opinion. And if you're sort of in a group chat with friends, you're sort of talking through your opinions and formulating them. And so how do we make a sort of Twitter for tentative thoughts and a Twitter for this is my, you know, established take? Even from the like the left, there's no room for breathing, you know, and some like prominent left figures have been canceled for being not left enough when they're just, you know, spouting the shit, you know, and trying to talk through ideas and workshop stuff.

7:56And if it's not fully baked, they get come for too, you know? So I think like it's, it, it is worth it to have a place where you can do that openly and, you know, workshop what you're thinking and be able to freely post. But Twitter is pretty baked, right? I mean, we tweet like headline, you know, I don't know. Yeah. I do think chats are good for ideas that you're formulating. You were in DC yesterday for the Hill and Valley forum. What, what was the mood there? The mood was really celebratory, Eric. I mean, it felt like, honestly, the onstage panels were a bit of a victory lap for the Silicon Valley China Hawks and defense founders who, you know, have been pushing this agenda of, you know, how tech and national security can work really well together, should work really well together.

8:43Everyone in the room was really in consensus on ideas that, you know, event co-host Jacob Helberg has been pushing for both, you know, as an advisor to Palantir and then in his own work lobbying in Congress for, you know, China hawkishness and better synchronicity between cutting innovation in Silicon Valley and defense and government operations. I mean, really, it felt like that ideology has kind of like become the mainstream in Silicon Valley. Like everyone there is totally bought in. If you zoom out last year at Hill and Valley, we were saying, man, they're trying to normalize Trump. They snuck Trump in.

9:19We were a little bit like, oh, they're trying to make it OK to be a Republican. On the one hand, it seems a little more like they've got a mix of sort of Democrats and Republicans. On the other hand, it's like Trump won. You can't normalize him anymore. It's like he's governing. So there was clearly just like the victory lap on, you know, we're in charge. We get to set the mood. But we did end our story with the like, you know, what it felt like morning in America. But if you look outside, you know, it's like the world is not as bright necessarily as it seems in the room. Did they talk about like the markets and how they can idealize tariffs and say, oh, we should be competing with China on stronger footing.

10:01But then as implemented, the tariffs are like insane and going to cause a ton of problems. And it's sort of a nearing train wreck. Very hard to deny. that the situation is going to get worse, not better, unless the situation changes sooner. Did they touch on any of that? The tariffs did come up because one of the biggest themes of the day was reshoring American manufacturing. In addition to defense and space investing, there was a huge emphasis in the panels about how important it is that startups be at the forefront of setting up this new manufacturing core in America. And so in a sense, the tariffs came up because that's kind of a part of the policy to do that.

10:41It was muted skepticism from the people who were a little bit more, you know, hesitant to say that these were a good idea. They were not saying, oh, the markets are that we're about to enter a recession and that all our enthusiasm could be dampened by. No, none of that. No. OK. Yeah. Which felt which always which felt a little bit, you know, just the meta narrative of the event. It was clearly successful, but it was so bizarre to be in this kind of bubble inside. A theory, part of investing and being a good investor is making sure you have follow on capital, right? And so there's sort of a rational cult-like behavior that you get into Silicon Valley where you're like, I need to make sure if I take this risky defense tech investment, somebody else will be the dumb money after me or at least sort of have conviction that there will be more money.

11:33until it finally gets to where it needs to be. And so these events, they all need to psychologically brainwash themselves. All right. We're all it's sort of a group sharing that we're all going to lock in. We're going to do defense tech. We're going to be hawkish on China. We fully divested from China. America is coming back. It needs the cult like behavior, which in some ways is a positive sign for the category because they're saying we're all going to dump money and to defense tech circumstances be damned. You mentioned, you know, I love Emile Michael and Bill Gurley, but Emile, you know, ex-Travis Kalanick, deputy, former Uber guy from much of my coverage, sort of took a subtle dig at Gurley and benchmark on stage.

12:16What was that? You know, Emile's now undersecretary of defense and was on a panel with Kevin Wheel from OpenAI. But you don't lose your petty gripes. You don't lose your petty feuds when you become under Secretary of Defense. Yeah, I mean, it was basically just, you know, there's been the Bloomberg reporting that benchmarks invested in Chinese company Manassei. An R4Rock scoop. Yes, an R4Rock scoop that Bloomberg confirmed. And they did not credit. They didn't credit. We credit R4Rock if he's first. I don't think Bloomberg mentioned him. I think the rest of the tech press kind of just like, it doesn't really acknowledge.

12:48Treats it like he's just a tipster. Like, he's right. He's getting it right. Almost at the time. It's one thing if he's like sort of anyway. Yeah, keep going. Anyway, benchmark. Emil was just kind of like, you know, there's not it's not like there's not a plethora of U.S. companies doing AI to invest in right now. You know, so it was I would say it was like, you know, subtle, but not so subtle. He was shitting on benchmarks, investment in Manus and saying, oh, he could have found it could have found U.S. companies. And I mean, we said this in the story. What's more contrarian than being pro China?

13:20You know, a lot of these people self-criticize VCs for not being contrarian. And then what it would be truly contrarian, a little sort of like comfort with China from Benchmark, which I think is an interesting theme. It's strange to have that posture when you're on top. You know, I don't know. I think like there still was certainly, you know, I would say a boogeyman in China that really like covered almost every single panel. It was very, you know, that was the tone in this circle in particular. And I think, honestly, more broadly in Silicon Valley now, that's just established to be the case. Yeah, I want to hear the first principles reasoning from Josh Wolf, who we'll talk to in a second from Lux.

14:00Josh was actually one of the voices that was like a little more moderating on tariffs, for sure. We should be, you know, ramping up this onshoring before we put the hammer down entirely, you know, and try like targeted efforts rather than blanket price increases on all of this before we have the technology really here. So that was, you know, refreshing to hear. The whole point of the tariffs is supposed to be, I mean, there's an American resilience and sort of national defense part, and that's important. But for the Trump people, it's about jobs and what sort of American life works like. Was the Silicon Valley set salivating over robots at this event?

14:38Or what was the balance between excitement over robots and human American workers getting jobs because of all of this? That was also a thing where I feel like, OK, you're having both, you know, like, where do you land on this? Where's the reality? But I think people were very on message about the robotics boom in factories enhances our workers to do be more productive rather than they'll totally take all the jobs. Jensen Wong spoke on stage from NVIDIA and touted his plan to invest$500 billion in chip manufacturing in the US over the next few years. And within that, he was talking about all the work that will come from skilled laborers, modeling the factories with digital twins to ramp out, solve all the problems before they get on the floor and then have all those jobs to be manufacturing chips and that being really important for our trade workers to bring in.

15:31And, you know, and also just, you know, building the factories themselves will take a lot of American labor. So that was kind of the I would say the party line of the event about how this would work. I do still feel like it wasn't really answered how all of this will happen when all the raw materials are tariffed out of existence coming into the country. But if we don't have minerals from China, we're in big trouble. Excited to hear from Josh. He was on stage at Hill and Valley. Any, what should people know about what he said on stage before we start grilling him? Yeah, Josh moderated a panel with Senator Jack Reed.

16:05And Josh's panel was all about autonomy and national defense against China with Senator Jack Reed and Kesar Yunus from Applied Intuition and where AI technology and robotic intersect with national security and how all of that is really relevant going forward. So happy to chat more about that too. Josh, good to see you again. Thanks so much for coming on. Great to see you both. How are you doing? For those of us who are not at Hill and Valley, do you want to just say, what was your core message on your panel? Or what do you think you were trying to get across? Well, our core message was very focused because I had an amazing entrepreneur that we backed from the beginning, Kasser Yunus, who was the founder of Replied Intuition.

16:42I got to tell you, we've got hundreds of companies that we've invested in. It is, I believe, the only actual cash flow positive business, which is just insane. He's a crazy operator. He is all focused on autonomy for AVs, for commercial sector, and then for defense because it's effectively the same thing. If you're trying to figure out how to get a car to be autonomously navigated and you're trying to figure out how to get a tank or a plane or something else, you know, it's vehicles and things that are moving. So a big focus on our center, which was also with Senator Reid from Rhode Island, was how do you balance American competitiveness?

17:14How do you balance the fact that these things are effectively these things being autonomous vehicles, data centers on wheels and the security and vulnerability? because those are threat factors that adversaries, particularly China. But you could also think about Iran, North Korea, Russia, want to penetrate. Kasser had just gotten back from China, so he was able to sort of report out. He would tell you that the AV industry and the EV industry there are not only huge, but winning. He also talked about the surveillance state experience being there, like how different it is technologically. Yeah. I mean, that's no surprise.

17:46I think the last time I was in Beijing, Shanghai, Hangzhou was 2019, right before COVID. but maybe it was really 2020. I think it's the last time I'll be able to go for a while until there's regime change, which may not happen in my lifetime, just because of how outspoken I am on the Chinese Communist Party. But I remember my wife was saying, you know, make sure you use separate phones and all this kind of stuff. And, you know, and I do and I did, but the second you land, you know, it's fingerprints, facial ID, like you're captured and you're tracked everywhere. And that's only improved. And that was really before the rise of the data capture was there, but the AI and the algos to do identification were just coming to form.

18:21So, you know, that's one of the great things that I think people think that technology is always this great democratizing force and it's going to give people more expression and more freedom and more access and more connectivity. And it can do that. But not necessarily. Yeah. But it can also be used as a tool of oppression. Private companies there, as you know, are mandated to be part of the military-civil fusion, which is if you make something, the government has effective full margin rights to basically just say that's going to be used by us to make sure we advance whatever principles we need to advance here or abroad.

18:51Well, in some ways, this event was during the military civil fusion of American companies with U.S. government. Or how do you as someone sort of troubled about that in China, how do you see sort of the U.S. taking sort of a different, more noble path while making sure that the government is getting the best technology it can? Well, it's something Kasser and I, the senator, were talking about, which is, you know, there's a few lines in our constitution, which are the distinction between a surveillance state and individual freedoms. And, you know, as many have said, democracy is, you know, the worst of all systems, but, you know, it's the least worst or the best of a whole bunch of bad systems.

19:29But our system is the best in the world. I don't want to live in a theocracy. I don't want to live in authoritarian or totalitarian state. Technology can be used by leaders of those states and has been from Hitler and Mussolini who commandeered radio. You know, we thought that would be a great liberating thing. But I think that the big message here was like why the U.S. is different is it isn't like this BS, rah, rah, you know, freedom, jingoistic. It really is not trying to suppress individuals. It is not trying to create a social score based on whether you pledge fealty to the great leader and whether you will be allowed onto the train or whether your kids will get admission into a school where you will get show tickets to the concert.

20:13This mechanism, which is straight out of Black Mirror, it makes Black Mirror writers look totally uncreative because it's real. It might have been presaged half a decade ago, but it's very real. We just see, you know, Chris Krebs, who had sort of spoken out against Trump, is now alleging literally today he lost global entry status because of, he presumes, sort of anger from the Trump administration. I have no idea. I don't know that example, but I'm just saying what you're describing, it sort of fit. I don't think it's so we're so insulated from that potential in the United States. I think, look, that is a right and just fear that anybody should have about people pledging loyalty or authoritarian instincts and how technology can be used in those ways.

20:59And, you know, all those things are very complicated, but we do have freedom of speech here and we do have freedom of expression and freedom of religion, freedom of sexuality. Yeah, Ryan Peterson just posted, like, I've been shitting on the Trump administration over tariffs and nobody's coming for me. It's been great to have freedom of speech. Right. Look, I did not vote for Trump. I didn't vote for Kamala. You know, I voted actually. Hold on. Hold on. Ready? I think there were seven people in my party. I know. Romney. Well, let me be honest. Hold on. Hold on. I made these hats before I consulted with my boss, which is my wife.

21:35Okay. And one of the top issues in our household is women's rights broadly and reproductive rights. So she reminded me that I needed to flip the ticket, which I did. When I voted, it was Bloomberg Romney. So I got asked at Human X, my favorite billionaire. And I worked for Bloomberg. I said Bloomberg, I think, was my favorite billionaire. So not wrong. Never going to get elected, unfortunately. No, I mean, look, I truly felt, and this is a weird thing to say, that I think that billionaires should run for office and hold office. And whether Mitt was a billionaire or close to one, Trump was not really a billionaire when he was running.

22:14Maybe he became, roffing off his name later. And the reason is, I don't think that they could be bought. I don't really think that there was anything when Mike Bloomberg was running the city of New York where he could be bought. And frankly, when there were cuts to the arts here in the city, he reached into Bloomberg philanthropies. And it was like 100 million plus to keep up the arts. that's the kind of benevolent mayor I want. And is he driven by pure virtue? Probably not. It's probably his legacy and his reputation and his family and all that kind of stuff. But man, you know, I wish he was a better debater.

22:44And, you know. Yeah. You got to win the stage presence. I do want to circle back a little bit to what we talked about, what was discussed at Hill and Valley this year. One big conversation, of course, was, you know, around reshoring manufacturing. And part of that is made complicated by the fact that China has so many of the critical minerals. So with this aggressive tariff policy, they have things that we don't have yet. And maybe we do under reserves, but we need to get them and that's going to take time. Where do you land on that liberating stance between a one size fits all tariff policy and not?

23:18Like, how does that score with the reindustrialization mission? Let me break down from the top layer, which is the tariffs. And I will say either. This was the greatest policy blunder and worst rollout in the history of presidential decrees in economic sphere. Or, and I'm giving a lot of credence here. This is not what I believe, but I'm giving credence. It is part of a grander bargain, and particularly China. And the game theory that I could see playing out, and again, I don't know that this was a priority planned. I'm not giving them the credit to say that this was some grand scheme of 4D chess.

23:53I think it was most likely that this was haphazard and chaotic, maybe ideological driven. I personally think that what happened is post-election, you had this boom of rah-rah, golden age of America. It was like just an echo chamber of homogenous only up from here. And then you started to see big tech with the recomposition of Zuck's board and meta. And you started to see one by one people taking the literal or figurative knee and a million dollars for the inauguration one by one, and they're all lined up. And I think that there started to be a confidence from the administration of we are running the table and everybody is bending down to us.

24:39And I think that that then got exacerbated onto the global stage. And it was sort of like when the tariff thing happened, we control the cards. And China's like, yeah, we make the cards. So you're saying tech capitulated so well. The Trump's like, oh, we're so powerful. We're going to keep running the table. I think that that is probably the psychological confidence slash overconfidence that led to that, that first part of why this rollout happened. Now, from here, I am more sanguine than everybody. And I'll tell you why. Beginning the tariff rollout three, four weeks ago, whatever it was, four weeks ago, I had friends that were reading hundreds of papers, hundreds of research reports, sell side by side, everything they could get.

25:20And I had other people that were reading nothing. I said, you know, come Monday morning, both of you will know the exact same thing, which is nobody knows nothing. You have no idea what's going to happen. I was shocked by only one thing, which was that people were shocked by the tariffs. I mean, Trump has been talking about them for 25 years. He campaigned on them. Democrats hit him on the fact that he was going to do tariffs repeatedly. And then they do it. And it's like, OK, wait, there's a shock. So if you were long volatility, if you bought deep out of the money puts like you did great. We happen to do that as a family because I was like, all I hear is positive, positive, positive.