The Next Era of Warfare is Here

27:34You know, you look at the battleships we have, there's this Aegis combat system on there. And that system has been able to go in full automatic mode for a very long time. You have an inbound threat and you don't have a lot of time to respond. You can have the ship do the work of determining, is this a hostile or a civilian or a friendly military aircraft? And then appropriately taking the response on that. You know, there's obviously risks there, but people have been more comfortable on the defensive side for a lot of good reasons, because time was of the essence. And, you know, you are by and large being attacked.

28:11So that, you know, that is one category we've had, and that technology has gotten better over time. And we've had this with torpedoes or anti-radiation missiles. So an anti-radiation missile you send out and you say, here's a geographic area. And if something is emitting, like a Russian radar, then that is a legitimate military target within that area. And so we've had this notion of you can delegate kind of the limited decision making to machines in a bounded way for a very long time. And I think that's realistically the framework of how this has to work. But importantly with that, there's a human agency that exists.

28:48So the U.S. government has always had this policy, which is that humans are accountable for the use of force in a battlefield. You send an anti-radiation missile out and it picks the wrong thing. that that's on the command, right? That is a, you should have known what that weapon was going to do, how it's selected. And, you know, were you safe to employ that weapon in that context? That has been the underlying framework that the U.S. and our allies have had, which is this is fundamentally about human accountability at the end of the day. You want your weapons to know exactly what they're going to do, how they're going to make decisions and what bounds you put on them.

29:25So the debate really boils down to, you know, should you use AI to get more precise, more accurate, more discriminating, or should you go with older generation technologies that are, you know, dumber, right? To me, the ethical imperative is to make the smartest, most discriminating weapons you can and do it in a way that is responsible based on where the technology is. And that's everything I've heard from the U.S. government as well. They're not interested in a fully automatic AI runs World War III Skynet scenario. That's not even on the table. What they're interested in is how do we make these systems more precise, more targeted, more discriminating.

30:06And the U.S. has led the way for decades in looking at this question of how do you employ weapons in the most accurate and precise way with the least collateral damage. And that is something they have spent tens of hundreds of billions of dollars investing into. when, you know, our adversaries like Russia are just happy to use dumb bombs, right? And that's, that is a big difference. So to me, the imperative is really how do we provide the best technology to make these things as, you know, precise and limited as we can? The alternative seems just wildly crass that you believe, like, they should have dumber things that are less safe to use.

30:45I guess the argument from Anthropics end would be, we just don't want to be in this business. We just don't want to be part of, you know, the defense industry because we're interested in using AI for different problems. And their argument would be maybe, you know, we shouldn't be punished for electing to make that decision. So that's the first piece that I'd be interested to get your views on. And then second, you bring up a really important point about accountability that, you know, at the end of the day, we're going to use technologies. What matters most is that humans are ultimately accountable for the decisions that they make in using those technologies.

31:27And I think to what's happened in the Iran conflict so far, and the headline that immediately comes to mind for me is the drone strike that hit one of the schools in Iran and killed over 100 children. and it seems based on the reporting that that was the US government and the president has been asked about this and he kind of says, we're looking into it. We don't really know. Seeming to sort of shirk the accountability for what was a devastating decision ultimately. So I guess I've asked two very big questions and maybe others will start with that second one on that accountability issue. How do you solve for that?

32:13Maybe starting with the first. I think Anthropic actually does work with the U.S. government extensively. They were the first ones leaning in. They have extensive work with the intelligence community, with the department, well before this came out. I think their concerns on, you know, use of these technologies in a way that the technology is not quite ready to be responsibly used is legitimate. But then I think the way you engage in that is actually working through those policy questions, being highly involved and steering the government away from things where they're not technologists, right?

32:50Like they're policymakers, they're warfighters. They need technologists to tell them what can and cannot be done and how can the technology get there in a way that is responsible and reinforce the values and norms we have. And so I think in reality, they were working with the U.S. government, continue to do a lot of work with us and several others. And, you know, I think they've are actually, you know, kind of very mindful of providing the U.S. and allies with the best technologies possible. So, you know, I think what went wrong was probably more a matter of personalities, trust, and, you know, style of engagement to get to the outcome on this.

33:32And, And, you know, that I get, these things are hard. They're very complicated topics and it's very tricky to work through. You know, maybe on the second question, you know, the U.S. actually has put out several different detailed things on what went wrong in that, you know, mistakenly attacking a school where they had multiple different databases. Some of them had marked it as a school. There were some older ones where the IRGC had used that as a command and control center in the past. And so, you know, this is where I think using technologies like AI to be able to coalesce all that information, to be able to have the most up-to-date information are massively impactful.

34:17Where when you think about the sheer volume of things that the U.S. was doing leading into that strike, right? They did something like 10 times the number of strikes that they did in the Gulf War within the first month. They executed like a thousand of these in a day. And for each one of those, they have a process by which they validate that the intelligence indicates that this is a target and that there is, you know, collateral damage assessment and, you know, all these, you know, kind of legal factors. One of the only militaries in the world, by the way, that does that or cares to do that, right?

34:51I don't think Iran is running that calculus every time they take a shot. And, you know, they have gone through and traced through what went wrong and what's happening. Now, I'm not going to sit here and say, like, you know, how Trump presents these things is, you know, the most measured way. Of course it's not. It's President Trump, right? Like that is the reality. But the U.S. military as an institution has gone through and traced through why this happened, what went wrong, and how do they fix this in the future? That is a sense of accountability on this that I think is what we're looking for.

35:23There will be mistakes. War is terrible. Again, this is why you do not want to get into war. You want to create the deterrence in advance. And the reality is these things are, you know, having that discipline to actually improve how you do this and investigate what went wrong, that is something that I think the U.S. leads the way on. I think those are really great points. But what it also points to is the more advanced that this defense technology becomes, the more lethal and destructive it has the potential to be, which basically means that whoever is in charge has increasing amounts of responsibility and accountability that they have to be responsible for.

36:07Um, and that puts you in a very interesting place because you are the CEO of one of the companies that is powering this defense technology revolution, which essentially means that you have incredible amounts of power and responsibility resting on your shoulders, as do many of the leaders in government who are deploying your technology. How do you think about that level of responsibility? Like, what does it mean to you? And how do you think about it for leaders in government as well? You do not want tech bros making policy. Nobody voted for me. Nobody gets to vote me out, right? Like that is an important construct to remember, which is like if someone disagrees, you know, I bet, you know, would the majority of Americans think that the U.S.

37:03government should have anthropic technology? Probably. Do they get to vote on that? Absolutely not. Right. And so the that seems to me to be actually, you know, an important construct to remember, which is, you know, we live in a democratic society where these policy decisions, where these things that, you know, about how use of force is done or, you know, what we prioritize in the country on any sort of domestic. These are political questions that we settle through voting, right? And that we settle through elected representatives. And that my responsibility as a technologist is to provide technology that works, to inform the elected officials on what it can and cannot do, how best to use this, how they should refine their policies to have you know, effective use where that new frontier is.

37:54That is a deeply held obligation that I feel I have, which is, you know, to build things that even despite what their process and system wants is the right thing to build, right? We see this all the time where, you know, we'll get requirements on, you know, a weapon or something like that. And we're like, these are insufficient for what you need, right? Like you need to deal with this GPS denied navigation better, or it needs to be more resilient against these conditions. You know, these are areas where we'll lean ahead and try to put in, you know, kind of the pieces necessary. And that's often a very positively received conversation, which is, you know, the state of technology has moved.

38:32Here's how you should think about this. And so, you know, our job is engagement. It's informing. It's getting, you know, them the right information to make the right decisions. It's providing the best technologies that can be used responsibly. And ultimately, the use of those technologies, that is what the voting process is for. That's what the democratic process is for. And, you know, I take very seriously that nobody gets to vote for me. I think this brings up an interesting question about the sort of the separation of the private sector and the public sector, which has become more of a debate this year as the government has started to take stakes in some companies.

39:13OpenAI has been floating that maybe the government should take a stake in them. It's been floated for a lot of companies. And interestingly, we looked at the prediction markets, which say that there is a decent chance, 23 % chance, that the U.S. government might take a stake in Andro. I guess my question is, what do you make of those odds? Is there any merit to them? And what are your views on the government taking stakes in private companies in general? So I think the U.S. government participating in the one of, you know, the most impressive wealth creation engine that has ever been constructed on the planet feels like probably a good idea where, you know, things like Trump accounts and, you know, kind of some of these other investment based things that allow Americans on a broad basis to participate in this can get us out of a lot of these challenges we have in the long run around, you know, kind of social security and a lot of these very challenging fiscal situations, that seems directionally like a very good idea.

40:16Now, this is a new thing, right? So then as new things happen, you know, in our messy political process, it's complicated, right? Where there's a lot of different attempts, often, you know, a little bit ham-fisted at first and, you know, that in fumbling the way through that policy debate is a tricky situation. And so that's the messy political process we live in. That's the reality of it. So do I think all of these will be, you know, the idealized final form? No. Do I think directionally having Americans participate in the wealth creation? Seems like a very good idea. Do you not feel concerned about sort of the crossover of sort of mixing government with private industry?

41:01I mean, the point which I agree with is, you know, you want elected to be doing what you're doing. but if the idea is that Anderil would have become sort of in some sense more part of the government, more part of the administration, more connected to this, to Washington, that maybe you are starting to have a say in the way that weapons are deployed, in the way that our policy is carried out, and that the lines between those two sectors start to be blurred. Does that concern you at all? Well, I don't know why equity states wouldn't do that, right? A lot of countries like Norway and Singapore have extensive southern wealth funds that don't seem to make the private, you know, CEOs somehow decision makers in the government.

41:53You know, I think the reality is there's ways to create even separation in that where you get the economic benefits and, you know, the population benefits from it without, you know, kind of interfering in the separation of these things. And the U.S. has had a significant tradition in being very clear and then reinforced through multiple case laws around how private institutions and governmental powers flow and how those things work. And you can't have governmental powers as a private institution. It just doesn't work that way. And so I think that's a good thing. And I don't see any evidence that's changing.

42:29Nobody calls me when it's like, hey, we're thinking about going into Venezuela. That's not how it works. But it seems that that has, in some of the reporting, that that is how it's gone. I mean, what we know is that with Iran, at least, that there was a call to Jared Kushner, as an example, and maybe we could say that he's part of the government, but not really. He wasn't really elected in. He's more sort of this informal advisor. It does seem to me that that is, in a lot of ways, how this administration is operating, that you do make a call and you have someone kind of make the call. That's at least what he said about Kushner.

43:08You know, I can't speak to exactly how that went down, but I can tell you, having seen both Democrat and Republican administration, there are a lot of senior advisors. There are a lot of people who the elected officials appoint in to provide them good counsel and to work on their behalf. Like that is a extremely common pattern. Right. And when you look at the Biden White House, the vast majority of policymakers there on National Security Committee on domestic policy, these were not elected officials. They were people the elected officials appointed that they felt resonated with their policy views and how they operated.

43:45That's how it works, right? In Congress, there is hundreds of staffers there that do a lot of the legwork around advising on how these laws should be written, drafted. You know, I think that the healthy version of this is there is a good dialogue with industry and with experts and with academics and economists and, you know, the business community and the finance community to understand what is actually happening. What is the impact of if we did policy A versus policy B? You know, what would what would be the impact of these things? You know, and then as we look at it from the defense industry side, you know, a legitimate conversation is what can you produce?

44:23What can you actually scale up? Right. In having that ability to have meaningful conversations around the trade-offs of how we could accomplish these shared policy goals, that's quite normal and healthy in all administrations. So I think a well-functioning government actually has deep connection with, you know, kind of the civilian sector. And they should. Right. And then, you know, if we believe that those, you know, the way it's operating is not in accordance with the laws and statutes that we have, then that should be something that's reflected at the voting booth and reflected through the courts and through Congress.

45:03Right. And that's the system we have. We'll be right back.

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46:28We're back with Brian Schimpf. I know you're a CEO, you're a founder, you're not a policymaker, but when you look at U.S. policy on autonomous weapons, when you look at the rules and regulations around how we are using artificial intelligence, I mean, AI policy has become such an important debate, especially this year. Is there any sense in which you think anything is wrong? Or are there parts of our policy and our legislation that you think are really going well, that are working, that are correct? What do you see as sort of the future of policy when it comes to AI and its impact on national defense?

47:08So I think the AI side, you know, everyone's wrestling with what is a incredibly complex and rapidly moving environment. And that's not. You know, when you look at, you know, something like the safety work, right? And, you know, how can you ensure these models are safe? The U.S. government has gotten very good at sort of, you know, kind of a proceduralism. And actually, I don't know that it's a bad thing, right? Where, you know, we want the system to be predictable, fair, and disciplined. Doesn't always mean it's fast, doesn't always mean it's the most logical, optimal outcome, but a fair and consistent application of the rules and policies in place and the regulations, that feels like kind of what you want from your government system.

47:51Now, you connect that with the AI side, and this is a much more complex question where there's still fundamental research to be done on how to make these things safe to assess if they're safe i think some of the um i think demis put out a post yesterday on um you know how to uh think about you know kind of a industry government collaboration on this where there's still fundamental research to be done where you know kind of an industry organization can be involved in assessment and advisory like we've seen in other you know kind of industries and it's worked well with a clear governmental role to enforce rules set rules and you know, take the guidance provided by this industry organization into account.

48:36But ultimately, the government entity is responsible for application of those rules. That feels to me like pretty sane, right? Like, you know, kind of the government can do what it does well. You know, these sort of private institutions can do what they do well, which is sort of more fast-moving and agile and exploratory, while, you know, we still have that mechanism of political accountability. So you think about this on the defense side, and, you know, I think a similar sort of notion applies where you have a clear industry responsibility, which is understanding how the tech can be employed, helping with test and evaluation, and, you know, really thinking through, are these systems actually working to spec, right?

49:18And the way it's been specified of what it has to do, industry needs to be a participant in figuring out how to assess that, how to get there. You know, can this really work and help evolve those specifications? And the government side has to evaluate, is that true? You know, where do we want these sort of decision-making frameworks? How do we want accountability to flow? They have to own a lot of the policy decisions on these things. And I think when you look at these policy side questions, particularly in defense, many of them are already settled, right? And then so then you have new technologies that kind of change the scope or reach by which you could do these things.

49:53But, you know, I think from a fundamental question, you know, we've, you know, historically have answered this question on lethal autonomous weapons. We're willing to do it within very defined bounds. Great. Now you can debate what are those bounds? How does technology change those bounds? Should we, you know, should we assess this differently? um you know those are very reasonable policy debates to have where we've you know kind of set policy frameworks around the impact and the safety and the risk and then the technology now changes maybe where you set those limits but fundamentally it's still the same ethical framework just given your seat in the national security ecosystem when you look at what's happening with Russia, when you look at the Iran conflict, China, nuclear weapons, AI, what do you see as sort of the biggest threats to stability and to peace in 2026?

50:55What keeps you up at night? So for the next few years, the threat of being able to do, you know, kind of these strikes against your neighbor over, you know, the rapid escalation of that. There isn't kind of a theory of deterrence on that, right? So sort of one theory is if we have better defensive weapons, then this will be mitigated. And I think every government has a responsibility to protect its citizens by providing the best defense it can against these types of attacks. But when you look at how this plays out, say like the Red Sea scenario, where the U.S. and allies very successfully mitigated Houthi attacks on commercial shipping.

51:36What did the Houthis do? They shot more, right? Like it didn't actually work as a deterrence. And so I think the other side of this is you've got to think about what is going to be an effective deterrent. For better or for worse, mutually assured destruction was incredibly stabilizing. You know, I think it was incredibly stabilizing. We didn't have a hot war between the U.S. and Russia. That is, it is like miraculous. And, you know, it was hairy in many scenarios. But I think ultimately, you know, if the consequences were smaller, the opportunity for escalation, for starting small and growing it could lead to these outsized, terrible outcomes.

52:17And so I think there is a period where we don't have that theory right now of what this looks like for conventional weapons. The cost of prosecuting these lower intensity conflicts seems relatively low. And that, I think, can lead to miscalculation, which can lead to escalation on these things. And so I think there needs to be a new theory of, you know, sort of what does this look like? What is the bad outcome that happens if you start something small that you just don't start it? Like that is fundamentally what has to occur to get things back to a stabilized place. Where does China sit in your list of threats?

52:59Because this has been, I mean, it's especially when it comes to AI, the concern seems to be about China. And the comparisons have been made between AI and a nuclear weapon. And perhaps we are going down a similar path of mutually assured destruction, which to your point might actually be a good thing. How do you think about China and the threats that they might pose? You know, you've got to contrast China under the prior leadership with the leadership of Xi Jinping, which is sort of ultra-nationalist, based around, you know, very aggressive posture internationally. You know, it is highly interventionist in their economy.

53:46When you look at the actions that Xi takes, it is fundamentally about, you know, kind of preservation of the CCP and, you know, control, you know, zeroing out whole industries that, you know, he decides are no longer aligned with the goals of the PRC, demonstrating that, you know, economic prosperity isn't, you know, we take for granted in the West that sort of economic prosperity and rising boat, you know, like providing better standards of living. These are, you know, kind of the fundamental for to take one priority that, you know, sort of Western politicians and things really rely on. It is fundamentally that we want to drive economic growth to provide better lives for people.

54:27And that's what the voters choose. You know, it's just a very consistent sort of selection over time. You look at China, that's not what he optimizes on, right? Shutting down the whole economy during COVID, you know, really focused on control. all. That is a tough thing, I think, for a lot of the people in a Western mindset to apply. He's a true believer in the CCP and in many ways his greatness in history. And that is a risky position to be in. So when I think about the challenges here, is the issue that we would have a competitor that is technologically sophisticated and forces the U.S. to get better economically and we share this economic pie and wealth.

55:11I don't, you know, I don't, I think a lot of people don't like losing, but I don't think that's fundamentally the issue. The issue is much more around, you know, is the form of leadership, control, uh, and operating that the current G autocracy has, is that what we want? I think for many, the answer is no. For myself it is no it does not seem like a good thing um and and so i do think this this does pose you know a real uh a real question which is it is not just about you know is the u.s strong it's just there is a real moral question to be answered around is that what you want in the world now i think what is different compared to you know like say the the cold war period china is extremely sophisticated extremely disciplined they have moved up you know the stages from um building out the sort of foundational manufacturing and resources through to you know making slightly more sophisticated things like owning whole industries like solar and a lot of the green you know a lot of these these types of things and then now moving into creating world-class firms byd all the work they're doing on ai um where they're moving on pharma they have sort of systematically moved up that chain in a way that gives them massive economic leverage around the world.

56:34And one of the patterns I've seen in Europe and other places, the Europeans will be angry at the U.S. They'll say this isn't, you know, how we're being treated isn't fair. They will push back. The reality is they push back because they know they can. They don't push back on China despite knowing that they're getting a bad deal. They know that this is not fair. They know that they're just going to like, you know, this is a short term thing. Everyone knows this. But I think the difference is with the U.S., you can say it. You can't say it against China. And is that the world we really want to live in?

57:11So I do think the stakes on this are quite high. I think the people have, you know, kind of grown up with America as the superpower. I don't think they can even imagine what China as a superpower would be and how bad that would be. They view it as this upstart that, you know, it's like, yeah, maybe I don't disagree with their leadership or how they operate, but who cares? They're kind of, you know, a sideshow. It's like them in charge is a very bad thing. And so particularly Xi in charge. And so I think the reality here is it's a very serious issue. They're extremely sophisticated, and they have a very sort of aggressive posture to where I think they want their country to go and the prominence in the world.

57:56Do you view part of Andrel's mission to prevent that from happening, to prevent China autocratic-style governments from becoming a global superpower and from superseding the U.S. as the global superpower? I don't think that's fundamentally how we view our goal. I think, you know, our role in the equation, I think our view is we need to provide the U.S. military and our allied militaries the best capability to take Chinese military action off the table. Right. Like that's what we need to do. and there's a lot of other considerations in this mix that we are not you know we don't have much to contribute on um or or not as contributing on via you know sort of we're not building foundation models right you know we're not um we're not in pharma right we're not solving a lot of these economic policy questions um there's a lot of these sort of bigger uh questions around u.s competitiveness and, you know, sort of Western competitiveness.

59:02But fundamentally, I believe if the U.S. and allies, you know, take the counter example, China can obviously, you know, say China could obviously invade Taiwan. Say China could obviously exert the well throughout the South China Sea and no one believed that they could challenge them or that the U.S. would be there to backstop. I think China would do it more. I think they would do it more because it's probably be a pretty effective strategy. And so the, you know, just knowing that that would be the case leads to a totally different political conversation. Or if they can use hard power as the backstop to exert their will, well, it changes the negotiation you have on a diplomatic basis or an economic basis or anything else.

59:46And so, you know, providing the U.S. and allies with the absolute best military that takes military, unilateral military action from China off the table, I feel like that is very much our responsibility as much as we can contribute to it i want to start to wrap us up here with a couple final questions and i want to thank you for your for your time um just two stats i want to get your reactions to so number one vc funding for defense tech startups hit 19.8 billion dollars in the first quarter of this year which is a record high it just blows blows previous years out of the water. And of course, it'll probably continue to ramp up.

1:00:28And the second stat is that Trump has proposed a one and a half trillion dollar defense budget, which would increase our defense spending in America by 44 percent. Extraordinary numbers. What is your reaction to those numbers? And what do they tell you about the state of the world? On the VC side, I think when you look at the history of any of these sector disruptions, the pattern's pretty consistent, right? You kind of see a couple of early winners do quite well. They tend to be the winners in the long run. And then you see a whole lot of frenetic activity from the investing side kind of chasing that success.

1:01:18And, you know, do I think there will be a handful of successful companies besides us? Absolutely. Like, I think there will be a few. But, you know, like in most things in VC, it's like they're looking for the one or two outsized performers accepting that, you know, many of these will fail. Right. And that's sort of the reality. And so I think it is just quite hard to to really succeed at scale in this business. The sheer complexity of what you have to do on manufacturing, on production, on hardware is just quite high. Right. And that is very hard. There's very few examples of that scaling in the U.S.

1:01:53successfully. And, you know, I think that's something where we're living right now and we're going to figure it out. But it's quite hard. Right. On the on the one and a half trillion dollar defense budget. You know, I think the. There's there's sort of a lot of ways to interpret it. Um, but when you look at what motivated much of it, it is, you know, kind of the threat from China combined with, um, I think the, you know, realization that we need to do significant investment in next generation technologies, replenish our stockpiles. Um, so we're at this tricky spot where we're both sustaining an expensive legacy military and that has to be sustained.

1:02:34So we have to be ready. We can't just divest to invest. That's a bad strategy with where the world is. um while we're going through a technological disruption with a new adversary that's extremely competent who can produce it in immense scales uh and we have you know significant depleted stockpiles from both conflicts we've entered into as the united states as well as supported allies right like that is a that is a precarious position to live in it's one and a half right should it be 1.2 should be one person i don't know right like that that's a harder uh kind of question and will get negotiated in Congress.

1:03:07Um, but the, the threat side, the displacement we're under, um, the shift in the world I think is real. Right. And, um, you know, and, and I think you're seeing the amount of ramp worldwide on defense spending, you know, doubling, tripling, right. Like a huge step up in defense spending worldwide. I think the reflection is that this is just actually quite a dangerous time. Our adversaries have been investing quietly for decades, and the Western militaries have, you know, in many ways behind in responding to that very real threat. I introduce you, Brian, as the founder of one of the more controversial startups in America and the world.

1:03:51My final question, what is the biggest misconception about Andro? What do people get wrong about this company? And what do people perhaps get wrong about your industry? I think it comes down to what is the point of what we're trying to do, right? And I think the sort of naive view is that this is war profiteering and that we want more war. And the reality is we do not. The reality is that, you know, the goal of, you know, investing in defense is you have it when you need it, but you hope you don't need it. And I think the thing that stands out to me about the American military leaders is they are the most cautious about the use of the military.

1:04:35They are advising to use it the least. And their view is this is a last resort. And we share that view. And so I think that the reality is that, you know, to have peace, you prepare for war. And I think that has been true for thousands of years. And we are not yet in a time where that is gone. Brian Schimpf is the co-founder and CEO of Anderil. Brian, really appreciate your time. Thank you. Thank you.

1:05:13This episode was produced by Alison Weiss and engineered by Benjamin Spencer. Our research associates are Dan Chalon and Kristen O'Donoghue. And our senior producer is Claire Miller. Thank you for listening to the Prof G Markets Founder Series. We'll see you next month with another founder story.

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