Palantir CTO 谈 SaaS 末日与阻止下一场世界大战 | a16z

World events remind us that there is actually evil out there. Just horrendous barbarism is still possible. When a country goes to war, it’s not enough to just have the Department of War fight these wars. It is actually the whole country. The idea that somehow the American people are not capable of this beggars belief.

I think our biggest risk as a country is suicide, not homicide. How do we win the AI race, particularly as it moves toward more physical AI and robotics? The things that we did to win in the past, we accidentally turned our back on. And there’s an opportunity to reclaim that with vigor.

So, Katherine, when we were talking about guests that we had on, Shyam was at the top of your list. Why was that?

Yeah, well, I think, after the Jeremy Stern profile and Colossus and a lot of stories or podcasts that have come out recently about Shyam, he’s one of these people that, if you were in the know several years ago, you knew he was the OG fixer for everyone. I think Trae Stephens, who’s the co-founder of Anduril, came out on Twitter and said, “He’s single-handedly responsible for my career.”

John Doyle and so many of our founders have pointed to Shyam as the person who made their careers and introduced them to Palantir, but also gave them wings to fly away from Palantir and start something new. You hear that story time and time again, but it wasn’t until a couple of years ago—and Erik, you and I were talking about this—that I think Shyam actually became more of a public figure. He was sort of the behind-the-scenes guy, the behind-the-scenes fixer.

I think the thing that really changed it was Shyam, and I’d love to talk to you about what the inspiration for this was. You sort of wrote this seminal piece about First Breakfast, about defense reformation, and were the first person to really start talking about it. But again, this was 17 years into the journey of Palantir when you decided, “I’m going to be a strident voice for what needs to happen in America.”

So, I’d love to talk to you about going from the behind-the-scenes person, the guy behind the guy in so many of our companies, to saying, “I need to come out and be a voice for this movement.” What was the impetus for that?

It was equal parts an act of desperation and an act of optimism. After years of just seeing the Pentagon from the inside and seeing how defense was operating, I felt this frog boil that continued to happen, set in a historical context. But the reason to say something is that I thought this was the moment that it could all be fixed.

Alongside of that, I was seeing what was happening outside of the building. The founders were reemerging. There was a huge amount of energy. People wanted to build in the national interest. It was a moment to crystallize what, at least, I thought the fundamental diagnosis was: the things that we did to win in the past, we accidentally turned our back on.

There’s an opportunity to reclaim that with vigor, and we needed to do so quickly. There was a shot clock here. We had frog-boiled our way to a place where we’d lost deterrence. Any one of these items in isolation, you can write off. You could say, “Okay, the Russians annexed Crimea in 2014. That’s just one thing.”

Then you have the militarization of the Spratly Islands in 2015. You have the failure of the JCPOA to keep the Iranians from getting a bomb. You have a pogrom in Israel. Certainly after October 7, it was kind of a radicalizing moment: What is going on here? We need to act.

I think we’ve only had more things since then. The good news is that in the last year, more has changed in the department than I’ve seen change in the prior 19 years. People are seizing that moment for reformation. It’s been rewarding to get it out there, get people to rally behind it, and have all of us building in the national interest.

What was it about 18 months ago where everyone seemed to agree on the thing that was so contrarian for many years, when you were banging your head against a wall saying, “This needs to happen”? As you said, it wasn’t a single moment, but there is some change in the culture and the zeitgeist. I think you have a unique understanding of culture and how these mimetic shifts happen.

Well, maybe unsurprisingly from my worldview, it all comes down to leadership. We call them the founding fathers for a reason. There is something special about the American spirit: every founding story is equal parts heresy and heroism.

We had the right people who saw, “Hey, this is not working. The shot clock is running out, and we have to do something.” We had those people both inside the building and outside the building. It was kind of a conspiracy—a coalition of the willing, a coalition of the capable—to go do that.

It’s hard to point to any one single moment. I think the election is a big part of it—not to make it political, but just being able to get in leadership that viewed it with clarity and set the conditions to make this change happen.

Yeah. So, you’ve been busy. You’ve joined the Army. You’ve written a book that’s coming out. I’d love to get into Mobilize, but first, why did you decide now was the time to write the canonical book of what needs to happen in America? Maybe we can talk about the fundamental thesis, too. Why now? Why write a book, join the Army, and also be leading Palantir?

They’re all part of a cogent thread, which is: how do we mobilize to prevent a bigger conflict? If you’re really paying attention, it’s hard not to think that we’re in the late ’30s here. Things are brewing. They’ve been brewing for a while. People talk about great-power competition.

I think we’re coming out of the malaise of having won the Cold War—or the Soviets having lost it, perhaps more accurately—and that led to a lot of bad behaviors. It allowed us to believe a lot of lies about the future that we’re now marking to market.

We will not have the luxury that we really had in World War II of letting the adversary attack us first and then deciding to mobilize. A more clear-eyed view of what actually happened in World War II is that’s not it. It’s not this facile thing where we just flipped a switch and the automotive industry decided, “Okay, after Pearl Harbor, we’re going to make all this war material.”

What really happened is that leadership from FDR realized in the late ’30s that we needed to mobilize, but there was not yet a national will or popular mandate to do so. Lend-Lease provided the mechanism to do that. It took us 18 months to build factories and retool them, and we were able to create capability and deterrence that we sold to the Brits and to the Soviets, such that when World War II really kicked off for us—when Pearl Harbor happened—we were at full-rate production.

When a country goes to war, it’s the whole country that goes to war. It’s not enough to just have a defense industrial base. I think part of the legacy of having won the Cold War is thinking that it’s enough to just have the Department of War fight these wars. It is actually the whole country.

The most stark thing is that we all, as American citizens, need to be invested in both the prosperity the country gives us and the freedom that underwrites that prosperity. We have come very far away from that world.

In 1989, only 6% of spending on major weapon systems went to defense specialists—that is, companies that were exclusively in the business of defense. That’s not that long ago. That’s when the Berlin Wall still stood. Now that number is 86%.

So, really, what we think of as normal is an aberration from the past. Mobilize seeks to set that story in the context of, first, this industrial base—what I like to call the American industrial base—that won World War II. Chrysler built Minuteman missiles and minivans.

Every camera, car, and cereal box that American consumers bought was also subsidizing our national security. That’s really important. We see this with the hyperscalers. We see this with technology. The amount that our private sector spends on R&D dwarfs what the government is capable of spending. You want to get on that price-performance curve as a way of delivering capabilities to our brave men and women in uniform.

So, how do we get back to that?

The second part of it: we had the American industrial base. But who was the American industrial base? Today we think of it as Northrop Grumman. We think of it as Lockheed Martin. But actually, it was Glenn Martin. It was Jack Northrop. It was Leroy Grumman.

They were people. They were founders. They were not thinking about, “Hey, what’s the performance going to be next quarter?” They were building something way bigger than themselves, way bigger than their companies.

And those founders weren't just outside of government. They were inside of government. It was the Hyman Rickovers, against the will of the Navy, building the nuclear Navy. I love that story, too, because it takes a lot of chutzpah.

Oppenheimer, the father of the bomb, said the nuclear Navy wasn't going to work. He told Hyman he was going to fail, and Hyman still proceeded. That's something I think in the Valley we recognize as the classic founder personality.

A big part of what happened after the end of the Cold War was that we wanted a peace dividend. We started spending less on defense. We had this famous dinner, the Last Supper. We went from 51 prime contractors down to 5.

The conventional explanation of what happened is wrong. People think, “Hey, we had consolidation. Consolidation means we lost competition.” That's not right. Okay, maybe at the margin, but first of all, it's always been a monopsony. The nature of the competition is not what people think. It's not these companies competing against each other. The competition has always been the services competing. It has been competition inside of government that drove innovation, not competition from industry.

What really happened from the Last Supper is that consolidation bred conformity. It was the beginning of the true financialization of defense. These companies could really no longer think about growth; they thought about financial metrics, dividends, buybacks, and cash flow. It became very narrow. That conformity is not an environment in which founders can thrive.

The heretics were expunged. They left. They went to other parts of the American economy, like tech. But those heretics are required. In fact, if you look at part of the book, we catalog all these amazing defense innovations. Almost to a T, every single one of them was a heretical idea.

The institution was against it. The bureaucracy was against it. The process tried to kill it. And these determined outcomes. You can think about the Higgins boat, the boat that won World War II. The Navy didn't want to buy the boat. The Navy tried to steal the designs for the boat.

In the end, 92% of all boats in World War II were Higgins boats. Think about where we'd be if this Scots-Irishman wasn't just willing to just almost pathologically commit himself to making this happen. The boys would not have landed at Normandy.

Yeah, no, that's super interesting. As you said, it's always been this sort of forced consolidation, that we picked the winners. We're post-history now. We don't actually need to build for wartime.

So, is it your view that that really just expunged all of the talent that used to go to defense? It's interesting because it's also, in some ways, serendipitous that that's exactly when the internet's rising. If you're this kind of weird personality, you're going to go work on this new thing that's so exciting.

I think of Marc Andreessen, right? He could have been in the defense industry maybe 20 years earlier. But the people who were building the internet in the '90s wanted to build the new thing. So, I guess, is that the fundamental problem? It just became a place where anyone who was interesting or anyone who had a different view couldn't thrive?

Exactly. And then we compounded that problem by the nature of the monopsony. Unlike a monopoly, where you have 1 seller of a thing, a monopsony is where you have 1 buyer of a thing. The Department of War is a monopsony. The nature of the monopsony is that it starts imposing all sorts of constraints on its suppliers—how they behave and what they need to look like.

That led to us putting all of these companies on the Galápagos Islands. They're not on the mainland anymore. What do you get on the Galápagos? You get these exquisite giant tortoises. They're really amazing. It's like alien life. It's very cool.

Except when you take the tortoise back to the mainland, they're not competitive. They're going to get eaten alive by the wolves. We started creating a huge number of barriers for these people, so even when they had ideas, those ideas couldn't come back into defense.

When we started Palantir, there was no front door in the Department of Defense. The only front door—there was exactly 1—was in the intelligence community: In-Q-Tel. If you were an outsider, there was no other way in. The only people that worked here were insiders.

Of course, now that is part of the sea change that happened starting really in 2015. That means putting forth the 18 theses of the Defense Reformation in 2024 makes a lot of sense, because we have 10 years of heretics who have been knocking at the gate, ready to come help the Department.

No, and so much of the book—you talk about these sort of heretical heroes. In doing the research—and you're now sort of the walking encyclopedia for the defense industry in tech—who are the most exciting heroes? Who's the person you look at and say, “Gosh, that is the person that people don't know about, but they need to know?”

Well, I think it's hard to pick only 1. A new profile that we put out there is Colonel Drew Cukor. Some of these figures are historical: Bernard Schriever, Edward Hall, Hyman Rickover, and John Boyd. But the one that's new is Colonel Drew Cukor.

Cukor is the father of Project Maven. Here you have this Marine colonel, born and raised by a single mother in Southern California, from a very modest background. His only way of going to college was ROTC. He joined the Marines. He had lots of incredible experiences there, but he had a seminal experience when he was trying to evacuate Yazidi refugees who were fleeing ISIS.

A young Marine looking at ISR made a call that he thought he saw RPGs. That would have made it unsafe for the Marines to land and exfiltrate these people. There actually wasn't one. As a consequence, you have on the order of thousands of people who were tortured, enslaved, and raped because of this operational failure. It just changed this man.

When he had an opportunity in the basement of the Pentagon, on a project with no resources, to bring AI to the Department, he leaned all the way in. You can see the journey of the heretic here: Everyone hated him, and everyone tried to kill him. Every service thought they were doing AI. People tried to throw IG investigations at him.

One of the details we document is that someone said Colonel Cukor was housing Iranians in his basement. They actually sent criminal investigators to his house to look into this. Here's a devout Mormon with 4 daughters, living in a 1,400-square-foot home that doesn't have a basement, by the way. The investigators were just completely dumbfounded.

It shows you that sometimes the question is: Are you willing to put it all on the line? Are you so committed, so incorruptible in what you're trying to deliver, or is this just a career? That's one of the things I draw a lot of inspiration from these folks. It's just seeing: If they can do this, we can, too.

These people exist inside of government, and they exist outside of government. In this moment, you could say we need to build more weapons. We need to do this. Yes, but the most important thing we need to do is inspire the latent heretics to actually step up. This is the moment your country really needs you.

What's been exciting over the last year or so is that I'm seeing those people. I'm seeing them inside the building. I'm seeing them outside the building. That is what is driving the change: The leadership is setting the conditions to empower the heretics. They're protecting them.

John Boyd was a famously difficult fighter pilot. His own service, the Air Force, hated him. But the Marines learned everything they could from him. He was really the father of the F-16, and all of his heresy was proven correct in the Gulf War. We destroyed the 4th-largest army in the world in days. Everything came to bear: his high-low mix, his OODA loop.

John Boyd said, “To be or to do. You can be somebody, or you can do something, but you can't have both.” How committed are you to this?

He was so difficult. He gets a lot of credit. I think the other person who deserves credit, whose name I don't even know, is a 3-star Air Force general who protected him. People like that do not survive in these bureaucracies on their own.

It's not like, “Hey, he's difficult, and we somehow tolerated him.” It's, “No, someone realized there's something special here and, despite that, we tolerate him.” You see that in the dynamic between Bernard Schriever, who built our intercontinental ballistic missiles, and Edward Hall, who specifically built the Minuteman.

Schriever fired Hall once and then hired him back, realizing there was no way we were going to get to solid-fuel intercontinental ballistic missiles without this notoriously difficult human. I think that's great leadership.

Yeah, no, you just said something interesting: It really takes leaders inside the building to model the change, to encourage it, and to protect the people who are those heretics. You've joined the Army. It's a program from General George and Secretary Driscoll. Maybe tell us a little bit about the origin of that, and then what you're doing specifically inside the Army now to support that change.

Well, the origin story of this is really that I've worked with the Israelis in some capacity since roughly 2014. This is a very technical country, and they're proud of how technical they are. After October 7th, on October 8th, they mobilized roughly 360,000 reservists. By definition, all these reservists are prior service through national conscription, and most of them now had 20 years of experience in industry.

When they got back to the IDF, they were horrified at the state of technology in the IDF, which is actually an implicit self-critique: “Hey, when I was 20, I was really good at coding, but I didn't know what I was doing. Now I have 20 years of experience building internet-scaled things, and I actually know how to do these things correctly.” So I saw them modernize more in the 4 months after October 7th than I did in the prior 10 years of working with them. I couldn't unsee that.

Of all countries in the world, we are drowning with that talent. The skills we have at building things in the Valley, the companies that a16z backs—we know how to do this as a nation. The 20-year-old version of our green-suiters maybe did it. There's the will, the intelligence, and the capability, but there's also the tradecraft, the know-how, and the experience.

All the dead ends that I've run into in my career, the mistakes I've made—if you're going to make mistakes, please make new ones. Don't make the same ones I've already made. How can you stand on the shoulders of American industry to go faster and do this? I'm not sure I really had a lot to give the Army at 24, but I think at 44 there's a lot I can do to accelerate certain things.

And that's not just a narrow statement about me. I think that's a whole statement about the Valley. This is a whole statement about American manufacturing. Everyone in El Segundo—how do we make sure that if the Chinese make civil-military fusion compulsory, we don't make voluntary civil-military fusion impossible?

When I look back at history, we didn't used to make it impossible. In World War II, we direct-commissioned 100,000 people who look like what we now consider Detachment 201 into the military. We should be doing that again. The authorities exist. They're just lying dormant, and we're basically underutilized.

I was proud to join the Army with 3 other colleagues. We have Bob McGrew, former chief research officer at OpenAI; Boz, the CTO of Meta; and Andrew Wheel, the former chief product officer of OpenAI, who is head of science now. I think we've been able to work on different projects where we really act as senior advisors to Army senior leaders, and there are different projects where we get our hands dirty and help.

I think it's been really productive. I've learned a lot by doing it. Hopefully the Army's benefiting from it, but I think, more broadly, we would like to catalyze this across all of the services—a broader call for folks who are listening to this now in industry.

What's been the biggest surprise? I mean, you've obviously worked with the department for years, but being on the inside now, what surprised you?

My focus is really 2 things. I'm helping them think through how to plan force structure over long periods of time. How do I generate the force I want for all the different military occupational specialties? So that's been one.

But the second part of it is thinking through how we want to employ software as an almost malleable weapon system, as something that our commanders can wield to drive advancement. They call these the operational data teams. What's been hugely impressive to me is the quality of talent in our green-suiters: people who are not formally trained computer scientists, people who have just learned these things.

The most compelling AI applications I'm seeing across the private or public sectors are being built by these green-suiters. I think there's something about the existential stakes. You're not doing this for fun. You're not doing this for 10% efficiency. It's a binary outcome: win or lose.

The other thing about this moment that I think is really interesting with AI is that it's massively empowering to people with specific skills. It's the intel warrant officer who really knows their domain. I was wondering, as someone who's been doing this for 20 years, where was this person 10 years ago? The conclusion I came to is that they were always there.

10 years ago, what would they have done, though, with their idea? Make a PowerPoint slide? Brief some program bureaucrat who would tell them how bad their idea is? No, because they're smarter than that. They wouldn't have wasted their time. Now they spend 2 weeks building it themselves. Now they're having an empirical conversation about how what they built actually drives the Army forward, and everyone is quick to adopt it because everyone wants to win.

So it's been really exciting to see that. The other part of it, I think, is that big institutions—this is true across the private sector as well—struggle with zero to one. Everyone wants to get to N as quickly as possible. If you have some sort of innovation, they almost want to rush to get to N as quickly as possible.

“How do I scale this across the formation?” Well, the Army is a very big place, and thinking very critically about the pathing—what is the journey and cycle of getting an innovative idea to scale—is literally what we do as an industry all day long, right? How do they take and buy those lessons rather than cargo-culting their way there, which is frankly what I think large Fortune 100 companies in the private sector do as well?

They have more to learn from startups in this capacity than they do from big Fortune 100 companies.

Totally. That's so interesting, too, about just—that is something I hear time and time again: the level of technical ability of someone very junior in the Army or the Navy today. It's like they came up tinkering, and, as you said, now the tools are there. They can just build something.

You're not only learning from startups; you're literally learning from individuals who are enlisted, who have a great idea. It does feel like, as you said, this is a revolutionary time for the military, where they can actually learn from their junior people who have a great idea, and that can be deployed very quickly.

Which plays to the American military's strengths of bottom-up innovation and mission-command-type control. It's really something that our military can uniquely do that no one else can.

Let's get into the SaaS-pocalypse. There's a line of thinking that says, “Hey, now that AI is here, the switching costs are very low. There's no code moat, there's no data moat, there's no UI moat, and there's a set of SaaS companies that are on the conveyor belt on the way to the guillotine.”

Maybe it's Monday.com first, maybe it's Atlassian, and companies that aren't systems of record—and maybe it's coming for them, too. There are other people who say, “Hey, you're not going to vibe-code Atlassian. You're not going to vibe-code these incredible products with all these integrations and all this distribution, et cetera.” What say you on the SaaS-pocalypse? How do you make sense of it?

I think both things are true. I would give you a different rubric to think about it, which is: what software is really fundamentally about beta, and what software is about alpha? I think that the software that's about beta is going to really struggle. This is software that made you more similar to everyone else.

This has been my historical critique of the software industrial complex: the feedback loop for the people building the software is, “Can I sell it?”—not, “Did it add value?”—which is downstream of, “Can you sell it?”

You could think of vibe-coding, the advent of AI, as allowing you to make software that's specific to you. It's inherently alpha-focused if you do it right. I think the platforms that are already focused on alpha are going to continue to have an advantage. It's actually going to be a win that fills their sail up.

On the other side, the stuff that's all beta is really going to struggle. You can almost argue that maybe the beta wasn't that valuable to begin with. One of the jarring moments for me was in COVID. If you really look back at what CEOs were talking about in their earnings calls about software, no one talked about the $5 ERP implementation they did that saved their supply chain, because all of them fell over like paper tigers in 2 weeks.

What they were talking about was Zoom and Teams and how that enabled them to go remote. You cannot think of that and not think, “That's crazy.” That should have been a Sputnik moment for the software industry to say, “Wow, we haven't built what's valuable.” How depressing.

On the flip side, for us at least, COVID was a huge tailwind because we're specifically able to help our customers adapt to this reality at the speed of the disruption. It kind of separated the wheat from the chaff. I think we'll see that. Maybe there's a lot of things we've been spending on almost mimetically, like, “Well, other people use it for this. This is a standard industry solution for X.”

Those things are going to feel a lot of pressure. On the flip side, there's going to be software that's almost like a toolkit and approach that allows you to express how you're more different than other companies.

The fact that it’s almost become software that allows you to express your competitive advantage and your strategy is going to be a premium. On the day-two stuff, like vibe coding, you can’t do it. I think that’s actually true. Day two is much harder, a lot of it is unsolved, and you’re going to have to figure that out. But I don’t think that’s going to preclude the pressure on the beta software.

In terms of accruing value, right now it seems like the hardware layer has the highest margins, whereas in the internet economy, the applications had the highest margins. I’m curious if you think AI will be like the internet, where the entities that control the end-user relationships accrue the most value, or if you think it’ll be more like the cloud, where the infrastructure layer accrues the most value or has the highest margins. How do you think that will play out? If you thought about the stack as chips, models, AI infrastructure, and AI applications, how do you think about it?

What I see happening empirically is that the models are being commoditized and are always under pressure. The model companies are expanding up. Sometimes they call it, in a diminutive way, a harness, but they’re actually building software around it that is AI infrastructure to do something like code.

Then the people who started as narrow vertical AI solutions are earning their way down the stack to realize, “Oh, I need this actual AI infrastructure to be able to scale to my customer base and handle more use cases.” So our theory has always been that value is going to accrue in 2 places: at the chips layer and at the AI infrastructure layer, what we would call ontology. Those 2 layers, I think, are going to be pretty defensible.

There was a funny chart in The Economist the other day about what’s going to happen to the economy, and it gives 3 predictions: either everything goes vertical—AGI; either we’re all dead, or we’re all economically dead and everything collapses; or 2% growth. The Economist is hedging, just like many others.

I’m curious what your mental model is for what AI is going to do to the economy in terms of the productivity stats and GDP growth, but also the job market. As AI achieves its goals over the medium term and we start to reach the potential that people have been talking about—people say AI 2027, or even if it’s 2030—how do you think it’s going to impact the economy?

I have a lot of thoughts here, so hopefully we’ll hit them all and I won’t forget them as we go through this. The first bit is what always irks me about how we talk about AI, as if somehow we have no human agency. “AI is going to do X.” No, that’s not right. Humans are going to use AI to do X. There’s a choice here.

Do we want to invest in AI slop, to borrow an expression from John Collison and Patrick Collison? No. I don’t want to invest in that, at least. So what is our normative view of why AI is valuable? How does it result in American prosperity? How does it make our society better, not worse? We have to reestablish the fact that we have agency and therefore an obligation to steer this in a specific way.

Then, if we have agency, what is that? My view of this is that we have a historic opportunity to fix the fundamental breakdown that happened in the ’70s between wage growth and GDP growth. This should be—if we look at just the example we have of the intel warrant officer who’s suddenly able to do so much—well, I see that playing out on the ICU floor. I see that playing out on the factory floor.

There’s an opportunity to give the American worker superpowers with AI. It’s David’s slingshot in a world where the Chinese Goliath has been this giant sucking sound of American prosperity. If we do that, it’s a basis for underwriting the reindustrialization of the country.

We’re not going to do this symmetrically. That’s why it’s a slingshot. It’s not like, “Hey, this is how they do it there. We’re going to do this here.” Actually, we’re going to do this in entirely new ways. Hadrian is a perfect example of that, right? We are reindustrializing using technology, making these people 50 to 100 times more productive than they could be otherwise, and it’s going to lead to all sorts of new possibilities.

In particular, I think the great lie of globalization is that we can do the innovation over here, and we’re going to have the production go over there. Well, guess what? Innovation is a consequence of productivity. If you don’t make the thing, you can’t innovate on how you make the thing and what the thing is.

You see that with SpaceX. There’s a reason the R&D engineers are colocated on the production floor. What is the feedback loop and cycle time they expect to come out of that? You see that in the negative, where we used to think WuXi was just some cheap set of pipetting arms for contract pharmaceutical research, and now 50% of all clinical trials are being done in China.

I think we should view this as a national emergency and a national opportunity around AI. What concerns me a bit is that these technology revolutions are, by the vast, vast majority, tool revolutions, not concept revolutions. It was not Galileo who invented the telescope; he used it to discover planetary motion.

The future of these technologies—the microscope, the power loom, the telescope, the personal computer—is determined not by the inventor of the technology but by the people who wield the technology. Today, when we listen to the AI doomerism, we’re listening to the inventors, who are incredibly smart. But just like their creations, they have their own jagged intelligence. Just because they were smart at building the model doesn’t mean they’re going to be right about the implications of it.

We are implicitly giving up our own human agency in how to steer it. It is us, as the wielders of it, who are going to determine the future course of this technology. Maybe the most authentic thing about that Economist graph is that the range of outcomes is exactly what’s possible. It’s up to us to pick which one we want to be on. It’s a choice we’re making; it’s not something that’s being done to us.

No, but you just said something so interesting that I think is underexplored: the colocation of R&D and production, which is something we very much understood. That was the Henry Ford style, right? That’s how we used to build things in the physical world. Then, of course, globalization led to this sort of separation of them.

You still see it in companies, right? The engineering team in many companies is not the same as the production team. You can be a production company or an engineering company. We see this a lot in our American Dynamism portfolio.

What was the impetus for that philosophical division? I think a lot of people point to policy changes in the ’90s, but what was the real impetus, from your research, that led to this divorce between production and engineering? How are you seeing it come back together again in companies today?

Europe has created exactly 0 companies from scratch in the last 50 years worth more than €100 billion. We’ve created all of our trillion-dollar companies from scratch in America in the last 50 years. The difference is founders.

You have really good companies over there, but they’re 300 years old, 100 years old, whatever it is. We had the Europeanization of our megacap companies until recently. At some point, there was this fork in the road where Intel could have promoted its CFO to be the CEO or Pat Gelsinger, as CTO. Back then—this is before he came back later to be CEO—who did they pick? They picked the CFO, the person that Wall Street would understand, not the person who could actually determine the future road.

By the way, it really looked like it was working for 10 years until it fell off a cliff. But that was all financial engineering, not real engineering. When was the last Boeing CEO to be an engineer? I think it was 2004. There was a period of time in our economy where we understood that the engineering was leaving these things.

Elon says the pathway to the CEO is through the CTO.

Which sounds like a crazy, heretical statement because, certainly for my generation, the way we grew up, that’s not true. That’s not what we were taught.

I’m not saying that because I’m the CTO here. Don’t read anything into that.

We won’t infer that you’re breaking news today. Thank you.

Andy Grove, who was the president of Intel, used to start his annual sales and marketing kickoff meeting by reminding all the salespeople, “Just remember: It’s the engineers who create all the value. You guys just move it around.”

It doesn’t mean the salespeople aren’t important or aren’t necessary, but there is a kind of sequencing here, and I think we got very confused about that. We became very good at financial engineering and forgot about engineering.

One of our portfolio CEOs said that maybe salespeople are the least AI-able in terms of being able to be automated or replaced. I’m curious how you think about the jobs at tech companies being leveraged with AI, and how you’re using AI in your own company, in Palantir.

How do you think about that?

Yeah. So, one part I was going to say from earlier that I think is relevant to this is that Pascal said every human has a God-shaped hole in their heart. Part of the potential pathology from the labs is that they have filled that hole with AGI. There are things that they assert as empirical that are actually articles of faith. They may be true; they may not be true. I don't know, but they get confused between what's an article of faith and what's actually an empirical reality.

If you view this through a very pragmatic, clear-eyed lens—say, with salespeople—I'm not sure why the goal is replacing people to begin with. Isn't the goal to win? Isn't the goal to be dominant in your industry? You want to be better. Maybe being better is about a mixed mammal AI team. How do I build the Iron Man suit for the salespeople I do have? How do I make the best salespeople more productive and systematize what makes them good for everyone else? There are all sorts of other ways of thinking about the problem if your goal is winning.

But if your goal is AGI, the aesthetic of the fact that you couldn't replace the person with this model is offensive, and you're just going to keep driving at that. I think it could be a distraction. This is one way in which I think the Chinese do have a little bit of an advantage. First of all, to be clear, I'd bet on us 100 times out of 100, but they have a pragmatic approach. The whole point of AI is to win. It's not AGI. It's, how do I improve my productive forces, as they would call it?

I think the good news is, if you look at the people who wield the technology in America, that's what they're focused on. The CEOs I deal with, none of them have asked me, “Hey, I want to fire a bunch of people,” or, “How do I get rid of these people?” Maybe because we're too expensive for that sort of use case. But they come to me and say, “I want to dominate my industry. I want to destroy my competition.” Great. So, the ambition is there, and maybe you get more efficient by doing it, but actually the whole point is to grow massively. That ambition sets the frame of how you're going to apply the technology and what sort of solutions you find valuable.

Speaking of China, how do we win the AI race, particularly as it moves toward more physical AI and robotics? What are the things to make sure we get right, or the things we need to fix?

I think our biggest risk as a country is suicide, not homicide. Anyone who knows me knows I'm a big China hawk, and I think part of the challenge with China is that it's not enough for the CCP to prosper; America must also fall. Look, if you want to buy our soybeans or not, I don't begrudge you. That's a business decision. That's free trade. Great. But when you're trying to smuggle in agricultural fungi so that we can't grow soybeans, that's a different ballgame altogether. That offends my kind of American Calvinist sensibilities of fair play.

All that said, that would make it seem like I care a lot about homicide. But I think our problem is actually one of national will and focus. Are we actually addressing the problems that we face here? Are we encouraging the agency in our people to believe the world can be better? This manifests in a sense of nihilism and polarization. We forget what unites us, and we focus on what divides us. There's this sense like, “Hey, nothing really works and it doesn't really matter, so let's just burn it all down.”

A big part of how I think about what Palantir does in the world is that it is about the legitimacy of our institutions. Whether it's doors falling off planes or basic government services working, these institutions should all work excellently. In the absence of them working, it breeds this nihilism. Then you get the wrong reaction to it. That's what I think we should focus on addressing.

So now, to physical AI: the point is having an ambition like, “Let's reindustrialize.” Let's be maximalist about this, not some sort of half measure, like a little bit of friend-shoring here or there. We invented all of these technologies. We invented mass production. We invented nuclear power. Thing after thing after thing—it's like, the idea that somehow the American people are not capable of this thing, how is that? It beggars belief, right? I think it's actually about will and motivation and leadership.

I think that's such a good segue into what you're doing in terms of building culture, because I think this is something that's overlooked. A lot of people think it's a technical problem or a production problem, and I agree with you that it's a seriousness problem. You have now been investing in film, which is totally different from what you do at Palantir. I would love to understand: Why did you start a film production company? How do you think that's ultimately going to change the culture around having more will about doing these hard things?

Well, it really starts with my own assimilation journey. I came to the U.S. as a young child and settled in Orlando. My assimilation journey as a 4- or 5-year-old was watching movies with my dad on the couch. What were the movies of the '80s and '90s? The Hunt for Red October, Red Dawn, and Rambo: First Blood Part II and Rambo III. I like to say that, as a 5-year-old, I knew what it felt like to be an American before I knew civics. Civics was way, way down the line.

A lot of people experienced that again after a long period of time when they watched Top Gun: Maverick. We sometimes over-intellectualize these things. There's a feeling to it. I heard from the guy who made the movie 300 that after 300 came out, Navy SEAL recruitment went through the roof. He was perplexed. Obviously, it's a movie about Spartans. What does this have to do with Navy SEALs? But it clearly inspired so many people to be like, “I want to look like that. I want to be that strong. I want to be that heroic.”

The virtue of entertainment is, first of all, it's got to be entertaining. It's not Pravda here. But then it lets us reflect on ourselves: Who do we want to be, and what do we want to be like? If our entertainment is all Terminator—AI ruins the world, technology is a force of evil, all dystopic future scenarios—that sets a sort of condition. I would juxtapose that to my youth in Orlando, growing up in the shadow of the Space Coast, which was just: science and technology are amazing, we're going to be living on other planets. As a 6th grader, you would write a report on how you were going to get to Mars, and it just inculcates a fundamental belief that the future will be better, and that science, technology, and the will to invest in these hard problems are worth it.

I think we have a moment to reclaim storytelling in a way that's both entertaining and inspiring.

And do you think the height of the battle between good and evil inside Disney films was The Lion King in the '90s? They were different films then. How do we get back? Maybe it's not back; maybe it's forward. How do we get back to those stories for children, for people to feel optimistic again? In some ways, you don't hear, “Oh, I grew up in the city and it's the height of optimism.” You don't hear that about California anymore. What will it take for movies to transform that?

Well, this is a kind of personal opinion, but I'm really excited that David Ellison is going to head Warner Bros. because, if you think about Hollywood, the original studio heads—they were founders.

Like Jack Warner in the 1930s, Germany was the 3rd-largest export market for American entertainment. The Nazis actually deployed censors into Hollywood to control what was being made. Every studio capitulated except Warner Bros. Jack Warner was the only person willing to stand up and speak truth.

Only a founder can do that, because if you're a professional CEO who's employed, you can't survive that. In some ways, there's a mirror between present-day Hollywood and the defense industrial base. It's conformity. It's a lack of opinion and a lack of a normative view of what it's trying to communicate.

Then, if you go a little bit further down the line, you look at the Vietnam era. We had very cynical Hollywood content during Vietnam as a reflection of how we felt about ourselves. In 1973, George Lucas made “American Graffiti” because he was tired of it. He said, “I'm tired of it. I just want to make a movie about boys driving cars and chasing girls.”

It was a palate cleanser. The American people remembered, “Okay, we went through our period, our cycle of grief and cynicism, and then we're ready.” It set the conditions for the movies of the 1980s and 1990s that we all love.

I think we're also tired of it right now. We're tired of the cynicism and the idea that everything's going to be worse. You see that in the performance of stories. “Top Gun: Maverick” is the easy one to point to, but the content that's doing well right now is American-oriented.

There are inspirational figures. The heroes aren't antiheroes who are drug addicts, whom you wouldn't want your kids to grow up to be. There's actually some sense of inspiration and pride in terms of who we are and how that reflects in the entertainment itself. If you think about the next 2 to 10 years, we're going to see a lot of content like that. That's what I see in the development pipeline from these studios themselves.

That's exciting. So maybe talk to us about some of your projects or things you're working on and what you're most excited about. We've had these conversations, Erik and I, with Mark and others about how the pipeline for the last 10 years has been dour, or we're sort of getting to the end of the pipeline. You're seeing it in the Oscar nominees this year; they're not optimistic.

But as you said, maybe 10 years from now we're going to see this pipeline of pro-America, exciting, optimistic, enthusiastic, golden-age sort of content. What are you seeing, and what most excites you?

I don't want to give away too much of my own development pipeline here. But you see “Call of Duty” being made right now by Peter Berg and Taylor Sheridan. You see the entire Taylor Sheridan universe. Talk about “Sicario”: it was 2014, and “Sicario” basically came to life with the new Jalisco New Generation Cartel. There's a sense in which the storytellers have exactly the frame that we're excited about.

Recent events are very interesting to tell stories about right now. Even a movie like “War Machine,” which just came out: from watching the trailers, it wasn't yet clear. You can imagine that 5 years ago, the storyline would have been something more like, “The U.S. government built evil robots that the human soldiers had to defeat.”

In this case, it was more like aliens—sorry to give away the plot if you haven't seen it—but you have an alien robot, and brave American Rangers have to defeat it through their own ingenuity. That itself, I think, is showing you—it belies the shift in the narrative and storytelling that's happening.

I think world events remind us that there is actually evil out there. Russian tanks can just roll across the border. October 7—just horrendous barbarism—is still possible. These things don't maintain themselves.

Putting this back in a geopolitical lens, as much as I've been saying we shouldn't call China a near peer, we should call them a peer, because calling them a near peer is like a shibboleth that lets us off the hook. When you look at operations like Maduro or Midnight Hammer, it's hard to think of more that you have done to restore deterrence in the world.

It's a reminder that we do have the will. Maybe because we didn't have the will, you forgot that we had the capability, but we have both the capability and the will to do things that are quite amazing.

At the same time, it signals a very obvious truth: somehow, none of the Russian and Chinese equipment worked. So if you're a third-party country and you're thinking about what the future of the world is and how you want to be allied, maybe you've been hedging because you've been seeing America in retreat.

It's also a reminder that the Chinese did not come to save Maduro, and none of the equipment they provided actually seemed to do anything. So is that really an option for you? I give you the geopolitical answer, but I think—okay, here are some projects I think I can share.

“Oppenheimer” was hugely successful and complicated, right? It's three-dimensional to the point of entertainment. It's not Pravda. I think there's a very powerful story in Hyman Rickover and the birth of the nuclear navy.

We talked a little bit about him, but what I love about Rickover is that he was born in a shtetl in Poland and came over at the age of 6. It's one of these near-miss stories: when you get to Ellis Island, you have 10 days for someone to come pick you up.

His mother sent a telegram and gave someone money to send a telegram to the father, who was already here, to come get them. The guy pocketed the money for the telegram. On day 10, someone happened to arrive whom they knew from the old world, then ran out, got the father to claim them, and bought them one extra day. So, on day 11, they got picked up.

This was a near miss: we almost didn't have Rickover. But Rickover was a notoriously difficult personality. He was a 5-foot-2-inch, short guy. In World War II, he drove a coal ship. It was not a prestigious post.

After World War II, he was sent to Oak Ridge, at the vestiges of the Manhattan Project, where he was inspired by the idea of putting nuclear power inside submarines. Before then, submarines sucked. They could go underwater for an hour. They were diesel-powered and loud. They were basically surface ships that could occasionally submerge.

After that, they became really exquisite. I think he built the first one in 5 or 6 years: the Nautilus. But the Navy didn't want him to succeed. Not only did Oppenheimer think it was a stupid idea, the Navy did, too.

His first office was a women's restroom. I kid you not. It's like, how can we humiliate this guy into quitting? And he just kept going. What I think is interesting when you look at his memoirs is that it's not that he was immune to the humiliation. He felt every slight and insult. He documented them.

But somehow, he was able to channel that into something he was going to push through and still succeed despite that. Admiral Zumwalt, who was the Chief of Naval Operations, the most senior uniformed person in the Navy, said, “The Navy has 3 enemies: the Soviet Union, the Air Force, and Hyman Rickover.”

The other thing that I think fits very closely with 18 theses is that Hyman Rickover was a 4-star admiral for 30 years. That is something that we can't even contemplate today. We almost view our officers as cogs to keep moving around. Every 2 to 3 years, you have to keep moving.

As the first director of Naval Reactors, he was in that role for a very long time, but that role even today is an 8-year stint. It shows you the primacy of people: with something this exquisite, something where this much knowledge and continuity matters, you don't just keep pulling people out every 2 or 3 years.

Our ships and submarines are the safest in the world by a long shot. Every 6 months, Soviet submariners would get 6 months of respite at Sochi to recover their white blood cell count because they were getting irradiated. We've had no deaths due to radiation.

He built it to the specification, “This has to be safe enough for my son.” He built it to a specification that was 100 times safer than the minimum safety standard. That is the sort of aspiration only a founder could have.

Yeah. This is going to be a great movie. What else is there to do? I mean, you're doing everything. So, what's on the radar for you?

Well, in some sense, maybe it's enough. All these things have a through line where it's really about American greatness and inspiring the next generation. It's driven home to me when I think about my kids and recognize that the America I grew up in is something that every generation has had to fight for.

I'm in that phase now where I'm fighting for the prosperity that the next generation ought to have. Whether it's soft power and inspiration in movies or hard power and deterrence of adversaries and preventing World War III, it's all about American greatness and the prosperity of the American people.