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

Michael, the undersecretary of war, four research and engineering, working directly for Pete Hegsa. We had to get this out to you on Thursday night because it is an emergency pod. One of my old besties, meal and Michael is here. A meal and I, uh, a part of team Uber back in the day he was, Travis is right hand man. Some might say, fixer and a meal, Michael is now the undersecretary of war. Here in the United States serving his country like our bestie David,

facts, welcome to the program for the first time. meal, Michael, I don't know. I'm doing good. Uh,

I hope was more than the fixer, but, you know, we did 20 billion dollars a year. I mean, you got it done.

That it done. The heart, he would give you the hardest things. Yeah, just third. If it was hard,

“and that's what a fixer is. An operational acts. That's what they call. All right. Sure.”

Brooklyn, we call him fixtures with us again. A rain maker. There's that, too. There's that, too. Making it happen with us again. Chimoff Polyhoppetea. How are you, brother? Great. Yeah, look at that smile. What do you got going on? You got some bokers in the fire. They're not going to say. In the coming weeks, I think some news is going to drop. That's my prediction. I don't know how you're loving them off, tweet mugging that's been going on this week.

So good. So good. He's good. He's good. He's looking back and by default, but he's been mugging the

gunners. Yeah. So funny. What was your favorite favorite? The one I say this morning that you said was, what are you collecting? What are you saying? Chimoff said, oh my god, it was like, yes, I did. Yes,

“I did. Someone said something to Chimoff. He's like, drops in. Why is everyone so mad at Chimoff?”

All he did was lose billions and retail investors money. One page specs. It's not like he then told them to enjoy their capital losses or anything. Give them a break. Chimoff's response. Yes, I did. All right, piling on is your sultan of science. Yeah, everybody's favorite. How to great. So yeah, some great science that he brought to the show last week, Friedberg. How are you doing? Oh, yeah, I've been traveling this week. Back at home. All right. Sacks is out today. He's

very busy on Capitol Hill. We'll talk about what he's up to next week. Let's go. Come on. Let's go. Let's go. Let's go. Let's go. Go, Jason. All right. The U.S. and Israel launch a joint attack on Iran on Saturday. Today is day six of Operation Epic Fury. Iran's Supreme Leader Ali Hamani. Was killed within hours of the operation. 40 senior officials have also been killed. Depth also far. About a thousand people according to reports, tragically six U.S. Army

Reserve soldiers were killed following the drone strike on a base in Kuwait. A U.S. submarine

sank in Iranian ship off the coast of Sri Lanka. This is the first torpedo kill since World

War II. Why were at war? Been a bit of a moving target and debate. First explanation from Rubio. He said Israel was going to attack and the U.S. had no choice but to participate. Later walk that back Trump made it clear. This is not a regime change effort. But we're doing this to stop terrorism and the development of ICBMs by obviously a pretty crazy group of individuals. And obviously nuclear bombs, which we blew up a couple of weeks ago. Trump also mentioned

the people of Iran should seize the moment quote and take their country back. Hegset.

“I believe is sure a boss and you'll said quote, this is not a so-called regime change or”

but the regime sure did change and the world is better off for it. So here's an interesting polymarket right now. U.S. forces enter Iran. This is boots on the ground by the end of March 40% chance by the end of the year 59% chance. So the idea that we're not going to have boots on the ground, the sharps on polymarket believe we will. Will the Iranian regime fall? By June 30th, 39% chance according to polymarket and by the end of the year 51% chance.

So Emil, I guess there are two questions people really want to know. I'll leave off why we're doing this and the President Trump has been pretty clear now. But how long is this going to take is the one question and are we going to have to have boots on the ground? Maybe what is success here? I think the the President talked about this is a week's not months kind of operation and it's aimed at essentially disarming the the regime or the country from in such a way that they can't

supply Hezbollah, Hamas, Muslim Brotherhood, all the kind of terror groups that get sponsored

reporting they're going after the depose, we went after nuclear sites before their prodigious drone maker. These like huge one-way attack drones that can go hundreds and hundreds and some miles, lots of ballistic missiles that are aimed at every country in the Middle East as you've

“seen, they attack them. So I think that's one in terms of boots on the ground. There's no scenario”

where we have some protracted boots on the ground, Afghanistan, Iraq too, like scenario. Freebird, your thoughts on this war obviously a lot of people voted for Trump in order

to have the peace dividend that he was in his first term, absolutely the peace president. And now

here we are, eight countries have been bombed and we've had two leaders deposed and one of those two have been killed. You're the one that's freebird. I think the President and the administration have probably the biggest meetings of the term coming up in China in April. My estimation, based on the conversations and the comments made by the President before he came into office and since he's been in office, is that finding a grand bargain or a deal with China is probably

one of his top priorities. And if you think about the importance of that, is the U.S. going to wait into a giant global conflict led by a U.S. China rift or is the U.S. going to find some grand bargain. I think he would probably have a preference for the grand bargain. And that being the case, I think you could look at the in the context of Maduro and the actions in Iran as creating maximal leverage going into those negotiations. The reason for that freebird, 90% of the oil that

comes out of Iran goes to China and there's been a long developing and developed relationship between Maduro's government and China. And these are big economic drivers or support the economic driving in China. So creating leverage by having significant influence or damage or destruction to those supply chains for China gives the United States footing to be able to negotiate a better deal for America. I would imagine that the President's intention here isn't to go and decide

who should be in charge and drive regime change and end in the multi-year conflict with Iran.

But ultimately, if there's some transaction with China that gets everyone out of this

and puts the U.S. on a strong footing where American businesses can sell into China, which is very challenging as everyone knows today. And there's parity, regulatory parity, economic and trade parity between the U.S. and China. There's a point of view in what happens

“with Taiwan and availability of key technologies like semiconductors. I think it could be a win-win.”

And I think that a deal with China could be the crowning achievement of this administration, particularly going into the midterms. So the timing is right. And I think that's probably a core part of the motivation here. Chumath, your thoughts on this action and why we're doing it. You've heard, obviously, the president has his position. We're not doing regime change. It's a secondary effect, obviously. But we want

to stop those ICBMs and nuclear bombs from being developed and we want to stop terrorism. Additionally, Freeberg says, "Hey, we're framing this great discussion. We're going to have a Xi and China and oil as part of that." Where do you think you stand on all this? I'll build on both what a meal said and what Freeberg said. I don't think this is about regime change, and I don't think it's about a local regional conflict. I think if you take a step back and zoom out,

the most important thing that we did in the last three months was by taking out Maduro and

by taking out the Iranian leadership. We have created enormous leverage as Freeberg said

“with China. Now, why is that important? Because I think all of this centers around that geopolitical”

discussion. Last night, something important happened, which is that the official Chinese bureaucracy posted what their GDP targets were. And it was shocking to anybody reading it because what we saw was that they guided to a range of four and a half to five percent. Which if you look at the historical context of that growth, is the lowest that it has ever been in about 30 years. So three decades. So before they entered the WTO.

And the question that one should ask yourself is, "When a country that's growing at eight nine and ten percent, start to grow at half that rate, yet have double the number of people and double the GDP, what happens?" You already have incredibly high domestic unemployment, especially youth unemployment.

would show that it will become more chaotic. If you have that as a starting point, what is it

“in China's best interest to do? And I think it becomes obvious that the right thing to do”

would be to invade Taiwan. Why? Because you start to create a sinkhole that occupies your people, that occupies resources, that can get domestic production up and running, that can start to generate a war machine. And you see the economic impact of war machines in any country during any conflict. And if I had to guess, just to build on what Amel said, the President saw that, and I think what they did can be summarized in this chart, which I sent to Nick. So if your goal is to

prevent war with China, which is a massive global conflict, which could be nuclear, which could be cataclysmid, how would you do it? And this chart paints one way to do it. If you look at the conditions inside of the Chinese economy, the most interesting takeaway is that they are enormously dependent on imported oil. So about 20% of their economy, but it's not 20% of their economy,

because it's 100% of these critical things that create GDP, logistics, transportation, aviation,

feedstock inputs. And of that 19%, about a fifth of it comes exclusively from Iran and Venezuela. And now all of that is off the table. So if you take that, and then you see what Steve Wittkoff and Jared Kushner and Josh Greenbond have been doing, which is trying to get a deal done in Russia. And you put all of these things together, because by the way, if you add Russia into that mix, it's about 40% of China's oil. Not only do you re-dollarize, not only do you stop the

funneling of all of these illicit oil funds to creating chaos all around the world, but you hem in China going into a massive moment at the end of March beginning of April, where as Free

“Brook said, really astutely, there is the potential for a grand bargain. And I think that's”

secure global safety in that that is a huge thing for America. And you know, how much does this have to do with China? I think, you know, my instinct is, and I'm not speaking for the administration

on this, that's a second order benefit to some of these things. Like the, you know, and then you

said eight, eight conflicts, they have not been eight conflicts. There is like we inherited Gaza, we inherited Russia, Ukraine, Venezuela was its own operation, and then you could sort of attach to it the drug boats that were coming out of that as like one big operation. And then the Houthis was just Biden was ignoring the Houthis, they were just shooting at our ships. So that was like very limited in terms of like stop shooting our ships. We need freedom of the seas, and that wasn't sort of

“you know, so that's something any president should be doing, generally, I think,”

the ran being the one, you know, material conflict outside of Venezuela. So it's not, it's not that many. And how long did Venezuela last? It was one raid. I guess that's for really in four hours. Yeah, it's important. It's important for you. I mean, I'll sort of, uh, I've made land throw on bears a new approach here with regard to these actions, which is no boots on the ground, and we seem to, uh, and you, of course, have better information than anybody else does. I don't think

anybody would have known Venezuela would have gone as well as it did. And so far, and listen, we got a long way to go with Iran. This has gone very well as as well. So explain to us what you know and what you, the president and hexaf, know that we don't, that makes these two operations go so smoothly. What, what is it? And then there's obviously some new technology here in the case of what happened in Venezuela. Yeah, besides this combabulator, what we've got is a very well-trained

military, like the global war in terror was the vaster and so many respects. But the people now who are fighting that are generals now. And so they've learned a lot of lessons. And you can pair that to the Chinese military. They don't have a lot of experience. In fact, the, the decapitation they did in the Chinese military, the one guy that took out was the one guy who had experience and Vietnam. So they don't have, uh, conflict experience. And that matters because you understand

going in, what are the things that could go wrong. And then you, you have incredible technology,

space, air, land, sea, cyber, um, all kinds of effects that you could bring together. And so you imagine, uh, a hundred guys goes into the most fortified compound in Venezuela. Where the president is,

incredible, right? He's stunning. Yeah. So, and they, they, these things, these war games have been

“on the, on the shelf for a long time. Every, every scenario has been planned for years ahead of time.”

Midnight Hammer and Iran was planned. Well, years ahead of time in terms of how would you do it if you were going to do it? And then you're keep refreshing the tactics, tactics, techniques, and procedures and you're updating them. So we have a very sophisticated way of doing these things to minimize loss of life and that's my success. Can I ask a question? Of course, I don't want it. I don't want to do real this conversation. But is the discombobulator real? Like what can you say

about the discombob? I can't say real. I completely, I was like obsessed with this when I saw it on Axe. I was like, what is this thing? I mean, I needed in my house, like, I should have put in the thought these, like, I'm just just for when help you chose out. Oh, my god. Not meant for your kids. I don't know if they're baby badly. No, it's, can't talk about it. I mean, do you think we would have been able to pull off that mission as successfully as we did

five years ago, 10 years ago, has the technology improved that quickly that this is not something that's been possible historically and how does that change the, the pacing and the face of war for the next couple of years? I'd say no, it wasn't only a technology maturation from five years ago. It's the rules of engagement. The rules of engagement that we used to have, there was, I mean, if you read about them, some of them were insane, like,

if in Afghanistan, if the guy had a small gun, you had to have a small gun. And, you know, there was this parody in your ways. And when you're like, well, but is the objective to have like a fair fight or an unfair fight? Well, if you're on our side, you want to be unfair. So the rules of engagement were relaxed to be, who writes those of me, who sits in an office and says, you can't shoot back, if a combatant is shooting at you, if you aren't matched, gun for gun.

Yeah, I mean, who writes that? Crazy policies that are written in the military departments.

“And that's why when Secretary Hicks had talks about this kind of thing and what was happening with”

him when he was in Afghanistan, if you ever read his book in Iraq, he's like the rules of engagement were so punishing that we were, we were at risk all the time because you had to have like a legal understanding of what was happening in every minute in the battlefield. As opposed to, well, your job is to, you know, take out these guys and protect these guys. Here's your munitions. Here's like the red lines. And then like in the middle of that, go, use your judgment.

Your commanding officer, use your judgment ahead of win. And we kind of gone back to that, use your judgment, push a responsibility field, still have your red lines, but other than that, the objective is the objective is it's more of a comb towel approach. It's like go all in, have a clear objective come out, use overwhelming force. And we were not doing that for the last four years. And then going back to the face of war going forward, my understanding is that there have

been more drones deployed by the United States this past week than we've done in the history of military activities at, right? And like, how does that really change things going forward here?

It changed a big, well, so, so the predator drone was the first big drone program, like 10,

15 years ago, and says big honk and drone. And then if you remember Obama would take out some of these alchita leaders with drones on their balcony and things like that. I think we present Trump took out Solemani with the drone nearest car. That was the beginning. And then they were like, sorry, the Russia Ukraine war happened where it's like drone on drone 70% of the casualties or for, but because it drones. So drone on drone warfare, robin on robot warfare,

“those things are the future for sure, right? And that's why companies like androle are companies”

like androle because they're making unmanned systems. And this has been something you've specifically been very focused on. And you tweeted today a little bit about a competition will play a little

video here and this Lucas. Yeah, this is an amazing combat attack systems. It used to take a lot of

time, certainly wasn't started up time to get new product into the channel for our military to use, explain what program you're running here feels like the DARPA self-driving challenge all over again. And what these drones cost? I knew there's a company making them for I think 35,000 dollars am I correct? I mean, the small drones like I'm holding right there and that are way cheaper than that. The Lucas one way attack drone, which can go five, six, seven hundred miles at the speed of an

airplane, carry a big warhead. Those are like $58,000. Depending on what kind of equipment you put on you put on it, but we've have a drone dominance program. And we basically have to build an arsenal for drones now. Are we likely to have a territorial conflict like Russia Ukraine with Canada and Mexico?

for any kind of major conflict like you're seeing in Iran, but also to protect military bases for America to 50 World Cup Olympics in 28. Like there's other there's a lot more uses of drones for surveillance not just for, you know, for combat. They're you're showing drones that are

sort of human-operated, but how much of this should basically be AI? So that is just some computer

vision. And again, back to what you said before, a model understands the rules and the red lines,

“but otherwise is beyond task in a compilisher mission. How much of it is one versus the other?”

I mean, it's I believe that a sophisticated drone war is going to be drone swarms controlled by AI to some degree or another, right? To what degree the control matters like, for example, drones have decoys, they could spit out, you know, they could dazzle, they could put out things. So how do you discriminate what's a drone and how to hit it? You can use AI for that because it's learned, you know, how to do automatic target recognition, for example. And then also could

identify a person and that and does that make it safer? So it's going after actually someone

you want to get and not someone you don't want to get. So there's a lot of uses for AI at the edge if you will. In the future here, do you creations and Russians do something called like a kill box where they lose comms because it's jammed for this drone and then it just starts going in a box and looking for, you know, the person that trying to get and they're trying to starting to use AI to do that. And China has this ability already, probably times some magnitude,

yeah, they've drone swarms because they can they can force the companies that make them not just the GI to interoperate. So interoperating drones called heterogeneous autonomy, right?

You take different kinds of drones and how to communicate with one another and then make sure they're

not going after the same target is like a pretty complex thing that they're definitely working on. And let's talk about the fidelity of these. Obviously AI is a new technology. They can make mistakes anybody who uses it on a day-to-day basis might experience a hallucination. How confident are you in the AI? Ukraine and Russia conflict. They obviously are not going to be as thoughtful maybe as we are in putting this together. They're in a hot war right now. But we as the United States have to be

very thoughtful about this. So how confident are you that this isn't going to make a mistake. I think

“that's the key to a lot of this debate. And when will it be, you know, perfect to find as much”

better, I guess this dove tells with the self-driving, you know, thoughts, it has to be a magnitude better than a human. So when will this be a magnitude more accurate than, you know, when we have make a mistake as a military and we kill a civilian? No, it's a good question. And I don't know when that moment hits that FSD moment where it kind of gets better. It's certainly not there and you wouldn't want to take huge risk with that. You know, there's a gradation of when you

would use that and what kind of risk you're trying to take or not. If you were trying to take out a drone using AI using a laser or something, you'd be pretty like, okay, make a mistake because you just miss the drone, you know, whatever with the laser, laser goes off, it's all over. If you're doing something more sophisticated in the population area, have a densely populated area, you'd take less risk. So we're developing procedures, tactics for each scenario. And this

is part of the debate I had with the anthropic, which is we need AI for things like golden dome. Chinese hypersonic mixle comes up. You've got 90 seconds before it separates and all kinds of decoys and you don't know where the actual payload is and you want to get it hit it from space and a human can't does another reaction time. Doesn't have the may not be able to discriminate with their own eyes with their going after. That's a pretty, you know, low risk thing

because it's in space and you're just trying to hit something and it's trying to hit you.

“So I think in the next 10 years, you're going to see a lot of these applications develop AI”

to one degree or another. So long as we think it's safe and it's not going to do the, you know, make mistakes. Before we get on to the anthropic discussion and we really appreciate you coming here in my Lord. This has been so informative. So thank you for coming here and explaining to the American public and to us what you're working on. It really makes us, I think, speak for everybody, really confident in what you're doing. It's so great that you've, you know, left the private sector

to do this. What I would say just very quickly, Amel, is I think that not enough people understand that the American military has had to fight with one hand tied behind their back. Just that little insight that you just gave about Afghanistan to me seem so scary because the men and women that

They deserve a lot more than being sent there and all of a sudden being given this rule book and say,

do your best and it's like, oh, wait, you violated 19 rules trying to protect America. Do your job.

“That's insane. Let's just, it's really insane in some cases. And my, my belief is that's what”

the frustration for those soldiers who were out there and those wars had more than anything. I mean, there was the broader frustration, like, what are we doing here? And then secondary frustration is, wow, I'm here. Why can't I do my job? Yeah. Is there, is there much of a debate internally? I mean, I'm sorry, Jacob, before we move forward. I was regarding this idea of full economy in military action. I don't want to speak ahead to the anthropic point, but it was

something that the media seemed to say was part of Dario's concern is that when you press the

button and hand over complete autonomy, and there's a kill action that you're now giving to a robot or to some autonomous system, do we then kind of have a moral issue at hand? And is that something that's kind of debated or discussed? And is that the right way to think about the framing that what goes on? I mean, we're not even close to there yet, right? The systems are not. We wouldn't feel that a system that would have sort of, like, real risk for a civilian is

ready to launch yet. So we're not even debating that. We're just trying to get basic autonomy in drones, basic autonomy in underwater, unmanned vehicles, basic autonomy that, you know,

you've heard of this collaborative aircraft that fly along with the jetcraft so that it has more

firepower, but it's still tethered to what the jet does. So we're not suitable. Yeah. So we're just at the very beginning of this stuff. But for golden domes, a good example of like, yeah,

“who can oppose that? Like, it's the only way to get out of threat like that. So who could oppose”

if you have a military base, you have a bunch of soldiers sleeping that you have a laser that can take down drones autonomously on that. So it's pretty scenario by scenario, but I don't, we're not having a lot of debate because the sky net thing is so not a realistic thing at this moment, right? Except if one thing I did tell the anthropic guys, I was like, you know, or I had tell say any I had company, your models are getting stolen by the Chinese. They're going to unguard rail them

and use them against us. And then you want a hard model to be less capable against your models. It's sort of not going to be thoughtful enough. Is that going to go for it? And, you know, if we just benched mark this against where we were at, you know, but 10, 15 years ago, there was the weeky leak of collateral murder, I think they called it, where we tragically had an Apache take out some journalists. And this technology even applied today probably would have avoided that in my mind,

yeah, like we have enough that when you're targeting, not drones, but, you know, people on the ground with an Apache, this would have probably avoided that. Yeah, or, you know, the, you know, the quitty aircraft hitting, you know, an American aircraft making a mistake because it doesn't have the identification. I mean, it's the same self-driving arguments to a degree, like self-driving could save lives, even though it's scary to look at a car without a human behind the wheel.

But there's tons of scenarios where it's a way better safer option, more precise than the alternative. All right, before we move on to the Darryu thing, an anthropic in that room, aha, there was one piece that we haven't addressed with this interaction, freeberg, Chimoff, which is the Israeli government and their desire to take out this regime and us, according to Tucker Carlson and a large contingent of the MAGA base, they feel that we are captured by this group does Israel have too much influence

over the United States with regard to these actions in the Middle East. This is, you know, a big debate within the party, within the Republican party, within the MAGA constituent. Hey, week number one, we don't want these wars. Number two is Israel driving this thing to the point of Rubio's quotes

“that, hey, we're doing this because Israel's going anyway. I think we should address it here,”

not that I have a personal stake in this. I'll give my personal opinion at the end. I don't think the president is captured by Israel in the least. I think he decides what is in the best interest of the United States. And if Israel can be a part of that, then they're a part of it. And look, let's be clear, they're incredibly capable. And so in something like this to be able to incorporate the intelligence of Masad, what you're seeing today

in this operation epic fury were four days in Iran has been 90% depleted of all of their munitions. It looks like they're just firing no more missiles out from Iran to anywhere else. There's fleets of drones and planes just waiting. Everybody knew where the Iranians were.

I think the opposite question should also be asked like, what was the UK doing? Why is Spain

“pontificating? Why was Europe taking the weekend off before they could even issue a statement?”

Why don't you ask that question? Yeah, no, it's equally valid. Question, you know, freedom do you want to get in on this or no? No, I'm a Jew no one's going to care what I have to say because they're either going to be like totally like, what do you want to say? He's going to f**k you. We shouldn't listen to him. So like, let's move on. Go ahead. Yeah. Yeah. I mean, any thoughts on this? I do want to know from a meal, though,

like, you know, is this iron dome working, this laser in Israel system? Is this operational? And if so, is there any success metrics you can share around it? I mean, I think the gold, sorry, the gold. Iron beam was the first generation of the Israeli air defense thing. And then they're building iron beam. And I think it's still early-ish. But yeah, it works. There are a technologically sophisticated country that's very

small that has, like, a reason to invest in these things and have a lot of smart people to do them.

“So I think I think it's good. But does it primarily work on rockets? And I guess I just want to”

understand the logical evolution of this because in the 80s and 90s, there was a lot of conversation about space-based lasers that could shoot ICBMs out of the sky to avoid, you know, global nuclear

war. And we could always take out every nuclear warhead delivered on an ICBM. Is that technology

feasible? Is there a place in the near future where we could see basically maximal global deterrence using these systems either ground-based or space-based to take out hypersonic missiles? I think I think the the harder, but more valuable problems solve would be the space-based way of doing it because then you could get at any kind of almost any kind of threat that hit space. But you still need a ground layer because there's cruise missiles like a combat you,

there's drones and so on too. So we called it multi-layers. Like how do you how do you get every kind of weapon at every layer? But, you know, directed energy lasers as they get more powerful, you could take on a bigger weapon farther away, right? So those, so those technologies

as that, as they improve, it gets more and more capable. And I think all these defense systems

are going to get more and more capable to get more and more of a variety of weapons that farther farther stand off, which is what you want. You want to shoot it, when it's right over Tel Aviv, you want to shoot it, you know, when it's still over there, their land, ideally. Are the laser interceptors in the field today? There's reports that they are. I think they're some, I think they've demonstrated some of them.

Got it. And, and assist our technology or Israel's technology, because pressing Trump said, hey, that's actually our technology. Is there any insight there? We have collaborations with Israel on some of the stuff they have their own. We have our own. So it's not, this is, but they're good at tech. We're good at tech. There's certain, there's certain ways you get part of our system and part of their system, because it's like a

hit. It's a quickly evolving part of science right now. How do you cohere beams of light to like get distance? How do you use high-powered microwave to like just drop drones in their tracks? There's lots of different ways to get at some of these things. And yeah, a lot of its hours, and a lot of, and some bits there. Yeah, and to the earlier question, you know, I am pro regime change if it can be done fogfully. And obviously isolating a dictator. That's the best

thing you can do. Done that successfully with, you know, Putin, Kim Jong-un, etc. keep diplomacy up. But if there is a moment in time where you could free the people of Iran after 50 years of being subjugated by these lunatics and dictators, I'm all for it. And I actually trust President Trump to make that decision. I know this may sound crazy. People think like I'm a libertar or something because of the way my besties frame me on this program. Which is completely inaccurate. I'm an independent.

You are. I actually were not independent. I'm completely independent. You're not independent. I am just based on my voting. Okay. I'm not on either one of the sites. I pro, President Trump, and I trust his judgment. I think he has more information. That's I think you had more information. I actually trust you guys to do it thoughtfully. And there obviously was a window here. His real can have their own, you know, motivation. There could be the China motivation. But there's also

spreading democracy. Can I say something like that of people's concerns here? But that's on the top of my list. I would like to see the people of Iran free. Just to build on your

“point Jason, the thing that Emil said before, which I think is important as well as we have an”

enormous amount of learnings about what happened in Iraq. We also have a ton of learnings between the Iran Iraq War and a ton of learnings in 53 when us and the British deposed most a day in the court, or at least formented that and put the Shaw. And then the Shaw was booted up. Yeah. If you take those three chapters in Iranian history or that regional history,

without creating some 20 year or forever more. There was an incredible tweet. I don't know if

you guys saw this. Somebody said, so every word doesn't have to be three decades and trillions of dollars to your friends in Virginia, Maryland and DC did you guys see that tweet? It's true. These things can be one and done in and up. And if President Trump succeeds here, I just want to also give him some flowers here. The people of Venezuela and the people of Iran being free represent about five percent of the people in the world living under an autocracy, under a dictator.

If those both flip back to democracies, he'll have done more for the spread of democracy than any president. For many decades, perhaps in our lifetime, this would be incredibly noble,

“incredibly noble, incredibly just. And would you and the human rights set?”

Want him to get the Nobel, then? Absolutely. Give him all the Nobel's. Literally, if you can all the Nobel's, all of them, give him every prize. Give him a prize, give him a prize for six. I can't believe you. You can't believe me. You can't believe me. This is for loss, he decals an independent. When's the last time you voted for a public and presidential candidate? Just curious.

Yeah, Sam. No, no, no, no. Mondale. No, no. I didn't, I would have voted for if I was a age. I would have voted for, I wouldn't have voted for the Bush's. I would vote for the moderates. Obviously, Clinton and Obama. Oh, we're playing the, what should I play game? I voted for Reagan and I would have voted for $4. Well, no, I didn't vote for Kamala. So I'll leave it at that. But I voted, probably 40, why don't you say that you voted for president? Just say you voted for

“president? I don't want to complicate things. But you did. So just say it. I didn't vote for Kamala.”

I'll leave it at that. All right. It's the last one that you'll say you're a moderate, but you won't say that you voted for president Trump. I am supporting president Trump in about 60, 70 percent of what he does. Let's leave it at that. Three, two, all right. Let's talk about economics, impact of oil and insurance oil has rose to $84 a barrel Wednesday. Straighten for moves. Here's a video. Is basically a standstill at this point. Here's the clip. You can see the traffic

slowing down and then hey, some of the dots are even going away. That could be ships we're taking out. Unless the straight opens, 3.3 million barrels of daily production would be lost early next week. And then there's insurance companies. They all cancel the war risk coverage of vessels in the

Gulf effective March 5th, super tank traffic dropped 94 percent with the first 48 hours. Trump said

the US will provide political risk insurance for all maritime trade through the Gulf, especially energy. Freeberg your thoughts on the economic second order effects that we're starting to experience here and over the next four weeks could be intense and acute. The modern insurance market emerged specifically to solve the risks of maritime trade. So in the 17th century, Lloyds of London, which was a coffee shop in London, we're all the maritime traders. We're getting together and they

talk about hey, what's the safest routes of pirates don't get our ship and so you don't run into weather. That's where they would kind of have these conversations and eventually they started underwriting the risks of the shipping routes and giving each other guarantees. They said hey, if you make this route, great, you pay me a certain amount. If you don't make the route,

“I'll pay you the lost value. And that's how Lloyds of London, which is the kind of world's biggest”

reinsurance market started. Today, Lloyds of London has 78, what are called syndicate members. And these are kind of these pools of reinsurance that underwrite big crazy risks like maritime insurance for folks that are moving oil tankers through the straight of her moves, which the IRGC just announced they're shutting down. When the IRGC announced that they were shutting down the straight of her moves, there's a significant risk of all the mines going in the straight

and the ship's getting attacked and blown up. So loss of value, the insurance premium spike

initially from a quarter percent, so 0.25 percent of the value of the ship to 1.25 percent.

So it went up by like 5x. And so folks had to pay a lot more of the value of their ship in order to continue the routes and get guarantees that they'll make it through. And then all of the markets started to shut down. So once the conflict got heavier, everyone said let's shut this thing down. And that's obviously a massive risk to energy prices globally, which drives inflation and puts US economic security at risk. And so this is a brilliant

move. I would say the US government stepped in with the US International Development Finance Corporation, which was actually funny enough started a couple of years ago, like in 2019 or something like that as a kind of output of one of the agencies that provided credit from USAID, much talked about USAID and so they're leveraging the credit capacity of this old USAID agency

And the reason they need it is the shipping companies are levered. They take on debt

“to buy the ships. And the debtors require that they have insurance or else they're not allowed”

to take the routes because the debtors are ultimately going to be out the money. And so the shipping

companies themselves need to have insurance. And so this provides a market that has now gone away. Very smart. And ultimately a lot of people are saying this could actually resure or onshore maritime insurance back to the United States and create an entirely new insurance industry here in the US that has historically been served almost exclusively by European syndicates and European partners. And it actually creates a big economic opportunity as this war dies down

for American insurance companies and American brokers to basically be the underwriters and the guarantors of this sort of insurance and create a new industry. So that's going to super, super interesting kind of side story on what's going on here. All right. Some breaking news here folks find Bloomberg. The Pentagon has formally notified in the topic that it's been deemed a supply

chain risk. This has never happened to an American company. It has happened to Russian companies

and Chinese companies, while late. And for background, the Department of War canceled anthropics $200 million contract on Friday. And said they would do this. The dispute came down to two clauses according to sources and we have one of the principles here. So we will hear directly from him in a moment. Andthropic had two concerns. Number one, fully autonomous weapons, aka murderer bots. As we previously discussed, Dario didn't feel that their technology was

reliable yet and wanted some assurances. The second thing inthropic said was they were concerned about mass surveillance of Americans because they believe this technology is uniquely powerful.

And it can do things beyond what a series of webcams or network of 7/11 cameras can do.

Pentagon said they want it all lawful use. Dario, you're welcome to come on the program next week or any time to give your side a story, but this week we have a meal, a meal, your thoughts, and explain to us what happened here and how this broke down. It's worth a little history,

“short history. So if you remember the Biden executive order on AI, which was this crazy executive”

order that limited the amount of compute any model company could do and was essentially grandfathered in a few small number of AI companies that they were going to designate the winners and everyone else was out so they could have more control and what they did. Andthropic was one of those winners. And then they were smart. Actors of grid sales strategy to sell it into the most sensitive parts of the U.S. government. Like our Oliver Command and Command

sent comm, sent central Command that's doing the event right now. The Indo-Paycom Command, which is sort of responsible for China, several of the intelligence agencies, and they did forward deployed engineers, pounter, style so they're very, got very sticky to the workflows and all that. And so I came in and I got the AI portfolio for department in August and I said I just want to see the contracts, you know, the old lawyer in me and I looked at contracts so it's like holy

cow. They said you can't use them for you can't use them to plan a kinetic strike. You can't use their AI model to move us out of the light. You can't do a 20 page. You can't do a war game scenario with it. You could do a scenario but you can't like, let's suppose you're writing a plan saying like if this happens, his what we would do and it might involve a kinetic strike which causes harm to a human. So like, well, what do you think his folks do? You know, this is the Department of

Wars. This is what we do. And so I said, okay, well, I've got a number one have direct relationships with these companies, not just through Palantir because I want to use it more broadly. And then number two, I need to have the terms of service be rational relative to our mission set. So he started using negotiations and took three months and I had to sort of give them scenarios about like these Chinese hypersonic missile example and they're like, okay, we'll give you an exception

for that. We'll have this drone swarm. We'll give you an exception for that. It was like the exceptions doesn't work. I can't predict for the next 20 years what all the things we might use AI for. And so all lawful use seems like a good thing. If Congress wants to act great, we have our own internal policies. Like, we'll follow them. We're not knuckle draggers here. We want to, we want to hurt people unnecessarily. So, you know, it's our province to decide

“how we fight and win wars. So long as they're lawful. And I think at some point it turned into a”

PR game for them because they were not going to win this intellectual battle of what we're going

US military. And it became this like let's find the issues that are most inflammatory robot weapons

“and mass surveillance. I mean, like, where's your apartment war? Not the FBI. We're not homeland security.”

We're not allowed to legally spy on Americans. Yeah, you're not. You're not. So it's, yeah. So you're like, and then what it came down to on that issue just as an anecdote is they didn't want us to bulk collect public information on people using their own AI system. And they wrote it in a way that was like, so you tell me before we got to bulk collect if someone types in, you know, using public available information that I'd be violating your terms of service. So like, yeah,

well, okay, let's rewrite it. So there's months of this, like, stuff, which, which was sort of insurmountable. And then the trigger point was after the Maduro raid. One of their execs called Palensier, who we bought ourselves through and asked them was our software used in that raid, which is by the way, the classified information. Anyway, so we're trying to get classified information and implying that if there was use in that raid that that might violate their terms of service.

“So they wanted to enforce, this is very important here. Yeah. They wanted to enforce their terms of”

service. They went behind your back to try to collect information to then maybe pull your license for their technology. You know, it wasn't by behind by back. I don't want to use them in that Palensier is the prime contractor this up. But it raised enough alarm with Palensier, who's got a trusted relationship with the department to tell me, and I'm like, holy ****, what if this software went down? Some guardrail kicked up. Some refusal happened for the next fight, like this one.

And we left our people at risk. And I had, so I went to a secretary headset that said, this would happen. And that was like a woe moment for the whole leadership at the Pentagon that we're potentially so dependent on a software provider without another alternative. That has the right ability to do to not only shut it off. Maybe it's a rogue developer who could poison the model to make it not do what you want at the time, or sort of trick you,

“you have to trick it. I mean, all these things that we know, where we were about models,”

or hallucinate purposefully, or just, or not follow instructions, like some insider threat stuff. So then, that culminated in the Tuesday kind of dramatic meeting with TechSat and

Secretary Hickset and me and Dario with the Friday deadline that got blown. And I never thought

they really wanted to make it. Meald, is the model entirely hosted by anthropic? Or just explained to us, technically, does this sit in a cloud that Palensier runs for you guys? Is there really technically a way that employees at anthropic could kind of interfere intervening in the use of the model? Yeah, so they put their model in AWS cloud. I got that. And then Palensier serves it from there and they refresh it, they held the control

plane for the model. So yeah, they can change the model weights if they want. They can do whatever they want. The insight into this thing is unbelievable, not just the governments, but now if you're

running a company, the reality is that what anthropic showed, which by the way, is their right

at some level, is that they're going to have a political perspective and a set of terms that reflect their philosophy and that that philosophy can change on a dime. But what the government did was also completely reasonable, which is we can't rely on you if you're going to be completely unreliable and disallow things that are reasonable. I'll give you a different example to make the point. There's a state that wants to run some healthcare program, but they're a pro-life state.

You can't conduct abortions in that state. Does that mean that the anthropic engineers can decide, you know what? We're pro-choice, so we're going to change the access model and the capability of that model inside of that state. Is that allowed? Should that be allowed? At one level you say this is a private company, they're allowed to choose. But what that really means is for the government, for all the states, for any city, for any company, you cannot choose to only use one of

these things because it is just a matter of time until some person inside of one of these companies goes on some lunatic moral tirade and then jeopardizes your business against something that is nothing about law, but is everything about subjectivity. That is the huge thing that this thing tore open this weekend. So, if you're not figuring out how to be multimodal and agnostic across these models, you're taking on enormous business risk after Friday, because you can't tolerate

all over again. Remember what happened when you didn't like what was said, now all of a sudden you were deplatformed? This is that times a thousand because this is not about posting on social media. This is about using fundamental technology to either advantage or disadvantage your business.

“Emil? Yeah, I mean, I think a described it the other way the other day as these companies say”

they're going to cause 50% white collar unemployment. This is as powerful as a nuclear bomb.

It's like 50,000 genesis in the data center, so you could have a small country coerced the world and so it's whatever. You're like holy cow. So this is a general substrate of intelligence, of technology that's applicable to a lot of things. Very generalized. It's not like work they sought like HR software, we could just use a computer. This is going to be part of our everyday life in so many different ways and they're controlling the what whether it has a moral conscience,

I mean anthropic has its own constitution, it has its own soul, it's not the US constitution. So you're subject to that plus whatever whims and how that changes and that's a scary thought for Americans generally and I think that did come through a little bit today and then the coming

“years is going to be a bigger and bigger deal. So take us through opening a high software,”

Gemini software, and Grox software. Have they push back on any use or are they like

Dell or Apple, they sell you a computer and you have the computer and you can use it as you will. I have any of those given you any push back. So Grox all in for all awful use cases across all classified and unclassified networks as you'd expect because you know Elon's truth seeking, we want truth and department of war. We don't want ideology because ideology will mess with operational decisions. But you don't want anyone to anything to be fake or tilted.

We're surveying Google and we have them. We have Google for all awful use cases on on classified networks and we're trying to move them to classified networks. They have to build that infrastructure because stuff's complicated. So then compliance in terms of what you're looking

for as a partner and then I guess the last one is opening I and Sam seems to be just characteristically

playing both sides of bed. No, no, no, he is too his credit. I called him and said, I need a solution if this thing goes sideways. I mean multiple solutions. I'd like you to be one of them. And he's like, okay, well, what can I do for the country? I need to get you up running as soon as I can. And he was he was trying to protect anthropic to his credit. He was like, don't call him a supply chain risk. That's bad for the industry. Let me maybe I can negotiate terms

that they'll find acceptable. But he's in the middle because they're they compete for the same researchers. So a lot of this comes down to this thousand researchers like baseball players that get traded between these companies. It's a very money bullish sort of thing. It is not that many of them. And you lose 20% of them. And all of a sudden, you know, they launched cloud code before you launched codex or something like that. And then the numbers changed pretty dramatically. So he was being a

real patriot to his credit and trying to him, you know, help and drop it while they were trashing him and recruiting his company. And I am not biased. I want all of them. I want to give them all the same exact terms. Because I mean, we're done in sea. I want to see if they diverge or not. Or if they converge, maybe I only need two over time. But we don't know. It's too early. But why keep them in the mix and meal. So if there's clearly like a difference of operations

and philosophy and how they want to run their business. And there's other models, is their model particularly good at particular applications that make it important to keep it in the mix,

“given that there are three or four other kind of alternatives here. And topic, you mean?”

Yeah. Well, because number the number one reason we were having this conversation at all is because they were deeply embedded. So now I have to unintangle them. And the other companies have not gone as heavy enterprise enterprise sales for deployed engineers, government business. So they're have to catch up not necessarily the capability of the model. But just how do you serve the government? The goal is just way ahead on that. But the models themselves, you don't think are uniquely

advantage or do you have a view on that at this point? I don't have a view on that. I don't think they're, you know, I mean, I was certainly clothed code was was innovative in ahead. That's true. But do I believe in 12 months? Code X is not going to be close. I think it will be. I think you're right. There's an asymptoting that's happening. If you just look at the like the confidence interval on how overperforming or underperforming some of the leading

models are the error bars are shrinking, right? The confidence intervals, like these things are all

enough compute. They're generating similar results. It turns out, which I think you would expect.

“So even more important that you have a complexion of models. The other thing, I mean,”

I don't know if you saw this, but they posted about the revenue ramp event dropping. And well, I have a small software company called AD90 and I asked the team, let's go look at our optics. I posted it because I was so shocked with these numbers. Our costs have more than triple since November of 2015. Between the inference costs that we pay, AWS, which is ginormous between our costs with cursor, between anthropic. We are just spending millions.

More per unit and more, more aggregate. Both, but the problem is that my cost are going up

3x every three months. My revenues are not. So token users are addicted. And by the way, because everybody has gotten infatuated with what we call these Ralph, we're going loops like just like send the thing off and like it'll just go figure something out. A, it never figures anything out. And B, you just get this ginormous bill from cursor. So one of the things we had to do was just, we had to say, guys, you got to deprecate cursor because you're just wrapping cloth code and charging

us way too much with these tokens. But I don't know if you're seeing any of this thing where like the tool usage, it's so great to use these tools. Let's be honest. It's super fun.

From it's like, you feel like a genius. But then the ROI of these tools are really important.

I'm not sure that that says much of an issue for you or not. And, and it will be for sure. As you can find more and more news cases, the use cases get more sophisticated. So the next

“marginal thing you have to do is likely to be harder and therefore be more consumptive, right?”

Right. Right. Let me just ask, let me old the important question that I think triggered a lot of the news. This week is why then designate them at supply chain risk? Why not just abandon them, move on, use the other vendors. Like, why take this kind of punitive action? Yeah. So I don't view this punitive and I'll tell you why. It's if their model has this

policy bias. Let's call it based on their constitution, their culture, their people, and so on.

I don't want Lockheed Martin using their model to design weapons for me. I don't want the people who are designing the things that go into the componentry to come to me because if that poison, if you believe the risk of releasing it, yes, it can enter into any part of the defense enterprise. But it's just the defense enterprise. So Boeing wants to use anthropic to build commercial jets have at it. Boeing wants to use it to build fighter jets. I can't have that because I don't trust

what the outputs may be because they're so wedded to their own policy preferences. I guess a dub tilt about is why couldn't this have been handled quietly? Is this anthropic who made this a public spat or was it the administration that made a public spat or to attend? I mean, they have a very good sophisticated press operation and like really good and painting us as doing master valence where where their issue was like some commercial database

thing that someone else could buy didn't want us to buy to use it, which I'm not even sure we buy them except to do recruiting for soldiers. You know, we run schools, hospitals, we go a lot of things that do do, we don't just fight wars. And the way they were able to characterize these two things, which are generally scary to people, but we're not the real issues. It was really the you worry I worried about them shutting off our system at a moment of need or them messing with

our system and motor vehicle. Those were really weird. It came to mind is if they are selling

“new batteries and you need to use the batteries or the laptops, whoever you need to use them”

lawfully, okay, that should be enough for them unless they are peace nicks and they don't want to be involved in selling weapons, which by the way was Google's position for many years, they just didn't want to be involved in it. Because to your point, they want to recruit talent, that is also aligned with that. So there's just seems to be maybe this isn't the right partner for the department of war. If you don't want your stuff to be used for department war stuff, you shouldn't be

selling to the department of war. It's in the name, it's in the name name. Well, and then also I have to say, you know, you said hey, we don't know how we're going to use this thing, like immediately came to mind was like 9/11. You have to go check with them. You know, if you find out there's another 9/11 unique, you know, Black Swan event that's going to occur and you have to go clear with them. That was literally the comment. That was literally the comment. That was literally

the comment when I was, yeah, so it was in a room of 20 people. So this is not undeniable. If everyone

just call me if you need another exception and you know, like, but what if the balloons going up at that

moment and it's like a decisive action we have to take, I can not get a call you to do something, it's like not rational. And so that was another holy cow moment of like how they think about it. That just means that what he wants to be is the secretary of war. That's right. If he wants to be the, the god came there and I guess you can't do that. The thing that shocks me and me, I don't know, maybe you can't say anything, but make guys you can comment on this.

“It's clear that anthropic just lost all the Republicans. But I think that if they think that they”

have the Democrats, that's fleeting as well, because I think progressive Democrats fundamentally just hate Silicon Valley and technology. And so there's no way they're going to let some god king over here that they don't control either. And so in both ways, I think they accidentally may have pissed off every constituent. The longer term fallout amongst them and progressives will come home to boost because as the progressives want more control and these guys push back on them,

they're just going to fall into the same situation. Yeah. I mean, it's interesting perspective. I think if you don't want to be involved in war, that's your right. I think you mentioned this like free time. Some often just don't sell bullets. If you don't want to be in, but you can't call Smith unless it and say, can I? The other thing is what the hell was the senior management and the board talking about over these last few days? Because to me, it would have sounded insane. So then the

“question is, were people just so breathless to buy this revenue curve? What is the board doing?”

What is the senior management really doing? What do you change, guys? What do you think you would tell them if you were sitting inside of the board of enterprise? If you're an investor, you're on the board. What do you say to Dario when he says, hey, I need to dictate to a meal and hexaphe, how they use my tool and everybody else is just saying, "Waffle use," that's the standard. What's your coaching advice? Well, it's also a very unusual circumstance because I don't think any

business in history has grown as fast as they have in the last 90 days. So they've added,

what was it? Six billion of ARR in a month or something? I mean, that's absurd. Like, I'm

absurd. It's absurd. It's absurd. It's absurd. It's a great product. Open claw has driven a lot of this. You're closing your eyes. You're shutting the f*** up. You're just shutting the f*** up because something's working. You're selling it. I think he's off doing his thing and they're going to let him do it and I don't think that company's worth 350 billion anymore. God knows what it's worth. Oh, that's interesting. Where do you if you get put a block of stock right now? Where do you put a

bit in? I'll tell you where. Oh my God, I had this conversation at dinner two nights ago.

“It's like you have to pick between open AI at their current mark andthropic at their current”

mark or Google and it's either multiple from here or net market value creation from here because those are actually two very different conversations. I think the net market valuation because Google's already worth 3 trillion. So if they double, they've added 3 trillion. But I think Google is the bet. I think Google is the market value trader bet, but I think anthropic is the multiple bet. I think anthropic is a trillion-fives market cap at the end of the day. Unless this blows them up,

you're still buying the 5x versus the 3x kind of thing. You'd buy the 5x instead of the 2x. But if you get put a block of stock now, do you buy it at the last poster? Do you buy it at a discount? Or do you just say, "Ah, I just buy it at the last poster"? Andthropic is worth a lot more than

3.50. That's for sure. It's undervalued compared to chatchip. They just added 6 billion in the last

moment. I just tell you, anecdotally, anecdotally, everyone I talk to is on co-work. Everyone is like gone deep on this. Everyone's amazed and shocked and actively using it. And everyone's saying the same thing, which is anthropic may actually be fulfilling the promise of AI. I will also say that it's only going to take 90 days for Google to flip on a virtual version of co-work. And once Google has this integrated with G Suite and you have a virtual hosted version of co-work,

I think Google sweeps the market with this thing and competitor. But right now, co-work is such an incredible product and everyone's saying the same thing. It's like giving Elon, giving truth to AI. Elon said something with respect to rock, which was that he expects it to exceed all of these coding models, probably in the Mayspin, but for sure by June. So to your point, freeberg, like, I guess my question, guys, to you is like, what happens? Okay,

what do you guys do? And what do you do when all the models asymptote? Let's just say by October of this, you let's just say I can guarantee you just for the thought exercise. By October, all the models are the same. Do you just take a complexion of the mall and say, great, we're going to build some governance layer around it and now we're indifferent or I love to be indifferent because then I can compete on price, right? And then I have one

to be one of them if they continue sort of with their sort of posture. So then it would be three.

“And if one gets wobbly from a policy scenario too because they all, you know, except for Elon's”

base in San Francisco and has that vibe to it. So you kind of want to have two or three at any given time. And yeah, then you price compete them. I do think Google has a long-term strategic advantage not because not only because of their consumer thing, but because they have their own cloud. So between them, they don't have the margin on top of the cloud that Anthropical have to pass on. So it's an interesting economic proposition from them and just to build on your point,

freeberg after you finish your insightful comments here. Pull this up, Nick. Almost on cue freeberg. There's such an Oracle. Here is the announcement from Google. Google Workspace is now integrated for agents and 40 agent skills were included today. And you know, you've been great today, super honest, Dario's position. I'm going to give you some fastballs here. Dario says the real reason the Pentagon and Trump admin do not like us is that we haven't

donated to Trump. While opening AI Greg have donated a lot. Here's Claude's answer to that claim. Here's nine companies and their activities with the administration from the inauguration to attending the inauguration to the White House CEO dinner, to the Malania documentary. If you go through and you look at these nine companies, Microsoft, Apple, Tim Apple, Nvidia, Amazon, they have all participated. There's one company that has in participated and that's Anthropical.

Are is Anthropical being singled out because they are not genuine flexing and because they're not paying the cover charge. People say this administration is paid for play. That's the accusation he's making. I'd say maybe this a cover charge. Nobody likes to pay it, but the other companies have. What do you think here? I mean, when the dumbest things I've ever heard. I'm in the part of war, I need to win wars. If you help me win wars, and I don't have to waste time

transitioning you out, that makes me thrilled. It's a criticism on me because it's not like Trump president Trump dipped in and was like, hey, I mean, by the way, those guys didn't get any money. You can't use them anymore. Obviously. It's sort of like invention in his own mind. It's like, I don't know if people sleep at night and for those thoughts good in there. I was trying to work with them. I would have spent three months trying to negotiate with them to get to a symbol standard.

If I would have just said, okay, guys, you're out. Bye. So I think it's just some internal

“psychosis that's the only way I can explain that. Okay. It could be on Dario that he's antagonistic”

to be administration, both with respect to how he operates commercially. And it's also reflected in the fact that he doesn't want to support the administration. I have a different theory. Yeah. How do you think they have a massive instance of work running internally that helps them come up with business strategy? And I bet you there's like some element of AI that says, yeah, you should do it. Do it. It just makes sense. Zigg, where they say, and get more press.

And so now there's some some f***ing clawed buck telling them to basically tell the department

of war depends on. It's going to turn out to be the stupid decision. If I was chairman of the board of that company, I pulled Dario aside and I'd say, listen, you're obviously ingenious. We obviously have the best tool in town. This is not a battle you can win. And it makes no sense. You're going to come across as not being patriotic. And Tim Cookies showing up for the marania premiere. Would he kill you to support the president? Would he kill you to show up?

“I think that's what happened when Biden excluded you on. That sampled him. Show up for the”

president. I'll show up for America and be a patriot. You don't have to donate, but be a patriot and show up for the dinners. That's terrible advice. Here's my advice. Okay. Here's your advice. Okay. Hey, Dario. Call a meal back right now and say, you know what? Sorry. We f***ed up. We're going to own this. And we're going to put out a press release that says, we support our customers' use of our models to do everything in anything that's lawful. Number one. And number two,

that our terms of service are written in stone and that you can expect solidity and reliability from us. And this was just the misstep. Come here. How do you respond? I mean, I would say that's what

I've always wanted. I need a reliable steady partner that gives me something. Kind of work with me

on autonomous because someday it'll be real. And we're starting to see earlier versions of that.

and it's rational. But then, you know, you call President Trump and your 5,000

“word essay on Friday. I want to be dictator. You're going to have to apologize to more people”

than just me. Yeah. Maybe time to read the right the position here. Let's just say, "Cool by y'all, everybody, cool by y'all." We solve the problem. And look who's on the line, surprise guest. Dario's here. I thought I would surprise everybody. Nick pulled Dario up. He's not here. What do you review on how the industrial supply chain for hardware components and systems is coming along in the United States? Because my understanding is we're trying to reduce dependency

on Chinese manufactured components. Where are we with respect to where we need to get to

in the US manufacturing supply chain? We are early days. Critical minerals you see, you see the

action around that. You'll start to see. So I have the Office of Strategic Capital, which has 200 billion in lending authority. And what we're trying to do is, it's like Treasury's plus a hundred bips, loan to companies, show them that the Department needs their solid rocket motors, their batteries, their fiberglass, like all the things that were heavily dependent on for our defense industrial base that are completely outsourced to China and domesticate them here.

And we've got a bunch of great people running it. So but it's early days. It's going to take

“for the rest of the term to get, I think we'll get critical minerals done before the rest of the”

term where we have the access to what we need to from us or allied countries. But from batteries is like the next problem I'm trying to solve for example. Batteries are totally outsourced both technologically and from with the end of China. And there's like, you know, kind of called

20 critical things. If I could get to all of them at some level, but then I'll take a few years

for them to like build plants and do that stuff. But they're it's it's very important. I hope whatever administration comes next continues it because I'm all free market, but but we outsourced so much that, you know, it crippled sort of the kind of assembly part of putting all these things together. Do we have a munitions risk right now given the conflicts that were involved in? We don't have a munitions risk, but we do need to plus up because the Europeans are taking a

long time to contribute. Like Ukraine Russia has consumed a lot of munitions from all over the world. And then obviously these conflicts have been in and we need to have like the next generation we're still there still a larger degree we're fighting with 1980 Cold War weapons, right? And not modern weapons. And so we need to plus up those things that to to regenerate them. I mean, our nuclear missiles are 50 years old. Some of the planes are 40 years old. So all that has to be renewed.

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

three X more than last year. So, you know, it is growing. What I need to do and what the Department needs to do is have some of these companies win big contracts quick, like whether you know, Andrew, sure, so that more money flows in, more entrepreneurs do it and I could buy more. Because generally,

I do think warfare is going from big carrier ships that cost $20 billion and a decade and a

“half to build to massive, riddable, low-cost things. And that's what these new projects,”

these new entrance can do. So we need those to succeed so that the fly will goes with venture capital money entrepreneurs capabilities. And what I've heard as kind of the explainer for this is we're moving from the old primes to the new primes that there's going to be a small set of big winners and then obviously lots of seconds and and subs and whatnot. Is that really how this market's going to evolve. So are we going to end up with Andrew, Palantir, maybe three or four others and that's

where most of the values going to accrue from the market perspective? I mean, Andrew, Palantir, want that and I joke with them all the time about it. But I want I definitely want at least a second layer that's innovative and trying to disrupt the first layer all the time. I've had a mom and pop, like wholly owned company that makes these missiles called e-rams that are we really selling send you a crane and they do it like 30 people and they could do a thousand a year because they

designed a manufacturer. It's awesome. So I won't companies like that to continue innovating. Maybe

the only but it's one is they learn how to contract with the government. They learn how to go through the bureaucracy and that became a competitive advantage. I'm trying to take that competitive advantage away.

“That's a really important point. How do you disassemble all that bureaucracy so that”

product innovation can actually get to you? Yeah. So we did we did a big so part of it comes out to requirements for form. It used to happen as people like we need a new fighter jet. So our Army Navy Air Force put into the requirements and we're you know it would we needed to be stealthy to hold a missile to hold four humans and they you know it became this unbelledable thing but the contractor didn't care because they're getting paid cost plus.

So like sure I'll fulfill their requirements two years from now you're like got it.

Those never engineered properly. It'll be enough a few years late and a couple more billion dollars.

So we're trying to change that to I tell you my common operational problem. I need a bunch of missiles that go 500 miles a more that have this kind of blast coming to me with solutions. It's little requirements as possible on that side. And then on the contract piece trying to get to it's close to commercial contracts as possible. And this is going to and this is where the startups are so good they'll do fixed cost pricing. They'll do bet you know pay me as much if I

deliver late you pay me more if I deliver early. It's very disruptive to the existing system. Super

“disruptive but that's that's what I'm like waking up every day trying to do. So you could put”

out at something saying hey they're straight before moves is super important. We need to keep it open. We need these type of devices to keep it open but come to us with your ideas and let them be creative entrepreneurs as opposed to you know just trying to goose the profits. Yeah it's really brilliant. I mean you also oversee DARPA yeah DARPA's the father of the modern internet and it's created a lot

of really critical technologies. Can you talk about what's going on in there? Are there interesting

things that you think our audience should know about that you're trying to push forward? I mean there's that's so much probably my favorite part of my office is like because there that's where you it's sort of the it's still a very honored profession to be part of DARPA like you know being a being in government service for a long time is sort of reduced in its stature since the Manhattan Project. Now because now now if you're a great ass you know someone

wants to do rockets to stuff you go to space act. DARPA still has the best of the best and so the most creative ideas happen there. One of the things that they're working on that's public is they're trying to use biology to synthesize critical minerals. So how do you so how can you just pull them out of ground? Use biology to do it so you don't need to do all this crazy

messy dirty refining. That would like change the game big time on our ability to get the critical

minerals you need faster and leapfrog the Chinese in terms of tech. So they're doing a lot of that kind of stuff. They're deep in cyber, cyber attacks are the next huge threat with AI right there but what we saw with creating all these agents to attack systems that I'm dropping extra happen to them. So they're they're they're working on that's it's not a fun I can talk about kind of DARPA because it's so it's so classified but those are a couple of examples for you.

All right speaking of classified just two quick questions before we wrap here are there aliens and what are you going to tell us as in number two in all seriousness. I'm curious what have you learned about China and where they're at and the threat they're in our ability to counter it. Like give us some idea of where we're at as a country because we hear a lot of hyperbolic stuff. They're building this incredible mobile small navy they've got hypersonic. They're just way ahead of

“us you know we hear these things but realistically are we competitive?”

I fought well I answer your first question was I fought for the alien portfolio. I didn't get it. All the guys on my team were like do you got to get this for us please talk to the secretary we want to do this but hey but I was like you know as long as that 100% access to everything I would do it because that would be amazing right? My same words would be against you. But on the second one it is true that Chinese have had the greatest military build up

in world history in the last 15 years and we're asleep at the wheel to some degree because we're focused on global war and terror so they've advanced without sort of us thinking about threat. That being said our operational expertise and our space we have some sophisticated stuff you know our subs our space layer we still have the best stuff in the world that was you know but we have to make sure that gap doesn't narrow. We can't be complacent we should sleep

and he's decisive in his actions but we cannot be complacent. I feel like this week was a true

“reminder of how fortunate we are to have the defense that we have for the United States”

when you look at what happened in Dubai and in Doha and in Tel Aviv and you see how people in their presidential homes are getting attacked and bombed you realize just have fortunate

“we are to have all of the layers of protection that we have by our government and I've actually”

come over to this quite a lot. I'm a true kind of arguably libertarian at heart small government

but the one thing that I've realized is so critical for us to have the freedom to do all the things

“we want to do is defense and so I think it's an amazing institution very valuable to the United States”

I mean I'll thank you for what you do. Yeah thank you. I really appreciate you coming on and being so candid

and thoughtful and incitory. This has been awesome and amazing. So see you next time bye bye. Love you boys.

My friends and they've just gone crazy with me. I love you guys. I'm sweet. I can't walk going on with you. Besties are gone.

We should all just get a room and just have a one big huge door because they're always useless.

It's like this sexual tension that we just need to release out. You're that beat. What you're here for? Be a good one. We need to get more peace on the ground.