Rational Security: The "Chicken Sh*t Bingo" Edition

You made your work. Maybe you're a group of barbecues and we can't tell over the inner ways. Gotta get into jujitsu, Kevin. They've got some great jujitsu down there. Jits. That is what you call it. You know, I don't know if you did choose on the menu. We're getting into stand up paddle boarding on a town like. So when you all visit, I've got a spare and we can, you know, go for a row, hang out.

Oh, I like that. I like that. I do have a top ten list now of breakfast tacos. So if I reach of anything, it's just having way too many breakfast tacos.

“I will say the one time I got to visit Austin since starting at Laugh Fair, I think.”

I reached out to Bobby. Chesney, wonderful friend of Laugh Fair, obviously. You go. You got to Austin. I got to go to BBL and he had a party very kindly me and joined me to join the plot. But I was there with a bachelor party, with a bunch of friends. And I got just too drunk that I felt comfortable interacting with the D&M team.

Well, I'm not irresponsible, but I'm like, with a bunch of guys who like started drinking at 9 a.m. And I was like, two in the afternoon, I'm like, I'm just like, his kids are going to be there. I feel like this is not a good one to be made. So I just skipped it. So I feel bad. No, no. I will share one thing about Dean Chesney, who is a remarkable human being.

In addition to being an excellent scholar and incredible dean, he plays for a band at something called

"Chicken Shit Bingo." So you can go see the Dean of Texas Law, jamming away with his buddies at Chicken Shit Bingo in Austin. And this is my sales pitch to all those students who are trying to decide which school to come to. Come to Austin, come see your Dean play in a band who needs no offense to my former Dean. Who needs, you know, Shakespearean plays. That's boring. Come see your Dean playing a band. God bless America. Yeah. This bar, future bingo. You said it's

“called "Chicken Shit Bingo." Is does it feature bingo? Can you play bingo at this bar?”

You can play bingo. We are waiting for where the chicken will shit. And that determines your Dean. Hello, everyone and welcome back to Rational Security. The show will be in bite to you to join members of the law fair team as we try to make sense of the week's big national security news. We have a special April 1st episode for you today. No, I don't want to talk about made up topics. It's all for real. You know, we're going to dig deep into some

interesting wonky tech-facing topics. I've got a wonderful tech-facing panel. Plus I had a power joining with us. I want to lump you in with that. But we're happy to have you. Let's talk through some of these things that we are trying to make sense of ourselves. And you're going to hear us do it in real time. Joining me for this episode is the aforementioned Annabauer from her brick line, beautiful New York, Brownstone, Flyer Blazing. Just perfect environment with the

perfect backdrop Annabauer. And I thank you for joining us once again on the podcast and dropping in for this special tech episode. And a couple of shoots outside your lane. But one that's more solidly in your lane. We're excited to have you here with us for. Thanks for having me. And join us as well from New York. Join filling out the New York contingent. We have Kate Klonex, senior editor here at Lauffer. Kate, you think you've you for coming back on the podcast

and digging into some of these tech-facing interesting topics we're going to dig into today.

Always a joy. And joining us for the first time in a while because it's been too long

is none other than Lauffer senior editor Kevin Frazier from the great state of Texas. He's taken the hat off. He's taken the boots off. He's relaxing with us. Thrill to have him Kevin. Thank you for joining us today. Always a pleasure. Scott. Thanks for having me. And glad to be back. Wonderful. Wonderful. Let's get right into it. Our first topic today. Our three topics today. So we deal at topic one. The Exposed Factor Rule. The Justice Department and Lawyer's representing Anthropic

faced off last week in northern California courtroom over whether defense secretary Pete Higgs-Seth's expost and some really communications amounted to an official order. And if this Pentagon supply chain risk designation retired against the company's first member protective views among other legal issues, on March 26th, Judge Rita Lynn in that case stayed the supply chain risk designation, ruling the Pentagon hadn't actually unlawfully retaliated against the Anthropic. We're also waiting

for another related decision from a DC circuit panel, expected to come down really pretty much

“any time now. What do we make of Judge Lynn's ruling? Do we expect the DC circuit to follow suit?”

And what does it all mean for AI companies and their relationship with the government? Topic 2. Straight out of options. Oil gas, helium, pharmaceuticals, fertilizer. The ongoing conflict with Iran has upended global supply chains across the board with the straight-up

from moves remaining closed, more or less with some exceptions. As critical infrastructure in

neighboring Gulf States faces Iranian attacks, the US has started to feel the first of the effects of the rising costs and a trepidacious stock market, reminiscent of the supply chain shortages that we felt during the coronavirus pandemic among other incidents in the recent past. unclear how severe and how long these shortages will last, but what could be some of the nasty security and political implications if these shocks continue and what doesn't mean for

the trajectory of the Iran conflict? And Topic 3. Space, the financial frontier.

recording, on the Artemis 2 mission, the first crewed mission to orbit the moon in more than

half a century. It is the biggest step to date in the new emerging space race, most specifically with China, one driven predominately by private actors, the biggest home, SpaceX, is preparing to make an unprecedentedly large initial public offering in coming weeks. How do we feel about this new, very different space race compared to past ones and what might it mean, both for good and for ill? To for our first topic, we are going to revisit this anthropic case that we have all been

“following anyone in the national security space has been following very closely. I think it is”

officially rocketed to the top of the charts of major national security actions happening in the courts this year. And about you were at or listening in, I should say one of the hearings that we heard in the northern district California, I think the only hearing we've heard on the matter of substance so far. Talk to the little about what you heard, what gave you a sense of the posture of the

parties of the judge in that case that we now have ruling in, which we'll get to in a second.

But first, give us a sense of your impressions from that hearing. Yeah, so Judge Rita Lynn, who is the presiding judge over this case held a hearing in the northern district of California, shout out to the northern district for allowing reporters and members of the public to listen in on proceedings. We love it. So I was able to listen in on that. You know, ahead of the hearing, one thing I'll note that was interesting, keep in mind,

anthropic has raised a number of different issues in its litigation. So it's raised first amendment retaliation claims, due process claims, claims that this supply chain risk designation was arbitrary and capricious, ultra virus claims. So it wasn't entirely sure where exactly the judge was going to fall in terms of finding which of those arguments are most or least persuasive. And ahead of the hearing, she issued this notice to the parties about a number of questions that she had.

And those questions none of them really indicated that she was focused on these first amendment

or due process claims. And I know that that's a prize. Some of us at law fair, Kate, especially

“I think, to my memory. Because, you know, it seemed like maybe those first amendment retaliation”

or due process claims might be, you know, pretty strong ones. And so it was interesting to see that maybe the judge wasn't so focused on those and was focused more on some of the statutory interpretation questions. But then when we got into the hearing, Judge Lynn started with this kind of like preamble kind of speech, basically about the case. And it gave you a sense that actually maybe she is focused on these first amendment retaliation and due process issues because of the

content of that speech. And then later when she issued this order, it looks as though part of that speech she gave during the hearing was kind of maybe a draft of the start of this order. Because she says some of the same things about, you know, it's not up to her or two courts to decide who the government is contracting with. But the question in this case is whether the

“the government went further than that. Also at the hearing, I thought one of the more interesting”

were, I guess I should maybe say I'm using parts of the hearing was the questions that she had about Pete Hugseth's tweet. Because even mine, there are like three communications at issue here. There's the Trump presidential directive that he posted. There's the Hugseth tweet in which he says something to the effect of like, you know, no one's allowed to contract with and thropic. And if you do like, we're not going to contract with you. And this decision is ultimate

and final. I'm paraphrasing. But that's kind of like the basic thing that he says. And then also at issue is this supply chain risk designation, the actual letter that was sent to andthropic. And with respect to that Pete Hugseth tweet, which is kind of created basically this secondary boycott effect. There are a lot of questions from the judge about that. And the government basically had to take the position that he didn't really mean it judge when he said this decision

is final and ultimate and binding. And it has no legal effect. And actually that doesn't really mean anything. And so the judge was like, are you saying that this statement by the secretary of defense is false? Not false. Just not to be taken seriously. Right. And DOJ kind of had to, you know, very carefully tiptoe around saying, yeah, that was, this is not true because and it was just really awkward and kind of fascinating to listen to. But, but as I mentioned, you know, overall by the

end of the hearing, we really had a sense that Judge Lynn is going to rule for andthropic on the on the PI motion and sure enough a few days later. And she, you know, posted an order in which she

to talk about that order in more depth. You would Kevin, let me come to you on that. Yeah, I mean, tell us just a little bit about what Judge Lynn decided kind of where the procedural posture leads to this case. We have an administrative for a few days with the government pursues in appeal. So actually, it hasn't, I don't think it actually kicks in till tomorrow in the recording. So work for April 1st of April 2nd. So talk to us about what what the grounds are that we see

Judge Lynn ruling in on and you're sent to them. I mean, somebody's been looking at this issue set where they're stronger or where they may be weaker. So I'll shout out the northern district as well

“as Anna did because I think that Judge Lynn and perhaps her clerks are working 996s because”

they got this out 43 pages in 48 hours, which was remarkable and Kudos to them for putting in the work on a very important case. So in terms of the procedural posture, just to go to full

law professor mode for a second, for folks who aren't aware when we're analyzing something

for perhaps injunctive relief. The standard we're going to look to as to whether or not preliminary injunction is going to be granted by a court is whether the plaintiff is going to be able to establish that they're likely to succeed on the merits that they are likely to suffer irreparable harm in the absence of preliminary relief and that the balance of equities tips in its favor and that in injunction is in the public interest. So those are the four factors that

the court is going to look to. In the case here, because the non-moving party is the government,

“we merge those final two factors. So really we're assessing anthropics arguments on three”

different inquiries. And here the judge was looking at three different potential arguments under that preliminary injunction standard. The first amendment claims, fifth amendment claims, and the administrative procedure act claims or the APA for all those admin law walks. And under each of these different prongs, Judge Lynn found that indeed injunctive relief was warranted in this instance. And as you pointed out Scott, we're seeing that there's been a seven-day period

for which the government can appeal this determination. We'll find out what happens presumably tomorrow,

which too bad we can't have back to back rat sex because that sounds like an incredible way to

have a week. But I will say that and I'm looking forward to getting into the weeds on this with Kate and with Anna. The first amendment claims here and the first amendment arguments are very intriguing because we're diving into what exactly Anthropics said and did in relation to this contractual argument. And when we cross from conduct into speech and expressive activity. And as much as I'd like to applaud Judge Lynn for doing humans work in a rapid fashion,

I will say that of the 43-page order, like three pages are reserved for this first amendment analysis, which is quite extensive and I think needs more inquiry and needs more deliberation. Again, based off this procedural posture, it's not surprising that it's short, but I think this is going to be a key area of contestation. Similarly on the Fifth Amendment claims, there's a real interesting scholarly debate and scholarly discussion that needs to be had on this idea of what Anthropics

“Liberty interests are. So if you're going to bring a procedural due process claim, you need to show”

some deprivation of life liberty or property. Here the judge looked at the sort of ability to offer and make available in AI product as a sort of liberty interest. And this is not something I've necessarily seen advanced in any law review article and I do my best to keep up with what the heck folks are writing, but this sort of notion as an ability to advance and offer in AI products as a sort of liberty interest and make sure that you're able to offer it in a specific

format, pursuant to a specific safety standard so on and so forth, is a very interesting argument

that I think warrants more investigation. And then finally, I think the perhaps easiest case

that I'm looking forward to diving into as well is this APA claim where really we need to make sure that when you are seeing some sort of final action being taken by the government, whether that's the headset declaration or not, the final action here being the supply chain risk designation under two different statutory authorities, but here we're only focused on one of those. Whether the explicit procedural processes were followed and whether there was a sort of arbitrary and

capricious decision that was made, that seems to be arguably the strongest basis of a which anthropic can say the government fell short of its obligations under the statutory authority upon which the Department of War Department of Defense was acting. For example, there needs to be a determination that the government considered lesser alternatives to declaring a party as a supply

It was just a conclusive analysis of saying yes, we considered these lesser alternatives and indeed they weren't available. But that's the sort of analysis that the courts do not look kindly upon. So those are the three different prongs. There's a heck of a lot to dive into in those different domains and we will wait to see what the government has to say in Rebuttal or Onitsapil. So stay tuned for tomorrow because I'm sure Laugh Fair will be pumping out some some great insights. So Kate, talk to us about

your sense of this case. Somebody who's also been watching. We have a little conversation on this side talking about some of the way the judge approached and prioritized some of these arguments. You know, what stood out of you kind of interesting about this case where the judge came out,

“what kind of call you by surprise, where do you think of my lead?”

Yeah, so there's a bunch of stuff that I think is kind of interesting. One is that and we kind of had like this before is that when the judge wrote about when Judge Lynn in the Northern District of California posted the questions that she wanted everyone to have answers for and be briefed on

ahead of the hearing. There was very clear that they were not first amendment based,

Alan and I kind of had a back-and-forth about like he was like, "Oh, I told you that like she's going to skip over the constitutional questions, constitutional, document constitutional avoidance. We're not going to get into these types of things." I mean, it makes a lot of sense, frankly. But then as Anna kind of like headlined and like kind of summing this up, she did like that was like the whole thing. She was basically like, "I want to talk about all of these things, but this is all

kind of in service of the fact that I think that there's a first amendment issue here," and it's very

“clear. So here's the interesting thing about the first amendment issues, as far as I can tell.”

In the briefing that Anthropica prepared and in the there was an insane amount of friends at the court, Amichi groups filed so quickly in this case, a number of them came from

like advocacy groups for the first amendment and things like that. A lot of it was around the

speech issues, specifically what's going to be a hop-button issue as we go forward and all of this AI stuff that's just trying to figure out how the law designates code, whether it's going to be seen as conduct or whether it's going to be seen as speech, and that's going to have a huge role in how it's regulated. But anyways, all of that was kind of interesting. But the really interesting thing was the retaliatory claim on the first amendment. Actually, if you kind of squinted at it and

looked closely, it was like a little bit questionable the way in my view how Anthropica argued it in their briefs, which was kind of like they were saying the retaliation came because Anthropica canceled these like backed out of these contracts. And that means that it actually, the retaliation actually wasn't for speech, arguably, that the retaliation was for conduct, that they ceased to have these claims. And that is the liberty argument that Kevin kind of talks

about and everything else, but like it's a harder claim to make on a first amendment basis.

And the judge did a really nice job here of being like, no, the retaliation was in fact because like they were angry, they she focused in in a couple statements that Trump and Higgs that then made on Twitter that was basically like they were angry that that Anthropica went to the press. And so that was speech, right? So that was like it was not that they can't like that they were fused to code exactly what that they could and that code is speech or something like that,

which would be like the like what the Anthropica was kind of arguing or pushing for. It was rather that the statements that they had made to the court following, following this cancellation, that was they're they're they're right to criticize the government basically after the canceling and this contract and to speak out about what had happened to them was in fact the protected speech that the judge found was retaliated again. And I think that this is this is

pretty significant. I think it was I think it's a pretty strong first amendment argument frankly and I think that I mean all of the other like arguments or strong statutory arguments are very strong here. Like at the very low high likelihood of succeeding on the merits in my opinion, I think everyone's opinion I've talked to. But she reached this first in her decision, which was quite long as Kevin said for for something written so quickly. And it went it went basically.

First amendment, DPC, the due process clause, fifth amendment kind of arguments and then it went into all of the statutory stuff. And so everything's preserved. It's not really like super significant on appeal like what they dig into like the you know the appeals court can certainly reorder like the like or decide you know that one that like any of these things are enough to

“grant a preliminary injunction on. But I just thought it was interesting that that's how she kind”

of dealt with it and that she thought the first amendment claim was the strongest in order at first. The other thing that I'll say is that we have not yet seen the government file an appeal on the

injunction said okay I'll give you a stay for seven days and that will give you time basically

to like get your to start this appeal well they haven't. And like I'm trying to kind of figure out this strategic posture of this. So I mean this preserves a stay preserves everything so that like the this designation is still in like like everything the government did is still intact it's going forward. I guess if they were going to make out some type of claim that they will be a reparably damaged like them not getting their stuff together and in time to make this claim is going to be

harder to make a claim like they've just kind of sat in their hands for six days. I don't know if they're looking for like an extension of the stay. I have no idea what's going on so it's very strange

meanwhile and I will also flag this where a week out from the end of briefing in the DC circuit.

And in that case the endropic flipped the order of their arguments interestingly and how they

“argue them in the brief and I think that that was in like I think that that was I don't know why”

but I think that they could just kind of argue that that was strategic in terms of the panel that they pulled over. They had filed their complaint before they pulled their panel. So I think that those are all just kind of interesting things to kind of be looking for and if the data tomorrow we'll see if the government files in appeal. I think that you heard me say last time Scott that I think that like they don't want bad law on this wouldn't it be crazy if they don't make appeals like the government

doesn't make appeals and this stuff and everyone is kind of like no they're going to go to the map because this is like like this is like machismo bullshit. Like kind of like thinking like they're going to like defend this like I don't know like do you want to like make it really clear that you can't use like this random like this random designation like in the future like I don't know like I don't know like I would be interested in like what Kevin thinks about that.

So it's worth noting that the government based it's supply chain designation risk based off of two different statutory authorities and only one of those was subject to analysis by the Northern District and the other one is going to be investigated by the DC circuit and under Secretary Michael has insisted that the supply chain risk designation is still in place under the other statutory basis that hasn't been ruled on in the DC circuit. So perhaps we're going to

see the government just put all of its eggs in the DC basket, Easter pun intended and perhaps that's their strategy. I don't know if they just want to give up on the Northern District of California.

“I think many people would be surprised if there was a favorable pro government ruling out of the”

night circuit for example and so maybe this is just trying to leverage its resources and target them in what they may think is a more favorable jurisdiction. But here again just the facts aren't good for the government. When you go and look specifically at the statutory arguments here it's worth noting again what the actual legislative history was of the supply chain risk designation statutes actually is whether or not we'll see the the judges lean into legislative history is another

conversation but this is very much focused on foreign actors intending to sabotage the United States and as Judge Lynn highlighted it's very weird for a company to quote and quote sabotage the government after months of what the government has labeled quote and quote cordial negotiations. Right that's not the traditional playbook for sabotaging or undermining the government and so

“just when you go through and see is this the basis for designating a company a US company as a”

supply chain risk the only AI company that prior to this point was actually on classified networks. It's just a tough road a hoe and I'm not sure that on the facts you're going to be able to convince any judge that you know we have clear statutory authority as the government to be able to move forward with this. Okay so can I jump in on something on the due process issue that Kevin was was talking about earlier I don't think that this is necessarily a completely novel kind of interpretation

of the liberty interest factor. The reason that I say that is because if you look in the order Judge Lynn she doesn't cite any ninth circuit case law or really supreme court case law but she does cite some DC circuit case law on this point and I took a quick look at that case that she sites this morning and some of the other case law and it is the case that the DC circuit has developed this what they call a reputational harm plus kind of analysis when they're looking at

whether someone has been deprived of a liberty interest under the due process analysis and basically

the idea is that the government has inflicted reputational harm on someone or on a company but

calling or an employment and so what she's doing here is is applying that established analysis from

the DC circuit to the case here because she's saying like you know not only has anthropics reputation been harmed but like these like for example the presidential directive like quite literally you know has a very immediate effect of saying like you know people can't contract with anthropic and so I get what you're saying Kevin that I I do agree it's a little bit novel and probably will be the subject of discussion as this case moves forward but I just wanted to kind of make the case that

it's not a completely new kind of a thing that she's doing here she's applying established law

“from the DC circuit no less you know obviously not binding in the ninth circuit but still I think”

significant and and yeah so I I don't know that it's necessarily as novel as as you suggested. Well

so I appreciate you pointing that out and I think you've given me a chance to clarify what I meant to say here which is so we see in the order the liberty interest protected by the fifth amendment encompasses the right to follow a chosen profession free from unreasonable governmental interference and then we see the tie-in to the idea that depriving a corporation of the ability to receive a government contract for example can trigger that deprivation of a liberty interest and so I

agree with you that the analysis that follows that is is a slam dunk applying strong precedent that you know although it's only persuasive in the ninth circuit does seem very compelling and very logically structured for me I'm more intrigued in the sort of broader scholarly question of this idea of AI development and AI use as a chosen profession as a sort of liberty that that to me is and I should have made that clear more generally that to me is a very fascinating and wonderful question

because this has been raised for example in states like Montana where they've enacted a quote and

quote right to compute that basically says that the government must survive strict scrutiny before

you're regulating computational resources and access to computational tools and so this whole liberty interest argument and the use of AI and the development of AI is something that I think is novel and I want to explore further as applied to the question of denial of government

“contracts I agree Alieu slam dunk LeBron James all that jazz I think it's a very strong argument here”

that's that's really useful yeah cause in some ways I was kind of it's interesting to see her go down this avenue in frame of this way I see why extra looking for case law obviously I should didn't buy it then I took it but like the idea that the government saying hey no one's allowed to contract with this entity that's like that hits corporate property interest that don't even you know you don't need a lot of case law to point out hey you're costing business to send it as not just

reputational harm if we're just like anthropic sucks then maybe you'd have this question like well is simply Reputational harm enough to rise this level this isn't Reputational harm this is public policy like prohibition just a very short follow-up on that it's worth noting and emphasizing and highlighting and you pick your adjective just how important it is that cloud has been the only tool used on classified networks for years and so when you go and say for example

that anthropic is operating in an unpatriotic fashion or is trying to sabotage the government there's just not a whole lot of alignment there and so also calling forth the reputational harm when you do see the government labeling you as un-American and so on and so forth especially

“during a time of war and geopolitical chaos I think does have just a clear reputational harm now”

Scott as you and I kind of nerded about earlier this seems to have backed by it on the government in terms of interest in anthropic and a willingness among the American people to shift from other AI tools to cloud for example well that's exactly what I want to talk to you about Kevin like talking to us a little about what this is meant for anthropic and for the biggest market and to some extent DOD they told us community other entities relying on this right like you know as

this is all gone on almost perfectly aligned timing wise we have seen an incredibly sophisticated set of military operations take place in Iran highly controversial highly problematic in my view and view of last other people from legal perspective about the perspective whatever but as from a tactical technical perspective like kind of ludicrous with the rapidity with which we see in the United States in Israel engage in targeting something that clearly has some degree of AI

involvement given how quickly these target packages are being put together and executed including some mistakes clearly we have like the Girl's School tragic bombing that took place in

the scale here of which we're able to come to the first 24 to 48 hours is extraordinary people

“looking at those are like wow this is like almost approaching a level of work where we didn't”

weren't even truly the United States in Israel another powerful military powers could accomplish

so DOD needs this stuff is using this stuff we heard a lot of talk from from headset about a six month implementation period of these bars not reflected the actual letters and at the I don't think judgment really knows what's going on with that either she mentions that there's no clear description about how this implementation period if it's happening is going to be implemented do we have a sense of that and then more generally like what has this meant for a

anthropic an AI industry companies generally like we saw open a AI pretty early pivot in and both kind of to some extent standby anthropics position on principle but then also go forth market share and say we're gonna provide alternative services to DOD does that look like

“it's gonna be able to fill the need is this effecting anthropic ability to compete like what are”

the dynamics around this in the broader AI industry that we see now that we are not quite a month in to this ultra veil well there's there's a heck of a lot to tackle there and I I

welcome my other panelists to jump in as they see fit the first thing I'll say is that

anthropic has said that they stand to lose perhaps hundreds of millions if not billions of dollars in contracts as a result of this whole affair and so in just in terms of irreparable harm and injury to anthropic's bottom line this does have very severe consequences and so just want to highlight that first and foremost is why anthropic is on the defensive here secondly when it comes to the use of AI in a military context like any good law professor I'm gonna assign

some homework to the readers which is to say you all need to go read professor Scott Sullivan's piece in law fair which is AI as abnormal technology this is a excellent piece on how in the military setting the use of AI is just moving so much faster than in other domains the idea that there's sort of institutional friction or inertia in let's say a Fortune 500 company when it comes to adopting and using AI just doesn't exist on the front lines and we're seeing this play out

in real time as you mentioned Scott and so having the latest and greatest and most reliable tools be available to the Department of Defense is a national security imperative because these tools

must be reliable they must be verifiable and clawed and co-work is doing incredible work making

sure that folks have access to those tools in Iran in Venezuela and so on and so forth and so what folks are debating at least on X and the other AI blogosphere is the extent to which it's going to be burdensome for the Department of Defense to switch out from anthropic to other tools now there's a traditional sense that hey you know you just swap in a different AI model Bing Bing boom and you carry on and everything works out as intended as we saw yesterday from

the the leak of some of cloud codes code and throughout because a very sophisticated approach to making sure these tools work as intended they have a very thoughtful architecture behind how all of these tools are being implemented and so whether or not just a sub out into gross products or XAI products or OpenAI's products works as intended and has the same degree of reliability and fidelity to user intent is an open question and so I do think it is

important to flag that we're just not sure what a sort of switch to new models may mean for the Department of Defense's functionality especially at a time of war that that should raise some eyebrows among the public. But let us pivot to our second topic which has a clear intersection here because we are still talking about supply chains but now we're talking to perhaps a more credible threat to supply chains that is the closure of the state of

removes and the impact it is having on a lot of key inputs into our economy. Kate you have have become one of our self-assigned supply chain mavens at law fair following this closely a supply chain nerd I consider myself a bit of a supply chain nerd increasingly these days as

“well. Talk to us about what we are seeing and these knock on effects I think we all know the price”

at the pump issue which has been the forefront of the kind of media coverage and frankly the day-to-day experience of most Americans resulting from this conflict but we're seeing a lot of other knock-on supply chain effects to talk to us but what those are and how those are intersecting with the Iran conflict. Yeah so I have become like I've just kind of gotten really into supply chains I love systems I love like kind of everything about how they work and figuring out like kind of the

entire soup to nuts of them and so like this is so as I've been digging into AI and getting into AI

kind of essential like minerals and and gases types of like supply chain questions which are

fascinating and involved geopolitics and all of these different ways then actual direct regulation and tech does but I digress to get to your question there are a couple of things besides oil that are really critical that have been caught off from the straightaway moves kind of being closed. One is liquid natural gas which is has a byproduct that can also which it can with helium which I'll get into which is key in semi-conductor manufacturer but then there is also there

are also a number of kind of questions about sulfur and polyethylene a bunch of things that you don't kind of think of as critical but these kind of ripple on and have these huge effects longer in the supply chain they affect the development of things like fertilizers which then affects the cost of food obviously these are kind of macro economic questions and so I'm not going to kind of get into them but I've been following specifically kind of just like the

helium and well if you don't know about the helium supply chain it's kind of interesting most of our helium comes actually in the world from the US and then about a third of it though comes from Qatar and so that is the that that one third is the part that's restricted right now

“through the closure of the straight and that is I think going to have kind of this huge effect”

semi-conductor prices were already going to be like going up like there has been like an

memory global memory shortage is like you know which Natalie always reminds me of sounds like

something very or wellian but it's actually about the supply of memory that is available is going to go up it is going to increase it was going up before the Iran war and it was going to like it's going to kind of keep going up with everything that's going on but it's just kind of it's just a essentially like people don't want to go through the straight it's highly it's like either they can't and they're blocked or it's it's a it's a risky maneuver and so like it's just people are going

not going and going round or there's just a there's a huge change and a shift and I kind of think that like I know Kevin's going to speak jump in here too and I know Kevin also loves these things

“we both are also sea cable nerds I think that we both are kind of drawn to the fact that like”

all of the sophisticated technology all of this stuff and I don't want to speak for you Kevin but this is my kind of fascination with the ends up kind of being supported by the most fragile of like architectures and the most human of like shit like actual cables that are actually on the floor of the actual ocean like you know it's like it's like you can all have all of these fancy things but like at the end of the day some type of like some type of cable has to get run from like you're up

to the United States like just in that old fashioned way and so this is kind of the same thing that is so compelling at the end of the day you just have to ship like helium canisters back and forth to like from from Wyoming to to you know China and that's like how it has to work and you have to get it from the shit on the you know and then that can't use his gas and then if you can get them at all and all of it is kind of like this crazy kind of thing about the fragility of our

entire ecosystem and how much we take for granted and that's kind of why I'm attracted to kind of

“this issue and to kind of give the like the listener kind of a view and argument about why you should”

care about the supply chain I guess and why it's actually a really super interesting thing to geek out about but Kevin go ahead. Yeah no I mean I'm a total fellow nerd in this regard to Kate and I think that when folks realize that modern life wouldn't be possible unless we had all of the

seemingly small interactions add up to incredible ecosystems you do become more attentive to the fact that

today my employers aren't going to like this but I could go to the organ coast take an axe to an undersea cable and the only fine would be $5,000 that's how old our lives are a hell of a week and Kevin. Well I don't where Scott I've got this whole trip to band and dunes plan I'm going to play it mean and then I'm just going to hack a undersea cable but don't give people ideas Kevin. Yeah I'm like worst the AI like why like what should I what is the most disruptive thing that I can

do to like the global like information ecosystem and then it's like gotta be like Kevin's face with an app. There we go. This is what I have to do to get Congress to act on undersea cables you know challenge accepted but I want to highlight too the fact that we have to have a more nationwide conversation on this whole AI infrastructure shout out to Jensen Wong and shout out to JPMorgan Chase. JPMorgan Chase came up with a seven layer cake for the AI tech stack. Jensen Wong has condensed it

to a five layer cake of the AI tech stack. You're not going to go with a layer dip and as the

that all of this AI infrastructure doesn't happen by accident and so this crisis is really highlighting

the fact that for example data centers now are a target in the Middle East. We saw that some of the first attacks were on data centers and so for the states and municipalities that have questions about data center access and I just want to say data centers don't only exist for AI we need data centers for hospitals to run for commerce to occur and for selfies to get sent on your phones. If we don't build those data centers here then pushing them abroad does raise some significant

supply chain risk concerns because we are seeing this infrastructure these for gotten pieces of the AI tech stack be targeted and so this is a real reminder that when it comes to developing

that infrastructure we have to regard it as critical infrastructure and we need to be far more

attentive to the fact that as Kate noted the fragility of all of these things is so immense even a couple weird actors doing weird things can have massive consequences go talk to the folks for example at Unilever which now has a hiring freeze as a result of the supply chain concerns they're seen with respect to their oil products so shampoo all of that needs a lot of the stuff that's going on in the Middle East also go talk to the folks who rely on there was one article

“I think it was in CNBC on how the pharmaceutical industry is being disrupted by the conflict they said”

don't worry you know it's only the folks who rely on quote unquote orphan drugs who should be

concerned and I'm guessing there are a lot of Americans who are thinking huh thanks for designation

is being an orphan but yes I actually do need that medication can we please take this seriously thank you so just being aware to the fact that any sort of disruption can have an impact on millions of lives in very sensitive ways I think this should be a alarm for Congress to take the sort of boring issues like undersea cables far more seriously can I just say like an orphan drug just to clarify for people who maybe don't know is a drug that it's like people with rare diseases typically who are

you know need an orphan drug so just to be clear that when people say oh it's just it's just the orphan drugs it's like the people who need it that medication the most so yeah that's that's nuts yeah they'll figure it out though Anna you know they'll get by there's you know they'll just kind of just get it drawn or something they'll pick it up somewhere well at the point I would I would

“dry a home for this I think it hasn't gotten picked up on yet but I think we're going to hear”

about it a lot more in the week particularly if this you know we've heard the Trump administration suggests we're in a pseudo negotiations slash light easing of tensions with Iran while these negotiations are ongoing Trump has said oh after the end of this period which is now extended twice that's when we're going to hit Iranian energy infrastructure a Iranian energy infrastructure is counterproductive certainly on the energy front a global gas prices front because that dropping

production like we saw happen when Israel hit the South Park's field last week has a big impact on global availability and supply chains but also we the big question I interviewed two former intelligence community veterans on Friday for the offer podcast about their view of this conflict is a great conversation I highly recommend a chip usher in air and fast from CIA and from state department

“but what one of them I think was chips said the big question for him that he didn't understand is”

yes so far is why the hooties and Yemen who are themselves partners of Iran not quite full clients but like closely allied with Iran today hadn't really when we recorded gotten engaged in this conflict and they control the other key supply route out of the Gulf area specifically the straight of mandab which goes up into the red sea so through the Suez Canal which is a hub of global shipping this is why during the Biden administration early in the Trump

administration to lesser extent though in the hooties were hitting maritime traffic over the Gaza conflict it was a huge supply chain problem then and you think back to like you know the with the evergreen the ship that blocked the Suez Canal how bad a complete shutdown of that can be the hooties enter the conflict over the weekend right like at a small scale so far we'll see the level of commitment is but they started hitting maritime traffic in the straight of mandab so this

could get a whole lot worse a lot faster across a whole broader range of goods because while the Persian Gulf has mostly about getting in and out things that are exported through this key part of the world it is a it's a cold sack doesn't really go any other places the red sea straight of mandab so it's canal that's like the key route through the Mediterranean right to get to other avenues and other parts of the world they could have a much broader effect so we're

Kevin I want to drill in on one thing with you and Kate you may have views on this too and

“I mean you might have views on it too I don't like you and I think you you maybe a little more”

and darker this than I am who's more technical AI question like what does it mean if you have these helium shore shortages preventing the additional construction of these chips what is that of what aspects of the AI industry does it affect is it the training and development of new models is it the abroad availability of AI services is it the expansion of AI services to other

industries like what which which I actually think probably blends in with the second question

because not like they're giving chips that's away they're like kind of just expanding services what is that like impact in terms of the trajectory of available AI services both kind of vertically and horizontally across the market it's everything chips chips are everything it is like flower going into that cake if you don't have flower you're gonna get a pretty gnarly cake and if you don't have chips you're gonna get shitty AI and so this has to do with not only the frontier labs

developing the latest and greatest models but also what we refer to as inference so this is just your ability to go and query your favorite model for whatever thing you're looking up or whatever task you're trying to accomplish and what inference means in this case just now yes yes this is going to become even more significant as we become more reliant on for example AI agents so right now any individuals need for compute is relatively low right if you're doing fairly unsophisticated

tasks like using chat GPT to come up with your March Madness bracket not a huge computational load if you are instead saying hey I want cloud to now design my syllabus for the entire semester based off of all of the lectures I gave last term and to integrate the latest news into those lectures the week of so on and so forth now you're seeing the AI agent trying to go through and use those computational resources for hours if not days if you go talk to the folks who are in the

bleeding edge of using AI their computational needs are even higher and so this has massive consequences not only for the leading labs but I also want to call attention to the fact that we need to support

“a competitive AI ecosystem I think it's also important to flag that access to computational resources”

is incredibly important not only for the frontier labs but also for our researchers for our academics for the folks who are doing new scientific discoveries all of them need to have access to these chips and we're usually trying to plan months if not years ahead for the sort of demand we're going to see from the industry and so even small lapses in the supply of the chips can have huge ripple effects you know I would say that the flower analogy is right I don't know there

is it just to put it even like in more simple terms it just blocks the rate at which things can scale

it's just taking an essential element you don't so like to put another way if you don't have the

flower you just stop making cake like you don't like right it's not that you make bad cake it's like you just stop making it like you can't make as much cake and so like right now we are just investing tons of money to make as much as possible to make the AI better to make it faster to make it deliver things quicker and we'll just do less of that like there's just like we won't build the data centers there won't be this smaller models coming up there won't be the bigger models we'll

get more expensive everything will kind of so I think that like that's just kind of like it's a it's a pretty simple it's a pretty simple kind of way to kind of think about it which is yeah it affects everything and I you know the newer times it's a great graphic in this about just kind of all of the down downstream effects of like the supply chain the supply chain all over the world from like people are making docile in India because it uses gas ovens to you know to healing

him at your kids birthday party is going to be more expensive for balloons like this is just kind of this is you know this is the world we live in everything is interdependent and people will pass on prices to consumers and this is just very much going to be our new future. Well what is transition to a third topic because some people have some very creative ideas for some of these supply chain issues particularly around data farms and data centers including putting them in outer space and that

is one Elon Musk we may be seeing the first step in this direction to the home degree later today

“at 6 24 p.m. I think is the specific time I can't remember what that's east coast or local”

the Artemis 2 mission is supposed to launch if you are a space nerd and I consider myself proudliest based nerd this is kind of a big deal this is the first manned mission around the moon and not landing on the moon they're kind of orbiting the moon the first time a man mission is

done that over half a century which is kind of an amazing thing that I don't think most people are

are fully aware of how much we just have not really bothered to go back to the moon again since the 1970s or early 1980s and it's pretty monumental it's also a huge huge step in a much

United States re-entering space in a big way and actually treating space as a kind of a growth domain from a strategic and economic variety of perspectives in area where the United States and Americans as well as people from other countries around the world are going to be operating in our lifetimes in substantial numbers you said you are a space nerd so I'm going to come to you

“first on this talk a little about why how significant you find this I think you mentioned that you”

watch a lot of these launches I tend to watch a few of them too I haven't tuned in live to this many I may try to tonight my kids cooperate to see what exactly happens but like you know I would just be on a curious how significant do you think this step and the broader effort is in the broader picture in an era where we are seeing such rapid change on so many dimensions technologically frankly politically socially too some extent where does that fit into that broader

picture yeah I think it's political I mean so much of space is political actually more than you'd

think first of all thanks for outing me as a secret SpaceX launch watcher Scott this is like

going to get me cans they're really kind of like platforms I mean I think of the like the blue sky mobs are already coming after me um like do you feel it basically uh I do I think that I think the the privatization of of space is like is actually just like absolutely fascinating and the idea the privatization of the space industry what's separate from that is the SpaceX is obviously going to sort like it has an upcoming like like public offering that is going to be hugely

significant which is the other piece of this that I love um that is super interesting and the other piece that does tie the space race into kind of my work is the fact that XAI was merged while both are still private companies and they don't have to like face any type of like a any type of government scrutiny into the same company which is a huge thing for the valuation of the platform X and Grock which are subsidies subsidiaries of XAI so this is kind of all tied

“together the space race and everything is happening with it right now I think that the significance”

of this is essentially that like that NASA and a public entity a government entity is putting efforts into space again when it was for quite a long time before we saw billionaires decide to like dip their to throw their hat in the ring was kind of like this like why do we need to go to why are we wasting money on going to the moon and shooting rockets into the sky when we can you know when we have all of these problems back here in earth which is absolutely true frankly like

there's a lot of good reason to kind of like think that that's something but there has been like just a tremendous tremendous amount of like of advancement and growth with private money once this has been taken out of the realm of NASA and it is it is it is incredible frankly to kind of see what is capable it just kind of boggles the mind it is the stuff of like to watch these launches

“to watch the chopsticks to watch everything happen it's just like kind of these like it just marbles”

of engineering and like things that I never thought that I would kind of see in my lifetime

and then I just want to just point out that like you know we also just still have sea cables like and so like it's just like you watch this gigantic a hundred million times like kind of spaceship to go off get launched come back to earth get caught on these chopsticks set down and then king so it can get reused just this and then you see Kevin in the background hacking and undersea cable it's actually in there you know you know old Portland climbers Fred give me an

axe if you're just what a what a time to be alive people would time to be alive it's just the high at low of it is like it's just astounding so well and this is this is the book that mean Kate needs to write at some point on just the scale of all of these projects almost inherently have to be done from a private sector standpoint now just because we're not seeing the level of

funny I mean for hundreds of billions of dollars to go towards any of these critical infrastructure

is now that just doesn't poof come up out of thin air and so we're seeing private dominance of the undersea cable system we're seeing private dominance of internet via satellites we're seeing private dominance of space generally what does that mean for the rule of law what does that mean for accountability what does that mean for international law these are huge questions but I do love that for one day we can all nerd out of watching this potential launch and being distracted from

a lot of other things for better for worse and just seeing some great Americans and one Canadian I will note there is a Canadian the first Canadian that will go around the moon so congrats to our friends to the north for you know getting getting a maple leaf going around the moon exciting

government's ability to spend money on big ticket item still I will note the cost of the Iran

“war as of this month actually exceeds the annual budget of NASA around the 25 billion dollar mark”

equals to exceeds roughly depending on how you count it exactly so we can still spend money on

big ticket items but not always the big ticket items you may want exactly only certain select ones

I want to put this in a little bit of context for people about where this fits into NASA's plans as I understand I'll feel free to correct me if I'm wrong on this so Artemis's ultimate goal is to build the US permanent presence on the moon or in with the orbit that's actually changed recently there were plans to build a orbital moon base or orbiting around the moon initially that's not been phased out in favor of a sooner permanent moon like surface base on the logic that once you establish

that you have a landing platform that because of the lower gravity of the moon and the orbit potentially access to resources there including healing three and a bunch of other stuff that you might be able to get out water you can all of a sudden the cost of sending things further out

“in outer space gets way cheaper because you don't need to escape Earth's gravity at the same”

extent it becomes a platform for me able to do all sorts of further outer space exploration and this was some of the debate between the Mars versus moon race that we have taught Elon

come in Elon was basically saying no which it goes straight to Mars forget all this skipping the

moon step and that appears to have lost out out to the more conventional NASA moon base saying this is the next step towards the rest of space is establishing a platform for which we can launch more cheaply and effectively and safely to some extent re-exiting and entering Earth's atmosphere is still the most dangerous part of any space travel at this point yeah the most expensive but most dangerous somewhat relatively to the relatively unambitious missions we're taking so far

that would change if you're trying to go a lot further out in outer space so I guess what I'm curious for you all is like what what do you see as the like most promising elements of this sort of

“mission I mean in theory Artemis right now I think Artemis 4 which is scheduled for 28 is in theory”

supposed to put human people back on the moon right they're gonna have one more mission next year where

I will think it's next year where they'll be testing basically like landing crafts that are being built

by blue origin and by other folks but where the theory has people back on the moon in 2028 and then moved towards a more permanent habitation of syndrome expansion is this you know an economic drive is commercial drive and what are the risk factors that you all see I mean what makes you anxious about it what makes you excited about this possibility about seeing this again in our natural lives which is kind of kind of extraordinary yeah I'll say that I think we have to

expand our horizons for for lack better phrase in terms of finding new domains to advance scientific knowledge in terms of finding new domains for these infrastructure endeavors whether or not I would gamble my own very limited funds on the creation of data centers in the next decade in space or a manned moon base in the next decade I'm unsure I do think though that we are living on a dying planet in many regards and finding the sort of resources and

advances we need to be able to sustain all of the things that we hold dear does require scientific advances and does require new and novel insights and so in that regard I'm very optimistic of trying to push us to new frontiers and trying to expand our capacity to study steady space and see all that we can leverage there I will say though that this is going to become a very fraught area very quickly to the extent it isn't already all law of the sea nerds love to say that

they understand a little bit of space law because that tends to be the law of the sea is the law of space and for all those who know anything about the law of the sea we know it's not going particularly well especially with respect to deep sea mining that's becoming more and more prevalent and so as soon as we do find out there's a vast repository of x y or z rare earth mineral or I guess do we say rare space mineral I'm not sure what the the right phrase would be it's going to

get contentious and gnarly and legally ambiguous very quickly and that doesn't add up to chill geopolitical vibes and so that that does give me pause because we're already seeing that countries for example even India are capable of identifying and targeting things in space and blowing them up intentionally therefore sending tons of debris that becomes a huge barrier to more space exploration and more space endeavors so even this question of space debris hasn't been figured out in a meaningful capacity

and that can be a real cap on our potential to make use of space so I'm at once very excited that we are pushing the horizon and that we have folks who are asking big questions but I worry about the nitty gritty questions of just is there even an orbit for some of these more sophisticated and

one other one other thing that I think that is really true of everything happening so this is that it's quickly becoming a monopoly or it already is a monopoly must owns two thirds of the satellites an orbit right now and so through starlink or other subsidiaries starlink and so there I mean that is something that is not great as we increasingly shift away from undersea cables and to satellite provision of internet services or telephones services so I just think that having kind of our

I am what's happening in space is going to be increasing the important well with that we are out of

time for today's conversation ran a little short on that third topic but we have many opportunities

to revisit it as I'm reading me watching in the weeks to come but of course this would not be a rush screen if we did not leave you with some object lessons to ponder over in the week to come okay what did you bring for us this week? Well it's topical what we were just discussing and have discussed throughout like the man like just I wish I could stop talking about him but my friend mailed me this the other day that she got and this is my object lesson is a notebook I wish it was

like a book I mean it could be a book it could be a book many many pages long ago but like to those who can't see it say book this is things Elon Musk has done to piss me off and it is in notebook it only has a certain number of pages so I you know but I might have not written anything

“in it yet but yeah I think that that is that's my object lesson for the day there's a constant”

kind of question for me is like how we how we deal with the new billionaire power structure that is fueling all of tech and increasingly all of geopolitics and national security so that is you know that is unfortunately my object lesson for the day to leave it on an optimistic note well I think we have lots of opportunities to make use of that particular object lesson in the weeks months and years to come and about or what did you bring for us this week? My object lesson this week is

survivor season 50 I know that the reality TV show survivor is very boomer coded and people might be thinking are there still people who watch survivor but we do in fact exist and every week I

actually go to a barn Brooklyn that hosts a survivor watch party and there's like almost always like

a hundred you know 50 to a hundred people there who show up and it's super fun but I recommend this season in particular I first got into survivor during the pandemic and my friends and I played this like game of virtual survivor but season 50 has been incredible thus far it is a season that

“involves like a bunch of returnies from previous seasons so if you want to get into survivor this is a”

good season because it's a really good one and so I hope people check it out well that's a great boomer recommendation for me in a bower coming in 50 seasons I must they're obviously making more it has not been on TV for 50 years right this is just because it is not like the last ever on the moon when they started doing survivor they must squeeze a couple in per year for some of these years no it's definitely because they have multiple per year I would be really upset

if it had been 50 years since survivor first started because I started watching it when I was like

I don't know probably like 11 or something it was definitely a 2000s that's what I thought okay I think it might have been around in the 90s actually because I feel like I remember watching when I was little we're not that old Scott that is not that old yet it's coming but also I want is I want to tell you though for people who are wondering it does have a renewed viewership in like millennials and jenzy there's not a boomer in sight at this bar that I watch

a survivor at on Wednesday nights so just for anyone thinking that it is boomer that may be more about bar and Brooklyn in the evening phenomena I will say but I'm not a blur but I have been into a bar the evening and I'm telling you everyone is there too watch survivor I promise all right all right well for my object lesson this week I will dip into the television zone as well for my pseudo annual maybe like very other year it's been one of the new season comes out

but it's very well timed with the Artemis launch this week the new season what is probably

“my favorite TV show I think is back this week that this is for all mankind the first episode”

actually I think drop last week I have not kind of watched efforts episode yet I like to wait for them to pile up because I hate having cliffhangers so sometimes I will wait for the whole season to come out so I could just binge it especially because I don't really get to watch TV in my everyday life so I have to wait for like a vacation or sometime what I can just kind of like

will say I think the end of season two for all my kind if you watch it you have to watch it it's

“amazing give it a few episodes the first few episodes are a little slow season one then it gets you”

and the conclusion to season two the last two episodes because the last episode which are both like film length like 90 minutes maybe the best television I have ever seen like the most edge of your

seat intense thing I've ever seen on TV and it's absolutely amazing you know last few season

I've gotten a little weirder I still really enjoy it and I feel like I'm excited to see what the season has in the pike not to into this weird spin off they're doing about star city which I don't know how to feel about but at least the season worth checking out with that Kevin bring us home what

“do you have for your object last in this week yeah well I'll double click on for all mankind”

great show and my wife and I debate over the do you wait to binge or watch episode by episode I am

an impatient individual so I'm just like if it's there I need to consume it so yes the internet's

working out for me wonderfully I want to bring is my own object lesson speaking of mental health and issues what I'm trying to make fetch happen which is we've heard of AI as normal technology Scott Sullivan said AI as abnormal technology I'm going to call attention to AI as boring technology and these are all the use cases of the AI that are just mundane that are boring that no one

“is really screaming about or clamoring about there's this new app called flourish that was sent out”

to 486 undergraduate students at Harvard and over several weeks participants in the treatment condition reported significantly greater positive affect resilience and social well-being so I am a big stand for mental health and mental health awareness and the fact that we have AI tools that have demonstrated positive use cases is something that I just want to scream from the rooftops because not everyone has access to a therapist and we should celebrate

and welcome the fact that there are innovators working on tools to help folks who have mental health issues and so kudos to flourish kudos to HBS students and kudos to Harvard on this project great recommendation there with that that brings us to the end of this week's episode raster security is of course a production of law fair so be sure to visit lawfirmity.org for our show page for links to past episodes for our written work and the written work of other law

for contributors and for information on law fair's other phenomenal podcast series while I had it be sure to follow law fair and social media wherever you socialize your media be sure to leave a rating review wherever you might be listening and all sign up to become a materials portal of law fair on patreon for an ad-free version of this podcast among other special benefits for more information visit lawfirmity.org/support our audio engineer and producer this week

because no moths band of goat rodeo to music as always was performed by Sophia again and we were once

again edited by the wonderful jet and patcha but have my guest Kate Kevin and Anna I am Scott our angst and we will talk to you next week till then goodbye you are a podcast in which you are on the right and right and right and right with every main thing where this whole spectrum of the primifell is still from all sides and how modern we will then call Hollywood kids and then you can see one new episode that we are

fantastic to click give this in your hands hurt my ring Hollywood kids overall worst podcast