Beyond P(doom): Marc Andreessen - Betting on America

Marc Andreessen joins CSIS's Navin Girishankar for a wide-ranging conversation on artificial intelligence, productivity growth, industrial policy, and America's technological future. Andreessen argues that while AI has already begun reshaping the economy, the largest impacts are still ahead. He explores how AI could dramatically expand access to expertise, improve productivity, and transform industries ranging from healthcare and education to law and software development. At the same time, he warns that many of the biggest barriers to progress are not technological but institutional, driven by regulation, policy choices, and infrastructure constraints. The discussion also covers the global AI race, U. S.-China competition, export controls, data centers, energy, reindustrialization, defense technology, and the role of government in fostering innovation. Along the way, Andreessen shares his views on technological progress, national competitiveness, and why he believes America still has an opportunity to lead the next wave of economic growth.

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Marc Andreessen?

  We could have a revolution education. We could have far better education at far lower cost. We could have a revolution in healthcare. There's all kinds of things that are possible now that weren't possible before. We could be in a world here within a decade where robots are building all the houses at far cheaper prices than today. Technology is a lever that could cause all those things to happen. It is really remarkable that China has decided that open source AI is something that is good and that they want to exist and that they want to propagate. We're in a weird state of the world where the supposedly totalitarian regime is trying to open up the technology and the supposedly democratic governance system is trying to restrict and control the technology. We live in this bifurcated economy where we've decided that some sectors are going to be subject to technological change and price declines and productivity growth and some sectors are not. As the prices for the blue sectors collapse, deflation, and as the prices for the red

• 0:45Marc Andreessen?

  sectors inflate dramatically, what happens mathematically is that the red sectors eat the entire economy, which is what's happening, which is healthcare, education, housing, law, government are eating the entire economy.

• 0:55Erik Torenberg?

  Artificial intelligence is often described as a technology story. Marc Andreessen sees it as something bigger. In this conversation with CSIS's Naveen Girishankar, Marc argues that AI has the potential to expand access to intelligence itself, putting world-class expertise into the hands of billions of people. But realizing that potential will depend on more than just better models. The discussion explores productivity growth, infrastructure, regulation, industrial policy, US-China competition, and the question of whether America's institutions can adapt quickly enough to take advantage of one of the most important technological shifts in history.

• 1:37Speaker 02

  Exponential growth is seductive, starting slowly and virtually unnoticedly, but beyond the knee of the curve, it turns explosive and profoundly transformative. Those are the words of futurist and author Ray Kurzweil. He argues that two world wars, the Cold War and every major economic upheaval of the last century, failed to make the slightest dent in the pace of technological progress. The disruptions are real, but the curve inevitably winds out. That's the accelerationist thesis. Now, even if we were to accept that society will always yield to technological progress, that is a prediction, not a policy. And predictions, however accurate on the trend, tell us nothing about the transition

• 2:20Speaker 02

  itself, who wins and loses, whether institutions can absorb the shock, and what government and the private sector must each do to ensure that the gains are broad and the losses are survivable. That is the question before us today. Not whether AI transforms the world, it's already doing that, but which policies are needed to ensure that the benefits are broad and that the risks are managed, risks like labor displacement, the concentration of power, geopolitical rivalry, and importantly, physical infrastructure gaps. I'm Naveen Girishankar, and today I'm in conversation with Marc Andreessen, co-founder and general partner of Andreessen Horowitz, and a member of the President's Council of

• 3:02Speaker 02

  Advisors on Science and Technology, PCast. Welcome to Betting on America. Marc Andreessen, what a privilege to have you on Betting on America. Thank you for doing this.

• 3:13Marc Andreessen?

  Good morning. It's great to be here, great to be with you.

• 3:16Speaker 02

  You know, you've been an innovator, a technologist, an investor, and importantly, which everybody knows, but importantly, such a huge contributor to the public debate on AI and technology. And so, we wanted to make sure we had the opportunity to speak with you. There are a lot of questions around policy that are very pertinent. You speak eloquently about modern alchemy, turning sand into thought. I love that metaphor. And you talk about the AI boom and that it's actually not quite here yet, it's coming. So, help us, give us your picture on what this looks like when the boom actually arrives. What will life look like?

• 3:59Marc Andreessen?

  Yeah, so I mean, so I think there are a lot of questions. I think there are a lot of open questions around that. I think that, I mean, the big thing I always kind of point out, like, I think it's very easy to find people who have a utopian view, you know, basically where, you know, we're off to the races, productivity growth, you know, goes to 10% or 20% or 30%. Economic growth follows, you know, material prosperity is everywhere. Every, you know, every field is transformed, AI solves every problem.

• 4:26Marc Andreessen?

  You know, there's kind of that view. And then, of course, it's also very easy to get the dystopian view of, you know, doom and death and destruction. And many people are out, you know, selling books, you know, based on that idea. I think the, I think maybe I tend to have a little bit more of a nuanced view, which is, you know, we have the potential for something resembling the utopian view, but we have a set of policy choices that are between us and that. And, you know, many of these policy choices are choices that have been made over the preceding 80 years in terms of, you know, really sharply restricting the ability for technology to actually affect the economy and day to day life in many, many ways. And, you know, AI does not make any of those go away.

• 5:10Marc Andreessen?

  And in fact, it, you know, it may well be a catalyst for more of those. And so I would put myself, you know, I'm a, I call myself an optimist, not a utopian. And then, you know, some days I, you know, when I, when I take a look at like what's happening, it feels like healthcare, education, housing, law and others, you know, I maybe even become a little bit pessimistic. And so anyway, like, I think this is like an actual, complex, nuanced conversation that needs to, needs to happen. And I think we'll probably touch on a bunch of that today.

• 5:35Speaker 02

  Yeah, let's, let's take a couple. One thing you've said, which I find resonates strongly is that AI is going to be your, your new brilliant genius friend, whether you're, it's a private tutor for your kids, or whether it's your financial advisor, your legal advisor, it's kind of a companion and tailored to your needs. And that this is something that we're all beginning to experience, all of us who are doing this. And you've said that intelligence, in a sense, is the real differentiator in human history with respect to progress and that AI, I guess my question is, does this become the great equalizer on intelligence? Or is it a magnifier of the differences? Let's start there, because I think it's an important question.

• 6:21Marc Andreessen?

  Yeah, you probably know, there's actually been some research studies in this so far that kind of, you know, frame the question, consistent with what you just said, which is basically, you know, there are many fields, you know, in which there's, you know, there's sort of superstars who are like hyperproductive and then there's the sort of rank and file, you know, people who are at kind of, you know, average levels of productivity. And so there's this question of, right, is AI, does AI basically cause the superstars to become, you know, a thousand X superstars and, you know, kind of cause the power law curve to spike way up, you know, for the outliers? And/or does it cause the media and performer to, you know, to become much better, right? You know, good to become very good. And at least so far in the research, interestingly, the answer is yes to both, you know, which is it does both. And way to think about it is, you know, this should make a superstar

• 7:06Marc Andreessen?

  lawyer, as an example, or by the way, Hollywood screenwriter or computer programmer, you know, far better, but it should also raise, you know, raise the average. You know, there will be a huge amount of focus, obviously, you know, politically on the distributional facts, you know, which are important. But I think that the dominant thing is, I think everybody gets better.

• 7:24Speaker 02

  Yeah.

• 7:25Marc Andreessen?

  You know, having said that, the other side of that is, you know, the, you know, the way I describe what you said is, yeah, you now have, you know, the world's best doctor in your pocket, you have the world's best lawyer in your pocket, you have the world's best accountant in your pocket, you have the world's best teacher in your pocket. But that's immediately where, again, I kind of, I run up against the kind of real world and political policy constraints, which is, AI actually can't be your lawyer, because it can't get admitted to the bar.

• 7:46Speaker 02

  Yeah.

• 7:47Marc Andreessen?

  It can't be your doctor, because it can't, you know, be admitted to the, you know, it can't, it can't actually be a doctor, it can't, you know, by the way, for example, it can't submit for reimbursement on insurance.

• 7:56Speaker 02

  Right.

• 7:57Marc Andreessen?

  Right, which is a key function of doctors and hospitals today. It can't be your CPA, like, it can't get licensed as CPA. By the way, it can't be your teacher, because, you know, as you know, like, you know, K through 12 teachers are, you know, government sponsored monopoly. And, you know, you can't, you can't get, AI can't get a credit as a teacher. So, so we're going to be in this world in which the software is going to be much better than almost anybody you deal with in any of those professions. And yet those professions, as far as I can tell, are going to stay completely untouched.

• 8:24Speaker 02

  Yeah, you know, it's another way of saying, if intelligence becomes less of the binding constraint on the margin, then what becomes the binding constraint? Is it the way we interact with each other? Is it our values? Is it how our institutions function? Doesn't that, it shines a light on our weaknesses in that realm, right?

• 8:45Marc Andreessen?

  Yeah, that's right, right, right, exactly. If you, yeah, if you remove variables, then you max out the impact of the remaining variables. You know, that's 100%, correct. And so, yeah, so I mean, like, you know, there's, as you well know, there, you know, there's already like extensive politics around things like, you know, K through 12, you know, teacher unions as an example. Like, you know, if everybody in the world has the world's best teacher in their pocket, then, you know, all of a sudden, the entire point of being a teacher in the K through 12 system is going to be the government protection of your job, which, by the way, is the direction that that field has been going in for 50 years anyway. And so it'll just blow it out all the way, right? So K through 12 teachers become a purely political function, which of course, you know, in too large extent, they already are.

• 9:25Speaker 02

  Purely political, or maybe they teach something else, right? Like, I mean-

• 9:29Marc Andreessen?

  No, they don't, no, not at all. No, no, no, they don't, they won't change at all. They don't have to. They're completely protected.

• 9:35Speaker 02

  Right, you're making a political economy point. Fully appreciate the point. I'm just saying that ideally, if more and more of that function is taken over by AI or supported by AI, then what, if anything, do teachers do? There's an opportunity for them to do other things, right? Teach other things, like perhaps more interpersonal skills or values, or I don't know what it is, but it's not the thing that the AI is doing, right?

• 10:02Marc Andreessen?

  Yeah, so look, if we didn't have government, let's hypothesize the world where we don't have the government protections and controls, right? So it's, you know, where it's somehow, you know, K through 12 is a free market system like everything else, or, you know, like people want to imagine it could be. So there, you may know, there is a school that is doing what you described. There's a private school system called Alpha School.

• 10:20Speaker 02

  I've heard of it, yeah, yeah.

• 10:22Marc Andreessen?

  Yeah, so it's a case study for what you're describing. So it's a private school, so it's outside the, you know, the public, outside the public system. It's a, you know, completely paid, you know, it's a cash pay thing, you know, with parents. It's obviously, you know, it's expensive, so, you know, most, you know, it's out of reach, obviously, of most kids, most parents. But it is, it is a model of what you're saying. And I'll just describe it for a moment. So the guy who built Alpha Schools, this guy Joe Lemont, who's one of the, actually like a, like a real software legend, you know, in the technology field, you know, from the, from the 90s, a really brilliant guy. And he spent the last, I don't know, 15 years or something. And I think he's put like a billion dollars of his own money into it. Like, he's very committed to this. And so he's built this new school system, which is, by the way, which is in-person schools, which he's building all over the country, you know, kind of as fast as he can. And,

• 11:03Marc Andreessen?

  and the model is that the academics are, so there's classrooms and there are teachers, you know, just like in existing school, but the, the, the day is very different. So there's two hours in the morning of actual academic instruction, which is, which is run by AI. And so it's, it's, it's AI mediated, you know, sort of computer-based instruction. The, the point of that being that the AI is, is already, you know, a better teacher than most human teachers. And then specifically, the AI could be in a one-to-one relationship with each student. And so each student stays in what's called the zone of possible development, which is they're sort of proceeding as fast as they can, you know, as they can master the material. The teachers are there, but the teachers are there to assist in that process for that, for that two hours. And so the teachers are there when a student's having trouble with something, or something's confusing. The other six hours of the day,

• 11:48Marc Andreessen?

  the teachers are primary, but that's not academic instruction, the way you're, you're used to think about it. The classroom, it's all project-based work and activity-based work. And so it's students coming up together to, you know, whatever, to have a, you know, community garden and learn how to take care of plants, or to, you know, learn how to start a small business, right? Or learn how to do, you know, whatever it is, you know, that you, you know, have, you know, long projects on, you know, like Model UN, or whatever the version of that is today, that, you know, people do for like learning about government. And so to your point, like the, the teachers are hands-on with the kids, working on all of these kinds of things that in a normal classroom, you never get to.

• 12:20Speaker 02

  Yeah.

• 12:21Marc Andreessen?

  Now, the challenge is Alpha School is a private, private system. Of course, the existing US educational system is going to do everything possible to marginalize or destroy it.

• 12:28Speaker 02

  Yeah.

• 12:29Marc Andreessen?

  The, the existing government K through 12 system will, will not do any of what I just described. And, and, and, and, yeah, and fundamentally, you know, very little will change.

• 12:37Speaker 02

  But what's really interesting is, it's what you're, the story you're telling is how technology is providing the motivation and the driver for institutional change, or at least the impetus for institutional change.

• 12:49Marc Andreessen?

  I appreciate your optimistic framing. I, my, my, my observation of institutions is they don't want to change. They have no intention of changing.

• 12:55Speaker 02

  I agree. And it's a hard thing to make them change, for sure.

• 12:59Marc Andreessen?

  Yes.

• 13:00Speaker 02

  Yeah. But the opportunity is provided by technology to do something that has not been done before.

• 13:06Marc Andreessen?

  Oh yeah, 100%, look, we could have a revolution education. We could have far better education at far lower cost. We could have a revolution in healthcare. There's all kinds of things that are possible now that weren't possible before. We could, by the way, housing construction, I mean, you know, we could be in a world here within a decade where robots are building all the houses at far cheaper prices than today. You know, you could open, and then self-driving cars open up entire areas of geography in the country for housing, you know, much better housing at much lower cost. Yeah, you could, I mean, but you, the revolution in government services, you can imagine the government, you know, literally, you know, becoming, you know, state of the art. You know, if you look at what the Nashville Design Studio, for example, is doing right now, and federal government trying to, you know, make government services as compelling and easy to use as, you know, private sector consumer offerings.

• 13:49Marc Andreessen?

  Yeah, like, yes, the sort of modern alchemy of AI is a, it's a technology is a lever that could cause all those things to happen. I just, just observing the behavior of all these, of every single institution that I just referenced, they all seem 100% opposed to that, so.

• 14:06Speaker 02

  I fully appreciate it. In fact, I want to come back to the question of public sector reform through this conversation, but I want to just put out the notion that it's not just the age of AI, it could be the age for institutional reformers, and it's something for us to consider. But I want to come back to regulatory constraints in a second. One more question for you. How do you see the productivity boom playing out? Because I've heard you talk about it, and give me a second here. I've heard you talk about that upward sloping curve to the right in terms of productivity enhancements in the aggregate. And again, that resonates strongly. Let's see it, how it plays out through different sectors. But that's the macro story.

• 14:51Speaker 02

  What about the mezzo and micro story? Because while it's upward sloping to the right, it could be pretty bumpy along the way, and there could be winners and losers, and I just wanted to get your thoughts on that.

• 15:02Marc Andreessen?

  The thing with the modern economy, the thing with the modern industrialized economy is the productivity, productivity growth, or by the way, productivity decline, it varies dramatically by sector. Yeah. And so there's no longer an economy-wide concept of productivity growth that makes any sense. You have to disaggregate by sector. And what you find in the charts, basically the chart that I always use is sort of separates between the sort of red sectors and the blue sectors. So the blue sectors are sectors in which there's very rapid productivity growth, there's very rapid price declines, and there's very rapid technological innovation. And these are sectors, you could say, like television sets, consumer electronics television

• 15:41Marc Andreessen?

  sets is an example, software, entertainment, content, you know, basically toys, by the way, fall in this category, where you have this sort of hyper-deflation of prices over time because of, you know, really rapid productivity growth, technological advances. But then you have the red sectors. The red sectors are the sectors in which you have either zero or probably negative productivity growth, you probably have productivity declines happening. Those sectors are specifically healthcare, education, housing, and then I would add to that law and government, which are often sort of excluded from the economic analyses. But I would argue, I would put those, those basically as like five red sectors.

• 16:23Marc Andreessen?

  The red sectors are characterized by rapidly rising prices, rapidly rising prices, rapidly rising spend, zero or negative productivity growth, and almost no technological innovation to speak of. And then, of course, the other part of it is the red sectors are sectors in which there's heavy government regulation. And then that government regulation, from an economic standpoint, takes the form of two mutually reinforcing factors, which is restrictions on supply. So those are sectors of the economy in which there are, you know, cartels, monopolies, oligopolies, you know, licensing restrictions, inability to fundamentally, you know, compete. And then, and then because of the spiraling upward prices, there's subsidization of demand. Right. Right? You see this with housing, housing policy all the time now, which is like, well, it's

• 17:08Marc Andreessen?

  too expensive to buy houses, so therefore we're going to subsidize, you know, home buying. Well, if you subsidize a market in which you've restricted supply, you just cause prices to rise further. Right. Right, which is why those sectors have this upward spiral.

• 17:20Speaker 02

  Yeah.

• 17:20Marc Andreessen?

  And so we live in this bifurcated economy where we've decided that some sectors are going to be subject to technological change and price declines and productivity growth and some sectors are not.

• 17:30Speaker 02

  Right.

• 17:30Marc Andreessen?

  And then mechanically what happens as, as, as, as the prices for the blue, the blue sectors collapse, deflation, and as the prices for the red sectors, right, inflate dramatically, what happens mathematically, right, is that the red sectors eat the entire economy.

• 17:44Speaker 02

  Hmm.

• 17:44Marc Andreessen?

  Which is what's happening, right, which is healthcare, education, housing, law, government are eating the entire economy.

• 17:49Speaker 02

  Yeah.

• 17:49Marc Andreessen?

  And so the, a modern Western economy consists increasingly of the sectors that are not affected by technology. And, and, and this is very important because this is the world that we've been living our entire lives. Like, everything I just described has been for sure the basically state of affairs since 1970.

• 18:04Speaker 02

  Yeah.

• 18:04Marc Andreessen?

  The change actually, of course, started in the 1930s when the federal government became much, much stronger. The, the consequence of this is if you go back 100 years, productivity growth was running two or even three times higher than it is today.

• 18:16Speaker 02

  Right.

• 18:16Marc Andreessen?

  And so, so we think that we live in an era of rapid technological change. There's endless books and magazine articles and news stories about how we live in an area of incredible technological change. We think the computer revolution has been this like huge, you know, change. We think the internet's been this huge change. We think AI is going to be this huge change. And if you look at the economic statistics, the result is super low productivity growth and super low economic growth. And, and so, so this is the problem, right? This is the problem is you, you can have the best technology in the world that could bend these curves and, and if, if, if, if the, if the policy setup in those industries prevents that from happening, but what's, basically another way to think about it is it's just, it's just going to be trick. We're just going to take all of the monetary gains that we get from AI and we're just going to spend them all on healthcare and education.

• 18:57Speaker 02

  So interesting.

• 18:58Marc Andreessen?

  Like, and real estate, right? Like, like that's where all the money is going to go.

• 19:03Speaker 02

  Yeah.

• 19:03Marc Andreessen?

  And by the way, everybody seems fine with this. Like, you know, this is sort of the, the state of sort of, I don't know, this is like my, my state of sort of disassociative, you know, living, which is like, everybody seems totally fine with this. Like, everybody keeps talking as if there's going to be a big technological revolution and the technology is changing fast, but the actual impact of it is going to be much, much less than people think. And, and I think 20 years from now, we'll look back and we'll say, well, wow, like, why, why didn't we get the pay, like, where's the payoff?

• 19:27Speaker 02

  Yeah.

• 19:28Marc Andreessen?

  Like, where's, where's the economic growth? Why didn't we get it? And then of course, the answer is we didn't want it because we'd rather have, you know, we'd, we'd rather have healthcare, education and housing work the way that they do today.

• 19:37Speaker 02

  Yeah, and I think that, so now I understand your skepticism about institutional reform.

• 19:44Marc Andreessen?

  Yes, exactly.

• 19:46Speaker 02

  And I'm gonna come back to that again. But let's just, so we're in the early innings of this. There are many different potential constraints. And I think you're pointing to the fact they're ultimately policy and regulatory. But there is an infrastructure, AI infrastructure build out that's happening that has some constraints, whether it's on energy, labor, others, permitting, I should say. And then there are these constraints on particular sectors, even as AI, you seek to flow AI through those sectors. What are the big, big constraints? Like the top two or three we should be thinking about when it comes to policy and regs?

• 20:29Marc Andreessen?

  Yeah, well, so look, so on the supply side, so on the supply side, you know, basically what the state of affairs right now is basically every single component that goes into the stack of infrastructure and technology.

• 20:41Speaker 02

  Yeah.

• 20:41Marc Andreessen?

  And capabilities that are needed to field AI. Like there's basically a bottleneck on every single, at every single layer of the supply chain.

• 20:48Speaker 02

  Right.

• 20:49Marc Andreessen?

  And so, and by the way, it starts at the very bottom with energy, you know, where there's bottleneck on energy production, you know, for reasons that you well understand. Then there's bottleneck on literally physical facilities, physical plants, right? So, you know, the big data center controversy, right?

• 21:05Speaker 02

  Right.

• 21:07Marc Andreessen?

  And the whole thing on that. There's, by the way, there's constraints on all the physical infrastructure that go into building data centers. For example, turbines are sold out, I think, for four years.

• 21:15Speaker 02

  Yeah.

• 21:16Marc Andreessen?

  Like you can't buy turbines, you can't buy transformers. I know of one hyperscaler that's actually milling its own turbine blades.

• 21:23Speaker 02

  Yeah.

• 21:23Marc Andreessen?

  To try to get new turbines into, for power generation. Cooling systems are sold out. You know, the big HVAC systems that you need, big water cooling systems. And then inside the data center, you know, Nvidia, you know, the GPUs and the chips that go in are in very tight constraint. Memory chips. You know, the price of memory chips are exploding right now. And the companies that make memory chips, their stocks are exploding because there's shortage of memory chips.

• 21:53Speaker 02

  Right.

• 21:54Marc Andreessen?

  And then you even go deeper, you even go backwards into the raw materials, the actual raw materials, like the rare earth materials that go into like high and semiconductors themselves are becoming bottlenecks.

• 22:03Speaker 02

  Yeah.

• 22:04Marc Andreessen?

  And so there's physical constraints actually at every layer. And that's important, you know, for several reasons. One is it actually means that the AI, the AI products and services that you have access to today as a consumer or as a business are actually not as capable as they could be if the supply chain was more liberated.

• 22:23Speaker 02

  Yeah.

• 22:24Marc Andreessen?

  So you're actually getting dumber versions of the AI today than you could you could get if chips were more plentiful. Because they're constrained, they literally, these companies don't have enough chips and power and data center space to be able to train them, to be able to train more advanced models. And so you're getting worse versions of the products and then, and then, you know, this is going to hit pricing. And there, you know, we've been, we've been in this world for the last like five years where the price per token of intelligence has been hyper deflating because the algorithm's been getting so much better.

• 22:51Speaker 02

  Yeah.

• 22:52Marc Andreessen?

  But that is rapidly running up against these physical constraints of being unable to build new data centers.

• 22:56Speaker 02

  Yeah.

• 22:57Marc Andreessen?

  And so I think the price declines in intelligence are going to, are going to stop. And in fact, you know, it may be that actually intelligence is going to start getting more expensive.

• 23:05Marc Andreessen?

  Because of those constraints.

• 23:06Speaker 02

  Such a great insight, such a great insight. But let me ask you something there because I could think on that full list of problems you identified, there are several things that could be done either at the federal level or the state level, whether it's permitting, whether it's, you know, constraints on energy, so on and so forth, maybe even labor. But here's one that's sticky and we're looking, we look at this often in our institution here at CSIS is the tariff agenda. Because the tariff agenda cuts against some of what we need to do on the data center build out, doesn't it?

• 23:37Marc Andreessen?

  Yeah. Yeah, so tariffs, I mean, look, there's sort of the, you know, there's, there's sort of the, you know, the, I don't know, whatever the classical kind of economic view of tariffs, you know, sort of a form of taxation. And then, you know, and then you get into the, you know, question of, you know, reindustrialization question. Because by the, you know, just as an example, one of the things we haven't touched on yet is Taiwan.

• 23:54Speaker 02

  Right.

• 23:55Marc Andreessen?

  Right, because. I'm not laughing because it's funny because it's very, it's very serious and it's kind of amazing how serious it is, which is, you know, we are completely dependent on Taiwan, Taiwanese fabs for, for, for the chips right now.

• 24:08Speaker 02

  Right.

• 24:09Marc Andreessen?

  To a degree that I think is actually bad for Taiwan.

• 24:11Speaker 02

  Right.

• 24:12Marc Andreessen?

  Right, because, because the fact that Taiwan is so central for, for the making of advanced AI just makes them an even bigger, bigger prize.

• 24:18Speaker 02

  Yeah.

• 24:19Marc Andreessen?

  You know, where, where the Chinese government has decided to move. So I think Taiwan, Taiwan sort of amazingly is, is like, Taiwan's almost like too important for its own good right now.

• 24:26Speaker 02

  Right.

• 24:27Marc Andreessen?

  And so, and then there, and then there's all the strategic kind of aspects, which is if the Chinese do ultimately move to Taiwan, it's like, okay, are we, are we going to be able to get chips? Are we going to be able to build anything? You know, and so there is this need to reindust, you know, is, you know, there's this need to reindustrialize.

• 24:40Speaker 02

  Hundred percent.

• 24:41Marc Andreessen?

  Several reasons, not, not least of which is natural security.

• 24:43Speaker 02

  Yeah.

• 24:44Marc Andreessen?

  And so then there, then you get, you know, the industrial, the industrial policy debate. But, but I will tell you that the, the, the other thing about the, the tariff thing, which I find fairly amazing in the discussion is, you know, a tariff, it's really funny. A tariff is of course, is it's a, it's a tax on international, you know, financial transactions, trade. And, and you know, there, there are people, you know, many people who are, have, you know, higher moral dungeon about, you know, about that as, as being somehow, you know, very, very bad. But we have many internal, you know, as we've been discussing, we have many internal constraints on trade. You know, we have many internal taxes and many internal restrictions. And, and I find a lot of, a lot of the arguments on, on this whole thing sort of suggests that like tariffs is a huge crisis, but somehow all of our internal taxes and restrictions on, on trade are kind of something.

• 25:29Speaker 02

  It's both. I'm just saying that if, if we're trying to solve the problem you're talking about, which is the data centers, the physical infrastructure is now going to become a constraint on, on intel, on AI. Don't you want to remove all the obstacles to it? That means the permitting stuff, but also it means tariffs, right?

• 25:47Marc Andreessen?

  Yeah, but like 99% of the practical restrictions, the practical restrictions and constraints are not the tariffs. 99% are on the things we do to ourselves inside our own country.

• 25:55Speaker 02

  Fair, fair point, behind the border.

• 25:58Marc Andreessen?

  Yeah, so I would just, I would, yes, so I would just, every, whatever, what I'm reacting to is not you. I'm reacting to, you know, five, you know, whatever, four years right now, I'm sort of this kind of, you know, hysterical kind of frenzy in the press and among the pundit class of the tariff topic from people who would think it's a great idea to have all equivalent taxes and restrictions on internal trade. So it's like the only thing that people get upset about in the public discussion on this is trade with foreigners. Like, trade domestically is former constrained and controlled.

• 26:25Speaker 02

  Yeah, and we should be upset about both. It's, I'm just saying, like, there are two dimensions to it. There's the cost dimension, and then there's the volatility, the erratic nature in which these things have been implemented. None of which is good for, I mean, you tell me, is it good for investors?

• 26:41Marc Andreessen?

  Well, you know, I'm just saying, 99% of the issue, 99% of the issues are internal.

• 26:45Speaker 02

  Yeah.

• 26:46Marc Andreessen?

  Like, the tariff just, it's almost, like, the, the, the, through your track, is what's happening literally in the US right now, county by county, with the ability to build data centers, is like profoundly destructive.

• 27:00Speaker 02

  No, true, yeah.

• 27:01Marc Andreessen?

  And that's like, that's entirely domestic. And a large number of politicians are like feeding that hysteria as much as they possibly can.

• 27:08Speaker 02

  Right.

• 27:08Marc Andreessen?

  And a lot of our leading public figures, and a lot of intellectuals, and a lot of the press, and a lot of the analysts, and the rest of it, is just like this, this, this, this kind of hyper paranoia about building data centers and the consequence of data. You know, and this, I'll just give you an example, this completely fake meme about water use, which is just like factually not true, which is just like running wild through the public discussion that somehow these data centers are like basically destroying all the water, which is like this completely insane idea. Like, that factor is like so much a bigger factor holding us back than anything involving internal trade.

• 27:38Speaker 02

  Yeah.

• 27:38Marc Andreessen?

  And so it's like, external trade is this thing that's easy to talk about. It's, it's, it's all of our internal issues that are like much, much more important.

• 27:45Speaker 02

  I think that's a very fair point. Let's, let's just talk about models for a second. So.

• 27:53Speaker 02

  You know, the Mythos case and the export controls that were put on it, it's really interesting because whether or not the Commerce Department has the legal authority to do it is a separate question. I look at this and I pose it as a question for you. Is the use of those export controls really just a reflection of some weaknesses around our approach to safety and governance? Because the EO that was issued by the White House just, you know, right before that was quite reasonable and reasonable approach. I would say quite a well-thought-out approach. But then, obviously, crisis hits and then this export control is put in place. How do you assess that whole thing?

• 28:36Speaker 02

  Because that's like, as far as models are concerned, separate from leading-edge chips, that's an important question that we would have to answer as well, no?

• 28:45Marc Andreessen?

  Yeah, so I think there's a whole bunch of, you know, it's a very complicated topic. There's a whole bunch of factors. I would start with a very high-level kind of view on this, though, which is we have, as is often the case with anything, you know, complicated in the real world, you know, there are multiple contradictory goals, you know, we would like to be able to solve them all at the same time, but it's hard because they conflict. And so let's just start with the US versus China part, because I think that drives a lot of this.

• 29:09Speaker 02

  Yeah, okay, yeah.

• 29:10Marc Andreessen?

  Because I think if China didn't exist, I think we'd be having a different discussion. It would be having a different and simpler discussion because it would just be about us.

• 29:17Speaker 02

  Right.

• 29:18Marc Andreessen?

  To start with, AI right now is a two-horse race. Like, it's US and China, you know, effectively, there's no other player. By the way, there could be other players specifically in Europe. They've decided to make everything illegal. So they've suicidally taken themselves out of the race, which is a whole other thing we could talk about. You know, they've taken every bad idea that we have and, you know, kind of masked it out to 11. And so that, you know, they're maybe becoming a case study of what not to do. But be that as it may, it's basically a two-horse race now. It's US versus China. So to start with, we have two contradictory goals, one of which is we want to make sure that the US wins the global technology race. Right? So we want to make sure that when we wake up in a decade, the world is running on...

• 30:03Marc Andreessen?

  On American AI and not on Chinese AI, right? And in fact, ideally, what we would like to do is live in a world in which China itself is running on American AI.

• 30:10Speaker 02

  Yeah.

• 30:11Marc Andreessen?

  Which today sounds crazy, but that actually was the ultimate resolution of the first Cold War with the Soviet Union, which is, as you know, like the Cold War with the Soviet Union ended because the Soviets surrendered. They gave up. They gave up because just becoming part of the West, or as best that they could do that, was a better outcome than trying to run their own parallel system.

• 30:27Speaker 02

  Right.

• 30:28Marc Andreessen?

  And so, like, I think we have a vision of sort of global technology supremacy that says the entire world runs an American AI, including ultimately China. To do that, what do we have to do? We have to export.

• 30:40Speaker 02

  Yeah.

• 30:41Marc Andreessen?

  Right? We have to take our technology and we have to make it available to the world.

• 30:44Speaker 02

  Yeah.

• 30:44Marc Andreessen?

  We have another goal, which is, as far as I can tell, just as important, which is AI is an extremely disruptive new technology. It has profound, not just economic implications, but also national security implications.

• 30:56Speaker 02

  Yeah.

• 30:56Marc Andreessen?

  Also, by the way, competitiveness implications, right?

• 30:59Speaker 02

  Right.

• 31:00Marc Andreessen?

  And with that goal, we need to, you know, we need to control and restrict and constrain and maybe even hoard AI to ourselves, right? We need to make sure that the AI is this magic technology that only we have, and we need to make sure other people don't get it. And we have to absolutely make sure that China doesn't get it.

• 31:18Speaker 02

  Yeah.

• 31:18Marc Andreessen?

  Right? And, you know, and this goes straight to topics like, for example, chip export controls, which, of course, you know, were in place even before the Mythos issue. And so, but right away there, you can see, like, these are directly contradictory goals. And I think what, right, and I think what you have, I think what you have in the US government is I think you have extremely well-meaning people who have the country's best interests at heart, some of whom have the first goal as the primary goal, some of whom have the second goal as the primary goal, and those goals are exactly contradictory with each other.

• 31:52Speaker 02

  Yeah.

• 31:53Marc Andreessen?

  And so, I think that's actually the underlying kind of logical question that you have to have.

• 32:01Marc Andreessen?

  Then the other example that directly on your mythos point, I would say is another example of sort of diametrically opposed goals, which is now you have a you have a level of capability with this technology, starting with the current models and the next set of models like mythos.

• 32:15Speaker 02

  Right.

• 32:16Marc Andreessen?

  Where they are better than human at both attacking cyber systems and they are better at defending cyber systems than than than human beings are. And so you have these models, they're a threat of disruption. And of course, this is where, you know, the current US government is very worried about disruption of the financial system, mythos models being used by bad guys, criminals or terrorists or, you know, foreign governments to, you know, for example, break into and really wreck, you know, US banks or US stock market or whatever, which is like, I think, a very legitimate concern.

• 32:47Speaker 02

  Yeah.

• 32:48Marc Andreessen?

  But you also have this diametrically opposed thing where those same the same tool that's good at penetrating is also very good at defending.

• 32:54Speaker 02

  Right.

• 32:55Marc Andreessen?

  And so the other thing you need to do is you need to get those tools in the hands of every existing company and business everywhere in the West, everywhere in the US, and you need to fix all the security holes in all the systems and have new kinds of AI cyber defenses and everything.

• 33:05Speaker 02

  Yeah.

• 33:06Marc Andreessen?

  But again, here you can see this thing where these are directly contradictory because the more scared you are of it, legitimately scared scared you are of it, worried about it, the more you want to restrict it, but the more you want to actually use it as a prophylactic to make sure that the all of our, you know, banks, for example, aren't subject to cyber attack, the more the more you want to deploy it.

• 33:24Speaker 02

  Yeah.

• 33:25Marc Andreessen?

  And so anyway, so I just, you know, a lot of people when they engage on these these issues, it's sort of, you know, they the question is people's motives. I think in this play, in this case, you've got you've got in both cases, you've got these like direction contradictory motives and you have to go straight to the underlying conversation of like, which is actually the most important goal before you can figure out what the right policies are.

• 33:43Speaker 02

  Hundred percent. And by the way, you described two groups of people, one that holds the kind of innovation goal, the other one that holds the safety goal. I would say like, a lot of times, the same person is trying to balance those two objectives in government. Having served in government, I recognize many people like struggle and wrestle with that. So, I mean, I'm going to ask you because in a way, you're now on the president's council of advisors for science and technology. What would you advise them to do? Because how do you weight these goals? Because I can imagine at any given point in time, one becomes more important than the other. And you described the like really challenging situation that we're in.

• 34:25Marc Andreessen?

  Yeah, so my view, my, my normal view on these things is basically, it's sometimes called the technological imperative, um, which is basically this idea, like you, you don't un-invent new technologies, right? You, you like, once a new technology exists, it exists, and it's, and it's, it's, it's going to make its way into the world. Like, it is, it is going to have a way of making its way out. Um, and you know, there may be physical constraints or whatever that prevent it from being fully realized everywhere, but like fundamentally, you know, I don't know, once the process for making steel like was a known thing, you know, it was inevitable that all military equipment was going to get made out of steel. Like, and, and by the way, and so was all civilian equipment gonna made, get made out of steel, and that was gonna happen. And the same thing, same, same thing for steam power, and the same thing for electricity, and the same thing, right? The same thing for, you know, what is it? The Haber-Watt process, and you just go right, right down

• 35:07Marc Andreessen?

  the list of all these innovations, and, and, um, you know, the computer chip, um, and, and they were going to happen. Um, they're gonna, and they may, they may happen faster or slower, but they're going to happen. And so if you're gonna live in that future world, in my view, you want to be as strong and powerful and dominant as you can possibly be, when those things do, do, do happen, right? Uh, you, you, you want to win. And to me, victory, like, if, if I were, you know, king for a day, victory would be, like I said, you, you, you would, you would set a vision, you would say, we're gonna have a world in which the entire world's gonna run an American AI. And, and American AI is going to be so good, and proliferate so broadly, and gonna be so universal in the world, that even China's not, at some point, they're just gonna say, this isn't even worth competing with us, like, this is a complete waste of time. And so, I, I would come out very strongly on the side of you kind of want, you, you want maximum export, right?

• 35:50Marc Andreessen?

  You, you want to just like, basically turbocharge exports, you want the US government, you know, working hand in hand with, with the companies to figure out optimal policies to make sure that AI, American AI, at, at, at the software level, chip level, and so forth, you know, basically proliferates and runs the entire world.

• 36:04Speaker 02

  Yeah.

• 36:05Marc Andreessen?

  Now, having said that, I, I, I think the people who are arguing, for example, for chip, chip export controls against that are, are doing so in completely good faith. And I, I think they, you know, they, they have a, you know, I think they have very reasonable arguments for what they're doing, but, but, but I would go, I would go in that direction. And then, and then, and then on, on things like MITOS, the direction I would go in, is I would say, look, the whole reason why we're worried about like cyber exploitation of systems is, it, so this is actually very important, so- AI hacking does not create new security vulnerabilities that don't already exist. AI hacking exploits existing security vulnerabilities that already exist. And those security vulnerabilities are subject to being exploited both by AI, but also by non-AI hackers. And of course, banks and all these other government agencies are getting hacked all the time, even without AI.

• 36:48Marc Andreessen?

  And then AI hacking is going to be much more effective. And so I think you need to get the defenses. We need to focus the defenses. We need to get the defenses in place. And the way to get the defenses in place is we need to use these new advanced AI models. You need to put them in the hands of all companies as fast as possible to be able to basically armor up and have AI defenses against AI hacking and non-AI hacking. Like, for example, this is also how you solve the ransomware crisis, which is you need to go fix all the systems in the hospitals so that they can't be held hostage by ransomware. And so, again, I would err there on the side of proliferation. I would say we have to get Mythos or equivalent model capability into everybody's hands as fast as possible so that we can do the defenses. But again, I think the people who say, "No, that's irresponsible" because that's putting this sort of cyber weapon in people's hands before the defenses are ready.

• 37:33Marc Andreessen?

  Again, I think that's a very good faith argument. And I think that people are arguing that are doing so out of a good place.

• 37:41Marc Andreessen?

  You know, I guess I'd say this. The winds are going against me on both of those topics. And so it feels like I'm not going to be king for a day. And so it feels like the world... We're going to be living in a world in which probably the opposite arguments are going to prevail.

• 37:59Speaker 02

  Yeah. If I might just offer a couple of reflections on that. That was a great rundown. Couple of reflections on that. One is that when it comes to chips, for example,

• 38:10Speaker 02

  fully accept your point that over time diffusion is going to happen. You can't prevent it. But whether you can change the timetable is an open question, especially when it comes to chips. And that timetable can be critical depending on where you are in your competition with China, for example. Would you agree with that point?

• 38:29Marc Andreessen?

  So I think that's true, but also I think something else is true, which is if you deny them chips, you incent them to create their own chips.

• 38:35Speaker 02

  And you see that happening already. Yeah.

• 38:37Marc Andreessen?

  And you see that happening already.

• 38:38Speaker 02

  Yeah. And they can start creating ecosystems that prevent us from entering them. They can advance faster than us. And then now we're not close to where innovation is happening. All of those things are true. But at the same time, taking that off the table is a real challenge. Like, I find it very difficult to say, we're gonna unilaterally not use this instrument if we can use it. I think the challenge is, or the question is, how do you use it where it really hits the mark? Rather than sort of taking a buckshot approach and using export controls all over the place for every problem? Which is really what I think sometimes we over-index on that.

• 39:19Marc Andreessen?

  Yeah, I mean, you know, you can try, you know, this is all the dispatch and trying to open up policy, right? You can try. You know, I'll just give you my background here. So my first commercial product I ever built was, and took to market, was an escape browser in 1994. It was export controlled.

• 39:36Speaker 02

  Yeah.

• 39:37Marc Andreessen?

  It was classified by ITR as ammunition. It was in the same classification category as a tomahawk missile.

• 39:43Speaker 02

  Yeah.

• 39:44Marc Andreessen?

  It was explained to us by our lawyers in no uncertain terms that we could not possibly let this outside the US, right? And by the way, when it started, you'll enjoy this, actually, when it started, encryption was such a sensitive topic of the 1990s that we were actually export controlled, not just on strong encryption, but also on weak encryption. We couldn't even ship browsers or server software, web server software that had weak encryption. It took, you know, it took years to get the government to basically come to grips with the idea that if we were not allowed to do that, you were gonna, what was happening, of course, is what you'd expect, which is the growth of web software companies in many other countries that were not under such constraints. And so, and again, the people who argued, you know, we had long arguments with a lot of folks,

• 40:27Marc Andreessen?

  including in the intelligence community and others, and, you know, they had very good arguments. I mean, you know, they come in and, you know, I don't know if you've been through this yourself, that, you know, they come in and they show you like, okay, here are the bad guys. Here are what the bad guys are doing, like, here's the dangers, here's the threats, here's the stuff that your encryption is gonna, you know, is gonna cover up and make it harder for us to prosecute or catch.

• 40:43Speaker 02

  Yeah.

• 40:44Marc Andreessen?

  And like, I think those are all legitimate points. Having said that, you know, again, back to the core argument is, do you really want to live in a world in which that means that US technology loses? Because encryption was going to happen, right? And they're like, I used to, I used to own a T-shirt, I probably still have it somewhere. I used to own a T-shirt, I say, remember, the RSA algorithm was like the key encryption algorithm of that era? And there was an implementation of the RSA algorithm, which was just math. There was an implementation of it in four lines of code. Um, it's a very complicated, hard to read code, but there are four lines of code. And I had a T-shirt that had the four lines of code on it. And of course, the joke, which wasn't a joke, was that T-shirt was ammunition. Like, right? It was actually illegal.

• 41:27Marc Andreessen?

  Like, in theory, I never, by the way, I never tested this, but in theory, if I had worn that T-shirt and boarded for a flight, I could have been put in jail.

• 41:33Speaker 02

  Wow, yeah.

• 41:34Marc Andreessen?

  So, so there's that.

• 41:36Speaker 02

  What a great story.

• 41:38Marc Andreessen?

  Yeah, yeah, yeah. It took years. It took years to work through that, right? And so it is kind of amazing. Okay, so then on AI, like, AI is math. Like, at the end of the day, it's math. Like, it's actually, by the way, it's actually remarkable. It's actually quite straightforward and simple math. It's basically linear algebra, and then it's a handful of algorithms with things like gradient descent, reinforcement learning. It's math, and you've probably been watching this, or I know your organization's been tracking this, which is the version of the math that implements a model at whatever, GPT 5.0 or 5.5 level, or a methos level, or whatever, like, that math looks hard and expensive for about six months.

• 42:18Speaker 02

  Yeah.

• 42:19Marc Andreessen?

  And then somebody figures out a way to run it on a PC.

• 42:21Speaker 02

  Yeah.

• 42:22Marc Andreessen?

  They figure out a way to shrink it down and basically run it on a piece of consumer hardware. Increasingly, by the way, these things just run on your cellphone. And the lag time between the new version of the AI, the new capability being something rare and special that you can control, because you can control where the data centers get built, to being something that is in open source, by the way, open source from the US, or open source from China, or open source, you know, in theory, from anywhere in the world, you know, any academic institution could do this now. You create the open source version, and then you have a version that can run on a PC or can run on a phone. And so this goes back to saying, like, in theory, you can calibrate who gets access to what and when, and in theory, you can kind of do this dance. Like, in practice, you do find yourself, in both in Christian case and the AI case, you find yourself trying to control the propagation of math.

• 43:05Speaker 02

  Yeah.

• 43:08Marc Andreessen?

  Extremely difficult thing. And then, by the way, there's another kind of dimension on this that I would put out there, which is if you really want to make sure the powerful AI doesn't proliferate, and if you talk to the people who are very worried about this, they will say this with complete seriousness, like you have to start to watch what people do on all computer systems.

• 43:23Speaker 02

  Yeah.

• 43:23Marc Andreessen?

  Right? You have to start to watch what happens on every chip, right? And so, what, like, the policy recommendations that ultimately flow out of this line of thought include things like putting a software agent on every chip on every computer everywhere in the world, including all the computers in your house.

• 43:38Speaker 02

  Yeah.

• 43:39Marc Andreessen?

  Right? Including your kid's laptop, right? And you put an agent on that, and that agent reports back to the government, like, what that computer is being used for, and if it's used to run, you know, AI is too powerful, you know, then there need to be some set of consequences to it.

• 43:50Speaker 02

  Yeah.

• 43:51Marc Andreessen?

  Right? And then, of course, the very next thing is, well, that needs to be a global regime, right? And in fact, you actually hear this from a lot of people in the industry. They're like, well, we need a global governance regime. It's like, well, what does that mean?

• 44:01Speaker 02

  Right.

• 44:01Marc Andreessen?

  Well, it means like a UN, you know, like a UN with teeth that, like, controls global use of software.

• 44:07Speaker 02

  Yeah.

• 44:08Marc Andreessen?

  And you find yourself walking down this, in my view, you find yourself walking down this kind of 1984 Orwellian totalitarian playbook, where Big Brother is watching what happens on everybody's computers, like, all the time, and then stepping in when you're running unapproved software. And so, again, it's just like, you know, in theory, you can kind of play this game, you know, you can kind of do the dance. I think in practice, the sort of downstream effects get to be quite scary.

• 44:34Speaker 02

  Such a great rundown of so many different issues and how they're connected. I would just say that you make a very compelling case, like, focus on innovation and innovating faster. That's really the only long-term way of staying ahead and remove the obstacles to doing that. Because trying to, I mean, trying to apply an export control on a model is exceedingly difficult. I don't know how you would implement that and enforce it effectively. But the second thing I would say is just look at what is happening in the PRC, which is a real commitment to diffusion and a real commitment to using AI in various realms of the economy. And I wonder whether our challenge now, especially coming on the heels

• 45:17Speaker 02

  of, you know, on the run-up to an election, skepticism about AI and the fears about it are like the overwhelming thing. And I think it might be getting in the way of our staying ahead in the tech race and getting all kinds of economic benefits from that.

• 45:38Speaker 02

  You agree with that?

• 45:39Marc Andreessen?

  Yeah, I agree for sure. And by the way, I'd start just to stay on the geopolitics for a moment. It is really remarkable that China has decided that open source AI is something that is good and that they want to exist and that they want to propagate. Like, we're in a weird state, we're in a weird state of the world where the supposedly totalitarian regime is trying to open up the technology and the supposedly democratic governance system is trying to restrict and control the technology.

• 46:05Marc Andreessen?

  Like, it's, it's the opposite. It's, we're in like opposite world from what you would think.

• 46:09Speaker 02

  Well, but that might just be a reflection of where they are in the, in the race, right? So they're also restricting critical minerals in a pretty coercive way. So I think that the minute the, if the balance, God forbid, the balance were to shift, then I can't imagine that they would be committed to open AI models just because of the goodness of their heart, right? So it might be just a reflection of where we are, no?

• 46:34Marc Andreessen?

  Oh, I mean, I would take it a step further. I think it's a deliberate strategy. I mean, I, I really agree with what you just said, which is I think it's a deliberate strategy. I think the Chinese, and by the way, I think the US government believes this very specifically.

• 46:44Speaker 02

  Right.

• 46:45Marc Andreessen?

  Which is that, that the Chinese are very deliberately, the Chinese CCP is very deliberately encouraging or mandating its companies to create AI open source and to advance it as fast as possible, precisely to prevent the success of, of, of American industry. Like, it's like, it's like a turbo dumping strategy.

• 47:02Speaker 02

  Oh, yeah, okay.

• 47:04Marc Andreessen?

  Right? So flood, flood the market with, with, with basically, you know, with basically free AI to prevent the American companies from being able to make money on it.

• 47:11Speaker 02

  Yeah.

• 47:11Marc Andreessen?

  But, but, so I totally agree with what you're saying. I just think it, it is fairly amazing, at least for now, that they're, that they are.

• 47:18Speaker 02

  It is, yeah.

• 47:19Marc Andreessen?

  That, that they're the proponents of free and open, free and open AI.

• 47:22Speaker 02

  I got, let me take a.

• 47:23Marc Andreessen?

  In the US where the, yeah, go ahead.

• 47:24Speaker 02

  Let me take 30 seconds. I gotta ask you something, because a lot of the people who argue for the pro-innovation stance on national.

• 47:32Speaker 02

  Let's just call it economic competitiveness and national security, right? The argument you've made. It resonates with me. But invariably, people who hold that position, when you ask them, what about deep civil military fusion in China? And the risks that a broader set of commercial technologies are dual use? I don't get a strong answer for them. What's? Give me your strong answer to that. Because it's true. Like, they have a policy of deep civil military fusion. My question is that your argument that the only way to get ahead of it is to out innovate and have them use American AI. Like, we need to stay ahead. But in doing that, this would be my counter argument with others who say, just open the doors and just let us trade,

• 48:16Speaker 02

  let us kind of export American technology to the Chinese. You know, what about the civil military fusion risk, which is very real there?

• 48:27Marc Andreessen?

  Meaning that if I understand properly, you're saying that the Chinese, the Chinese take American AI, they use it to build better military weapons?

• 48:34Speaker 02

  Weapons, yes. Because they have deep fusion across their commercial and their military sectors. That's their policy.

• 48:41Marc Andreessen?

  Oh, yeah, yeah, for sure. Yeah, I mean, look, I think that's a real, I mean, a hundred percent. I think that they absolutely would do that. By the way, I think they're likely doing that today.

• 48:49Speaker 02

  Right.

• 48:51Marc Andreessen?

  This is, this is the other thing, which is, are we actually successfully embargoing chips? Like, you know, there's a lot of chips in the world. It's hard to control where they, where they go.

• 49:00Speaker 02

  Yeah.

• 49:01Marc Andreessen?

  And by the way, like, here's, here's a question. Do we think the Chinese already have Mythos?

• 49:08Speaker 02

  Yeah.

• 49:09Marc Andreessen?

  Like, all Mythos is, is it's a set of numbers on a hard drive.

• 49:13Speaker 02

  Yeah.

• 49:14Marc Andreessen?

  It's a file.

• 49:14Speaker 02

  Yes.

• 49:16Marc Andreessen?

  Like, how incompetent is the MSS if they haven't already figured out a way to download that file? And by the way, any, any data center that runs an AI model has a copy of that file. Like, that, that is how the systems work. They just, it's a giant matrix of numbers. And so like, so I would say to start with what you're describing is probably already happening. A. B, because you know, we have to, you know, we would question whether the controls can actually hold. Like how, another way to put it is, there are no American AI companies that have anything resembling counterintelligence or any security control system that you would, that anybody with a government background would possibly find to be even remotely acceptable. Yeah. Like, they all have, they all employ like, large numbers of Chinese nationals. They all employ large numbers of, frankly, Chinese Americans with relatives in mainland China.

• 50:01Marc Andreessen?

  Right. You know, who are subject to, you know, to exploitation. They, you know, they run open and collaborative R and D environments. They don't have internal, you know, they don't have internal stove piping, they don't have classification, they don't have counterintelligence. By the way, it's actually illegal for American AI companies to not employ Chinese engineers under civil rights law. Right? So, so even if you tried to control for that, you can't, like, it's not allowed. Right? I mean, SpaceX got prosecuted by the previous administrative justice department for not hiring enough refugees as a federal military contractor that's only allowed to, in theory, that's only allowed to have US citizens work on its systems. So, anyway, so first of all, it's likely the Chinese have everything that we're describing anyway. A. And then B, yeah, 100%.

• 50:45Marc Andreessen?

  Like, yeah, if they get free and unallocated access to everything, then yeah, they're going to use it. But again, it's, you're back to the question of trade-off, which is, okay, if they're not using the American technology to do that, then they're building domestic technology to do it. And then, do you really want to live in the world in which their domestic technology is their military technology? Like, wouldn't it be better from a national security standpoint if the, if the US government always knew that they could go talk to any American technology company for anything happening anywhere in the world? As opposed to having black box companies in mainland China that they have no access to and no way into? Yeah. And again, but again, I would say, look, I think it's a completely legitimate question and observation, because I think there are, there are real trade-offs. And if, if American AI wins all over the world, then yeah, American AI will be the basis of everybody's military systems.

• 51:30Marc Andreessen?

  Like, and, and yes, that, that could lead to faster advances in enemy military systems. And I think that's a completely real question.

• 51:36Speaker 02

  Yeah, I mean, I think this is the moment we're in, right? Like, we, the economic policies, the national security policies of the last 75 years, 80 years, really are not crafted for the moment that we're in. And this raises a question for me. You know, I think we need a significant public sector reform effort. I put out a piece in Foreign Affairs saying, "America Needs Economic Warriors." And it was kind of a, the title was the title, but the main argument was like, we need to retool government to do the things that it has to do in this moment. And that means not only efficiencies, but also new capabilities that we do not currently have. The administration deserves some credit for doing that with Tech Force and other things like that.

• 52:21Speaker 02

  But we're far from that. And I just wanted to get your thoughts. I think, I think you were pretty optimistic about what Doge could do and some of these other things. But where do you think we are now?

• 52:32Marc Andreessen?

  Yeah, so I think there are a bunch of people, like in this administration, who are trying very hard. And I just, I mentioned earlier, the National Design Studio, Joe Gabia, who's, you know, one of the great Silicon Valley founders, co-founder of Airbnb, you know, who's literally in the White House trying to do what you're describing. I think he and his team are doing great work. By the way, a lot of the Doge people, a lot of the Doge, a lot of the really sharp-tail Doge people are still in government. And I think having, having, having pretty big impact. And so, you know, I think, I think there are examples of that. You know, having said that, again, the, the, the, the main issue is not sort of, you know, what's possible. The main, the main issue is do these institutions want to be reformed? And what are the levels of the antibodies that come out, you know, whenever there's any suggestion of reform? And, you know, and as you know, the antibodies are extremely strong and vigorous. Everybody who tries to change these things gets...

• 53:16Speaker 02

  I totally agree with that. But there are better and worse ways of doing reform, don't you think? Like, I mean, I think that some people would argue that the Doge effort has left some bureaus like Swiss cheese, and the holes are not where you need those holes to be, right?

• 53:31Marc Andreessen?

  You know, I would love to, I would, I was like, like you, I would love to see other approaches to reform that work.

• 53:36Speaker 02

  Yeah. And, and I think that's the moment that we're in, Mark. Like, I feel that we need American institutional reformers, like par excellence, who know how to do this, who can face the, the interests that are gonna resist against it, but also are imaginative in terms of thinking about the capabilities that government needs in this era of AI, which we're far from thinking, we're, it's, it's, we're not there yet, right?

• 54:03Marc Andreessen?

  And I'll also add, and I say this hopefully on an optimistic note, this doesn't have to be a partisan issue.

• 54:09Speaker 02

  Yeah.

• 54:10Marc Andreessen?

  What you're saying, and in fact, you may remember, you know, there was actually, the Clinton-Gordon administration in the 1990s had a big effort in this direction.

• 54:16Speaker 02

  Yes.

• 54:17Marc Andreessen?

  Called REGO, reinventing government.

• 54:19Speaker 02

  Right, reinventing government, yeah.

• 54:21Marc Andreessen?

  And Al Gore in particular put a lot of time and effort into it and, you know, got some ways down the field. And so like, I like, yes, one could imagine, one could, I, one can certainly imagine what you're describing. I think that you're 100% right that it would, that we needed and it would be great.

• 54:37Marc Andreessen?

  Having said that, I would just say, the people who have tried, the people who have tried to do it with whatever method are, have a lot of scar tissue. And so it's, yes, it's a, it's, yeah, I was gonna say this, it's never been harder.

• 54:48Speaker 02

  Yeah, I hear that. I wanna, I wanna ask you, there's a lot of talk about what the, what policy do we need for AI? What about AI for public policy? What's your view on that?

• 55:01Marc Andreessen?

  How so?

• 55:02Speaker 02

  Well, I just think that there are a lot of policies that we put, that we, that different politicians promote. But we don't know if they're effective or not. And I wonder if we have an opportunity now to really accelerate evaluation in real time of what's working and what's not working. So it improves the quality of the debate on what policies we should undertake, whether it's in healthcare or housing or whatever it is. So, I mean, AI for policy and the policy evaluation and design.

• 55:33Marc Andreessen?

  Yeah, I think that's a great idea. I think the current tools are actually quite, quite good at this. I think optimistically, you could say that this is kind of happening in the field, in the academic field of economics.

• 55:43Speaker 02

  Right.

• 55:44Marc Andreessen?

  In a way that's sort of analogous, or maybe even directly on point, which is, you know, my sense of like academic economics is a sort of shifting from, call it the post-World War II method of sort of physics, of, you know, kind of the physics of economics where everything is formulas.

• 55:58Speaker 02

  Yeah.

• 55:59Marc Andreessen?

  To a, you know, the newer generation economists work much more with data.

• 56:03Speaker 02

  Yes.

• 56:04Marc Andreessen?

  You know, they gather large data sets and process the data sets. And so, yeah, one could imagine a similar kind of change of analysis, where instead of, you know, kind of having an argument about hypotheticals, an argument about, you know, whatever, you know, kind of, you know, concepts or formulas. You know, instead you go, you go get the data and you analyze the data. And of course, you know, AI is very good at that. And so, yeah, so for people who want, you know, who legitimately want to do what you're describing, I think the new tools are quite good at that.

• 56:30Speaker 02

  Yeah. I would love to see if like the GAO and CBO and others really jump into this in a significant way because they could really help us understand what's working and what's not and we could save a lot of money and a lot of time, hopefully.

• 56:45Marc Andreessen?

  Yeah.

• 56:46Speaker 02

  I gotta end on one thing because you are have been such a great investment leader over the years and American dynamism in some many ways is quite inspiring about, you know, with respect to reindustrialization and investing in sectors that VC has largely forgotten or not even looked at in the past. And we, some people say we are in the midst of an industrial renaissance. I wanted to get your perspective on that, you know, and by the way, that effort kind of spans multiple administrations and I wanted to get your thoughts on where we are there.

• 57:19Marc Andreessen?

  Yeah, so I think there's a lot, so here, I'm reasonably optimistic. I think there's a lot going on and it happens on a number of fronts. So one that's just very specific is reindustrializing, reindustrializing on the defense side.

• 57:33Speaker 02

  Yeah.

• 57:34Marc Andreessen?

  And so, you know, as your organization has studied at length, you know, there are very real issues about the physical supply chain that goes into the US military and national security. And so they're, you know, we are intensely proud of our companies that are in that space. And, you know, I would say the current administration has been incredibly supportive of those efforts and is working very aggressively with young companies, you know, really for the first time in, you know, I don't know, 40, 40 years or 80 years, you know, you know, really, really helping, you know, get new defense companies, you know, into business in a critical mass. By the way, the, I won't, I won't weigh in specifically on the politics of it, but the, you know, the proposed expansion of the defense budget, you know, at least the promises that a lot of that money will go to these, to these new approaches and in a lot of cases, new vendors.

• 58:18Marc Andreessen?

  And so I think that's a, you know, as you well know, like there was an explicit policy decision made in the 1990s to shrink the number of defense vendors in the US. And for the first time, we have a strategy to actually expand that, create more competition, advance the technology faster. So that's very helpful. And then that, that's been kind of a bootstrap, I would describe, like, those are like early wins in a way that then leads a lot of entrepreneurs in my world to think like, well, maybe we can do this for other categories of manufacturing. And of course, Elon, of course, has been an incredible leader there. But there are many, many other founders that are inspired by Elon, inspired by Palmer Lucky and the team at Androl and these other companies. And there are startups, many of whom we're backing, but there are startups doing nuclear efficient reactors for the first time in decades.

• 59:00Marc Andreessen?

  There are startups doing, we have multiple companies going after rare earth mineral discovery, extraction, processing. There's energy. We've actually backed a company, by the way. I mentioned electrical transformers are sold out. We backed a new generation electrical transformer company that's building electrical transformers in the US. And so, yeah, so I think there's optimism there. By the way, I would say even in California, where there's all kinds of, both a lot of good and bad things happening. But there's like a new industrial, I don't know, even like manufacturing ecosystem, entrepreneurial cluster in and around Los Angeles.

• 59:34Speaker 02

  Yeah.

• 59:36Marc Andreessen?

  Around El Segundo and Hawthorne and these places where SpaceX was born and so forth. And where Androl is based. And so, optimistically, we maybe get actually two Silicon Valleys in California. We get kind of software AI Silicon Valley up north. And we get like defense and industrial Silicon Valley around LA.

• 59:54Speaker 02

  Yeah.

• 59:54Marc Andreessen?

  So I think that's a possibility. But this way, the entrepreneurs all want to do it. The money, by the way, is lined up. But the money is available to do it. At least this government really wants this to happen and is doing everything that it can to foster it. By the way, again, I would hope this is the kind of thing that is not, becomes a nonpartisan issue, which is, I think Democrats are at least as interested in reindustrialization as Republicans. And it's logically, because you want, you want jobs, right? You want, you want jobs. And all these communities that have gotten hollowed out, and in many cases have gone sharply to the right as a result. Like you actually want reindustrialization because you want those people to have good new jobs. And so, optimistically, this could be a bipartisan effort.

• 1:00:37Speaker 02

  Yeah, and I would say even the, we can, there's a debate on what tools are the best tools. But the previous administration made efforts around chips. And you talked about chip making that were important. And similarly, under the IRA. I would just say, across both administrations, this is a huge priority across parties, I would say. The thing that I find interesting from an investor's perspective is that Are we in a moment where you could pursue financial objectives as an investor and non-financial objectives around, say, national security or national interest without giving up returns? And it seems like you're saying we are in that moment.

• 1:01:19Marc Andreessen?

  So I don't think it's the case that like this I don't think it's the case that there's like a direct trade off, at least for what we do, there's not a case that there's a direct trade off of like financial investing versus versus the larger goals, which is what you do, what you do in our world is you organize the entire purpose of the company around the larger goals. And then if you execute on the larger goals, the financial results follow. And so I think that like our companies that have a view, for example, of American manufacturing, like they're not doing it because they're making like some explicit dollars and cents trade off, but should we invest in the US versus here versus there, they're setting, they're setting a North Star goal of wanting to do something specific. And then they're basically saying like, what's the way to turn that into a mission that then attracts the smartest people in the field, right? That attracts people who are the most ambitious about about undertaking your programs, you know, you infuse

• 1:02:03Marc Andreessen?

  the company with patriotism, you get a completely different kind of energy than you get if you're just outsourcing everything to China. You get, by the way, co-located R and D happening with manufacturing, which is, which is actually what everybody actually wants when they're trying to manufacture anything complicated. You then bring customers into this and the customers have their own incentives to want to buy, you know, more American produced goods. So what you do in our world is you line, you line, you, you, you create the strategy first and then you line up the financial plan behind that. And so from that standpoint, you basically just like set out like these, these are the kinds of companies you're building. You're not building companies that just default to Chinese, you know, contract manufacturing, like that's not anywhere in the DNA of the company. And then you see if you can actually build a superior model with a new approach. And I think, I think we have, you know, probably at

• 1:02:48Marc Andreessen?

  this point, dozens of companies that are doing what I just described.

• 1:02:51Speaker 02

  Phenomenal. Well, thank you so much for spending all this time today and we'll be watching what you're doing and also what you keep saying about these things, including in your role at PCAS. So thank you for contributing to the, to the national debate markets. Really fantastic.

• 1:03:06Marc Andreessen?

  Good. Thank you so much for having me. I really appreciate it.

• 1:03:09Speaker 02

  Thank you for listening to today's conversation with Marc Andreessen. You can find this episode and more on csis.org, YouTube, or wherever you get your podcasts. This is Naveen Girishankar, reminding you that everyone has a role to play in winning the tech race.

• 1:03:25Erik Torenberg?

  Thanks for listening to this episode of the A16Z Podcast. If you liked this episode, be sure to like, comment, subscribe, leave us a rating or review, and share it with your friends and family. For more episodes, go to YouTube, Apple Podcasts, and Spotify. Follow us on X at A16Z and subscribe to our Substack at A16Z.substack.com. Thanks again for listening, and I'll see you in the next episode. This information is for educational purposes only and is not a recommendation to buy, hold, or sell any investment or financial product. This podcast has been produced by a third party and may include paid promotional advertisements, other company references, and individuals unaffiliated with A16Z. Such advertisements, companies, and individuals are not endorsed by AH Capital Management,

• 1:04:09Erik Torenberg?

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