Josh Wolfe and Tony Thomas - The Past, Present, and Future of Defense – [Invest Like the Best, EP. 216]

My guests today are Josh Wolfe and Tony Thomas, better known as T2. Josh is the co-founder and General Partner at Lux Capital. T2 is now a venture partner alongside Josh at Lux Capital, after serving for almost 40 years in the US military and becoming a 4-star general and the 11th Commander of US Special Operations Command. Our conversation focuses on the technology frontier in defense as well as the geopolitical threats that the US faces. We talk about everything from semiconductors and autonomous weapons systems to the moral dimensions of investing in defense technology. I hope you enjoy this fascinating conversation with Josh Wolfe and Tony Thomas. For the full show notes, transcript, and links to mentioned content, check out the episode page here. ------ This episode is brought to you by Tegus. Tegus has built the most extensive primary information platform available for investors. With Tegus, you can learn everything you’d want to know about a company in an on-demand digital platform. Investors share their expert calls, allowing others to instantly access more than 10,000 calls on Affirm, Teladoc, Roblox, or almost any company of interest. All you have to do is log in. Visit tegus.co/patrick to learn more. ------ This episode is brought to you by MIT Investment Management Company – also known as MITIMCo, the endowment office of MIT. MITIMCo seeks to find people who are focused on achieving exceptional long-term investment returns, partner with these firms early, and stick around for the very long term. MITIMCo doesn’t care how small, new, or un-institutional your firm is if you have the potential to generate amazing results that support MIT’s pursuit of world-class education, cutting-edge research, and groundbreaking innovation. Despite their willingness to invest early, they do not ask for GP economics and they commit their initial capital for ten years. Visit www.mitimco.org and their new emerging managers page to learn more. ------ Invest Like the Best is a property of Colossus, Inc. For more episodes of Invest Like the Best, visit joincolossus.com/episodes. Stay up to date on all our podcasts by signing up to Colossus Weekly, our quick dive every Sunday highlighting the top business and investing concepts from our podcasts and the best of what we read that week. Sign up here. Follow us on Twitter: @patrick_oshag | @JoinColossus Show Notes [00:03:46] - [First question] - Overview of Tony Thomas’s career [00:06:36] - His focus on the information wars and truthiness [00:08:50] - How Josh and Tony met [00:12:27] - Experiencing the slow pace of technology growth within the Department of Defense [00:15:51] - History of businesses selling to and engaging with the government [00:23:52] - Consensus of the threats we face today [00:28:55] - Most important competitive frontier today [00:35:09] - The lessening of kinetic warfare [00:46:51] - State of the drone technology and industry [00:52:56] - Mapping the arctic and the geopolitical ramifications [00:54:31] - The frontier of space [00:59:26] - What shouldn’t be unmanned technology [01:02:31] - The cutting edge of simulation technology [01:06:50] - The most important thing to know about the future of semiconductors [01:11:36] - The moral lens of working with and investing in defense companies [01:20:53] - Traits of the most exceptional soldiers he’s served with [01:23:53] - Kindest thing anyone has done for Tony

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• 0:00Patrick O'Shaughnessy?

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• 1:27Patrick O'Shaughnessy?

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• 2:11Patrick O'Shaughnessy?

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• 2:53Patrick O'Shaughnessy?

  Hello and welcome, everyone. I'm Patrick O'Neal and this is Invest Like the Best. This show is an open-ended exploration of markets, ideas, stories, and strategies that will help you better invest both your time and your money. Invest Like the Best is part of the Colossus family of podcasts, and you can access all our podcasts, including edited transcripts, show notes, and other resources to keep learning at joincolossus.com.

• 3:19Speaker 01

  Patrick O'Neal is the CEO of O'Neal Asset Management. All opinions expressed by Patrick and podcast guests are solely their own opinions and do not reflect the opinion of O'Neal Asset Management. This podcast is for informational purposes only and should not be relied upon as a basis for investment decisions. Clients of O'Neal Asset Management may maintain positions in the securities discussed in this podcast.

• 3:45Patrick O'Shaughnessy?

  My guests this week are Josh Wolfe and Tony Thomas, better known as T2. Josh is the co-founder and general partner at Lux Capital. T2 is now a venture partner alongside Josh at Lux after serving almost 40 years in the US military and becoming a four-star general and the 11th commander of US Special Operations Command. Our conversation focuses on the technology frontier in defense as well as the geopolitical threats that the US faces. We talk about everything from semiconductors and autonomous weapon systems to the moral dimensions of investing in defense technology. I hope you enjoy this fascinating conversation with Josh Wolfe and Tony Thomas.

• 4:23Patrick O'Shaughnessy?

  So T2, I think since the audience knows Josh very well, we have to begin with you and your fascinating background. Could you begin by giving us sort of the thumbnail sketch of your career up until this point?

• 4:34Speaker 02

  Thanks, Patrick, and thanks for the opportunity to engage with you here today and with my teammate, Josh. I come from some pretty common formative years. And in fact, I joke, I was probably voted on more occasions than not if we'd had that early balloting of least likely ever to become a four-star general in the UOD. So I'm the oldest of six kids from the Philadelphia area. Stumbled through 10 years of education before I finally had the opportunity to visit West Point. And for whatever reason, and I still don't understand how I was mature enough on that day to grasp the opportunity, it struck me that I need this place. I need some orientation. I need to go here. So switched out of Catholic school into public school, got a haircut, started hanging around with the right kids, and applying myself. Up to that point, my parents at university said I was the most

• 5:18Speaker 02

  underachieving person on the planet. And luckily, by hook or crook, got into West Point. Like a lot of guys and gals that go to the military academy, I had no intent of making a military career. I mean, I was interested in serving my country, certainly, and I knew that there was a five-year commitment. I didn't have a plan past that. I didn't have a plan on where I wanted to go for my initial assignment until I picked it. But I got into the military and immediately just grew incredibly fond and passionate about the people and the shared sense of purpose. That drove me for 39 years through all those ranks from second lieutenant on up to four-star general, where I ended up culminating as the commander of Special Operations Command. Most Americans don't realize that the Special Operations Command is 75,000 strong and on any given day, operating in 80 different countries around

• 6:03Speaker 02

  the world. That spooks a lot of Americans on why are we there? Why are we doing these things? I try, when I do engage the public, I try to assuage their concerns by mentioning that I think it's an insurance policy ahead of time that we are trying to develop partner capacity in countries so they can deal with their own crises when they happen, so that we don't have to deploy loads of US service members down the road. My experience over the last couple of years really has been seminal in the context of the 19 years now going on 20 years of continuous combat against Islamic extremism. But also where people don't realize, we were knee deep in countering Russian activities, especially on the Eastern European front. We were turning, pivoting, as everybody was,

• 6:45Speaker 02

  towards the challenge that is China, which is massive. And then we were also dealing with some not so small contingencies in the form of North Korea and Iran. So incredibly busy command across all those areas. During my stint, we picked up responsibility for weapons of mass destruction, no small mission from Strategic Command. And at the very end, we were given a mission that I was actually salivating about, and that's information operations to help the DOD at least compete in the information space, which is now more challenged than ever. But if you look back over this last 19 years, we've had this living laboratory of a conflation of all things automated. Everybody thinks Predators and Reapers and things like that, but it's yes, plus. So many other aspects of automating

• 7:29Speaker 02

  our approach to that kind of combat, but it transcends to other forms of warfare. And of course, teasing the heavy question of if you integrate AI, do we go automatically to Skynet? And I try to assuage people of that concern if they are even inclined to listen to you. But the other part is this aspect of the miss and disinformation that is really complicating matters. It complicated our matters even in the backwards environments, the less developed environments of Afghanistan, Syria, Iraq, but even more so on the global scheme now with major competitors like Russia and China, who are manipulating the information space like nobody's business. And we in the United States suffer from the thing I hearken back to, a Stephen Colbertism. It was word of the day, one day that he invented was

• 8:11Speaker 02

  truthiness. We in the Western world suffer from the intent to be factual to our fault. And I'm of the school of thought now that better to be Fast, get something out there in the information space and recover off that, adjust off that, then in the pursuit of perfection and truthiness, when the ship has sailed, the story is already out there and you're in the recovery mode. So we've been lucky to have a developmental environment to trot out and work our national security repetitions over the last 20 years, but the next 10 to 15 years are going to present some much more daunting challenges that I hope we're able to pick our game up and be prepared for ultimately to deter war. I'm one of the bigger advocates that we should be the last button you press to

• 8:55Speaker 02

  press send, that you've exhausted every other thing. You should have that big can of whoop ass in the closet that people find a challenge, but it has to be integrated with your diplomatic approaches, your information and your economy levers that are keeping things real, short open than can of whoop ass. That balance going forward is tough for any administration. It'll be a huge challenge for the current one again, as they pick up from where we are now and projects us in the future against some really daunting adversaries.

• 9:22Patrick O'Shaughnessy?

  We might call this episode can of whoop ass. I was like naming them early on. I think it's actually the kind of perfect framing. Josh, I'd love you to talk a little bit, one, about how you met T2. I think it's an interesting backstory, but then two, start to lay the groundwork for this inextricable link between government, military and technology through history. I don't think maybe many fully appreciate just how important both government and military are at the bleeding edge or frontier of technological innovation. So first tell us though how you met T2 and then let's get into that history.

• 9:51Speaker 03

  I had a former Navy nuclear sub officer who used to work for me and he went and helped stand up at the Pentagon, this entity called JAKES, which was the Joint AI Center. And he had met T2, Tony Thomas, and said, you know what, he's going to be in New York. He's starting to look at some of the cutting edge technologies that could help the warfighters. And I recommended that come see you. So this was scheduled, I think for a Friday, two days earlier, unbeknownst to me on a Wednesday, I'm in my office, which you've been to, and Bibi, who is my partner and assistant who runs my life knocks on the glass window. I sort of waver off because I'm engaged with an entrepreneur and I'm really excited about what they're pitching. And she's a bit persistent. And so I suddenly get up and I say, okay, what's going on here? She very quietly, but nervously turns to me and says, there's three federal agents downstairs and they're asking for Josh Wolfe.

• 10:34Speaker 03

  And I sort of now pause feeling bad that I had waved her off. And I said, okay. She's like, what do you want me to do? And I'm like, well, let them up. I'm not sure if she thought I was gonna like rappel out the window or I was wanted for something. These three guys come in flak jackets. I am drenched now in sweat, pondering what could I have possibly done? That the feds are here. They come out the front elevator. As you know, it opens up into our main space. And they say, we're here for Josh Wolfe. And I said, that's me very nervously and sheepishly. And they said, we're Tony Thomas's advance team. And I let out this great exhalation of relief, but they had come to basically scout out every angle and window and entry point to make sure that if somebody was on a rooftop gonna take him out, they'd know it ahead of time. But that scared the heck out of me. Anyway, T2 comes. I don't know, we're probably scheduled for a half hour, something like that. And maybe two or three hours later,

• 11:19Speaker 03

  we finish and we had covered everything from cutting edge technology to science fiction where he was in a fiction auto. At the end of it, he turned and said, I'd like to take you to the edge of the formations to actually see some of the men and women in theater. I think in particular, I talked about one of the identifying techniques that we use at LOX, which is, as you know, asking what sucks. He said, you know, I want you to go out to the edge of the formation and take a look and tell me what sucks. At the end of that trip, which I think was a little under two weeks covering, I don't know, eight countries or so. I'm in the Pentagon. He's in full uniform and I'm in a black t-shirt. I think I was wearing a nice cover shawl, but trying to be as respectful as possible. I don't think I wore my crazy vans that day. He said, what do you think? And I said, if I was a peer adversary and I wanted to sabotage your systems,

• 12:00Speaker 03

  I would basically plant a 1980s guy out of office space, a bureaucrat, to put the IT system in that you have now.

• 12:11Speaker 03

  We are sabotaging ourselves. And I was astounded visiting some of these folks, whether it was Philippines or Thailand or right outside Malaysia. And they could paint a target in five seconds with a laser, but it would take them five minutes to send a classified file. Just listening to the frustrations of people who wanted to do something like blue dot tracking, the ability to track peers like we do for our families on an iPhone, and they're on these. Clujy, basically slightly better than BlackBerry phones. And just that cycle of technological innovation that might happen every six months or a year that we're so adapted to here as civilians. And these six-year-plus cycles for adoption into the DOD was just astounding. We hit it off. We both speak a mile a minute. He's got the Philly jersey thing and I got the Brooklyn thing.

• 12:54Speaker 03

  And a few years later, he joined Lux as a venture partner and has just been incredible addition.

• 12:59Patrick O'Shaughnessy?

  Tony, I'm curious just to double click on one of those ideas. It sounds like in the military, often the pace of kinetic flow, I'll call it, the ability to paint the laser can be quite cutting edge and fast, but information flow and the systems behind that much slower. What did that feel like from your felt experience across those three or four decades, watching technology progress and seeing its utility change to you and your teammates?

• 13:22Speaker 02

  I was actually very lucky to be in units that were decidedly nimble at leveraging modern technology, at least as much they knew about it. I would offer they didn't know everything that was brewing, but the special operators that I worked with always had that insatiable desire for an advantage, whatever it might be. And we were able to bring it back at that level, not necessarily to scale. And in fact, part of the problem, when I got up to SOCOM, I realized that a lot of the leading-edge technology was resident in some of our special mission units, but had not scaled to the entirety of our formation. We had some interoperability issues. At a point in time, we had better interoperability between one of our special mission units and our Kurdish surrogates in Syria than we did with special forces and elements that we inserted later.

• 14:07Speaker 02

  And that was a terrible shortcoming that we hadn't rectified. But I was lucky, again, to be with those units that had the adaptability early on to bring technological advantages to bear. It diminished the higher I went. And in fact, it was a source of frustration, the higher I went, that there was less of that. Practitioner-driven innovation tied to our tactics, tied to our operations. It was enlightening me to where we needed to invest in the future.

• 14:33Speaker 03

  When I was out in the Far East, we spent a day with some of the breachers, the people who break down doors and collect information and people. And some of the inventions that they had were straight out of MacGyver. They had hacked together these systems, whether it was a saw that was fit into a backpack, explosive tape that was hidden, all these kinds of jerry-rigged things that out of necessity, they had very scarce resources that they had to pull together in very creative ways. Just as T2 is saying, it was the exact opposite of a top-down bureaucratic approach to designing something. It was instead this completely, oh crap, we got a problem. How do we solve it with the stuff we've got? Almost like that scene out of Apollo 11, when they're like, you've got to make this fit into this.

• 15:14Speaker 02

  Our luck that we invited Josh to get under our tent. The immediate return was what I took away is so beneficial. Based on the realization, we were chasing technology everywhere. We were literally chasing our tail and mostly trying to ferret and find individual companies. I give Dave Spurk, who's now the Chief Date Officer for DOD, credit. We flipped that paradigm and said, let's bring these people under our tent, assume some risk in terms of classification and things we'll have to figure out.

• 15:41Speaker 03

  Possibly getting them killed, that's all right.

• 15:43Speaker 02

  But let them come in with their creative minds and more importantly, just the expanse of their networks to understand our problems and say, geez, I can come up with five or six solutions to that problem. Which one would you like to pick? That changed our approach, at least certainly my approach at the time. And it's something I think the department needs to do at scale. I appreciate it more now that I'm outside, how very difficult it is for individual companies to get in the department and blossom to any sort of program or record. There's a better way to do this. Josh did so well at the Reagan Library last year. I'm going to try and leverage him to get into the system some way, somehow, serving our defense establishment to help us get across this divide.

• 16:23Patrick O'Shaughnessy?

  Josh, I want you to set up for us this background and history of what I'll call, everyone talks about B2B or B2C businesses. We're going to talk about B2G, businesses that are selling into the government and also just working with the government, R and D wise and development wise to develop new technologies. Can you give us kind of the background of the relationship between government and Silicon Valley and technology innovation?

• 16:45Speaker 03

  Like you alluded to in the beginning, it's something that is totally lost from a lot of people. I mean, the roots of Silicon Valley are this myth of vineyards and orchards and brilliant nerds hopping and catching fire in garages and Hewitt factory. But Silicon Valley and tech, as we know, it was really rooted in 40 years of electronic warfare. Post World War II, 1940s, 1950s, the US government begins funding universities to basically do weapons research and technology. The dean of Stanford at the time, a guy Fred Terman, he's encouraging grad students and professors, spin your research out into startups that can be sold as products to defense contractors. And a lot of people don't know, the first IPO out of Silicon Valley, it wasn't Google, it was 1956 for a company called Varian, which sold microwave tubes for military applications. And so there's a symbolic significance that we'll probably return to later, I think,

• 17:30Speaker 03

  when we talk about semiconductors and things that are geopolitical significance. But the dawn of the computer chip, the soul of the new machine, was all Defense Department funded. A year after that 1956 Varian IPO, so 1957, we've got Fairchild Semiconductor, which was born out of Shockley and Bell Labs and is really considered the pioneer, the icon of today's Silicon Valley. And it won its first revenue through military contracts, building chips that basically helped US astronauts get to the moon, helped build missiles to arm the US in the Cold War. You go back to Lockheed, obviously today a Bellway Bandit, a giant defense contractor. It was almost non-existent. It sets up shop in Sunnyvale in California in the valley, gets a contract to build all the submarine missiles for the US and then employees go from basically zero to 25,000 in four years.

• 18:13Speaker 03

  You go back before COVID to Sand Hill Road, and if you ever visited Rosewood, it's sort of the inside joke that on Thursday nights, you see all these Russian ladies of the night preying on, you know, rich, young, techy nerds for both money and intel and maybe kompromat. But from the 1960s to the late 80s and 90s, Silicon Valley was basically crawling with Soviet spies. We've completely forgotten this history. Today, we think tech is Facebook and Google and Instagram and Snap and Clubhouse and Amazon. And it's coincided with this zeitgeist over the past really 15 or 20 years that's been anti-defense, anti-government. Some of that is tech company employees at Google refusing to work with the DOD or walking out or quitting in protest. And it's one thing to be anti-war. I'm anti-war. I would even argue T2 is probably

• 18:55Speaker 03

  anti-war, but it's another thing to be pro-defense. I think Microsoft got this morally right, and I think Google got it morally wrong. Microsoft basically said, "We're an American company first. We're going to make sure that the men and women on the front lines in US defense are going to have the best technology and the best advantages and not be disadvantaged, especially when our peer competitors are aligned between industry and government." And I think that was an important stand. It's the zeitgeist that is now starting to change. We're working to change it. The companies we're funding are working to change it. But I think it's interesting, if you look at why, like, what caused the zeitgeist in the first place? Because it wasn't always like this, right? We just talked about how 40s, 50s, 60s, and beyond, you had this close relationship, one that was even chastised as being a military-industrial complex. Some of it, I think, is generational. The past

• 19:37Speaker 03

  20 years, you had two main wars, Iraq and Afghanistan, and T2 played a key role in these. And some called it war of choice, a war of necessity. You had jingoistic, American neocon sensibility in Bush for two terms. You had a more internationalist Obama fighting a global war on terror. And then you've got this offensive populist, anti-globalist in Trump that's abandoning allies and bizarrely buddying up to North Korea and Russia. So for many, myself included, the politics was gross and demoralizing. But some of it was also the demographic. When you look at the valley over the past 20 years, and you look at some of the brilliant and beautiful people, the influx of immigrants that are populating our companies, many of them did not feel that same feeling that Russian immigrates felt in the 80s when they came to the US. They were running to the US. They

• 20:20Speaker 03

  were running from Russia. Instead, a lot of the last 20 years of immigrant entrepreneurs, many were more transient visitors. They'd get equity, they'd get rich, they'd get out with no real roots or loyalty, or even sort of an understandable resentment to the growing anti-immigrant sentiment. The second thing, I believe that there have been information operations that have been influencing certain points of views and sowing seeds of dissent. When I grew up in the 80s, we had a very clear and present danger in Russia. We had it in every movie, in every TV show, in Saturday Night Wrestling. It was Hulk Hogan waving the flag of America versus Nikolai Volkov with USSR. It was Red Dawn, it was Rocky in his big American flag shorts versus Russian Drago. It was James Bond versus the KGB. It was the hunt for Red October, it was Red Heat, Red Dawn, Red Scorpion.

• 21:04Speaker 03

  So I'm visiting Pacific Command and I'm talking with Brigadier General John Braga on a T-2s guise who helped lead the war on ISIS. And we noted that where are all the Chinese villains? You can't name one. Some of that is basic economic interest. You've got Hollywood that has this huge incentive to sell to a huge multi-billion population of moviegoers, so they don't want to upset the country and so they self-censor content. Some of it is China actually making purchases strategically, very cleverly. They bought AMC back in 2012 for just under $3 billion. They bought a series of other movie theaters and chains. They bought Dick Clark's production company, they bought Legendary Pictures. So this was a very successful information operation. It could be this mass oversimplification, but if you just observe history, you can

• 21:47Speaker 03

  see this undulation in the domestic sentiment between peace and war, between unity and domestic strife and division. And that's almost always coming because there's some common foe. You've got the Civil War happens basically right after the US crushes what's the closest thing to an enemy, 1948 in Mexico. 13 years later, you've got the Civil War. World War I, we get unified again, then you get this crazy division amongst the roaring twenties and the Great Depression, you have the rise of the KKK. You had divisions of cities versus towns, wet versus dry with prohibition, Reds versus Americans. You go into World War II, it turns out it wasn't the New Deal so much that started to bond us, but military and our mobilization. You get common bonds between ethnic Italians and Irish and Polish immigrants, all now compatriots fighting a common enemy.

• 22:32Speaker 03

  And then after World War II, you get this peacetime dividend, we get the civil rights movement, but then you get Vietnam. And then we get unified again during the Cold War with this common enemy in Russia and the propaganda that was connected to that. And then you see this huge surge in partisanship since then. And one measure of that, which I thought was interesting, Since 1988, that was the last time that we had a unanimous confirmation of Supreme Court nominees. The one conclusion, which is sort of this weird one, we want unity, we need higher purpose. That could be from a shared ideology, it could be about some big technological achievement, going to the moon or going to Mars. But what's united us most often has been this us versus them. It's a foe. And a foe typically has to have two big things. It's got to be really big to scare us.

• 23:16Speaker 03

  And it's got to be really alien and different and weird that we are just like uncomfortable to make it tribal. Nazi Germany was a perfect foe, right? It was big, it was alien ideology, it was unifying. Japan in the 1980s, big, but not really a rival in democracy. It was sort of a common system, rival in electronics, sure. Russia, check. Big, alien, different, weird, perfect foe. Al Qaeda and ISIS might have been alien to us, but it wasn't big, it was diffuse, it was abstract, it was a war on terror, it wasn't really a war on territory. China, China is interesting because it's now got the potential to be both big and sort of scary and threatening with an alien ideology.

• 23:55Speaker 03

  And so the downside of this rivalry of growing disharmony with China, and ideally it need not be that way, there are big global problems to tackle and doing it as allies would be better, but the upside of it, as cynical as it may be, is that we may end up creating domestic harmony as we get unity that's forged against this foe. There was this quote from some Soviet era advisor, he said to an American audience, sort of as the Cold War was ending. This very chilling quote, he says, "We are going to do something terrible to you. We're going to deprive you of an enemy."

• 24:24Patrick O'Shaughnessy?

  It's a fascinating idea, Tony. I'm really curious to hear your take on, back to the can of whoop ass. So we'll talk about the cans of whoop ass later in terms of what they mean technologically. But in terms of just the felt nature of the threats that we face. I always loved Eric Hoffer's nature of mass movements and his concept that like the most important thing was a common devil. That was the galvanizing force. And Josh just kind of laid out that history. What was your perception of that being in the military and how that evolved? And how would you describe the state of that, the sort of consensus threats today, whether they be kinetic or information based?

• 24:57Speaker 02

  I'm glad you asked that because I think we don't look back often enough. Your perspective can vary. To see how we got to here and to flash forward. I'll pick a point thirty to forty years ago, but forty years ago, vis a vis Russia, as Josh described. I can remember the same movie genres. The acknowledgement for me as a military professional was that is an incredible foe. Much bigger than us conventionally. We probably will not win in Germany. Probably go nuclear. And then against the backdrop of mutually assured destruction. That's how we grew up. Acknowledging that this is tenuous. And you had the fringe activities against the Soviet Union. The smaller wars that were on the periphery. But it was something that obviously was a focal point and it drove our national animus.

• 25:40Speaker 02

  We had our stuff together in terms of Voice of America, our strategic messaging, our economic approaches. And then tried to recover our army from the nature of Vietnam into a fighting force that might be able to go belly to belly with the Russians. But you think about the same timeframe, some ten years later, after I got commissioned, the fall of the Berlin Wall, which I think shocked everybody, how quickly the dissolution of the Soviet Union. And I would offer, we spiked the ball at the one yard line. Conversation at the time where let's not affect too harsh a peace. Let's not have the Versailles of our time. So we forced the bear to come out of the closet. Let's take advantage of this unexpected development. Let's let them fade to black. Now, the problem is we left a big fat piece of red meat out there unresolved. And so that was specifically Ukraine.

• 26:25Speaker 02

  We had Estonia, Latvia, Lithuania, Poland, all come into the NATO construct. Russia didn't like that at all. In fact, Putin has leveraged that great advantage back into the Russian population that NATO is now on our front. We used to have this buffer with the Warsaw Pact. But we left Ukraine out there and what do you know? The not quite dead yet Soviet Union now in the form of a revisionist Russia stole a march on us. We saw it coming. I think there were every sort of indicators. We slept through those indications. Crimea was a fait accompli and now you had the morass of what's going on in Russia. China thirty years ago was Tiananmen Square. I think our universal thought among the Western world was, oh, this has got to be the beginning of some modification of the hardline Chinese approach.

• 27:10Speaker 02

  And arguably, they did that economically. I mean, amazing kind of economic development from there, but they ratcheted the party system down harder and meanwhile gained steam in terms of an economic juggernaut. But I can remember five or six years ago, The Economist, among every other publication, disparaging the Chinese economy as, quote, "state-sponsored capitalism." They would then go on and say, completely stunted, "terms of innovation, can't take off, can't go to scale, they'll have moderate development, but it's not going to be something we have to contend with." Three to five years later, the cover of The Economist was "How the West Got China Wrong." But I would offer, about the same time that that article came out, was about the time I joined the Four Star Club and my very first China tabletop, the chairman and all the

• 27:54Speaker 02

  other four stars, about twenty of us in the room, we had a bunch of young bucks in there and we were talking about China as an adversary. And the chairman felt compelled to tell all of us new members, "Hey, you need to know that the administration policy, the Obama administration policy is to not refer to China as an adversary. We're not picking a fight here. We're dealing with this developmental country. Don't want to call them an adversary and don't want to talk about containment or any other generalized approach to it. We're trying to figure out what's the nature of this thing short of calling it a threat." I think you've seen that transformation in the last three to four years where, on a bipartisan basis, people are realizing this is a threat. It could be a really, really substantial threat if they march all the way to taking Taiwan or an inevitable imbalance of power.

• 28:39Speaker 02

  But it came up on us in a hurry and we certainly have to acknowledge it. Inside that, you could talk about the failure, just utter failure. It was an underestimation that there's no way, no how North Korea can get a nuclear bomb. We are now being held nuclear hostage by totalitarian despot. God help us. If anybody can predict what he's going to do next, I'm intent on finding out. But in just the last three years, my gallows humor was, "The good news, as I sit here in Tampa, is he can only reach Topeka." Then he did an apogee test three years ago that shocked everybody, all the intelligence community, and they had reluctantly acknowledged, "Nope, he can hit anywhere in the United States. The good news is it's only a Hiroshima-sized bomb."

• 29:20Speaker 02

  Drop a Hiroshima sized bomb in U. Pickett State or municipality in the United States and see how it's hanging when you are at about that point.

• 29:27Patrick O'Shaughnessy?

  I'd love to talk to you both about what you view as the most important competitive frontier. So against all that backdrop, a couple of things stand out in my mind. One is as a civilian, it just seems as though I'll call it pure weapons technology, like kinetic weapons technology is, I don't know, less important or less prominent. I hear about it less. I think about it less as somebody that's interested in military history. And obviously, the nuclear arms race was maybe the most profound example of kinetic weapons being developed at an incredible pace and being really important in the balance of power and a competitive frontier that drove global geopolitics. But then I also think about this book that just came out about Russia cyber warfare against Ukraine. You mentioned Ukraine earlier, and it seems like there's these twin separate fields, one

• 30:10Patrick O'Shaughnessy?

  digital, one physical. And I would just love to hear maybe Josh, starting with you, what in your mind the competitive frontiers are, just like we would think about a competitive frontier in business. In the world of the military and governments, what are the most competitive frontiers? And how are we doing on those fronts?

• 30:26Speaker 04

  It's almost the blending of almost every sphere you can imagine. And I'll give you an example from history that I think is sort of poignant on how little things that are totally overlooked can have decisive advantages for one party or the other, and it isn't predictable a priority. But I think every domain, obvious ones that we already categorized, air, land, sea, space, information, cyber, but it's really the intersection of these things, the ability to influence a population as you've seen Russia and China do, turning our own tools on us in the same way that terrorists did it with our own domestic airplanes on nine 11, with our own elections and sowing seeds of dissent and disharmony and civil unrest domestically using Facebook, which you would have thought was a benign thing. But hitting on the technologies, Chris Bros, who's had a strategy at one of our companies, Andro, which is a real defense focused company, was sharing that over the

• 31:11Speaker 04

  past decade in the US, when we did war games against China, the US, to his surprise, had a near perfect record. And the punchline was, we lost almost every single time. And so the Chinese are so far ahead of us in many of those domains, particularly in space. At a micro technology level, like to underscore the importance of basic science research and constantly celebrating our scientists, making sure that they're welcomed here. There's a story of a guy Eugene Hudry or Howdery, I'm not sure how the last name is pronounced. He's a Frenchman. He's a tank commander in World War I. He resettles in the US. He goes and sees an Indy 500, okay? And he gets obsessed with cars. And then particularly becomes obsessed with fuel. And there's this widespread belief at the time that petroleum is going to be going out of business

• 31:55Speaker 04

  and you've got to find ways to get gasoline. So he figures out, using hundreds of different catalysts, how can we coax out of coal gasoline to basically produce a fuel? This is late 30s now, by the early 40s, a bunch of these plants are actually up and running. He's created effectively a catalytic converter. And what was crazy was the British were using a fuel that was 87 octane. Okay, this is such a trivial thing. They're getting trounced by the Luftwaffe, by the German air force, over France. Few months later, they start using this fuel, which is 100 octane fuel, 13 difference points just in the chemistry and the pressure that it's being able to produce. And all of a sudden, these Spitfire planes are now going 25 miles an hour faster at sea level, 35 miles an hour faster at 10,000 feet.

• 32:37Speaker 04

  And that extra speed gave the British this decisive advantage over the German Luftwaffe because they're able to climb faster, they have better maneuverability, they have better performance at higher altitudes. So over the English Channel, Hitler's looking at this technological superiority and turns away from the attack on the UK, allows the UK time to regroup and probably changes the face of history. You could argue that a single chemist played a pivotal role where same planes, different fuel, technological breakthrough, little things lead to big things. So I think in a sense, it would almost be arrogant to point to any given technology and say, this is the thing that's going to matter because it's going to be small things like that that accumulate advantage in a decisive point. One of the amazing trends we detailed over a pretty long period of time now is that

• 33:20Speaker 04

  technology tends to evolve between this perennial arms race between deception and detection. You see this everywhere. Day after Pearl Harbor gets bombed, Lockheed Martin has this huge ammunition plant, arguably America's most important military asset at the time, and therefore it's a target. So they scramble, they create a decoy California suburb made out of burlap stacks on top so that if there was aerial surveillance of it, all you would see is what looks like this town, not a military munitions factory. You had audio engineers that were basically making tank sounds. You had people that were literally stagecraft and Broadway theatrical artists that were doing inflatable tanks to communicate that we were there when we weren't actually there. Or conversely, you want to let somebody know that we're not here, but we actually are,

• 34:04Speaker 04

  you know, sort of really evade detection. And it's this infinite game. You had sonar as a technology. Nobody would have anticipated that it was super valuable, but it was invented to detect submarines. And then to evade sonar, the subs ended up getting built with these silent engines that were basically Navy nuclear, putting nuclear power instead of loud engines. And now China has invented the ability to detect these things from the sky using lasers to go subsurface in the ocean. So I think that that perennial sort of evolution is just this natural force that then trickles out into the real world, but constantly trying to detect something that is hidden, the smallest signature. Every day, I'm sure you have a pattern of life of when you go to Starbucks and you pick up your kids from school and you go to the gym. And, and when there's those aberrations, that's a signal that is valuable to somebody that

• 34:47Speaker 04

  is trying to detect a pattern of life, whether it's, you know, to find a target or, or identify when two people that shouldn't have been meeting at a certain place met. The counter to that is people trying to defend against that detection. We've got satellites up in space in many of our companies that are imaging and revealing all kinds of crazy stuff. We've got revelations of Chinese concentration camps done by Planet Labs. We've got revelations of Iranian nuclear development and testing of weapons. And at the same time, you've got Chinese technology on the ground that are developing lasers to basically be able to take out satellite detection. And they're probably the most advanced at this because they don't want us seeing 10 centimeter resolution of what's going on. So that constant arms race is playing across, you know, and I just named a bunch of technologies.

• 35:28Speaker 04

  The solid state chemistry that is going into high powered CO2 lasers to satellite launch capability. Again, it touches everything from air, land, sea, space information. And it's just this, you know, aggregation of all of those things.

• 35:41Patrick O'Shaughnessy?

  T2, do I have it right in my impression that the kinetic has sort of taken a backseat? And I also want to understand what I view as a little bit of a strange paradox for me, which is you mentioned, I think when you're done, 75,000 people in special operations, which seems like I certainly would not have guessed such a high number. So that's grown a lot. While at the same time, it seems as though warfare involves individual humans fighting each other face to face less and less. So help me understand from your perspective, the same question, the competitive frontier and the degree to which kinetic warfare has lessened and other forms of it have increased across your career.

• 36:15Speaker 02

  I think I would challenge weapons being less significant in that they've been relegated. To a thought or perception where they're not as significant, but I think it goes back to one of Josh's favorite lines, this is a failure to imagine failure, they're going to matter. And I'll bring this back full circle. And if I get too far off the reservation here, remind me that I want to come back and absolutely emphasize that the information challenges are paramount. You can have all sorts of kinetic success, but you lose the information fight, you lose, period. And that's at both the tactical and strategic level. On the theme or the topic de jour of deterrence based on the locker of can of whoop ass, let me first start by saying that none of our adversaries, and this has been

• 36:57Speaker 02

  consistent for the last several decades and up till the current time, that none of our adversaries, anybody we've mentioned so far, wants to go toe to toe with the United States. That's a good thing. They all know that we are incredibly capable, we've got a lot of reps, we train our tails off, we've got extraordinary people. So none of those adversaries want to go toe to toe with us. The China war game pieces is interesting. I would offer when you play the same set of hey, diddle, diddle, up the middle into the South China Sea with aircraft carriers and things like that, that the Chinese have planned on for years, you're going to lose that fight every time. Come up with a new strategy. That's a failure to really innovate in terms of strategy, strategic approach. And it does beg the question, do you want to own the South China Seas? Do you want to be on the

• 37:41Speaker 02

  Asian mainland? Or is there another way to push your national interest further forward? This does go back to, and weapons, as you brought up the topic, ain't cheap. Right now, the Department of Defense is flush with the biggest budget we've ever had. Three straight years of $700 billion a year equip ourselves to advantage USA. And against the backdrop of, it's almost like they feel compelled to remind us, but actually it had me thinking, oh, my God, this is 2020, we are hearing Putin rattle a nuclear capability in the form of nuclear torpedoes, the non-strategic nuclear weapons. There's no such thing in the US inventory as a non-strategic nuclear weapon. I hope we never lose sight of that, that we go nuke. It's strategic. There's nothing tactical about a nuclear weapon, but Putin likes to play

• 38:25Speaker 02

  in that space there that, "Here you go, I'm moving pieces around," I think partly to force us to recommit. A good chunk of our $750 billion budget over the last three years has been to rebuild the nuclear triad, because at the end of the day, if you at least don't have that to maintain ourselves, you're probably on a wing and a prayer. China is building up their nuclear capability. So, you know, one of the less publicized aspects for years, China has been way behind. They could trade nukes with us, but not to scale. They're seeking nuclear parity, I would imagine, for the same reason we do, that you don't want to go here. I will belly up to whatever you have to offer, and it'll just be ugly, and mankind ceases to exist. So, you've got those big brewing issues on the background. Again, who would have thought, in this day and age, we'd had it?

• 39:07Speaker 02

  You've got the fascinating aspect of the unbelievable empowerment of individuals. Whether it's off-the-shelf stuff, or the ability, just like we had here in Florida recently, where somebody tried to poison the water system over in St. Pete, not too far from me, it's almost a menu for miscreants to do bad things time now, much less empowered by more technology coming their way. But back to the information space, again, we, the US, are not even competing in the information space right now. We're watching Russia disrupt. I think Russia's more about disinformation than driving the narrative. And then you've got China, interestingly, inside DoD, they have a daily product that pushes out the daily news stories that are pertinent to DoD, then once a week, they give you the

• 39:49Speaker 02

  Chinese version, playing it back at us. And it's amazing how they manipulate the information space to a growing global audience as we go forward. Josh likes the one story I tell about empowerment of individuals, but in Mosul, Iraq, which was my hometown from '07, '09, I was back out there in about the '15 timeframe. We were retaking Mosul. I saw some pictures recently of a historic town, a pre-biblical town of amazing history that's been laid to waste, just razed to the ground, thanks to the nihilists of ISIS. But on the day I was out there in '15, here is ISIS leveraging DJI technology, and the Iraqis refer to it as "the day of the drones." In that 24-hour period, they had floated 70-plus drones above

• 40:32Speaker 02

  Friendly forces armed with little 40 millimeter grenades, just a very ad hoc attachment to the underbelly of a DJI drone that they can release once they loitered over your target. Imagine we had air superiority above this with every pointy-nosed fighter in the inventory. Nothing could come at us that way, but underneath that you had swarms of drones that were wreaking havoc among the allied forces. All we had was small arms to deal with these things, but that was just a day in the life. And that problem, and I don't like to talk about this too much in public, but I certainly have talked about it with law enforcement folks, that problem is coming to a theater near you if it's New York City, LA, or whatever, where anybody who wants to do bad things with enabled by unmanned aerial vehicles, they could bring it to you tomorrow.

• 41:15Speaker 02

  It could be just worse than a freeway shooter in terms of disabling economies and paralyzing the kind of security apparatus. So all of that is happening in around this current environment. And again, we are badly suffering from a failure, imagine a failure and not taking the leap ahead to really safeguard our interests both domestically and overseas.

• 41:35Speaker 03

  T2 mentioned the cost of some of these programs historically, and that used to be an advantage. When something was multi-billion dollars, the average person or a small non-state actor could not put together the funds or the resources or the talent to be able to do that. As more and more technology has become democratized, we lose that advantage. And so, you know, the state of the drones is this great example. Even when you think about the origin of the drone itself and its current incarnation, there's this amazing story, one of our other venture partners, Jim Woolsey, who used to run the CIA. It was 1993, he's looking at genocide that's happening in Bosnia with Milosevic in Serbia. He's trying to get eyes on the ground beneath cloud cover. He remembers seeing in Israel a drone that was able to lace to laser target something. And he said to the Pentagon, hey, can you get me one of these things? And they said, it'll take six years, 500 million dollars.

• 42:20Speaker 03

  He reaches out to this contact he had, this guy Abe Karim, who's this Israeli engineer. He says Abe was developing this thing called Amber, which was a basically 30-hour loitering glider. He said, could you make a more sophisticated version for me? He said, yes. How much would it cost? And remember, the Pentagon said six years, 500 million dollars. Abe, who's basically an entrepreneur, says six months, 5 million bucks. So Woolsey hustles, he goes to Charlie Wilson, the congressman, this wildcat, gets the money, sort of secretly, puts it together, ends up getting a few of these things made, takes one, sends it out to Albania, where they get an airfield, that he traded two truckloads of alpaca blankets for use of an airstrip. And from Langley, he's got eyes

• 43:02Speaker 03

  on the famous bridge, Mostar Bridge in Bosnia. And then the Pentagon jumps on this, General Tompkins gets this huge win as a result, when they get the contract to make this stuff. And then Jim turns to Abe and says, this thing's pretty successful, what do you want to call it? And he says, why don't we call it Predator? And that was the birth of that program. But that used to be really expensive. Those things were 30, 40 million dollars apiece, or more. And the cost of these things to put some sort of payload on a DJI, like T2 said, is quite scary.

• 43:29Speaker 02

  I can springboard on that, because I think, Patrick, your audience would find it fascinating. Thankfully, America puts its money where its mouth is, and has written the check, consistent year on year, to resource our department. The frustrating part is, we're stuck on old school approaches. And the glaring example I trot out, my Navy brethren hate me for bringing it up, the primes don't like me, I'll never sit on a prime board, that's not my worry, that's not what I want to do. But on two occasions, we were having dinner with the President of the United States, the previous guy. And on two occasions, he trotted out, he asked the Chief of Naval Operations, John, tell me that 13 billion dollars I just spent on the Gerald Ford is the best thing money can buy. That's state of the art, right? Our carriers are without any parallels. John would look at me usually

• 44:14Speaker 02

  when he'd say that, because I would start smiling, because the 13 billion dollars that we spent on the Gerald Ford was my annual budget. It's apples and oranges, but it was out of a 700 billion dollar annual budget, 13 bill gets you SOCOM, 13 bill gets you a keel in the water. It builds an aircraft carrier, it's not the operating costs for that thing year on year, and it's what builds it. The President went on to say, John, actually the thing cost me 18 billion because it went 5 billion over, correct? And the thing, I would hang his head and go, yes, Mr. President, you got that right. He goes, well, I've been reading, this was four years ago, mind you, and it showed that he did, he was at least adhering to some of the intelligence that was passed his way. He said, I've been reading... That in two years' time, the Chinese will have a mix of weapon systems, hypersonic,

• 44:59Speaker 02

  glide, etc., that can defeat any one of our gray holes east of the second island chain. The room got kind of quiet because he was just loading you up for the follow-on. He said, "Why would I ever buy another aircraft carrier?" And you could hear a pin drop in the room. Right now, the US taxpayer has funded, in this last NDAA, two more carriers that you won't see for another decade, that you wonder are going to be applied against what? Aircraft carriers have been the best power-projection platform that we've had for the last 75 years, but they arguably have gone the way of the dodo with a little more shelf life to go, and we should be spending our $700 billion on something else to have advantage to US

• 45:41Speaker 02

  and not put 5,000 kids in the Strait of Taiwan to hope that a reign of DF-21s isn't going to just smoke them out of the water. But we're still stuck on that, and it's as much stuck on what congressmen represent, the carrier-building communities and constituencies, and what primes are working our government to say, "Hey, don't lose sight of the potency of this platform, it's not done yet." So you could go on F-35s, you could go on any number of topics. I told Josh, the one that had a brief moment in time six months ago or less, to me, oh, should be driving daily conversation right now, was the DARPA dogfight, which I'd commend to any of your viewers to cut to the chase. It's a four-hour YouTube thing, go to the last 20 minutes, five zip. AI beats...

• 46:24Speaker 02

  These are guys from the weapons school, and I actually felt for them because they looked so pathetic in their chairs, trying to keep up with these drones. To me, most frustrating was the after-action comments. The good news is we still drill down on things in very vigorous fashion in after-action reviews on what went right, what went wrong, what's this mean for the future? And in almost every case, people were discounting the results of this thing because the AI was doing suicidal-like tactics. Well, no kidding, the AI knows no fear. It actually may do a suicidal event to kill you, and it'll be machine one, human zero. You can write it off. The machine knows no fear, no fatigue, so many advantages, yet the fighter community wants to hold on to the advantage of a guy in a cockpit, a guy or a gal in a cockpit.

• 47:08Speaker 02

  To me, I don't want my kids going up against some AI-enabled fighter capability in the future. We need to leap ahead right now, make the sky black with automated AI-enabled capabilities, and get your check, if not checkmate, for the next 20, 30 years.

• 47:23Patrick O'Shaughnessy?

  You've raised two fascinating examples, the Greyhills and the F-35s as the iconic projections of power and military technology and excellence, and then raised the point that, well, yeah, for fighting the last war perhaps, but for fighting the next war, there may be a basket, four or five things that we should be investing in, and that's going to be what matters. I'd love to talk through those things now. So I'm thinking here of, I'd like to talk more about drones, about space, about simulation as a technology, I think that's going to be really important, about semiconductors and onshoring. Maybe we can start with drones and just wrap that up. I would be curious what the state of that technology is. So you talked about the story of the Predator drone. What has happened since then? What is important in this frontier that the audience might find interesting?

• 48:07Speaker 04

  There's broadly more imaging capabilities, ISR, things that are able to measure very different things and pick up sound signatures and conversations that you'd be shocked by. But by and large, that is something that I think is increasingly becoming democratized and noisy. And the key thing is really, can you give deterrence by denial? Can you create these anti-drone systems, which you basically want to be able to rapidly detect, intercept a projectile that's moving, in some cases, 80 to 100 miles an hour in half a second, and be able to basically destroy it. So companies like Anduril, Performance Drone Works, others that we've invested in are basically focused on, how do you find this thing that basically is flying faster than any bird, intercept it and destroy it before it can do damage? Even if you look at something that was hailed, like Israel's Iron Dome, it's still a very

• 48:51Speaker 04

  crude mapping, projection, analysis, mathematical calculation. So I think that that will evolve more on the actual defense side than the offensive side. And I think that you'll see bad actors basically take off-the-shelf stuff. The one drone that is causing utter havoc is the Turkish drone, but these are basically like six-foot or eight-foot wingspans that are basically dive bombing. They're almost on these suicide missions. And so they can hover and loiter for a very long period of time. And then, once the target comes, they just basically are like a missile diving down and destroying material. That's something that people are trying to contend with right now, I think in the Azerbaijan conflict. That was one of the things that was absolutely destroying people, tanks and vehicles.

• 49:32Patrick O'Shaughnessy?

  T2, anything you'd add on drones as important?

• 49:35Speaker 02

  I think unfortunately, most people automatically go to the sky. I'd highlight one of our portfolio companies, Sail Drone. And this is interesting. When I first met them, I'd just come on board with Lux. I was touring different companies and someone recommended I stop by this great company out in Alameda. Here's automated maritime capability with unlimited range, unlimited duration. Out there, it's just extraordinary technology. But the founders had no intent of any military application for it. And so as I talked through all the possibilities, I could tell I was making them a little uncomfortable. And they got together afterwards and their internal discussion was, why wouldn't we be interested in this space? We hope to do very well in the private sector, but if our technology is applicable to national security

• 50:18Speaker 02

  or even local security, think of New York Harbor or LA Harbor or anything like that. Why wouldn't we consider to adapt ourselves to the space? Just the prevalence of unmanned capability, maritime, land, air, space. I'm more inclined to ask in every case, why can't it go unmanned? What is the advantage of being manned at this point in time? I had a very celebrated helicopter pilot who was my operations officer here at SOCOM. A two-star commanded the Nightstalkers, the 160th Aviation Best Helicopter Organization on the planet. Still phenomenally head and shoulders above any other capability like that. But I came in one day and I said, I just read an article about the biggest quadcopter experiment in the world ongoing right now.

• 51:00Speaker 02

  It's actually in the form of a UH-60 Alpha out on the Nellis Range somewhere that they have tricked up with all sorts of sensors. And on average, competing against, and think of drone racing league and some of these other things, but competing with a manned crew, it's winning on average by two seconds per event. You pick the courses that they're throwing them into. And I intentionally laid this out to my friend, my counterpart and said, When are we going to an unmanned cockpit in the front of these helicopters? And naturally, he took it as a personal affront and came back very testy fashion and said, "When are you going to put your skinny ass in the back of that helicopter?" Actually, I was prepared for that response. I said, "I am comfortable. I think I'm there now as long as you are sitting in some ground control station somewhere with enough Cheetos

• 51:43Speaker 02

  and Mountain Dews, whatever it is that keeps you, you know, so that you can go to override if and when helicopter, the AI-enabled platform fails me." But you think of the pucker factor events of a helicopter coming in and flaring over a target and fast roping, making gun runs and things like that, where the incredible pressure on an individual pilot can be removed just by getting them out of the cockpit, putting them back somewhere. The Air Force now is going to the loyal wingman concept, where you'll have one-man guy up there with some drones along with them. It has me asking, "Why is that guy even up there? Is it just an individual can throw a scarf back and say, 'I'm still up in the blue,' or is he or she better off on the ground without that inherent pressure managing the entire fleet?"

• 52:27Speaker 02

  It does assume a command and control structure, a far-reaching command and control structure that I honestly don't think is going to be there. It requires AI at the edge, compute at the edge, enablement where things can function when they're not tethered back to an elaborate command and control structure, but I think it's all very feasible.

• 52:44Speaker 04

  By the way, I think one big innovation, something that we're funding, we haven't yet announced, but very quiet, almost secretive rotor, motors and sounds that have a signature that is almost completely undetectable, is something that will probably find its way first in military applications and then ultimately in consumer, probably very high-end consumer, so all the Hamptonites or whatever, you know, not the Bladecopters flying overhead. But that's something where listen to the sound of our arguably crude machines and engines, and I think that those will basically be eliminated in the same way that today you hear an electric car have to actually put a sound signature on it because you otherwise can't hear it, and we'll see the same thing in the air. On a sail drone, as T2 mentioned, truly stunning achievements. I'm sure you've read the leadership

• 53:26Speaker 04

  books about Shackleton, and these were the guys with pure just good intentions, no interest in being involved in defense or military, but they did the first autonomous circumnavigation of Antarctica, and that was just for scientific data collection. They mapped the Arctic. Now, both of those things, very geopolitically relevant. Russia does not want us mapping the Arctic. They do not want us circumnavigating Antarctica. These guys did 196 days, 12,000 nautical miles.

• 53:51Speaker 04

  50-foot rogue waves, 80 mile an hour winds, collisions with icebergs, sea lions that hijack this thing. Video footage imagery is pretty crazy. They navigated the Bering Strait, talking about Russia. Five-month, 8,000 nautical mile mission, leaving from San Francisco, going to the Bering Sea, totally autonomous and almost perilously coming close. The fastest Atlantic crossing by an autonomous vehicle and the first ever in both directions. That was 3,400 nautical miles in just under 68 days. And you think about having a fleet of these. Today, they're bright red, but you know, tomorrow they won't be. Helping with some of the geopolitically sensitive things. You think about China, whether it's their Coast Guard becoming more militarized, building islands off their coast, cutting off sea lanes,

• 54:35Speaker 04

  territorial disputes, illegal fishing and pollution concerns that are affecting another 200 million Asian population. Their own growing navy presence. You're going to have these things for both peacetime and wartime mode. Peacetime, they're going to be more geared towards scientific observation, detecting and looking for signals and patterns. And then wartime, it's going to be trying to anticipate signals for hypersonics and cruise missiles and seabed sabotage. We've got a lot of fiber optic cables in that vicinity. That needs to be protected along with some critical comms infrastructure. So on the drone front, I agree with you too. It's not just air, it's sea and of course, space, right? I mean, satellites are effectively autonomous systems. Space is a stunning frontier. You've got this amazing phenomenon, if you wanted a historic analogy in space, to the railroads.

• 55:18Speaker 04

  We did it 130, 150 years ago, where if you were to take the tracks horizontally laid down in our pioneering spirit going west and just flip those vertically and make them disappear, that's the first leg of this. The first is the launch capabilities. When the space shuttle was in operation, it could launch a payload of 27,000 kilograms, give or take, billion and a half dollars. Okay, 50K per kilogram. Now you've got SpaceX Falcon 9 doing a rocket to the ISS and it's about 3K per kilogram. And so that's just going to keep directional error of progress. It's going to keep getting cheaper and cheaper. We've got relativity in our portfolio. You've got Rocket Lab, you've got Blue Origin, you've got SpaceX. So those are the railroads.

• 55:55Speaker 03

  Flip those things vertically, boom, we're going up to space. Then the second is, what's the infrastructure that follows that? It's going to be communications. Same way as like you had the telecommunication replacing the Pony Express all along the lines of the railroad because it was easy to get the infrastructure and the maintenance along those same routes. And so you're going to have the same sort of thing, but instead now again, invisible satellite communication going to low earth orbit, launching thousands upon thousands of competing constellations. That of course means on the defense side, you're going to have people that are developing both kinetic interference, RF, laser weapons to be able to take these things out. Some already have those capabilities. Right now, there's about 6,000 satellites above that are at least known. 60% of them are defunct, done, they don't serve any purpose, they're space junk. A lot of people, including China, that have been showing that they could remove space

• 56:39Speaker 03

  junk, which is really a euphemism for we could blow your stuff out of the space. 40% of those are operational, so maybe you've got 2,500 operational satellites. We talked earlier about laser capability from the ground to be able to disrupt those things, whether it's a communication signal or an imaging capability. China, interestingly in space, wasn't really talked about a year ago or so, maybe sooner. They visited the dark side of the moon. It was like a Pink Floyd phenomenon. There will be lunar bases, the ability to have assets, refueling, material, listening bases. It's like something straight out of a James Bond, Moonraker kind of thing. It's very real. The next thing after that is thinking about privatization of space stations. So you had Mir, Mir one, Mir two, which was planned ISS today, modular units that basically

• 57:22Speaker 03

  go on and create the physical platform, literally for research, observation, different missions that people have. You're going to see private companies launching things like that. And then it's going to be jurisdictional questions over who gets to govern those things. We just funded a company with founders fund, some tremendous people out of SpaceX that were responsible for Dragon One and Falcon and that are basically focused on one of the craziest things, which is manufacturing things in space.

• 57:47Patrick O'Shaughnessy?

  This is Varda.

• 57:48Speaker 03

  Yes. And so Delian had the vision of this, pulled together incredible team, really fascinating people, very high risk. And it's really thinking about what kinds of things would you want to manufacture off earth that have very high dollar Per value or per mass or kilogram value in a market, but are very low mass. It's much more aligned with the Bezos model of why don't we take the dull, dirty, dangerous stuff off planet and send it up into space as opposed to let's go populate Mars, which to me feels like Fire Festival 2025. Mars is not that attractive. Lots of cool things will come in our pursuit to go to Mars. It's stunning watching what NASA has done and what Elon even is doing. But I think low Earth orbit and just everything that's happening around our own planet is going to produce some incredible innovations in the entire

• 58:33Speaker 03

  space ecosystem. So every aspect of that, if you have a factory in space that's making something, and that could be pharmaceuticals, it could be fiber optic cables, it could be novel materials that only can be made cheaply in low Earth, low gravity or no gravity space, then you want to think about other means of transporting that stuff. And you're going to have propulsion systems and positioning systems. You're going to have satellite repair robotics, which today you can on the ground, watch some of these companies that are able to basically lock on visually using computer vision and machine learning to find an object, lock on to it, and then basically do some small repair mission. And so whether that's replacing a solar cell or a panel, whether that's refueling, that entire ecosystem is going to evolve very much like the railroad industry, classic sort of Carlotta Perez.

• 59:16Patrick O'Shaughnessy?

  Tony, what's your take through your unique lens on everything that's happening in space, especially both from a military standpoint and also based on what you've seen through the portfolio at Lux?

• 59:26Speaker 02

  Patrick, I've actually been public when people say what keeps you up at night. Space is the one domain that I am very concerned how far behind we are. And without getting into classified levels of discussion, Josh touched on some of the anecdotal things that have been trotted out for public consumption. That's the tip of the iceberg. Meanwhile, we debate whether or not we want to weaponize space. Genie's out of the bottle, ship has sailed, use whatever analogy you want to. So we're in a little bit of dreamy land there that we need to catch up. If I could come back to reattack, though, I don't want your audience to wander away muttering that when I say I think unmanned everything challenged me what shouldn't be unmanned. I can imagine some of them will immediately go to the Skynet discussion. Here we go. Borg's taken over and we've lost all control. That discussion

• 1:00:09Speaker 02

  has to happen. But I think you have to press all the way up to the very tenuous edge of that where we may have complete disagreement. We've had the luxury the last 20 years, operating in an environment where we haven't had a lot of compelling imminent threat type of situations. But your future adversaries, the decision-making is going to be so much more impressed and challenged than it is right now, that I think we humans need that assistance. We need to sort through the madness and the disinformation, misinformation, target identification, et cetera, et cetera. We need to function in conjunction with the laws of armed warfare, which is necessity, distinction, proportionality, all those things that we could sit back and have a nice leisurely conversation, or I could talk about situations where that's going to be several decisions a minute that you're going to have to make.

• 1:00:53Speaker 02

  We absolutely need to be enabled from an AI standpoint. Here's the interesting discussion that when I'm allowed, I'll press into this environment, that if you acknowledge that guys like Putin are saying, he who gets AI first is, with the most is wins, he's absolutely intent on gaining the advantage here. But tied to nuclear deterrence, if the day comes when the lights are out, the satellites are out, the communications is out, I think you want a capability that is still in the footlocker, that is AI-enabled, I can still come find you and kill you, don't do this. It is the deterrence, it's that mutually assured destruction aspect that will, again, mitigate command and control infrastructure being knocked out is probably the first couple shots fired.

• 1:01:38Speaker 04

  By the way, just to put a fine point to this, if you take the best of science fiction, where you think about EMP pulse and power's gone, you know, what survived, like Ghost Fleet, was the analog ship, the one that was disconnected from the network, that was advantaged in a sense by being previously disadvantaged. But what T2 is talking about here is if you have a perfect simulation, the perfect model of a target, where you need to go in a total GPS denied environment, the GPS, remember, triangulation satellites, you knock out the satellites, you got no GPS. But if you have something that whether it's visually identifying the real world, having run and been trained off of the simulation, and you can then go from point A to point B. And that your adversary knows that you can do that and you have that capability,

• 1:02:20Speaker 04

  even if the power is out. That's a really powerful mutually assured destruction deterrent.

• 1:02:24Speaker 02

  To that point, I need to work on being more eloquent in this discussion because if folks can hang with me to the bitter end, what I'm arguing for is this might be the ultimate deterrent. It actually might prove out the futility of future nation on nation, state on state warfare. Let's stop doing this. Let's stop pursuing this madness that you don't know what I have, but it's not human. It's AI enabled and it'll come get retribution down the road. It almost borders on deeply philosophical, but it's a practical discussion we need to have sooner rather than later because there's too many arguments already coming up on why we should never go down this road. And I think it's foolhardy.

• 1:03:03Patrick O'Shaughnessy?

  You both have mentioned simulation a few different times. It seems like kind of an interesting weird side piece that fits into a lot of these different technologies. It certainly fits into running games or whatever the case may be. What is the cutting edge of simulation that the audience may find interesting? What's the technology look like there?

• 1:03:20Speaker 04

  I'll give you a few and then T2, maybe you can give a few, including even the actual practical simulation of something like a Bin Laden raid. But the cutting edge started with autonomous vehicles and basically repurposing GPUs and gaming engines so that you could model the real world. That has since evolved in a very serious way to really do first principles physics to be able to not just say we're going to have the static, rectilinear world, but we're going to be able to actually intuit whatever shape, shadows, surfaces we're encountering that we may never encountered. That is paired with a big movement in something that we're calling synthetic data, which is you don't need to actually train the model on data that you're collecting from sensors, but you can actually generate all kinds of variations of that data. Now for a drone or for a satellite or even for a ship, it might be an aqueous simulation, it might be a topographic or geographic simulation,

• 1:04:04Speaker 04

  but you're basically generating examples of a world that doesn't really exist, totally fictional world, training it so that when it does encounter that, it's encountered more possible edge cases. The philosophical point here is if you think about where most of the systems have failed historically when they were trained on video games, it was quite literally on the edge cases. It was the unusual fat tail far thing that was improbable to happen. Here, if you're basically training for the edge cases, it flips the value for for the simulation. So companies like Applied Intuition, which is us and Andreessen, a handful of others have funded, run by incredible guy, Kassar Yunus, is really taking that approach. He's starting with automotive, but I suspect they'll go into other fields like we're talking about here.

• 1:04:43Speaker 04

  And I think that that's important because philosophically also, I'm obsessed at the moment with this combination of sensors that can capture the real world with ever higher fidelity, with ever higher resolution, whether that's inside the body, from space, on ground, at sea, whatever it is. And then basically ingest that compared to a model that is forecasting what it's going to see. And as soon as model encounters what's been sensed, it's then at this compute layer where it's either updating its model in sort of this Bayesian way, the same way that we encounter each other and change our beliefs, or it's moving the system to that state of the world. And I just think the speed at which that is happening is going to blow people away. And I think it ties very nicely into what T2 is talking about, ultimately having this as a system of deterrence.

• 1:05:24Speaker 04

  Because the system will be that good to be able to, in the absence of power and connectivity, be able to find a target.

• 1:05:30Speaker 02

  From my experience, when we've had the opportunity, every time we've had the opportunity, we rehearse to non-technical term, a Nats as detail. What might happen on target, we'll throw all sort of permutations at it, but it'll be a full up rehearsal. It'll be everything live fire, nothing chalked off to simulation, everything is realistically rehearsed as possible. The inside advantage, I think, simulation and the simulation capabilities that are developed now and think of gaming and all, is when they don't have the time to build out a full scale mockup and do all these things, you literally could have all the members of a team up on simulation going through reps at the speed of failure, at the speed of, okay, recock it, go again, again, again, okay, throw this variation into it.

• 1:06:15Speaker 02

  And the level, the degree, the sophistication of the simulation, I'm not a gamer. I wish I had more time in my life to get into gaming. I can understand the fascination with it, but one time in my office, just as an example. One of our SEALs had taken a program, a gaming program, brought in some AR aspects to it, let me put on the sights and play with it. I would have played with that for the next 20 hours if given the advantage because it was so realistic of directing combat operations and oh no, I screwed it up. Recock, let's do it again, play it from the beginning. It's just incredibly powerful for, again, anything I could conceive of doing from a, either from a national security or from a law enforcement standpoint. But it's that crossover from gaming that too many of my people my age disparages a total

• 1:06:59Speaker 02

  waste of time to actually some huge applications if you can bring it into practical application.

• 1:07:05Speaker 04

  T2 and I were talking about this the other day, but he knows my love for science fiction. He was invoking the Tom Cruise movie Edge of Tomorrow. The practitioner who's basically at war is almost like a video game player where he does it, he dies, he starts over again. And in a sense, that's what you get to do in this simulated environment, but without dying.

• 1:07:22Patrick O'Shaughnessy?

  So our last topic is semiconductors. I've left it for last because I think it is sort of a unifier here that we've talked a lot about machine learning and automation and all these information warfare, cyber warfare, et cetera. Underneath all of these, I spend a lot of my time in machine learning, is chips. Where we began the conversation with Fairchild and Shockley and the origins of the intersection of military and Silicon Valley. Semiconductors are at a fascinating point because so much of their fabrication happens overseas in Taiwan. Intel has very visibly and famously sort of lagged behind. What is the cutting edge here, Josh? What do you think the most important thing for us to know about and consider as we look to the future of semiconductors?

• 1:08:02Speaker 04

  I'll give you the punchline, which is chiplets. And there's a bunch of winners, I think, in the interstitial period in software and hardware as this competitive, basically reshoring of semiconductors happens. But you're right, 75% of chips are made in Asia. There's basically two companies, TSMC and Samsung, that can manufacture with a 7 nanometer or below node and do it in high volume. Both those companies, obviously, Asia. You've got a huge risk that companies are basically automated. Away and gone entirely fabulous. So they've turned what would have been an internally capex decision into an opex one and shifted that over forty years, more or less. TSMC has got thirty percent of the market share in everything below forty nanometers,

• 1:08:43Speaker 04

  fifty billion in revenue, and then you've got UMC and SMIC and Samsung and global foundries that are all sort of high single-digit or low double-digit market share. But you have probably with TSMC, as you noted, the most geographically or geopolitically important company in the most geopolitically sensitive place that you can imagine. And we think about it as a low possibility, but it's certainly a probability of China making a move on Taiwan. They've been pretty overt that they believe it's theirs. And so, yeah, Intel, I think that they've got to get in the game. I think you could see a combination of activism pushing them to manufacture other people's chips and possibly government or US industry consortium that pushes for it because the US needs the capacity. Sure, TSMC, Intel wrote a note to the government, TSMC said, we're going to do a plant. The government said, we'll give you money for it in Arizona, but that at best will

• 1:09:28Speaker 04

  produce about twenty thousand wafers a month. And you compare that to twelve million, it quite literally is analogous to like a piece of dust on a chip, you know, in one of their fab facilities. Congress passed chips, which is, you know, creating helpful incentives to produce semis, fifteen billion dollars. And then you've got the American foundries program, that's another twenty-five billion. We have today one pure play semi foundry, which is in Minnesota. It basically produces next to nothing and strictly dedicated to defense. So I think there's going to be winners, losers and disruptors. When you have a new fab that costs fifteen to twenty billion dollars to build because of the semi cap equipment, the scientific instrument, the metrology, the process handling, the clean rooms that have to be done so that you can't even have a speck of dust in a square meter of space. Upgrading the facilities costs another few billion dollars. Designing the

• 1:10:13Speaker 04

  chips themselves is now hitting close to half a billion dollars. So who are the beneficiaries and are likely to be the beneficiaries as you have renewed demand? You're going to have on the software side, cadence and synopsis, both today, forty billion dollar market cap companies, they'll continue to crush it. On the hardware side, you've got ASML, that's now $250 billion. You've got Lam Research, that's going to be really at the forefront of doing 3D chip stacking, which I think is important. KLA, TenCore, Applied, basically all the semi-cap equipment companies that are going to continue to crush it. You've got a German company, interestingly, called Trump, Trump with an F at the end. That is the sole manufacturer of one of the key lasers that's used in the EUV machines that ASML makes. And so even when you think about supply chain vulnerability for these things, it's very, very concentrated industry and that's got to change.

• 1:10:56Speaker 04

  My partner Shaheen has had the view, and he's been pounding the table, that we revisit basically the obsession that we have with cheap transistors and said, think about, how do you make them cheap to design and deliver? So these two curves, if you look at the transistor cost and accessibility are diverging. And we love creating new codes. There's areas that other people think aren't that sexy. He's convinced, and he's convinced me, that the key is going to be instead of having a monolithic system on a chip, which is basically what's done today. And then the other extreme where you have an integrated circuit that's on a PCB, on a printed circuit board, you're going to have this middle ground, which is basically going to be these chiplets. Just like everything else we're talking about, from drones to chip themselves, everything became modular and distributed.

• 1:11:36Speaker 04

  These chiplets are basically going to be higher yield, lower quality than some complete integrated circuit on a monolithic system on a chip, but are basically going to allow people to more cheaply design and manufacture chips. Today, Intel in Oregon and Arizona really is only one of three companies, TSMC and Samsung being the other, that can do these high-end chiplets. I think you're going to see a handful of companies that basically become the next TSMC, but in this chiplet technology. So that's something that I think could be quite disruptive. It's going to take time, but it could be like what TSMC was 20 years ago. One thing we felt important to talk about was just the moral dimension of defense. And because this was something that is probably for our partnership, which is a very ethnically and cognitively diverse firm,

• 1:12:19Speaker 04

  was something that was very controversial, getting involved in the idea of funding defense. And even though a lot of people have forgotten that the history of Silicon Valley started with these roots in defense.

• 1:12:28Speaker 03

  If you look around and say, one of my favorite questions, of course, that you know I love to ask is what sucks. Often what sucks is human nature. It's the grudges, it's the hostilities, it's the humiliations, the delusions of grandeur, the maligned ambitions, the tribal red lines that create an us versus them, irreconcilable differences, the injustices, the atrocities, the conflicts, the rivalries, the revanchist China and Russia, all of which have the sad reality, which is that in reality, there are bad actors. Bad actors do bad actions and they cause human suffering. And if you have indifference to that, as they say, indifference to injustices, this pays the road to hell. You've got North Korea, China, Russia, Iran, all with closed societies, information suppression, human rights atrocities, corruption,

• 1:13:10Speaker 03

  and they're aggressively using technology to take territory, to interfere in elections, to sow seeds of civil unrest, to build islands, transform, terraform the ocean, to censor, surveil, suppress, murder, dissidents, minorities. Ideally, in a beautiful world, sanctions and diplomacy and economic and international pressure affect the outcome to get these people to act well and kind and benevolent. But when that fails, as Clausewitz said, that force is politics by other means. Or as one of the special operators that was hosting me at T2's push was, said, "In God we trust, all others we recon." I think there are two moral things that give me comfort, that we're on the side of good

• 1:13:52Speaker 03

  in investing in technologies and people who are developing and delivering technologies. One is about precision, technological precision and moral precision. I think the greater your technological precision, the greater your moral precision. We went from hand-to-hand combat, which was one-to-one, to a nuclear bomb at the other extreme, which was from one to many. And I think we've returned to this precision targeting where it's a moral good if you can discriminate between a good guy with a pickaxe that is going home from the farm to his family, and a bad guy with an AK-47 that's going to a schoolhouse to shoot it up. So this idea of like deterrence by denial. A year ago, you had the Iranian military leader Soleimani, who was targeted with precision. I think 10 people in that immediate vicinity were killed, or less. I think there were 55 people that were killed

• 1:14:36Speaker 03

  at his funeral a week later in a stampede. But the second thing, in addition to the technological precision, that I think gives the greater moral precision, Is a sense of moral leadership that technologies get invented often before the standards that govern them do. This was true of nuclear, it was true of chemical, biological, satellites, missiles. And so the powers that produce them, they are the ones that ultimately get to lead and define as others follow behind. And you've got a situation now where it's observable. China is lobbying the UN to define standards for facial recognition, which they have already shipped to dozens of countries. You have to make a moral decision. Is it better to act with indifference and just let that kind of stuff happen? Or do you want to take a moral leadership position at being in the forefront of helping to develop these technologies, but also lead the very public discussion so that they're

• 1:15:21Speaker 03

  used in the best way possible?

• 1:15:23Patrick O'Shaughnessy?

  TT, you've mentioned already very anti-war, yet in favor of creating the can of whip ass as a deterrent to ensure that people that don't need to die, don't. What's your view on this moral lens through which to view the investment in and development of military technologies?

• 1:15:39Speaker 02

  I'd like to think I'm practical. I was a military professional for four decades. My sons have both served. I know the anxiety of having your kids in combat, so I've got skin in the game. That's really what drives my logic, my rationale for, I hope we know what we're getting into. I hope when we're applying this, it's the last resort. But I do think practically you need to have that capability to avoid war for war ultimately, and then if necessary to deal with it. Josh mentioned on the morality of this, I think the missed opportunity with the whole Google episode, I remember being in Pentagon, talking to the Secretary of Defense at the time, and he was giving a big hand wave for state of affairs with the private sector. And I said, whoa, this Google thing just happened. What do you think of that? Oh, no, no worries there.

• 1:16:23Speaker 02

  And while Google now has come back fully in the game and said, hey, we had our epiphany internally, we want to be players here, specifically with Eric Schmidt and others. The missed opportunity I think we had was to Josh's point that, hey, America and you companies that are associated with this, here's what we're in pursuit of. The most pristine, precise application of military power ever envisioned, zero collateral damage. And oh, by the way, we've been trying to do that all along. We don't get a lot of credit for it, but we kept a very rigorous log of our successes and failures, and we were succeeding 99 plus percent of the time in terms of the target identified, the individual we were searching for, and zero collateral damage. On a couple of occasions, we had misplayed and we would take them as failures that we had collateral

• 1:17:08Speaker 02

  damage or we missed target for whatever reason. But we're pursuing this extraordinary objective inside this idea of sometimes you have to go to war. And so to have the technology that pertains to that is critical. Or we could just go back to carpet bombing or other techniques that people advocated for that we were in the military profession, we were absolutely opposed. We don't need carpet bombing, much like we didn't need harsh interrogation techniques. We had better ways to crack that than going old school and techniques that are not in keeping with our moral standards.

• 1:17:38Speaker 04

  When I was in these theaters, looking in some of these operation centers, there was something in there that I was shocked to see, totally surprised. And it was like my naivete, like the scales falling from my eyes. It wasn't the cutting edge lasers or the drones or, you know, the straight out of the movie operation center with all the screens. It was lawyers. And I'm sitting there watching as one guy is flying drones and there's lawyers looking over, basically documenting and authorizing and making sure that he or she is doing what they ought to be doing. And I do think that that's one of the great technologies that we have, which is the sort of rule of law, the rules of engagement, the democracy that has built that. And I think it's not celebrated enough.

• 1:18:19Speaker 02

  If I could expand on that, when I call those situations, God calls, much like a surgeon cracking a chest and all, when people have asked me the toughest decisions I had to make in the military, one was putting people in harm's way. And too often that led to casualties and sometimes to folks being killed in action. That will weigh on me to the end of my days. And I have presented flags to wives and mothers where I made that decision. I literally sought those opportunities to say, okay, if you want to look for who decided to send that element into combat for that raid, that operation, I did this. This is what we were thinking. This is what we're trying to do. Blame me. And they never do. The amazing part is they never rear up and blame you. They knew that their husband or spouse was doing what they love to do in the profession that they just relished.

• 1:19:03Speaker 02

  But the other one, the toughest decision, or what I call God calls, and I probably have made a couple thousand God calls where from a remote location. Sometimes halfway around the world, I have said, "Take that shot." That is whoever we've been looking for, we've been watching him for the last 5, 10, 15, 30, sometimes months, to make sure it was the right guy, "Take that shot." And every time, I had that little gremlin on my shoulder, thinking, "Thomas, I hope you're making the right call." And I would tell our commanders, "The day you lose that gremlin, that little creeping doubt, you probably should check out of the community because you're a soulless bastard who's lacking a little bit of humanity." But interestingly, inside those calls, and I don't know that I've ever spoken about this publicly, but to the lawyer point that Josh mentioned, at the height of ISIS,

• 1:19:48Speaker 02

  when literally I had the FBI Director James calling me, saying, "Can you take out Abu X, who is calling back to New Jersey actively right now, fomenting more plots that we can't keep up with?" And he knew we had him in our sights, that we were watching him move around some environment. We were going after a whole network, we weren't just going after individuals. Inside that scenario, I was given by our lawyers, and this is, it's hard to describe the discussions or wrapped in this, but I had what was called an NCV, a noncombatant value of 10. And that meant when I thought the time was right, that we had the individual that we were targeting, I could accept a noncombatant valuation of 10 people in that shot group. I could accept the death of 10 people.

• 1:20:29Speaker 02

  I waved that one time out of thousands of shots, and it was for an individual who was particularly bad, and we needed him gone, he was causing a lot of problems. But he would go from his high-rise apartment, a lot of people, to a marketplace, every day, that was his pattern of life. And the only opportunity to kill him was in his taxi ride between the two locations. And so for five days or so, we watched him take that ride, and I couldn't tell if the taxi driver was one of his teammates, confidants, or just a hapless taxi driver who he happened to hook up with. And on a fateful day, because we just couldn't get a better opportunity, I said, "Take that shot." And I'll live with that forever. I mean, I hope that that wasn't an innocent soul. I hope that was one of his contemporaries, no way, no. But that's the kind of...

• 1:21:13Speaker 02

  Warfare that we've had for two decades now.

• 1:21:17Speaker 04

  Patrick, that trivializes almost every consequential decision that we make on a daily or weekly or monthly or yearly basis.

• 1:21:25Patrick O'Shaughnessy?

  It's incredible, right? The opportunity that I've had to talk to Josh means, Tony, that I get to ask you my two traditional closing questions. I'll tailor one to you specifically and then ask you the one I ask of everybody. The first is for me to point out, like, clearly, none of this is easy. It's incredibly far from easy. It's incredibly hard. You've had the opportunity to work with, I'm sure, some of the most exceptional, not just soldiers, but also leaders. What do the most exceptional of those that you've worked with share in common? As you think about a great soldier, generically speaking, or the average of the great soldiers that you work with, what are the qualities that allow them to stand apart that made you proud as their leader?

• 1:22:02Speaker 02

  Every leadership venue, every book, all the professional attempts to categorize leaders, usually harps on the ability to listen. I don't think people still listen to that, one of the most critical characteristics of really, really good leaders, and more importantly, to listen and adjust. And I usually cite Bill McRaven as just an incredible mentor, but an example in that regard, where you literally could walk into his office, shut the door, and I was his deputy for Osama bin Laden raid, I worked with him for years, a tremendous professional and always very positive, but you could walk in their office, shut the door, and essentially say, "The emperor has no clothes on right now. You're not seeing this," or "You're missing something," or "Your message is being missed and through," whatever.

• 1:22:43Speaker 02

  And you might get a little pushback, he was a human being, after all, but invariably, he would digest the constructive criticism you were giving him. And amazingly, here's a guy at the height of his game now, as an international celebrity, he often would come out, whether it was me or somebody else who'd come talk to him and say, "Hey, I'm seeing things differently now. So-and-so talked to me, I was missing this, I was a little bit blinded by my own biases, I'm going to acknowledge we were on the wrong path and we're going to change it." And to me, that was just incredibly self-actualized, self-aware, and certainly, he lived that. The mantra that I tried, again, James Comey, before he had his implosion, to me, was an incredible public servant, and the FBI, really, I sensed, they really loved his leadership because he was a very humble guy.

• 1:23:28Speaker 02

  He talked about your organizational humility one day, and he said, "The longer I've been at this, the harder it is for me to come into a room and not think I have the answer before the question is even asked." But he said, I check that. I try and block that pre-existing condition out when I come in the room. And I don't know if it was him or somebody else that came up with this mantra that I try to play to myself because I suffer from the same challenge. Are you listening? Or are you just waiting to talk? And even today, while we're going, one of you would go down tangent. I'd be scribbling to say, oh, I want to pick up on that. But the problem with that is, are you listening? Are you so damn self-important that you think I've got the ultimate nugget that must get out here? So how you really wrestle through listening intently to understand the other guy's optic, the other guy, other gal's optic is, to me, the mark of a real leader.

• 1:24:14Patrick O'Shaughnessy?

  An incredibly hard skill that's very hard to cultivate, but very, very valuable. T2, this has been so much fun. Josh, thanks for doing this with us. I've learned so, so much, as I always do. A very unique conversation. I asked the same closing question of everybody as I referenced. That question, T2, is what is the kindest thing that anyone's ever done for you?

• 1:24:32Speaker 02

  I hate to admit that Josh might have warned me ahead of time. And I've been struggling with it ever since.

• 1:24:37Speaker 03

  That was the kindest thing. The kindest thing was Josh giving you the heads up.

• 1:24:42Speaker 02

  I've wrestled with it ever since he said, be prepared for this. I have been blessed by so many incredible mentors and my parents, all the way up to countless mentors and teammates. So I was going down that tangent, but actually, the more I thought about the kindest thing I would chalk up and not attribute it to one individual are the number of folks who forgave my transgressions, forgave my, my passion, my temperament, and allowed me to make mistakes and recover from them and move on. So it's a broader kind of hand wave for the kindest thing. I feel so very grateful that I was able to fumble through a lot of situations and figure it out ultimately, I hope, to a successful level. But that didn't happen without people saying, oh, boy, give him a little more rope. And/or they pulled

• 1:25:26Speaker 02

  me in and said, you could have screwed that up a little harder, but you might have had to try. But they, they then allowed me to recock and get back at it.

• 1:25:33Patrick O'Shaughnessy?

  Well, guys, my favorite discussions explore complicated topics and leave open 20 threads to go pull on. This one has done that in spades. I'm so appreciative of your time. Thanks so much. If you enjoyed this episode, check out joincolossus.com. There you'll find every episode of this podcast, complete with transcripts, show notes, and resources to keep learning. You can also sign up for our newsletter, Colossus Weekly, where we condense episodes to the big ideas, quotations, and more, as well as share the best content we find on the internet every week. [Music]