The Next Era of Warfare is Here

Ed Elson sits down with Brian Schimpf, co-founder and CEO of Anduril, to discuss how AI is transforming the defense industry and where it should, and shouldn't, be deployed. They also explore the growing threat posed by China, why we’re in such an unstable time right now, and what people get wrong about the defense industry. Learn more about your ad choices. Visit podcastchoices.com/adchoices

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

• 0:01Speaker 00

  This episode is brought to you by Google Chrome. You think you know a browser, but Gemini and Chrome, that's new. It can help you with practically anything on the web, like restoring a vintage motorcycle from a 50-page restoration blog, or finally break down that long article you've had open for weeks. Gemini and Chrome is here for it. Ready to make anything online make sense? There's no place like Chrome. Check responses set up required. Compatibility and availability varies 18 plus.

• 0:32Ed Elson?

  Welcome to the Prof G Markets Founder Series. I'm Ed Elson. For decades, the defense industry was dominated by a small group of legacy contractors, companies like Northrop Grumman, Lockheed Martin, and Boeing. They built the aircraft, missiles, and weapon systems that defined American defense. And for years, Silicon Valley largely stayed away. That is starting to change. A new generation of defense startups is challenging those incumbents, competing for Pentagon contracts with a software-first approach and building AI-powered systems designed for modern warfare. And their systems are being used today on battlefields in both Iran and Ukraine.

• 1:15Ed Elson?

  So we wanted to speak with one of the founders leading that transformation about how AI is reshaping the defense industry, where we should draw the line when it comes to automating warfare, and what it means to entrust America's national defense to a new generation of technology companies. Here's my conversation with Brian Schimpf, co-founder and CEO of Anduril. Brian, thank you so much for joining me on the show. It's great to see you.

• 1:44Speaker 02

  Thanks for having me on.

• 1:44Ed Elson?

  So you are the CEO and the co-founder of what I think people would agree is one of the more controversial startups in America. I eventually want to get to how you think about Anduril's role in national security, in geopolitics and technology. But before we do that, let's just rewind the clock to June of 2017. You and a handful of founders, including Palmer Lucky, who people may know as the founder of Oculus, you have an idea for a defense tech company. Tell us the origin story of Anduril.

• 2:23Speaker 02

  So several of the co-founders, so Matt Graham, Trey Stevens, we'd been longtime friends and had worked together for quite some time. And then Trey had left to go do investing, working at Founders Fund, looking for a defense company to invest in. And at the time, right, this was 2015, 2016. Nobody was touching defense in Silicon Valley. And so we'd been talking for years about doing this idea of, you know, bringing the best in Silicon Valley technology to the Pentagon. And, you know, it seemed like, you know, something that was, you know, some massive opportunity, massive impact on the mission side, and just nobody was willing to touch it.

• 3:07Speaker 02

  And so when Palmer was out of Facebook, he was like, all right, let's, let's go. And we'd gotten to know him over the years as well. And so it kind of, you know, was this very unique opportunity in terms of the team, the size, and the ambition of what we were trying to do. And, and the fact that just nobody would do it. It was just too controversial at the time was, actually, I think, a huge advantage for us in terms of being able to work on this problem.

• 3:36Ed Elson?

  Why did you guys want to do it? Why did you guys want to go to that place that many investors and technology founders didn't want to go to?

• 3:43Speaker 02

  So I'd spent probably about a decade working around the national security space. And when you, a big part of the motivation is when you meet these folks working on these problems, they are true believers in what they are doing. The mission is very visceral to them, very real. And providing these, you know, soldiers, sailors, airmen with the right capabilities just felt like something that, you know, the idea of just not doing it and saying, too bad, you know, like, you just get what you get, it just didn't make sense to me. And I think my other view of this has been, you know, the goal of the company is deterrence. The goal of the company is to not get into a conflict. So, you know, why do people get into these wars?

• 4:27Speaker 02

  Right? They, they think they're going to win. And the history of warfare is often, these things are, you know, very, whatever your political aims were at the beginning, it's often quite unsatisfying. You don't quite get where you wanted to go. And so military power, you know, the idea is you want to make it clear what the outcome of these conflicts will be. You want to make it clear that, you know, use of force probably will not succeed, that we want to provide our allies in the United States with the best capability possible, to make that very clear. So 2017, it was a very different time, right? We just had not had significant, large-scale conflict in a very long time. And so it was sort of hard for people to get their head around that this, you know,

• 5:11Speaker 02

  this could be an issue. Fast forward, you know, nine years, it's a different world, right? We've got multiple hot wars in Europe, or we've got, you know, kind of Russia, Ukraine. We've got everything going on in the Gulf, which has been persistent and, you know, will be for a long time, for better, for worse. India and Pakistan, Cambodia and Thailand, lots of, you know, kind of aggression in the South China Sea. Like, it's a very different time. And I think the understanding that hard power is a backstop for all the other peace and stability that you want is, I think, becoming more clear to folks.

• 5:46Ed Elson?

  I want to get to that in a moment, but just thinking about those sort of, those early years when you were just starting up. I mean, part of the big idea was we're going to take the Silicon Valley ethos and the Silicon Valley culture, and we're going to bring it to the national defense conversation. And I think that the, on the one hand, the great thing about that is that this is where all of the futuristic thinking is happening. This is where the technology is being built. On the other hand, the criticism of Silicon Valley has been this move fast and break things mentality that was, you know, popularized at Facebook, which a lot of people say kind of works because these legacy institutions, they move too slowly, they're too sluggish.

• 6:29Ed Elson?

  But when it comes to weapons, you know, lethal devices, some would argue that that's not something that we should be bringing that ethos and that culture and mentality to. What is your response to those concerns? And how did you think about that in the early days of Anduril?

• 6:48Speaker 02

  I think a lot of the, the meta lesson from Silicon Valley from the last 20 years has been going faster is more important than thinking. Right? You have relatively few decisions you can't iterate your way out of. And, you know, just the speed of learning trumps any sort of quality of thought you had up front. That that's just not true in certainly a hardware world, and especially in a defense world. So in a hardware world, you know, you make these decisions around what you're going to build, how it's designed. We get to ship a product that survives for 10, 15 years, turns on and works. It's got to work in just incredibly difficult conditions. And the cost of iteration in a hardware world is quite high, right? Both in terms of actual dollars out the door, but just timeline, right?

• 7:33Speaker 02

  Like, you know, if you've got parts that take three to six months of lead time, you don't get to, you know, that many iterations before you want to ship. And so the quality of thought, the foresight you have to have around these things, the level of engineering and analysis is quite different, right? And even as you extend that down into the software side, when you start talking about safety critical systems controlling an aircraft, it's a different type of coding. It's a different type of operating. And so we've tried to blend the cultures as, as effectively as we can. Now, one of the pieces is that being rigorous, being disciplined is not the same thing as going incredibly slow. Like, it's just, you can still do this efficiently, right? Like, Elon has proved this out in a number of different cases.

• 8:17Speaker 02

  You know, I think we've proved this out in a number of different cases, is that you can do that engineering quite rapidly. You can do your homework. You can really assess, you know, are these systems going to work? And have a rigorous, you know, kind of testing and evaluation process. But that doesn't have to be 10 years long, right? That can be, you know, kind of measured in a much shorter duration in months. And so we've, we've tried to blend the two cultures as effectively as we can. And I think we've done quite a good job with it. But, you know, we kind of reject the idea that this has to be a slow and lethargic industry.

• 8:53Ed Elson?

  Just so that everyone knows what kinds of products you guys are making and manufacturing. I mean, you started with surveillance systems, then you get into kind of autonomous software, underwater vehicles, drones. I mean, take us through like the evolution of Anduril's technology. And what is it that has made your products so compelling to clients like, you know, the Pentagon, Department of Defense, basically the government? What has been the timeline of that technology?

• 9:22Speaker 02

  So we started out working on a lot of things around border security. And this is one of the first areas we worked on where, when we started out, we believed that modern technology, particularly, you know, computer vision, sensor fusion, how you would network all these systems together, would give the ability to make what is effectively a long-range nest camera, right? Like, it tells you, hey, here is a person walking, or an animal, or a car, and gives that awareness to border security, border patrol officers, so they know what is going on. And this has been used, you know, we have maybe two-thirds of the southern border covered now. It's been extensively deployed. It's working quite well. And it was just providing that awareness of what is actually happening.

• 10:04Speaker 02

  You know, we've had a huge amount of support on this, you know, over the years. And, you know, the, from there, we extended into counter drone technology. So this was things like, you know, great, we've got this technology that can detect things on the ground. How do we upgrade the radar, upgrade the cameras, add in some additional sensors? So we can, you know, very robustly identify and track any drone incursions that are happening. And then it got to how do we defeat those? So we worked on a variety of jamming systems and surface to air missiles. So we have, you know, both have low end versions of this with our Anvil system, which deal with, you know, kind of quadcopter threats through to higher end versions that deal with, you know,

• 10:47Speaker 02

  some of the Iranian drones you're seeing today. And then we've really expanded, you know, from there, it was a lot of autonomous platforms. So this was everything from smaller drones into, you know, we did a co-development program with the Royal Australian Navy, make a school bus sized autonomous submarine. We won a competition to do a loyal wingman fighter jet. So this is something we, you know, beat out Lockheed, Northrop and Boeing. So us and General Automics are building the Air Force's next generation autonomous loyal wingman. It's incredibly cool project going really, really well. That was kind of a turning point for us where then we're proven on these high end programs. We could design and build aircraft. We could do the autonomy software to power it. You know, we've built up a number of sensors over time.

• 11:32Speaker 02

  And since then, we've seen a huge expansion in what we're doing. Everything from space through to, you know, a very large portfolio of missiles and a variety of weapons, which, you know, I think was timed with the realization of some of the production challenges that are in the existing industrial base. We really just kind of expanded out year over year on the sets of problems we're working on. And, and I think, you know, there's a couple of cross cutting things. So one is from that software layer, we've really thought about what does the future of this look like? You are going to have thousands of systems on the battlefield, be it sensors, surveillance drones, strike munitions, soldiers, you name it.

• 12:15Speaker 02

  The battlefield in the future is much more distributed, much more complex, with a huge amount of information flowing in. So we built our lattice software to network everything together, to fuse all that information, to apply AI and machine learning at the edge. And that's, that's worked incredibly well. So now when we start a new program, you can bring to bear a huge suite of sophisticated technologies that make these systems very, very smart. And I think the second part of this is we've really focused by necessity on just execution and delivery. And I think one of the most scarce things, really in any industry, but especially in defense is you just do what you say you're going to do, like actually just delivering and doing what you said on time, on budget, that's quite rare.

• 13:00Speaker 02

  And we have a track record of standing behind that. When we sign up for something, we make it work, we make it go. And I think that, that reputation has, has served us well and our pattern of delivering very well has, has really what has accelerated us over the years. And now we're moving into a phase where we've won all these programs, we've built them all, built all these systems, we're really seeing, you know, massive ramp in production and manufacturing scale. And that's, that's the sort of current era we're entering into.

• 13:31Ed Elson?

  Just looking at the financials today, you did $2.2 billion in revenue last year, targeting $4.3 billion this year, so almost doubling. And as you say, as you said earlier, this is coinciding with a very different and seemingly more unstable world where we have, you know, an increase in conflict in the Middle East, in Israel, in Iran, we have the conflict in Ukraine. And it does seem as though, you know, when the world becomes less stable, Andorl's business improves. And so I'd be curious to hear how you think about this dynamic. Does it concern you? Does it create, I don't know, some personal conflicts and business conflicts

• 14:16Ed Elson?

  that you kind of win when the world gets worse in some ways?

• 14:22Speaker 02

  Well, I think the question is how do you stabilize the world? And, uh, you know, from our perspective, you know, you, you have a lot of different trends occurring. You know, one, there's a technology change, right? So you've got the ability for nations, you know, historically making like a cruise missile was some, or ballistic missile, that was something very few nation states can do. The degree to which that has proliferated is massive, right? You see what Iran has done, the number of other nations who have access to this technology, it's, you know, highly destabilizing. You've got the ability to do ubiquitous space based surveillance at a relatively low price point, right? And so nations are able to understand everything that's going on. And, you know, obviously you've seen with Ukraine, the rise in drone warfare

• 15:04Speaker 02

  and sort of these, you know, smart systems makes it very, very dangerous time, right? So the technology shift has radically shifted warfare. Adversaries are going to see that as an advantage while our allies have not yet caught up, don't know how to defend it. And then the other side of this is you have a shift in US posture, where for a very long time, the US was so dominant, so clearly ahead on military technology, that the idea that you could even try something, you know, combined with a fairly interventionist US policy, meant that if anyone started conflicts, the US would come in, stabilize the system and say, no, we are not doing this, right? And so there was sort of this Pax Americana period was a very long time.

• 15:48Speaker 02

  We, we relied on it in all sorts of subtle ways that you're starting to see erode. And like, I think people forget that before World War II, you couldn't ship anything on the high seas. It was just piracy, it was madness. The US Navy and the allied navies stabilized the system to give us this period of global trade and prosperity that we've all been benefiting from. So the question with this is not, you know, sort of, uh, you know, are we profiteering off the war side? It is about stabilizing the world order so that our allies have the right capabilities to deter a conflict, right? So we just did a weapons deal with, with Poland to provide them with strike capabilities. They're not going to shoot first, right?

• 16:28Speaker 02

  Like they're not going to antagonize Russia, but then being unprepared to counter a Russian attack? That seems like it would encourage Putin to attack more. And so you just got to make the consequence of these, you know, aggressive actions very, very clear. And our belief is everyone in the world is wrestling with this problem right now. How do they stabilize? How do they make clear to their neighbors that these attacks won't work? How do they build the right defensive capabilities as well as the right, you know, threat of offensive capabilities that will cause everyone to not attempt belligerent action as, you know, thinking it might work?

• 17:08Ed Elson?

  I'd be curious to get your views on what you think changed? Like how we went from this period of sort of relative stability to now what actually Jamie Dimon has recently come out and said is the most unstable period the world has seen since World War II? That was his view. One, do you agree with that? And, and two, if so, what has been the difference maker? Is it a political problem? Is it a technology problem? Why are we living in such an unstable world?

• 17:40Speaker 02

  I do agree, when you just look at it from any dimension, the number of regional conflicts, you know, the number of simultaneous threats going on, this is very different, right? And it is, you have to look all the way back to around World War One period to find this rate of regional conflicts. So I do think it is a very precarious period in time. You know, the reasons for this are sort of hard to say. My, my best thesis on this is I think it is the combination of the technology shift with the political shift, but I suspect it is probably more skewed towards the political shift,

• 18:19Speaker 02

  which is, you know, Russia both expected that they would, I think they underestimated the technology change when they attacked Ukraine, right? Like everyone, New York Times, everyone believed that Russia was going to roll through Kiev in three days, right? Like it was headline, that was the consensus. So I think they underestimated the technology shift here on the sort of defense side. But the political side, I think they believed that the West would not have the appetite to intervene. And I think this was a combination of US posture, the, um, where kind of Europe and NATO

• 18:58Speaker 02

  had gotten very comfortable, very believing that these conflicts weren't going to occur, had under invested in defense for a long time and had, had truly become quite reliant on the US in this regard. And so I think, you know, most nations, because they were able to rely on the US for so long, had atrophied their defense apparatus. And I do think that creates the conditions where, you know, a more aggressive and bellicose neighbor can take strategies to undermine their neighbors where they, they want to for their political ends. With, you know, and the consequences don't seem that severe. And so I, I think that's probably the, the biggest shift that has occurred, which is, you know,

• 19:43Speaker 02

  the, the belief that they can succeed at these things or that through, you know, military or, you know, covert action, they can accomplish, they can undermine the concept of NATO. They can tear lines into, you know, tear seams into, you know, kind of the allied construct. You know, they've done doing this in the information space with, with no consequence, right? By the way, no consequence for a very long time. And now are, are pushing the limits of what is possible on the military side.

• 20:13Ed Elson?

  What is possible at this point? Because we're now on this frontier of drone technology, which seems to be playing an outsized role on the global stage at this point. I hear about it all the time, autonomous weapons and of course AI, artificial intelligence. I mean, what are we contending with here? What does the next era of warfare actually look like? And what should we be worried about to that end?

• 20:45Speaker 02

  There's a lot of different dimensions to this and there's a lot of ways to group it. You know, you've kind of got, when you look at Ukraine and Russia, the small drones were largely changing what the, you know, kind of assault, counter assault. So like sort of for that military infantry, you know, kind of army infantry sort of scenario.

• 21:03Speaker 02

  That that's a world that not many people want to even imagine right now. Right. And so I think the the reality is it's quite clear that with kind of short range drones, the efficacy of sort of a military invasion, like an army invasion is is quite low, right? Like for for a well defended adversary. And the cost of building that defense isn't isn't that high. So I think that's like dramatically changed the equation where if like, you know, historically, it was sort of the rule of thumb was three to one, you know, on the attack side to the defender's side in terms of manpower and equipment, you probably need now like 100 to one, right? And it's sort of just so costly and so obviously costly that was a strategy that maybe sort of closed for for quite a while.

• 21:47Speaker 02

  So then, you know, what what we've been seeing is a lot more of what, you know, I would sort of call like long range strike. So this is the ability to use missiles to inflict a level of, you know, destruction on your adversary. And what are they targeting? A lot of the theory before was sort of attrition of military equipment, right? So I win a military conflict by taking out my adversary's military. That's not what's happening in Iran. Iran is targeting the economic infrastructure. They closed the Strait of Hormuz most visibly. They struck data centers. They struck oil and gas refineries. And they understood that creating that economic pressure,

• 22:28Speaker 02

  that is what's going to cause the most, you know, sort of political capitulation on, you know, certainly the Western side. But you see Ukraine doing this to Russia as well, where Ukraine started doing long range strike against oil and gas, you know, reserves and refineries. They're taking out the airfields and the supply chain in the rear. They're striking all the way into Moscow to make it a much more challenging political problem for Putin to argue that this is working and that, you know, that the defense is working and is this really worth it? And so this the sort of category of long range strike is, I think, the the area that we'll see over the next several decades is the preponderance of, you know, sort of where militaries kind of turn on this

• 23:13Speaker 02

  for thinking about, you know, how to, you know, how to force that political outcome. And so that that drives a lot of investment into long range weapons and then into the defenses of those as well. And so there's, there's a whole lot of consequences that play out from there. But I think the fundamental challenge, you know, that I think we're hearing from a lot of nations we're we're talking with is now you have a whole of country defense problem where your adversary gets to choose when they're shooting, you know, 100 rounds at one facility. And you have to defend everywhere in your country simultaneously against those 100 rounds, and you won't know where they're going to come and when they're going to come. That is a very hard math problem as the defender.

• 23:56Speaker 02

  And so I think this is the the biggest risk on this. Then you have all these other sort of, you know, kind of spider web style attacks where you covertly sneak in large amounts of drones to do, you know, kind of a different form of this strike against, you know, kind of infrastructure in the rear. But this is where I think a lot of warfare trends, which is really looking at if war is meant to effectuate a political end, this sort of approach seems to be the most effective at changing the calculus.

• 24:30Ed Elson?

  We'll be right back.

• 24:41Speaker 00

  This episode is brought to you by Google Chrome. You think you know a browser, but Gemini and Chrome, that's new. It can help you with practically anything on the web, like restoring a vintage motorcycle from a 50 page restoration blog, or finally break down that long article you've had open for weeks. Gemini and Chrome is here for it. Ready to make anything online make sense? There's no place like Chrome. Check responses setup required. Compatibility and availability varies 18 plus.

• 25:10Ed Elson?

  We're back with Brian Schimpf. One interesting political dispute that kind of emerged this year was this fallout between Anthropic and the US government. Yeah, Anthropic said that they would not allow the military to use their AI for mass domestic surveillance and for fully autonomous weapons. Those were their two kind of no goes, red lines. It caused a rift and, you know, now they're dealing with the consequences of that. I mean, Anduril sits at a very interesting place in this debate because you are building weapons, building defense technology, and also using AI to accomplish those objectives. So how did you think about that debate?

• 25:56Ed Elson?

  And what are your views on Anduril's role in using AI for those objectives, for autonomous weapons which could be used for lethal means?

• 26:09Speaker 02

  My view is these are very complex nuanced policy questions. And that writing two sentences into a contract does not actually lead to a disciplined policy debate, weighing out all the competing objectives, nor was there even an understanding of the wide body of policy that already exists within the US government around control of these technologies. So take something like the lethal autonomous weapons. We've had lethal autonomous weapons since probably the 1970s. You know, you look at the battleships we have. There's this Aegis combat system on there. And that system has been able to go in full automatic mode for a very long time. You have an inbound threat and you don't have a lot of time to respond.

• 26:53Speaker 02

  You can have the ship do the work of determining is this a hostile or a civilian or a friendly military aircraft? And then appropriately taking the response on that. You know, there's obviously risks there, but people have been more comfortable on the defensive side for a lot of good reasons because time is of the essence. And, you know, you are by and large being attacked. So that, you know, that is one category we've had, and that technology's gotten better over time. And we've had this with torpedoes or anti radiation missiles. So an anti radiation missile you send out and you say, here's a geographic area. And if something is emitting like a Russian radar, then that is a legitimate military target within that area. And so we've had this notion of you can delegate

• 27:39Speaker 02

  kind of the the limited decision making to machines in a bounded way for a very long time. And I think that's realistically the framework of how this has to work. But importantly with that, there's a human agency that exists. You know, so the US government has always had this policy, which is that humans are accountable for the use of force in a battlefield. You send an anti radiation missile out and it picks the wrong thing. That that's on the command or that is a, you should have known what that weapon was going to do, how it selected, and, you know, were you safe to employ that weapon in that context? That has been the underlying framework that the US and our allies have had, which is this is fundamentally about human accountability.

• 28:21Speaker 02

  At the end of the day, you want your weapons to know exactly what they're going to do, how they're going to make decisions and what bounds you put on them. So the debate really boils down to, you know, should you use AI to get more precise, more accurate, more discriminating? Or should you go with older generation technologies that are, you know, dumber? Right? It it to me, the ethical imperative is to make the smartest, most discriminating weapons you can and do it in a way that is responsible based on where the technology is. And that's everything I've heard from the US government as well. They are not interested in a, you know, fully automatic AI runs World War III Skynet scenario. That's not even on the table.

• 29:05Speaker 02

  What they're interested in is how do we make these systems more precise, more targeted, more discriminating? And the US has led the way for decades in looking at this question of how do you employ weapons in the most accurate and precise way with the least collateral damage? And that is something they have spent tens of hundreds of billions of dollars investing into. When, you know, our adversaries like Russia are just happy to use dumb bombs. Right? And that's, that is a big difference. So to me, the imperative is really how do we provide the best technology to make these things as, you know, precise and limited as we can? The alternative seems just wildly crass that you believe like they should have dumber things that are less safe to use.

• 29:49Ed Elson?

  I guess the argument from Anthropic's end would be we just don't want to be in this business. We just don't want to be a part of, you know, the defense industry because we're interested in using AI for different problems. And their argument would be maybe, you know, we shouldn't be punished for electing to make that decision. So that's the first piece that I'd be interested to get your your views on. And then second, you bring up a really important point about accountability that, you know, at the end of the day, we're going to use technologies of what what matters most is that humans are ultimately accountable for the decisions that they make in using those technologies.

• 30:31Ed Elson?

  I think to what's happened in the Iran conflict so far, and the the headline that immediately comes to mind for me is the drone strike that hit one of the schools in Iran and killed over 100 children. And it seems based on the reporting that that was the US government. And the president has been asked about this. And he kind of says, we're looking into it. We don't, we don't really know. Seeming to sort of shirk the accountability for what was a devastating decision ultimately. So I guess I've asked two very big questions. And maybe we'll, I'll just start with that second one on that accountability issue.

• 31:16Ed Elson?

  How do you solve for that?

• 31:17Speaker 02

  Maybe starting with the first. Okay, I think Anthropic actually does work with the US government extensively. They were the first ones leaning in. They have extensive work with the intelligence community, with the department, well before this came out. I think there concerns on, you know, use of these technologies in a way that the technology is not quite ready to be responsibly used is legitimate. But then I think the way you engage in that is actually working through those policy questions, being highly involved and steering the government away from things where they're not technologists. Right? Like they're policymakers, they're warfighters. They need technologists to tell them what can and cannot be done.

• 32:00Speaker 02

  And how can the technology get there in a way that is responsible and reinforce the values and norms we have? And so I think in reality, they were working with the US government, continue to do a lot of work with us and several others. And, you know, I think they've are actually, you know, kind of. Very mindful of providing the US and allies with the best technologies possible. So, you know, I think what went wrong was probably more a matter of personalities, trust, and, you know, a style of engagement to get to the outcome on this. And, you know, that I get. These things are hard. They're very complicated topics and it's very tricky to work through.

• 32:45Speaker 02

  You know, maybe, maybe on the, the second question, you know, the US actually has put out several different detailed things on what went wrong in that, you know, mistakenly attacking a school where they had multiple different databases. Some of them had marked as a school. There were some older ones where the IRGC had used that as a command and control center in the past. And so, you know, this is where I think using technologies like AI to be able to coalesce all that information, to be able to have the most up to date information are massively impactful. Where, when you think about the sheer volume of things that the US was doing leading into

• 33:27Speaker 02

  that strike, where they did something like 10 times the number of strikes that they did in the Gulf War within the first month, they executed like a thousand of these in a day. And for each one of those, they have a process by which they validate that the intelligence indicates that this is a target and that there is, you know, collateral damage assessment and, you know, all these, you know, kind of legal factors. One of the only militaries in the world, by the way, that does that or cares to do that, right? I don't think Iran is running that calculus every time they take a shot. And, you know, they have gone through and traced through what went wrong and what's happening. Now, I'm not going to sit here and say like, you know, how Trump presents these things is, you know, the most measured way. Of course it's not.

• 34:12Speaker 02

  It's, it's President Trump, right? Like that, that is the reality. But the US military as an institution has gone through and traced through why this happened, what went wrong, and how do they fix this in the future? That is a sense of accountability on this that I think is what we're looking for. There will be mistakes. War is terrible. Again, this is why you do not want to get into war. You create the deterrence in advance. And the, the reality is these things are, you know, having that discipline to actually improve how you do this and investigate what went wrong, that is something that I think the US leads the way on.

• 34:48Ed Elson?

  I think those are really great points. And, but what it also points to is the more advanced that this defense technology becomes, the more lethal and destructive it has the potential to be, which basically means that whoever is in charge has increasing amounts of responsibility and accountability that they have to be responsible for. And that puts you in a very interesting place because you are the CEO of one of the companies that is powering this defense technology revolution, which essentially means that you have incredible amounts of power and responsibility resting on your shoulders,

• 35:33Ed Elson?

  as do many of the leaders in government who are deploying your technology. How do you think about that level of responsibility? Like, what does it mean to you? And how do you think about it for leaders in government as well?

• 35:50Speaker 02

  You do not want tech bros making policy. Nobody voted for me. Nobody gets to vote me out, right? Like that, that is an important construct to remember, which is like, if someone disagrees, you know, I bet, you know, would the majority of Americans think that the US government should have anthropic technology? Probably. Do they get to vote on that? Absolutely not. Right? And so the, that, that seems to me to be actually, you know, an important construct to remember, which is, you know, we live in a democratic society where these policy decisions, where these, you know, things that, you know, about how use of force is done, or, you know, what we prioritize in the country on any sort of domestic.

• 36:33Speaker 02

  These are political questions that we settle through voting, right? And that we settle through elected representatives. And that my responsibility as a technologist is to provide technology that works, to inform the elected officials on what it can and cannot do, how best to use this, how they should refine their policies to have, you know, effective use, where that new frontier is. That, that is a deeply held obligation that I feel I have, which is, you know, to build things that even despite what their process and system wants is the right thing to build, right? We see this all the time where, you know, we'll get requirements on, you know, a weapon or something like that. And we're like, these are insufficient for what you need, right?

• 37:17Speaker 02

  Like, you need to deal with this GPS denied navigation better, or it needs to be more resilient against these conditions. You know, these are areas where we'll lean ahead and try to put in, you know, kind of the pieces necessary. And that's often a very positively received conversation, which is, you know, the state of technology has moved. Here's how you should think about this. And so, you know, our job is engagement. It's informing. It's getting, you know, them the right information to make the right decisions. It's providing the best technologies that can be used responsibly. And ultimately, the use of those technologies, that is what the elect, that is what the, the voting process is for. That's what the democratic process is for. And, you know, I take very seriously that nobody gets to vote for me.

• 38:02Ed Elson?

  I think this brings up an interesting question about the sort of the separation of the private sector and the public sector, which has become more of a debate this year as the government has started to take stakes in some companies. OpenAI has been floating that maybe the government should take a stake in, in them. It's been floated for a lot of companies. And interestingly, we, we looked at the prediction markets, which say that there is a decent chance, 23% chance, that the US government might take a stake in Anduril. I guess my question is, what do you make of those odds? Is there any merit to them? And what are your views on the government taking stakes in private companies in general?

• 38:47Speaker 02

  So I, I think the US government participating in the, one of, you know, the most impressive wealth creation engine that has ever been constructed on the planet feels like probably a good idea, where, you know, things like Trump accounts and, you know, kind of some of these other investment based things that allow Americans on a broad basis to participate in this can get us out of a lot of these challenges we have in the long run around, you know, kind of social security and a lot of these very challenging fiscal situations. That seems directionally like a very good idea. Now, that, this is a new thing, right? So then, as new things happen, you know, in our messy political process, it's complicated, right?

• 39:30Speaker 02

  Where there's a lot of different attempts, often, you know, a little bit ham-fisted at first and, you know, that in fumbling the way through that policy debate is, is a tricky situation. And so, that's the messy political process we live in. That's the reality of it. So do I think all of these will be, you know, the idealized final form? No. Do I think directionally, having Americans participate in the wealth creation seems like a very good idea?

• 39:59Ed Elson?

  Do you not feel concerned about sort of the crossover of sort of mixing government with private industry? I mean, if, the, the point which I agree with is, you know, you, you want elected to be doing what you're doing, but if the idea is that Anduril would have become sort of in some sense more part of the government, more part of the administration, more connected to this, to Washington, that maybe you are starting to have a, a say in the way that weapons are deployed, in the way that our policy is carried out, and that the lines between those two sectors start to be blurred. Does that concern you at all?

• 40:42Speaker 02

  Well, I don't know why equity states wouldn't do that, right? A lot of countries like Norway and Singapore have extensive Southern wealth funds that don't seem to make the private, you know, CEOs somehow decision makers in the government. You know, I, I think the reality is there's ways to create even separation in that, where you get the economic benefits and, you know, the, the population benefits from it without, you know, kind of interfering in the separation of these things. And the US has had a significant tradition in being very clear and then reinforced through multiple case laws around, you know, how private institutions and governmental powers flow and how those things work.

• 41:25Speaker 02

  And you can't have governmental powers as a private institution, it just doesn't work that way, right? And so, I, I think that's a good thing. And I don't see any evidence that's changing, right? Like, nobody calls me when it's like, you know, hey, we're thinking about going into Venezuela. That's not, that's not how it works.

• 41:40Ed Elson?

  But it seems that that has, in some of the reporting, that that is how it's gone. I mean, what we know is that with Iran at least, that there was a call to Jared Kushner as an example, and maybe we could say that he's part of the government, but not really, he wasn't really elected in, he's more sort of this informal advisor. It does seem to me that that is, in a lot of ways, how this administration is operating, that you do make a call and you have someone kind of.

• 42:08Ed Elson?

  Make the call. That's what, at least what he said about, about Kushner.

• 42:12Speaker 02

  You know, I can't speak to exactly how that went down, but I can tell you, having seen both Democrat and Republican administration, there are a lot of senior advisors. There are a lot of people who the elected officials appoint in to provide them good counsel and to work on their, you know, behalf. Like that is a extremely common pattern, right? And when you look at the Biden White House, the vast majority of policymakers there on National Security Committee, on domestic policy, these were not elected officials. They were people the elected officials appointed that they felt resonated with their policy views and how they operated. That's how it works, right? In Congress, there is hundreds of staffers

• 42:53Speaker 02

  there that do a lot of the legwork around advising on how, you know, these laws should be written, drafted. You know, I think the, the healthy version of this is there is a good dialogue with industry and with experts and with academics and economists and, you know, the business community and the finance community to understand what is actually happening. What is the impact of, if we did policy A versus policy B? You know, what would, what would be the impact of these things, you know? And then as we look at it from the defense industry side, you know, legitimate conversation is what can you produce? What can you actually scale up, right? Like how, you know, in, in having that ability to have meaningful conversations around the trade offs of how we could accomplish these sort of shared policy goals?

• 43:39Speaker 02

  That's, that's quite normal and healthy in all administrations. So I think a well functioning government actually has deep connection with, you know, kind of the civilian sector and they should, right? And then, you know, if we believe that those, you know, the way it's operating is not in accordance with the laws and statutes that we have, then that should be something that's reflected at the voting booth and reflected through the courts and through Congress, right? And, and that's the system we have.

• 44:10Ed Elson?

  We'll be right back.

• 44:21Speaker 00

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• 44:49Ed Elson?

  We're back with Brian Schimpf. I know you're a CEO, you're a founder, you're not a policymaker, but when you look at US policy on autonomous weapons, when you look at the rules and regulations around how we are using artificial intelligence, I mean, AI policy has become such an important debate, especially this year. Is there any sense in which you think anything is wrong? Or are there parts of our policy and our legislation that you think are really going well, that are working, that are correct? What do you see as sort of the future of policy when it comes to AI and its impact on national defense?

• 45:29Speaker 02

  So I think the AI side, you know, everyone's wrestling with what is a incredibly complex and rapidly moving environment. And that's not, you know, when you look at, you know, something like the safety work, right? And, you know, how can you ensure these models are safe? The US government has gotten very good at sort of, you know, kind of a proceduralism. And, and actually, I don't know that it's a bad thing, right? Where, you know, we want the system to be predictable, fair and, you know, disciplined. Doesn't always mean it's fast, doesn't always mean it's the most logical optimal outcome. But a fair and consistent application of the rules and policies in place and the regulations, like that feels, feels like kind of what you want from your government system.

• 46:12Speaker 02

  Now you connect that with the AI side, and this is a much more complex question where there's still fundamental research to be done on how to make these things safe, to assess if they're safe. I think some of the, I think Demis put out a post yesterday on, you know, how to think about, you know, kind of a industry government collaboration on this where, you know, there's still fundamental research to be done. Where, you know, kind of an industry organization can be involved in assessment and advisory, like we've seen in other, you know, kind of industries and it's worked well with a clear governmental role to enforce rules, set rules and, you know, take the, the guidance provided by this

• 46:55Speaker 02

  industry organization into account, but ultimately the government entity is responsible for application of those rules. That, that feels to me like pretty sane, right? Like, you know, kind of the government can do what it does well. You know, these sort of private institutions can do what they do well, which is sort of more fast moving and agile and exploratory. While, you know, we still have that, that mechanism of political accountability. So you think about this on, on the defense side and, you know, I think a similar sort of notion applies where you, you have a clear industry responsibility, which is understanding how the tech can be employed, helping with test and evaluation. And, you know, really thinking through, are these systems actually working to spec, right?

• 47:39Speaker 02

  And, and the way it's been specified of what it has to do. Industry needs to be a participant in figuring out how to assess that, how to get there. You know, can this really work and help evolve those specifications? And the government side has to evaluate, is that true? You know, where do we want these sort of decision-making frameworks? How do we want accountability to flow? They have to own a lot of the policy decisions on these things. And I, and I think when you look at these policy side questions, particularly in defense, many of them are already settled, right? And then, so then you have new technologies that kind of change the scope or reach by which you could do these things. But, you know, I think from a fundamental question, you know, we've,

• 48:20Speaker 02

  you know, historically have answered this question on lethal autonomous weapons. We're willing to do it within very defined bounds. Great. Now you can debate, what are those bounds? How does technology change those bounds? Should we, you know, should we assess this differently?

• 48:35Speaker 02

  You know, those are very reasonable policy debates to have where we've, you know, kind of set policy frameworks around the impact and the safety and the risk. And then the technology now changes maybe where you set those limits, but fundamentally, it's still the same ethical framework.

• 48:51Ed Elson?

  Just given your seat in the national security ecosystem.

• 48:59Ed Elson?

  When you look at what's happening with Russia, when you look at the Iran conflict, China, nuclear weapons, AI. What do you see as sort of the biggest threats to stability and to peace in 2026? What keeps you up at night?

• 49:19Speaker 02

  So for the next few years, the threat of being able to do, you know, kind of these strikes against your neighbor over, you know, the rapid escalation of that. There isn't kind of a theory of deterrence on that, right? So sort of one theory is if we have better defensive weapons, then this will be mitigated. And I think every government has a responsibility to protect its citizens by providing the best defense it can against these types of attacks. But when you look at how this plays out, say like the Red Sea scenario where the US and allies very successfully mitigated Houthi attacks on commercial shipping.

• 49:57Speaker 02

  What did the Houthis do? They shot more, right? Like it didn't actually work as a deterrent. And so I, I think the other side of this is you've got to think about what is going to be an effective deterrent. For better or for worse, mutually assured destruction was incredibly stabilizing. You know, I think it was incredibly stabilizing. We didn't have a hot war between the US and Russia. That is, it is like miraculous. And, you know, it was hairy in many scenarios, but I think ultimately, you know, if the consequences were smaller, the opportunity for escalation, for starting small and growing it could lead to these outsized terrible outcomes.

• 50:38Speaker 02

  And so I think there, there is a period where we don't have that theory right now of what this looks like for conventional weapons. The cost of kind of prosecuting these lower intensity conflicts seems relatively low. And that I think can lead to miscalculation, which can lead to escalation on these things. And so I, I think there needs to be a new theory of, you know, sort of what does this look like? What is the bad outcome that happens if you start something small? That you just don't start it. Like that is fundamentally what, what has to occur to get things back to a stabilized place.

• 51:16Ed Elson?

  Where does China sit in your list of threats? Because this has been, I mean, it's especially when it comes to AI, the concern seems to be about China and the comparisons have been made between AI and a nuclear weapon. And perhaps we are going down a similar path of mutually assured destruction, which to your point might actually be a good thing.

• 51:43Ed Elson?

  Where do you, how do you think about China and the threats that they might pose?

• 51:47Speaker 02

  You know, you've got to contrast China under the prior leadership with the leadership of Xi Jinping, which is sort of ultra nationalist, based around, you know, very aggressive posture internationally. You know, it is highly interventionist in their economy. When you look at the actions that Xi takes is fundamentally about, you know, kind of preservation of the CCP and, you know, control, you know, zeroing out whole industries that, you know, he decides are no longer aligned with the goals of the PRC. Demonstrating that, you know, economic prosperity isn't, you know, we take for granted in the

• 52:30Speaker 02

  West that sort of economic prosperity and rising boat, you know, like providing better standards of living, these are, you know, kind of the fundamental, if we're to take one priority that, you know, sort of Western politicians and things really rely on, it is fundamentally that we want to drive economic growth to provide better lives for people. And that's what the voters choose, you know, it's just a very consistent sort of selection over time. You look at China, that's not what he optimizes on, right? Shutting down the whole economy during COVID, you know, really focused on control. That is a, that is a tough thing, I think, for a lot of the people in a Western mindset to apply.

• 53:11Speaker 02

  He's a true believer in the CCP and in many ways, his greatness in history. And that is a risky position to be in.

• 53:21Speaker 02

  So when I think about the challenges here, is the issue that we would have a competitor that is technologically sophisticated and forces the US to get better economically? And we share this economic pie and wealth. I don't, you know, I don't, I think a lot of people don't like losing, but I don't think that's fundamentally the issue. The issue is much more around, you know, is the form of leadership, control and operating that the current Xi autocracy has, is that what we want? I think for many, the answer is no. For myself, it is no, it does not seem like a good thing.

• 53:58Speaker 02

  And, and so I do think this, this does pose, you know, a real, a real question, which is, it is not just about, you know, is the US strong? It's just, there is a real moral question to be answered around, is that what you want in the world? Now, I think what is different compared to, you know, like say the, the Cold War period, China is extremely sophisticated, extremely disciplined. They have moved up, you know, the stages from building out the sort of foundational manufacturing and resources through to, you know, making slightly more sophisticated things like owning whole industries like solar and a lot of the green, you know, a lot of these, these types of things. Then now moving into creating world-class firms, BYD, all the work they're doing on

• 54:43Speaker 02

  AI, where they're moving on pharma. They have sort of systematically moved up that, that chain in a way that gives them massive economic leverage around the world. And one of the patterns I've seen, you know, in Europe and other places, the Europeans will be angry at the US. They'll say this isn't, you know, how we're being treated isn't fair. They will push back. The reality is they push back because they know they can. They don't push back on China despite knowing that they're getting a bad deal. They know that this is not fair. They know that they're just gonna like, you know, this is a short-term thing.

• 55:23Speaker 02

  They know, like, everyone knows this, but I think the difference is with the US, you can say it, you can't say it against China. And is that the world we really want to live in? So I do think the stakes on this are quite high. I think the people have, you know, kind of grown up with America as the superpower. I don't think they can even imagine what China as a superpower would be and how bad that would be. They view it as this upstart that, you know, it's like, yeah, maybe I don't disagree with their leadership or how they operate, but who cares? They're kind of, you know, a sideshow. It's like them in charge is a very bad thing. And so particularly Xi in charge. And so I think the, the reality here is it's, it's a very serious issue.

• 56:07Speaker 02

  They're extremely sophisticated and they have a very sort of aggressive posture to where I think they want their country to go and the prominence in the world.

• 56:17Ed Elson?

  Do you view part of Anduril's mission to prevent that from happening, to prevent China autocratic-style governments from becoming a global superpower and from superseding the US as the global superpower?

• 56:35Speaker 02

  I don't think that's fundamentally how we view our goal. I think, you know, or our role in the equation, I think our view is we need to provide the US military and our allied militaries the best capability to take Chinese military action off the table, right? Like that, that's what we need to do. And there's a lot of other considerations in this mix that we are not, you know, we don't have much to contribute on or, or not as contributing on via, you know, sort of, we're not building foundation models, right? You know, we're not, we're not in pharma, right? We're not solving a lot of these economic policy questions.

• 57:15Speaker 02

  There's a lot of these sort of bigger questions around US competitiveness and, you know, sort of Western competitiveness. But fundamentally, I believe if the US and allies, you know, take, take the counter example, China can obviously, you know, say China could obviously invade Taiwan, say China could obviously exert the well throughout the South China Sea and no one believed that they could challenge them or that the US would be there to backstop.

• 57:44Speaker 02

  I think China would do it more. I think they would do it more because it's probably be a pretty effective strategy. And so the, you know, just knowing that that would be the case leads to a totally different political conversation. Or if they can use hard power as the backstop to exert their will, well, it changes the negotiation you have on a diplomatic basis or an economic basis or anything else. And so, you know, providing the US and allies with the absolute best military that takes military, unilateral military action from China off the table, I feel like that is very much our responsibility as much as we can contribute to it.

• 58:20Ed Elson?

  I want to start to wrap us up here with a couple of final questions and I want to thank you for your, for your time. Just two stats I want to get your reactions to. So number one, VC funding for defense tech startups hit $19.8 billion in the first quarter of this year, which is a record high, just blows, blows previous years out of the water. And of course, it'll probably continue to ramp up. And the second stat is that Trump has proposed a one and a half trillion dollar defense budget, which would increase our defense spending in America by 44%. Extraordinary numbers.

• 59:04Ed Elson?

  What is your reaction to those numbers and what do they tell you about the state of the world?

• 59:11Speaker 02

  On the VC side, you know, I think when you look at the history of any of these, you know, kind of sector, you know, disruptions, the pattern's pretty consistent, right? You know, you kind of see a couple of, of early winners do quite well. They tend to be the winners in the long run. And then you see a whole lot of frenetic activity from the investing side kind of chasing that success. And, you know, do I think there will be a handful of successful companies besides us? Absolutely. Like, I think there will be a few. But, you know, like in most things in VC, it's like they're looking for the one or two outsized performers, accepting that, you know, many of these will fail, right?

• 59:56Speaker 02

  And that's sort of the reality. And so I think it is just quite hard to, to really succeed at scale in this business. The sheer complexity of what you have to do on manufacturing, on production on hardware is just quite high, right? And that is very hard. There's very few examples of that scaling in the US successfully. And, you know, I think that's something where we're living right now and we're going to figure it out, but it is quite hard, right? On the, on the one and a half trillion dollar defense budget, you know, I, I think the, there's, there's sort of a lot of ways to interpret it.

• 1:00:32Speaker 02

  But when you look at what motivated much of it, it is, you know, kind of the threat from China combined with, I think, the, you know, realization that we need to do significant investment in next generation technologies, replenish our stockpiles. So we're at this tricky spot where we're both sustaining an expensive legacy military and that has to be sustained, so we have to be ready. We can't just divest to invest. That's a bad strategy with where the world is. While we're going through a technological disruption with a new adversary that's extremely competent, who can produce at an immense scales, and we have, you know, significant depleted stockpiles from both conflicts we've entered into as the United States as well as supported allies, right?

• 1:01:15Speaker 02

  Like, that is a, that is a precarious position to live in. It's one and a half, right? Should it be 1.2? Should it be 1%? I don't know, right? Like, that, that's a harder kind of question and will get negotiated in Congress. But the, the threat side, the displacement we're under, the shift in the world, I think, is real, right? And, you know, and I think you're seeing the amount of ramp worldwide on defense spending, you know, doubling, tripling, right? Like a huge step up in defense spending worldwide. I think the reflection is that this is just actually quite a dangerous time. Our adversaries have been investing quietly for decades and the Western militaries have,

• 1:02:00Speaker 02

  you know, in many ways behind in responding to that very real threat.

• 1:02:05Ed Elson?

  I introduce you, Brian, as the founder of one of the more controversial startups in America and the world. My final question, what is the biggest misconception about Anduril? What do people get wrong about this company? And what do people perhaps get wrong about your industry?

• 1:02:24Speaker 02

  I think it comes down to what is the point of what we're trying to do, right? And, and I think the sort of naive view is that this is war profiteering and that we want more war. And the reality is, we do not. The reality is that, you know, the goal of, you know, investing in defense is you have it when you need it, but you hope you don't need it. And I think the thing that stands out to me about the American military leaders is they are the most cautious about the use of the military. They are advising to use it the least. And, and they, their view is this is a last resort. And, and we share that view.

• 1:03:07Speaker 02

  And so I think that the, the reality is that, you know, to, to have peace, you prepare for war. And I think that has been true for thousands of years and we are not yet in a time where that is gone.

• 1:03:22Ed Elson?

  Brian Schimpf is the co-founder and CEO of Anduril. Brian, really appreciate your time. Thank you.

• 1:03:28Speaker 02

  Thank you.

• 1:03:34Ed Elson?

  This episode was produced by Alison Weiss and engineered by Benjamin Spencer. Our research associates are Dan Shalon and Kristen O'Donoghue, and our senior producer is Claire Miller. Thank you for listening to the Prof G Markets Founder Series. We'll see you next month with another founder story.

• 1:04:01Speaker 03

  This podcast is supported by Anthropic, the public benefit corporation behind Claude. Everyone's got a hard question about AI. Anthropic was built to surface those questions and share what it finds along the way because there's hope in hard questions. Ask yours at claude.ai/spotify and keep thinking. That's claude.ai/spotify.