[Music] I'm driving Palmer Luckey's personal warship and we're all about to die. Sorry guys. So this is a Mark 5 Special Operations craft that I purchased from the Navy.

Are you sure I'm not going to flip the boat? You're going to be fine.

It's the fastest boat that the Navy ever built. It was designed specifically for Navy SEAL insertion and extraction missions. It runs really fast and it's a lot of fun.

While this boat may be part of the Old Navy, Luckey is trying to bring Silicon Valley speed and innovation back to the Pentagon.

Well, some of the United States technology is very bad. It's also extremely expensive and not necessarily adapted to the types of conflicts we're going to see in the future.

The United States has a lot of investment in legacy weapon systems that are not necessarily having China quaking in their boots.

He's betting his new age defense company can take a slice of the Pentagon's $850 billion budget and reinvent how they do business from the outside in.

That is if they can beat the incumbents and convince the top brass that a billionaire founder sporting Hawaiian shirts is just as serious about rebooting America's Arsenal as they are.

You're not the typical Silicon Valley founder wearing a black turtleneck, nor are you walking around and talking like a buttoned up defense contractor CEO.

Like how does that play? I am a little bit of a caricature, uh, but it's because I just haven't changed.

It was really easy when we started and all to say conflict is over.

We're living at the end of history. This idea of putting our best brains towards things that can kill people is a waste of talent and a waste of money and unethical and that's not what anyone's saying anymore.

The war in Ukraine and China's rapid militarization have renewed fears that the US defense industry isn't modernizing fast enough.

That's brought a controversial handshake between tech and defense back out in the open.

The military has a long and storied history with the tech industry. Post World War II, billions in defense funding transformed California into Aerospace and Technology boom towns.

The first company to manufacture microchips that guided missiles, satellites, and helped Silicon Valley get its name was funded by the Pentagon.

Founders of that very company pioneered modern-day venture capital and helped cultivate a vibrant tech industry.

Today, there's a new generation trying to bring back America's past, proven by Palmer Luckey's collection of unusual vehicles. You sure it still works?

It should, it should, yeah. So this is a 1967 Disneyland Autopia, uh, designed by Bob Gurr and Walt Disney.

As far as I know, mine is the only complete Autopia that is outside of the parks. Mine has the original mechanicals, original gearboxes, original wheels, the whole deal.

When I got it, though, uh-oh, technical difficulties. Got a, got, got a flathead screwdriver.

Oh, there we go. Look at that. We got to get moving. All right, there we go, back in business. So are you sure this is street legal?

We're on the street, aren't we? You grew up in Long Beach, right? Not too far from here. That's right, close to the port, and it was a place with a lot of car culture, a lot of Aerospace culture, a lot of defense activity.

I grew up watching the Marine Corps practice right offshore in their helicopters, watching Navy ships do exercises and, uh, you know, it gets in your brain and it doesn't leave.

Southern California, unlike a lot of places, is a place where almost everybody knows someone who has served in the military or has a family member who served in the military.

When that's the case, because of the density of military population here, you don't really have the crazy political ideology that you get in places like the Bay Area.

But when I started Anduril, of course, it was a totally different world. Uh, defense was not cool and it was definitely not the hottest thing.

Before launching Anduril, Luckey worked on virtual reality headsets in his parents' garage. By age 18, he had a prototype that kickstarted the modern VR movement and caught the world's attention, including Mark Zuckerberg.

Lucky was later ousted. The thing is, I'm actually not nearly as political of a person as people think I am. I mean, people think you got kicked out of Silicon Valley.

Yeah, I got kicked out of Silicon Valley because I made a $99,000 political donation.

The reason that people pay attention to it at the end of the day is because it's novel for a person in tech to have supported the person who became president that year.

To be clear, he means this guy. Meta disputes that Luckey was fired for his political views, but whatever the reason, the result was a rift between Luckey and the Valley, so he turned his attention to defense and set up shop in Southern California.

This, my extraordinarily tall door, the house was built in the 1980s and I've kept all the bones the same.

I think it's a pretty cool place, has some good Miami Vice vibes.

I've got my my 2-in uh teal shag carpet. This is my fish tank. It's about a 6,500 gallon aquarium.

This looks like a Dungeons and Dragons table. Oh no, this is just my coffee table, although it does have a map of our Dungeons and Dragons campaign.

What kind of character are you in Dungeons and Dragons? I am a chaotic neutral wizard uh named Nrim 5. He's from the Lost Nation of Atlantis.

How much success have you had with that? Pretty limited so far, pretty limited so far. I know you're a big gamer. What are the connections between navigating a virtual Battlefield and a real Battlefield?

Probably the the main similarities are some of the technology that we're applying to things like heads up displays and augmented reality for for soldiers and Airmen to allow them to see where the danger on the battlefield is.

It's also worth noting that really virtual reality came out of military research in the first place and the games industry and the military industrial complex have always shared kind of back and forth how'd you get interested in defense technology?

I briefly was able to work as a lab technician on an army project called Brave Mind that it was treating veterans with PTSD using virtual reality exposure therapy and that was actually before I started Oculus.

I kept in touch with a lot of friends in the defense industry and what I heard over and over again is that it was broken. The incentives were wrong.

They were being punished for doing the right thing, rewarded for doing the wrong thing. They made more money when they were over budget and uh that really got me worried especially in a world where we were running a new experiment as a country, an experiment where for the first time in American history, tech companies were not working with.

The relationship between Silicon Valley and Washington splintered after the Cold War.

Top talent caught the .com wave, ditching government jobs in windowless rooms for positions at shiny tech firms. Everybody used to work on Capitol Hill or the government for the military.

Now everybody works for an internet startup. The defense industry consolidated power around five big primes to supply the military's hardware and software.

It's a large complex oligopoly with a strict chain of command that filters ideas through layers upon layers upon layers of bureaucracy.

For tech startups looking to get a piece of the action, welcome to the Valley of Death. The government tries to nurture new ideas, but the amount of time it takes to go from prototype to adoption puts most startups in the defense market graveyard.

It seemed impossible for outsiders to compete until SpaceX and Palantir sued the government, claiming the bidding system unfairly favored the incumbents.

Palantir co-founder Peter Thiel's venture firm was the first to invest in Anduril.

It's no coincidence that the only two companies to break through in the last 35 years since the winding down of the Cold War, really, uh, were both founded by billionaires.

It's it's it's unfortunate, but it reflects the reality that we've created where this muscle we used to have as a country of turning small innovative defense companies into large scale providers of weapons, uh, we we lost it.

And the only way to bypass that was to already have made billions of dollars somewhere else. As a as a country, we need to do better.

So this is the old LA Times printing plant. It was the old LA Times printing press. I started Oculus in Orange County, and it was a place where I could hire people from all over the country.

When I moved up to the Bay Area, it actually became a lot harder to hire people who weren't already in the Bay Area, but this is a place where you can build great companies that draw from all of America, not just from that one tight little isolated bubble.

Well, I was actually wondering, is it, is it, is it hard to poach people from sort of big tech companies?

Oh, no, no, the way that you poach people from Big Tech companies is to tell them that their career is meaningless and that they're wasting their lives on something that doesn't matter.

A decent trick of people when you can kind of shock them out of the Matrix, being, what are you doing with your life?

There's big problems in the world, and you're not part of solving them.

That's been behind a lot of the people who leave big tech companies come to work at Anduril.

Anduril has been clear from the get-go, to come here is to build weapons and surveillance systems. They started with this tall autonomous security tower that sits on borders in the US and abroad, launched in the early days of the Trump presidency.

They've expanded their arsenal to autonomous submarines, counter drones, and other robots that are cheaper to build with menacing names.

This is a half scale model of Fury, which is an autonomous fighter jet that we're building.

This is WISP. This is scanning infrared imager that's able to detect aircraft by building a 360° sphere that it integrates as scams, and uh, this is an electronic warfare system.

It can jam and hack and make sure that you're able to talk and the other guy isn't in a whole bunch of really powerful ways.

You're trying to run a defense tech company like a startup.

How does that compare to like Lockheed Martin and Boeing, and how do you get Washington to accept that most new R&D is done on a cost plus basis, meaning the contractor gets paid for their time, their materials, and then a fixed percentage of profit on top.

Of course, that incentivizes you to come up with expensive solutions and to drag it out as long as as long as you can.

And we're the opposite because we're a defense products company that makes things that work and sell them rather than getting paid to do work.

Uh, it means that when we do something faster, it helps our profit margins.

You're building products that the government doesn't even know it needs yet, right? Very often, it's pretty rare that we work on something that is consensus in the government, where there's widespread belief that what we're doing is the right solution to the problem.

Often we're building things that they've written off as not feasible or not viable. There was a lot of skepticism about applying artificial intelligence to defense, a lot of skepticism about artificial intelligence in general.

Chat GPT was one of the most helpful technologies to us because it helped convince people that AI can do things they didn't believe computers could do.

Are we getting to a point where battles could be fought by AI and counter AI only?

We're not going to have systems that are acting entirely on their own without human direction, but will we see dog fights between AI fighter jets that don't have people in them?

Yes, absolutely. In fact, in Ukraine, there's been a variety of engagements where you had uh unmanned systems destroying other unmanned systems.

It seems like what's happening in Ukraine has marked a shift in warfare strategy. What's happening in Ukraine is is fascinating because they can't afford to treat warfare as a thing to be think-tanked or as a thing to be debated in white papers.

They have to actually win today, and that means that a lot of barriers to trying new ideas have been lifted, and that's one of the reasons you've seen, for example, the proliferation of small unmanned armed quadcopters.

It's why you've seen the proliferation of a lot of really interesting counter-drone systems, things that were not nearly mature enough to be deployed, let's say, by the United States, uh, but they are willing to deploy them in a very early stage maturity because they know they can't win doing things the old way.

The old way meant having the biggest, most expensive weapon on the battlefield. Now it's about having a swarm of commercial technology available quickly and cheaply.

To that end, the Pentagon recently announced the Replicator program to fast-track thousands of low-cost autonomous drones. Startups and venture capitalists who historically shunned military work declared it's time to build to get in on the action.

The old school way of working through five, six large primes and developing technology just doesn't work.

You have to work with the private sector to bring new technologies in. Big tech firms have had more long-term success offering hardware, AI, and cloud services in exchange for billion-dollar deals, but there's been friction on the tech company side from engineers who don't want anything to do with the military.

Some tech employees have pushed back on working with the US government and the US military. Do you see where they're coming from.

Fundamentally, I think it's an emotional thing. They came to a company to work on consumer tech. They weren't told that their work would be used for potentially violence and they don't like that.

And I I I empathize with that because to them it feels like a little bit of a bait and switch.

Critics see the technology you're building, worry it could be misused on American citizens, for example.

Are they right to worry? Oh, of course, anything can be misused. But like, if you want to point to things that can be misused against American citizens, I mean, the military has a lot of guns, the military has a lot of aircraft.

You have to have trust in the system. You have to believe that democracy works and you have to believe that the right way to control these is on the policy side.

There are actually things I would like to build that the DOD would not use and would not deploy, that they do think are beyond the pale, and that's the way that it should be.

US foreign policy and military policy shouldn't be in the hands corporate executives.

The heart of Anduril's technology isn't its hardware, but it's software.

Engineers here have developed a proprietary AI driven system called Lattice that acts like an intelligent control center for the company's hardware.

Lattice is our AI system for controlling distributed robots. We're doing processing and computer vision, machine learning on that data and producing an operating picture of the world.

So we understand the chessboard, so to speak, and then the autonomy can apply those very logical decisions about what to do and move forward and act.

So walk me through the process from identification to decision or decisions. So we've got a manned crew that's going to try and fly in and land somewhere, they have some mission they need to do on the ground, but there's threats that are unknown.

So we're going to send the autonomous systems forward.

They're going to try and draw out any enemy fire, and with the autonomous systems, you're okay if they if they die, you're okay if they get taken out because that tells you more information about the the battlefield so that you can make informed decisions.

Interesting, but there's still a long way to go, still a lot to build.

Palmer Luckey Wants to Be Silicon Valley's War King | The Circuit

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Palmer Luckey Wants to Be Silicon Valley's War King | The Circuit

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