CEOInterviews.AI#190 Shyam Sankar - Chief Technology Officer of Palantir: The Future of Warfare

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Narrator0:00

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Shyam Sankar1:44

With AI and the AI revolution, people think it will make the median person better. That's true, but it will make the very best person superhuman.

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Host1:54

Hot news right now is the tariffs just came out yesterday. I'm curious, what are your thoughts on that?

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Shyam Sankar2:00

When Rocket Man was rattling his saber in 2017, the Army wanted to know how many tanks there are. That is a 3-week data call. Operation Paperclip brought Nazi scientists to the US for our defense program. How worried should we be about China?

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Host2:29

Shyam Sankar, welcome to the show, man.

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Shyam Sankar2:32

Great to be here. Thanks for having me, Sean.

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Host2:33

My pleasure. We had Joe on four months ago. I'm fascinated with what you guys are doing at Palantir. You've got a hell of a life story. Thank you for coming.

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Shyam Sankar2:56

Thank you. Everybody starts with an introduction here.

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Host3:02

Shyam Sankar, CTO and employee 13 of Palantir, BS from Cornell, MS from Stanford. Over two decades building disruptive software for government and private sector. Sworn enemy of slowness. Dedicated to upending failing institutions. Your manifesto is at 18thesis.com. Your goal is to fix how the military buys weapons. Your quote: 'America is not a place where everything is perfect, but where anything is possible.'

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Shyam Sankar4:04

I love that quote, man.

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Host4:05

I have a ton of respect for you. From where you grew up to where you are today, it's fascinating and brings hope. You've earned everything. Thank you for being here.

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Shyam Sankar4:27

Thank you. I'm grateful for everything this country has given us.

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Host4:32

Me too. Everybody gets a gift.

Gummy bears made in the USA. Legal in all 50 states. No funny business. They'll probably be illegal when RFK gets going, but I love them.

But they taste good. One other thing before we get into it.

I have a Patreon account. These guys have been with me since the attic. Wife kicked me out when we had a kid. Now we're building a new studio three times larger. Should be done in three months. You have to come back.

I give Patreon supporters the chance to ask questions. This is from Kevin Omali: 'Will quantum computers influence the balance of power as offensive tools?'

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Shyam Sankar5:43

Absolutely. Quantum surprise, staying ahead. It's about the OODA loop. Quantum has exponential implications on how quickly you go through observe, orient, decide, act. What is quantum computing? Is it just really fast?

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Host6:41

Oh boy.

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Shyam Sankar6:42

It's millions of times faster. It uses quantum mechanics to compute enormous permutations. It breaks legacy encryption. Anyone storing historical encrypted communications can decrypt them instantly. We need quantum-proof encryption. Beyond that, how do we employ this for decision advantage?

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Host7:03

How close are we?

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Shyam Sankar7:05

Smart people say we're close, but they said the same about AI in the 60s. We'll see.

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Host7:18

Who else is working on it?

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Shyam Sankar7:20

The Chinese.

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Host7:22

Great. We'll talk about China. Getting into the interview, you grew up in a mud hut in India?

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Shyam Sankar7:37

What?

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Host7:37

My father did. Your father did.

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Shyam Sankar7:39

My father was the last of nine children, born in a mud hut in South India. His siblings helped him get to college. He couldn't go to med school due to DEI, so he became a pharmacist. He slept under his brother's kitchen table. His sister-in-law found him a job in Nigeria building the first pharmaceutical plant in Africa. He did well. I was born seven years later in India, then returned to Nigeria. We had an armed robbery. They decapitated the dog, pistol-whipped my dad, threatened my mom. I was excited to have visitors. One robber was a regular at my mom's open kitchen and spared us.

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Host9:45

Wow.

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Shyam Sankar9:46

We left everything and resettled in Orlando selling knick-knacks at theme parks. My after-school care was going to SeaWorld with my mom. I thought it was normal. I wore misprinted t-shirts. But it was a privilege to grow up near the space coast, watching shuttle launches. It gave me a sense of scientific progress and American prosperity.

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Host11:21

Wow. Your dad is your hero?

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Shyam Sankar11:26

He is my hero.

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Host11:26

Is he still with us?

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Shyam Sankar11:28

He passed away in 2021.

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Host11:29

Sorry to hear that. When did the entrepreneurial mindset kick in?

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Shyam Sankar11:41

Early. My dad was an entrepreneur. I worked at his pharmacy, started programming in 11th grade, dropped out of Cornell to build a company. I went to Stanford to be on the West Coast with builders. Within two months, I was the fifth employee at Zoom with an X, a money transfer startup funded by Peter Thiel. My interviews were with PayPal Mafia members. That's how I got started.

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Host13:06

You all know each other. How did you meet Joe?

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Shyam Sankar13:14

I was at Zoom for three years. A colleague said there's a company perfect for me. My freshman dorm mate at Stanford was a co-founder, Joe. He put me in touch, and Joe hired me.

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Host13:36

I love talking to Joe. What was Palantir at the start?

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Shyam Sankar13:48

It was smaller but ambitious. We wanted to help institutions with counterterrorism. The political debate was security vs. privacy. As engineers, we knew both matter. We built technology to protect data and maximize sharing. One operation defeated an ISIS cell that planned to blow up a hospital with a downed drone. It required intel from Denmark, the US, and the UK. Our technology enabled machine-to-machine sharing, and they were gone before the drone left the garage.

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Host15:36

I'm still trying to figure out what Palantir does. You're in anti-money laundering, rail, energy, defense, insurance, semiconductors, utilities, retail. At least 30 things.

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Shyam Sankar16:00

We do much more now. The business is 50/50 government and commercial. Commercial covers 50 industries. Government is mostly defense and intelligence, but also health, IRS, justice. Our technology is an operating system for organizations. It lets you see yourself. For example, the Army took three weeks to count tanks because there's no canonical record. We built systems to integrate data. Data is not the new oil; it's snake oil. Value comes from using it to make decisions. It's about decision advantage.

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Host18:30

For the ISIS drone example, what data do you feed Palantir to speed decisions?

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Shyam Sankar18:50

So the

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Host18:51

I'm a former SEAL. I'd say raid the compound. The decision seems obvious. So what?

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Shyam Sankar19:11

The decision is leading up to realizing what they're trying to do. How do you integrate human reporting from different countries? How do you automate sharing? Combine SIGINT, FMV footage, and intercepts to piece together the conclusion and timeline.

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Host19:58

So it's basic. Government communication is a disaster. Palantir takes all the information, processes it, and gives probabilities. It turns on the light in the battlespace.

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Shyam Sankar20:49

We provide software to the government. They have the data but it's in the dark. We spotlight what matters. Can you answer the next 10 questions in 10 seconds? If it takes 10 weeks, you won't bother. We automate information sharing with software that enforces rules, creating a hive mind. The government can operate competently without human gatekeeping.

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Host22:14

The mission gets obfuscated by interpersonal factors. What were you doing as employee 13?

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Shyam Sankar22:32

It was hard. None of us had clearances. We carried our own projector to DC. We coded based on customer feedback overnight. We used synthetic data until we got conviction. It started with a renegade analyst, Sarah Adams. She brought CIA analysts to see our demo. They revolted against IT trying to shut it down. That broke the floodgates. I did 300 demos, and she made it happen in one day.

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Host24:24

I'll talk to her. So you started in defense tech and grew into other areas?

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Shyam Sankar24:34

It was always about defense. The commercial business powers innovation we bring to government. We started because we cared about the government mission. We only built a commercial business because the government was too slow and we would have gone broke.

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Host25:08

What pushback did you get from the deep state?

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Shyam Sankar25:15

They wanted to build it themselves. Analogy: SpaceX next to Boeing. Boeing looked sophisticated, SpaceX looked like a joke. But the first derivative matters. SpaceX improved fast. In our early days, we seemed like kids in shorts. I once got dressed down for not wearing a tie in the Pentagon. But the substance is the code, not the tie.

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Host27:04

You disrupted the military-industrial complex. Was there pushback from Lockheed, Boeing, etc.?

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Shyam Sankar27:27

A lot of pushback. Fake partnerships. But the government was our real competitor. Program offices have long-term plans. We disrupted them. Our adoption came from the field. First deployment was with 10th Group in Balad. The colonel called us three days before deploying. He palletized our servers and gave us four seats. We earned our keep. Matt Grimm and Greg Barbaccia were there.

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Host29:21

Yeah.

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Shyam Sankar29:22

What was that like for you?

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Host29:24

Eye opening. I spent most of my time at Leatherneck in Helmand with the Marines.

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Shyam Sankar29:30

Nice place. I've been there.

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Host29:31

Dicey spot.

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Shyam Sankar29:34

What year?

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Host29:34

2011.

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Shyam Sankar29:38

I was there around that time.

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Host29:41

Interesting.

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Shyam Sankar29:43

Tell me about it. We had these experiences that were like a water tank of motivation. People came back from missions with feature requests. I coded in a plywood setup and had something better the next day. I was the first forward deployed engineer. Investors hated it, but it was right for users. You need to be in the tent with the people doing the work. That builds deep understanding and addiction to purpose.

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Host31:12

I love that thinking. There's always a box they want you to think inside. I think there is no box. You guys nailed it.

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Shyam Sankar31:55

Credit goes to our customers. That colonel took risks. More people put in urgent operational needs to get Palantir. Some suffered career consequences. Good ideas don't come from Palo Alto; they come from Djibouti or Detroit. We haven't held ourselves accountable to winning. Does the software work? What can you change to make it work better tomorrow? Are you impatient enough to drive that change?

Institutionalizing rebellion. There was nothing that headquarters was going to tell our engineers in the field that would make them better at coming up with the next feature. That was going to come out of their own crazy creative ideas, being right next to the problem. So my job is to support them in doing that to the greatest extent possible as we continue to build the company, so that the machine doesn't crush them, the machine encourages them. That's led to this philosophy at Palantir that we are not a factory. We're an artist colony. My job is to find Delali and Monae and not do stupid things like yell at Monae to paint more like Deli. Each of these people are unique artists, and my job is to get out of their way, make sure other people stay out of their way, provide as much room as possible, and help them. Just like an artist, it's not like every piece of art is better than the last one. You go through waves and cycles and just create the environment that allows them to do their best work.

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Host34:31

Interesting. You guys, Palantir sued the government towards the beginning, correct?

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Shyam Sankar34:38

Yeah. In 2016, we sued the army because we were unable to compete on their army intel program. The story is, all these units as they would deploy, they would request Palantir. The reason they had to request Palantir is there was an army program of record called D6A. And D6A was the blessed system that was supposed to do army intel, except it didn't really work. $26 billion, many years of development, and you would honestly find it, when the generals came, people would turn it on and pretend like it worked. But it was a paperweight to them. It was just sitting there collecting dust. We were there on the ground, highly responsive, and all we wanted was the opportunity. This program was coming up for recompete and we wanted to compete to win it. The way the army structured it precluded us from competing. It basically said you have to custom build a product and turn over all your IP to us or you're not even allowed to compete, which is illegal. It turns out, which is why we sued, there's a law from 1994 called the Commercial Item Preference, that if a commercial product exists, the government is not allowed to go custom develop something because that's risky and probably going to cost a lot more. As a philosophy, we'd rather tie our investments to what the commercial world has adopted because it means it probably works, it's been derisked, hypercompetitive free markets are voting on it and providing the stimulus to keep making it better. It's going to be cheaper. So we sued them. It went to appeal. We won on appeal. So it's a very strong precedent. But the key lesson from that is how hard it is to change the momentum in the bureaucracy. One of my favorite anecdotes is there was a contractor working on this legacy D6A system in his civilian job, but he was a reservist. He got flipped to active duty and deployed to Afghanistan. The first thing he did when he hit the ground was put in an arms for Palantir. So when his life was on the line, he knew what he wanted to back.

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Host36:49

Wow. What are some other? I mean, how often were you guys going overseas?

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Shyam Sankar36:55

Constantly working with the warfighters. Yeah, constantly. We were in Iraq and Afghanistan throughout the conflict supporting users. We were working with coalition as well, with UK special forces, other places, Philippines, Djibouti, supporting ODAs. We get on the conveyor belt of flights that would go visit the forward operating bases and make sure folks had what they needed. Make sure that their forward lock, they would take their laptops to do key leader engagements where all the intel was really coming back. When you were alone and unafraid and disconnected, this was your brain, this is how you were coordinating things. A lot of the value was doing our part to change the nature of the conflict from being 17 one-year-long wars to really creating continuity. Some Marines will tell you there are Marines alive today because of the simple fact that we could look back at past deployments and realize every time prior teams landed at this HLZ, they got bombed to shit. It was always an ambush. Just being able to see things that we couldn't know because we weren't there on the ground, but being able to learn from the history and the experience of everyone else who's been here before us made us smarter and more lethal and more survivable.

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Host38:15

Any close calls when you were over there?

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Shyam Sankar38:17

Not for me personally. Some of our teams definitely were under mortar attack and a few convoys that took some fire, but fortunately for us no one got hurt.

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Host38:27

Right on. You know, Palantir sounds like one of the main philosophies is founders first or founder-driven. What does that mean?

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Shyam Sankar38:39

Yeah. I think we could start by what does it not mean? Why do doors fall off airplanes? Why do we have this legitimation crisis for our institutions? This sense that the institutions we have aren't working, and I think it's because they're stuck in manager mode. There's this idea that there's a playbook and if you just follow the process, everything will work. My experience is it's all well-managed into the ground. Whether it's a company or a country, there is no playbook. It really comes down to human discretion, human decision-making, bold leadership, people with the right ideas. In our history, it comes from one of our founders, Peter. It's called the Founders Fund. The whole idea is that the value creation engine comes from the founder personality. The most dynamic parts of our economy are led by founders. Europe has created zero companies in the last 50 years from scratch that are worth more than a hundred billion dollars. Zero. We have created all of our trillion-dollar companies in America from scratch in the last 50 years because of founders. There's something special about founders. There's a reason we call them the founding fathers. This is a unique legacy of America that we should really be leaning into and embracing. It's more than just did you found a company. It's a mentality, a personality. When you think about Bill Knudsen and how he mobilized us for World War II and built the arsenal of democracy, he's got a founder personality. Or Admiral Rickover. This guy born in a Polish shtetl, came here when he was six years old, short man, feisty. He was so hated at the US Naval Academy they tore his picture out of the yearbook. Zumwalt said when he was CNO, the Navy has three enemies: Soviet Union, the Air Force, and Hyman Rickover. But he built the nuclear navy. After World War II, he went to visit Oak Ridge and realized, 'Holy crap, this could power an entirely different regime of sea power and give us the ability to keep our subs underwater more than an hour.' Those diesel subs back then, it's laughable when we think about it. He was a four-star admiral for 30 years and we kept him in place and he built one of our last remaining asymmetric advantages. That's a founder personality. Gene Kranz who built the Apollo program, Kelly Johnson who built 41 airframes in his life, including the U2 which we still fly and the Oxcart and the SR71. These people did incredible things. That's the promise of America. We have these people who do incredible things. Don't squash them. Don't crush them. Let their innovation thrive. Those people are in government. I think the reason JSOC was one of the first places to adopt us is you got a lot of founder personalities in JSOC. That's how that institution works. That's what happens on the ground. They are entrepreneurs in a different domain. For us, it's great. When you have someone who has the creativity and the vision, I can build a software Iron Man suit around them. I know how to make them a hundred times more lethal or effective in the business context than otherwise. When you have a manager who's just trying to follow the rules, maybe you can make them 10% better. You're just rearranging the deck chairs on the Titanic. There's this constant need for reinvention. We can't rest on our laurels. It's these founder personalities that push that reinvention, who see what could be and see what is broken and close that gap.

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Host42:24

So it's enabling that.

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Shyam Sankar42:25

Yeah.

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Host42:26

Love that. You brought up the nuclear program in World War II, and I heard you downstairs talk a little bit about Operation Paperclip. That's something I've been fascinated to hear about. What was that?

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Shyam Sankar42:41

Operation Paperclip was our covert action to bring the very best scientists from Nazi Germany to the US to enable our defense program, in particular our rocket and space program. Think about how hard that would be. These were our sworn enemies. They were horrible people. They did horrible things. But they were without exception the world leaders in this capability. They could either fall into the hands of the Soviets, which would only create more problems, or we could bring them here, hold our nose, and figure out how to rehabilitate them and use that for our own economic prosperity and national advantage. We did that. What's really instructive about Operation Paperclip is there were two competing programs. One was Operation Paperclip and the other was called Fiat. Fiat was this idea that we don't need these dirty scientists, let's just steal the scientific papers, take the technical documents, and we'll be able to learn from the documents alone. It was a catastrophic failure. It turns out there is something special about the human separate and apart from just what they wrote down on a piece of paper. There's more to replicating these things than math. There is something about the human mind that's really relevant here, and it underscores this point around the founders and the primacy of people, which I think is one of our greatest national resources. The reason it was called Paperclip is that's how we told them to come in through the front door through State Department, which obviously would screen out Nazis. So you had to have some sort of cover. We would have these files and we would resettle them. This is how Huntsville got started. Where can we put these people where it'll be low viz, low profile? We built a whole space industry in Huntsville, Alabama around von Braun and his colleagues.

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Host44:42

Wow. That's awesome.

Well, I had something that I ran across that I think a lot of people are fearful of. It's predictive policing software. Are you guys involved in that?

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Shyam Sankar44:59

We don't do predictive policing. It's widely believed publicly we do. We don't. And it has probably the most scary name possible.

I think a better way of thinking about it is the projects I've seen and been close to, it's about resource allocation. Where should I preposition police to deter violence? We look at the historic data. We see there's a lot of stabbings at this Jack in the Box at 2 a.m. on weekends when the temperature is pleasant enough for people to be outside roaming around. It might be nice to have a cop on that block, make the presence known, deter any bad actors. That's been effective where it's been possible. The branding has been really detrimental, but there is a clear correlation between the presence of policing and deterring violence. The other aspect is understanding that with gang violence, it's usually a cycle of retribution. This person got killed. The family of the person that got killed, their gang knows who did it. There's going to be retaliation. If you can figure out ahead of time these relationships, you can have presence there to suppress the ability for retaliation to happen without consequence, which then hopefully gives time and space to quiet down the violence.

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Host46:24

Okay. So this is similar to what you guys are doing, just in a different outfit. It's sifting through data and telling you where to allocate resources.

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Shyam Sankar46:35

Yeah.

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Host46:36

Interesting.

Well, let's get into you talked a lot about the bureaucracy in America and the challenges it caused you guys to overcome. What do you think's wrong in America today?

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Shyam Sankar46:51

What I think is wrong writ large with the world is that, let's steel man it. The executives of these agencies or companies have a steering wheel they're trying to steer the ship, they're trying really hard, but what they don't know is that steering wheel is like a prop from the Jungle Cruise ride in Disneyland. It's not connected to anything. The people on the factory floor look up and say, 'How can my leadership be so dumb? How can they not see what's actually happening here?' Then you have all the layers in between. Part of their job is to make sure the steering wheel doesn't actually work. They're controlling and massaging the information as it goes from one place to another. So you can't see yourself if you're at the top. This breeds a nihilism. Nothing works. We should tear it all down. Sometimes that's the answer. But you have to wake up. There has to be some force trying to make these institutions actually functional. That's what we see our software doing. It's creating a steering wheel for the executive that is connected directly to the people who do the work. That gives you a basis to understand what is happening. How do I know when I provide steering input, is it actually going to result in changes? How do I iterate on my policy and strategy? When I have a question like how many tanks are in the army, I should know that in three seconds. That lets me know, do I need more or not? I can move on to the next problem. If I have to wait three weeks to answer that, the whole system gets gummed up. Nothing actually works. You don't understand that the quality on assembly of doors is not working, and therefore small problems that can be solved become big problems. This breeds a legitimation crisis. The legitimacy of our institutions is based on the fact that they work. How do you spend $11 billion on high-speed rail in California and have 1,600 feet of track that goes nowhere? With a government institution that's really proud about how many jobs they created. Compare that to SpaceX. They've only spent $9.6 billion and they put more than 300 rockets into orbit. We spent $40 billion on rural broadband and have no rural broadband. We spent $80 billion on electric chargers and I think we had like eight. There's something wrong. Part of the disease is this idea that all you need to do is cut a check. Money will just solve the problem. Money enables the founder personalities. Money enables people to do the work. It's the front end of enabling the work, and it's the back end, the reward for having done the work. But someone's got to do the work, and you got to be really good at doing the work. That's art, that's craft. It's not a commodity. It's not mindless. You don't just outsource it. We need people to be proud of that and our efficacy in doing that. The counterfactual: if we didn't have Rickover, if we rotated people in and out of driving the nuclear navy every two or three years, we wouldn't have it. It wouldn't have worked. Why does the F-35 take 30 years when Kelly Johnson could build 41 airframes in his career, build the U2 in 13 months?

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Host50:30

Do you see this changing?

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Shyam Sankar50:31

I do. The reason I've been writing about it is that I'm wildly optimistic that we're on the verge of changing it. It's a little bit like a ketchup bottle. You shake it, nothing comes out, and then it comes out all at once. This has been building. People can feel this subconsciously. They can see it in the parts of the American economy that are working, which frankly are the only parts of the economy. Look at Europe, nothing's actually working over there. The parts of the world economy that are working look like this. The parts that don't, you see it with when DOGE goes to DC. There's a lot of noise from the other side around DOGE, but it's been amazing. You have people who are the NBA athletes of technology walking around realizing, 'Oh, that's a seventh grade basketball team over there.' People who can call balls and strikes. Conversely, that person in government is a genius, they're not empowered. We need to empower this person who actually knows the right answers. DOGE has the ability to make those calls and to do so with taste. That realignment is profoundly needed.

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Host51:37

Why do you think there is so much pushback on that? What are they scared of? This sounds like we're going to save money, things are going to become more efficient. I don't understand the pushback.

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Shyam Sankar51:54

It's not supposed to work this way. We were following the playbook. There's a system. It's this belief in process over outcomes. It's profane to have to blow up all the process and to believe that everything we believed in the past didn't actually work, or that there would be another way of organizing yourself that would be superior and would work better. That's the subconscious undertone of the pushback. People, it's like the best engineers. Like I said with Hyman Rickover, he was hated by the Navy, but he was a national treasure. Can you hold that contradiction? The engineer said something that hurt your feelings, but they're right. Can you hold that? If you care about the outcome, that's easy to get over.

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Host52:47

So it's ego. It's all ego.

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Shyam Sankar52:50

What a shame. But I think the results will speak for themselves. I've seen this so many times. Once the bureaucracy gets out of the way, you can often solve these problems inside of 30 days. I know those guys, that's what they're focused on every day, delivering results, keeping their head down. They're a national treasure.

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Host53:12

How long ago could we have done this, do you think?

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Shyam Sankar53:15

From a technical perspective, we could have done it 30 years ago. From a political will perspective, it took President Trump's political will and the mandate that he got with the election to make it happen.

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Host53:28

And you still see the amount of pushback that there is.

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Shyam Sankar53:30

Yeah, it's insane. I just don't understand it. It seems like it's better for everybody if we do this. People are screaming on the rooftops. To tie it back to founder mode, my own support for President Trump is, I had a three-hour dinner with him in the presence of a few other folks. What I felt profoundly was a founder personality. This is a person who was going to throw away the manager playbook, who actually had an intuitive understanding of the things that were broken and what to do about them, was going to make contrarian calls, and actually cares about the outcome.

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Host54:05

Speaking of President Trump, hot news right now, the tariffs just came out yesterday. I'm just curious, what are your thoughts on that? Are you worried about that at all?

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Shyam Sankar54:19

I'm not. I think there will be some volatility. I've been looking at the markets, thinking about how much of this is the market reacting to the playbook. It's prophylaxis before the pain is even felt. They take as an axiomatic given from economic theory that this is a bad thing, versus empirically it's already resulted in badness. There's going to be some chop between here and there. But the ultimate thing about the founder playbook is not that founders are always right, but that they are first intuitionally driven and often can only fully explain their intuition over time. You have to decide: is the rebuttable presumption going to be we lean in and try what the founder is saying, or are we going to resist every step? Is the burden of proof such that I will not take any action until I perfectly understand everything? No great things are accomplished that way. It's too slow. The OODA loop is too long. So I'm in a suspension of disbelief mode.

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Host55:22

A lot of people are worried the prices are going to go up on everything.

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Shyam Sankar55:28

I would say Scott Bessent is a very smart human, very smart macro trader, part of an elite world. There's probably on the order of 10 people in the world like him as a current Treasury Secretary. It comes down to confidence in the team. I have a lot of confidence in the team.

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Host55:49

Okay. Back to Palantir, what other countries are you guys working with?

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Shyam Sankar55:55

The US and our allies is really our focus. We have most of Western European intelligence organizations using our software. Some of that is, they're subscale in many ways, so I don't want to call it philanthropy, but it's the right thing to do. After the Bataclan massacre, we volunteered to help the French out massively. They took that as a mark-to-market moment of we need the help. A lot of these European countries have their own indigenous industrial base which they're very proud of but is not at the level of the US industrial base. There's always a conflation of what part of my industrial base is a jobs program and what part is supposed to provide deterrence and lethality to protect my nation. We're really happy with that level of work. Australia, Japan, the US and our allies.

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Host56:52

What do you think about a lot of stuff going on in Taiwan right now? How important is it? Should we even get involved in that?

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Shyam Sankar57:03

I think the way I think about it is that we want to make any sort of kinetic or even non-kinetic economic action against Taiwan too risky for our counterparts in China. We want to push out. If the Davidson window ends at 27, our goal is to make that 28, then 29 and 30, and just keep making it harder and too risky for the CCP to do anything. That's the optimality. It plays to the primacy of winning. It's a mindset that we're not trying to solve the problem. We're trying to make sure they can't move on Taiwan.

H

Host57:45

How exactly could you be a little more descriptive on how we would do that?

S

Shyam Sankar57:50

We have to make it not survivable or unpredictable what the outcome is going to be. The way the CCP works, the amount of certainty they're going to need is pretty high for an operation. If they know exactly what we're going to do, they'll figure out a counter plan. They're the best at long-range planning. They have a 50-year plan and it's really well thought through. But the fundamental American strength, why I think we'll win in the end, is that we're crazy. We don't know what we're going to do when we get punched in the face. So how could they? We have to bring that craziness left of the balloon going up and make sure the level of unpredictability we're creating in that battlespace means we stay in competition and never get to crisis or conflict.

H

Host58:47

How dependent are we on Taiwan for semiconductors and chips and all these types of things?

S

Shyam Sankar58:54

For the leading edge, very. That's the important part of our hedge strategy. I heard that Intel and TSMC are announcing a new joint venture. We need to bring this as part of the broader need for re-industrializing the nation. We probably have two weeks of pharmaceutical supplies. Most of these pharmaceuticals, the upstream ingredients, the APIs, are made in China. If we just start going through the things we need to ensure our American prosperity, too many of them are in the hands of our lethal adversary.

H

Host59:27

China is a topic we continuously discuss here. How worried do we need to be about China? It seems like they have us in all these different areas. Manufacturing, pharmaceuticals, our whole supply chain comes from there. They're involved with drug trafficking coming out of Mexico.

S

Shyam Sankar59:56

First Opium War, as I call it.

H

Host59:58

They're buying up all our land. They're investing in our country. How far are we behind China?

S

Shyam Sankar1:00:10

I think we do not yet have clarity of the threat amongst the American people. The national security community has not confused. They understand it is the priority threat. Part of this might come down to our media and our culture. What was the last movie you saw that showed America is the good guy and the CCP is the bad guy? When I was a child, even the World Wrestling Federation had the Iron Sheik. We had the Iranians as the bad guy. There was a USSR heel. We had a very clear sense of who our adversaries were and that we were competing every day. If you look at the essential Chinese propaganda, which we kind of imposed on ourselves with their ascendancy into the World Trade Organization, it's taken two forms. One is we're so weak, there's nothing to worry about. The other is we've already won, there's nothing to worry about because you've already lost the competition. These two lines of propaganda, even though they seem contradictory, have one thing in common: saying we're not competing because either we're irrelevant or we've already won. It was designed to obfuscate the fact that we are competing every single day and viciously. That's the clarity we need as the American people to realize we're in a competition today. It's an economic competition. Let's do everything we can to make sure it remains only an economic competition, which requires us to invest in deterrence. The Chinese were kind of surprised that we did nothing when they militarized the Spratly Islands after telling us to our face that they were not going to do it. This is the part where I think their miscalculus comes in. The sort of Midwestern, we positive sum, we're fair people, we seek peace, so we'll take you at your word and treat you well. But at some point you'll break that, and then as one admiral once told me, the American OODA loop comes out: observe, overreact, destroy, apologize. How do we manage this so that we are actually conveying and managing the threat appropriately?

H

Host1:02:20

Where do we even start? We have all these politicians that have businesses over there. I rattled off a bunch of other stuff. What would happen if they just cut our supply chain?

S

Shyam Sankar1:02:40

Well, right now,

H

Host1:02:41

It would be really bad.

S

Shyam Sankar1:02:42

It would be very bad. Right now it would also be very bad for them. They're trying to produce their own indigenous chips, their own GPUs. They want their own Nvidia. We've curtailed their access. Of course, they're getting around sanction evasion, buying from Malaysia, Singapore, but we've made it hard for them. We're creating dilemmas and problems. So they're trying to make themselves self-sufficient. We need to be investing in the same things along strategic areas. It can include our allies. Sometimes I worry that friend-shoring is a half measure. It's an easy out. I'm not trying to exclude our allies from being part of the solution, but everything that we can make at home in America, we should make at home in America. The pathing really matters. When we were mobilizing for World War II, we took Bill Knudsen, a Danish immigrant, and he was in charge of war mobilization. He had a lot of room and flexibility. FDR put him in charge as a civilian in the lead in 1938. In 1938, there was not consensus in America that we should be involved in this European matter. There was a strong sense of isolationism. But what FDR realized is it takes time to build factories. I need an option. Maybe we should be isolationist, but what I definitely don't want to do is be isolationist because the cupboard is bare. So how do we mobilize so that we can provide credible deterrent? This is not about wartime mobilization. It's about mobilizing so that there is not a war. That is really mobilizing our re-industrialization. I've been talking about this for five years now. Back then it seemed like a far-off fantasy. People thought it was a little crazy. This term has entered the mainstream. You will see it on Fox News. Re-industrialization is a theme. There are serious people investing serious capital to do this. When we get the American private capital markets behind this, which is starting to happen, it's going to be unstoppable.

H

Host1:04:47

There are so many sectors to build. Pharmaceuticals, chips, everyday products. How are we incentivizing entrepreneurs to start building these factories?

S

Shyam Sankar1:05:04

To the point of confidence in your team, they're thinking about that. I've heard proposals around changing the depreciation and amortization schedule for factories and investments. How do I use the financial math to encourage the capital markets to view these things differently? Fundamental deregulation. How do we change NEPA? How do we change the regulation permitting processes so that it doesn't take you four years of waiting for a bureaucrat to tell you that you didn't dot the right i or cross the right t, but minutes to get the approval to go? This is what unleashing American energy is about. What does a factory run on? The cost of energy is a material input to everything. It is the first input into all the goods and services we buy. Bring the cost of energy down, it is a massive deflationary force. We are the largest energy producer in the world. We need to just get out of our own way on this and not have a regressive mindset around using energy is bad. Actually, the basis of modern civilization is energy. The more energy you use, the better your standard of living, the more things are possible. That's not a contrarian thing to say anymore. You would have had pitchforks and protests if you said that five years ago. Now people are like, 'Yeah, obviously that's true. How do we get after that?' You see the tech community investing in things like fusion and fission and small modular reactors. People recognize the reason to be super optimistic, particularly on energy, is that the AI companies are going to be crippled if they're not able to have the energy needed to run their AI. They are investing in it themselves off their own balance sheet. They're not waiting for a utility to do this or that. They're going to be building energy production behind the meter.

H

Host1:06:46

Wow.

S

Shyam Sankar1:06:46

It's not even going to the grid. It's captive energy for their data center. A lot of that is the bureaucratic BS of how long does it take. Oracle was just talking about how one state utility company was saying, 'Oh, we could get you this energy in the 2030s.' 2030s. We should be measuring everything in months. This is the core thing that's going to solve our problems: being impatient. We need to be thinking about what can we be doing now, what can get done. That's what I love. The focus of this administration is very much these are the things that must be delivered inside of this administration. That then changes how you think about solving these problems.

H

Host1:07:29

Forces you to realize that the playbook and the process is totally screwed. It's never going to get there. It was never going to work anyways, but now it's just clear it's not going to deliver in the time. How do we reinvent ourselves in this moment to go make it work? What kind of energy should we be looking at?

S

Shyam Sankar1:07:44

All types. Like I mean if you really look at, we need more natural gas. We need to make investments in nuclear. It's going to take longer. We sure bring on more renewables. But look at the irreliability around base load, the variability, the battery storage means that we need to be practical. So I'm not trying to favor one type over the other but we're going to need more of all these types of energy. Would you like to see more nuclear?

H

Host1:08:12

Yes, I would.

S

Shyam Sankar1:08:13

Why?

H

Host1:08:13

I think turning our back on the atom was one of the gravest mistakes for our rate of progress.

S

Shyam Sankar1:08:21

Nuclear is largely expensive right now because we've regulated ourselves to death.

H

Host1:08:26

The designs that we have are very safe. Him and Rick over when he was building the nuclear navy, his safety standards were set so high, higher than civilian safety standards because his litmus test was my son will be in this sub. How safe does it have to be for my son to be in this sub? If you compare that to the Soviet submariners, they had to for every six months they served, they had six months of rest in Sochi to regenerate their bone marrow because they were irradiated to all hell, you know. So there's a way of doing it. You get the right people, the right design, the right founder mode leadership. This stuff is safe and it's abundant and it's clean and we can get it at scale and you can build it in all sorts of places. And we got we have to be thinking about this from a competitive advantage perspective. I'm not sure it's a perfectly linear uh extrapolation, but you know, in order for our ship building to be competitive, you need more than just building government warships because to this point of of a diversified R&D base, um workforce that knows how to do these things. You need scale, right? As we all know, the one shipyard in China alone has more than all the ship building capacity of all the US combined, right? They have 250 times the ship building capacity

that we do. 250 times.

S

Shyam Sankar1:09:48

I'm not sure that we need to match them, but we need to be able to produce ships. When we say we're gonna have two subs a year, we need to have two subs a year, not 1.1. You know, Palmer Lucky talked about this when I interviewed him. He said 250 times as well. But I am curious, what do those ships look like? Are they an equivalent to something that we make or is it a shell that's basically a cargo ship? What do you have any insight on that?

H

Host1:12:20

Oh shit.

S

Shyam Sankar1:12:49

That started in the 70s. Boardroom started talking about it. It accelerated in the 80s. And then when the last supper happened in 1993, there was this dinner in the Pentagon.

H

Host1:13:34

What are the five?

S

Shyam Sankar1:13:35

Northrup, Lockheed, GD, Boeing, and Rathon. The popular narrative is this is when we lost competition in the industrial base. 51 down to five, you have less people to pick from. That definitely happened but I don't think it's the dominant problem. The dominant problem is you lost that is really that the consolidation bred conformity. You had companies that were you know almost like test tube babies artificial mergers no single unified culture. They became essentially like almost state-owned enterprises extensions of the government just doing the government's bidding and there was not enough heresy not enough crazy ideas that pushed the envelope you know not enough Kelly Johnsons of the world. It drove out the founders. Founders cannot work in a conformist environment, they are heretics by their very nature, and it drove the founders to other industries like tech. The reason for immense optimism in this moment so that 6% today is 86%. So the 6% that used to go to only defense specialists has ballooned into 86% that go to defense specialists. So these companies have very little commercial business. They are kind of on the Galapagos islands. They've built specialist entities that only know how to sell and interact with the government.

H

Host1:14:59

So that's the key. The key is to learn how to sell and go through all the red tape to sell to the government.

S

Shyam Sankar1:16:34

Seronic and their unmanned, their USVs, the surface vessels. You have Epiris with anti-drone technology, counter-cas, Shield AI.

H

Host1:16:47

What's Shield AI?

S

Shyam Sankar1:16:48

Shield builds autonomous autonomy for fighter pilots. They flew the F-16 autonomously. They built the VBAT which is a drone that is so far seems the primary US-made drone that is able to survive in the contested Russian EW environment in Ukraine. They, you know, to the point of just getting out of our own way. Like how do the Ukrainians decide what drones to buy? They once a quarter they have a field test. They create a test range. They jam the crap out of the environment. Anyone who wants can show up, fly your stuff. If it doesn't fall out of the sky, we might buy it. And Shield showed up to one of these things and they were the only one who didn't fall out of the sky.

H

Host1:17:29

No kidding.

Yeah. Do you want to talk about Epirus a little bit? I love that company.

Oh, so it's one wave. I thought it was like simultaneously shooting out EMP pulses or whatever it is.

How fast you can make them.

Palantir's down in you guys are working with the border too right down the border. What are you guys doing down there?

Wow.

What do you think we should do about that?

Yeah.

What's working down there? I mean, getting into the nitty-gritty down on the border. I mean, how was it? How did we seal it off so fast?

Let's take a quick break. Sure. When we come back, I want to talk about the future of warfare.

But I want to dive a little bit more into the reverse opium war. Can you go into that?

S

Shyam Sankar1:26:30

Yeah. You know, so we had the opium war where really the Chinese felt like a lot of drugs were flooding into China. The reverse opium wars. The Chinese are funding and enabling fentanyl precursors to be shipped to Mexico to then be funneled into our country. We lose at least 100,000 Americans to this war every year. You know, it is an ungodly casualty rate. And it's not just happening on its own. If we were losing even a fraction of this number of people to kinetic attacks, we would have a radically different posture to what's happening here. I think some of this is our own conflicted and I think retrograde feelings of is it the fault of the person who's using the drug? But you have to really step back and recognize the environment that is enabling all of this to happen. It's a tragedy at a big scale and I think obviously the cartels bear a lot of responsibility but these precursors are coming from somewhere and the Chinese have so much control over their economy if they didn't want it to go it wouldn't go. And I think they view it as part of their national interest to undermine us from the inside.

H

Host1:27:56

Yeah.

S

Shyam Sankar1:27:59

It was just expansion, you know, it was economic expansion where people were trying to trade with China at the time. You had the collapse of the historic dynasty, the beginning of the century of humiliation. And it was kind of an outgrowth of unbridled economic expansion. There was a market for it. I think it was largely the British that was supplying it. Maybe was coming up from Afghanistan as I recall. And it undermined the Chinese people, you know, you had lots of people who were addicted to opium. It undermined their productivity and I think that's why it's the reverse opium war.

H

Host1:28:36

And we were pushing that.

Why? Why were we pushing it?

S

Shyam Sankar1:28:43

I don't know. And so this long later, I mean this is because of that. Actually, I think it is an asymmetric way of weakening us. It's an asymmetric way of doing it. It's pretty cheap if you think about cost per kill. It disintegrates society. It weakens families. It causes a lot of trauma. Weakens our will. It distracts us from doing the things we need to do around our economic prosperity, around reindustrialization, around taking them seriously as a threat.

H

Host1:28:54

Yeah. Well is it because of that or I think more it is an asymmetric way of of weakening us?

One other thing I want to get to before we go into the future of warfare is we were talking about Operation Paperclip later. And so just downstairs, I just had a thought. I mean, should we be doing that today?

S

Shyam Sankar1:29:39

We should. I've been trying to socialize this idea and I think I don't know if we're at a point of having the political will. Operation Paperclip 2 should really be around re-industrialization. If you think about German Mittelstand companies as these middle tier high-skilled manufacturing companies, I think they're kind of somewhat lost in Germany today. If you look at what happened in Germany, the big companies sold out the German economy to the Chinese. BASF, big chemical company, most of their factories now are in China, not in Germany, Volkswagen, and the investments they've made in China. But that was never the perspective of the middle tier German manufacturer. Most of these companies are family-owned. They're hundreds of years old and been in the family consistently. They're high-skilled. It's not commodity stuff. High art, high trade. Maybe some of them want to move their manufacturing to America. Maybe we should enable that. Maybe we should be basically if you generalize this concept you have entrepreneurs, highly skilled who make things that are not commodity, hard to make anywhere in the world let alone here, and we can marry them up with the deepest richest capital markets in the world which exist in America. How do we help them build their business, create employment, and drive our national security by re-industrializing America?

H

Host1:31:05

Damn. I mean, who all would you who all should we be targeting other than? Is there anybody that's making defense tech or anything that we should be snagging up and bringing?

S

Shyam Sankar1:31:17

I would you know, you'd have to heavily vet them, but I think we should be thinking pretty seriously about disaffected Chinese that we can be pulling over. You get a little twofer for that. Weakening them and strengthening us. And then the surrounding areas like Taiwanese entrepreneurs, Japanese entrepreneurs, manufacturers really, and then you have a belt of these folks in Europe, a little some in France, a lot in Germany, maybe even a few of them a little bit in Eastern Europe. But we should be taking the cream of the crop who are doing these things in new and novel ways and bringing them here. While the main effort should be investing in the founders who are here in the area around El Segundo where we have this revival of American manufacturing happening doing it in different ways and I think it's worth double clicking into that because you know the conventional view of efficient manufacturing is that you have this very distributed supply chain. Everyone makes one part and these supply chains go really deep but what that's done is it's hollowed out the knowledge from the buyer. So if you're at the top of the stack and you're building jet engines, you don't even understand your supply chain. You just think you're buying something. We've kind of fucked your mind in terms of how deeply you understand the product that you're building. You're just ordering parts and essentially assembling them. That's not what Elon did. He vertically integrated. He builds the whole rocket engine himself. And that means he can control and reduce the number of parts. He can say, 'Hey, these three parts should be combined because it'll be more efficient.' And that's how you get the asymmetric advantage and the leaps, the ability to innovate on these things. So that's where I say it's not that we're not good at making things in this country. It's that the old way of doing it is not competitive anymore. We need this new way, much more vertically integrated, much more creative. His R&D engineers at SpaceX sit on the factory floor of assembly. Usually these are thought of as two totally different things. You have people who design the parts, you have people who assemble the parts, but actually if the engineers can see what's happening in assembly that's causing it to be slow, what's causing quality issues, it might change how you design the parts. And so how are they going to observe that if they're not physically sitting together? It sounds so simple, but it speaks to the cultural thing. And it's resonant with forward deployed engineering. So how do we leverage this uniquely American perspective on doing these things to just get back to being the best in the world at doing it again?

H

Host1:33:40

And you're starting this conversation. How are you doing that?

S

Shyam Sankar1:33:45

Well, I'm talking to colleagues in the national security community about it to see if there's a way of doing it. I'm also trying to just do it through the front door. Are there companies in particular where we can provide capital to reinvigorate it? The easy place to start is in the US. You have a lot of these mid-tier suppliers. They are actually family-owned. The next generation maybe doesn't want to continue the business. Because the government has been such a promiscuous buyer, so unpredictable in demand, they haven't had the economic reason to invest in capitalizing their facilities to do much more. There have been boom and bust cycles around this. But if you can buy a bunch of these up and aggregate scale particularly in a thematic line where it's like actually these three parts are related and I could actually make it one part and I could deliver the part more cheaply generate more value. He's like how do you get the math to work out? But I think we could just start here and start filling in the holes that we have with capabilities and technologies from allies.

H

Host1:34:42

Yeah. You know, there was a lot of blowback on the H-1B visas. That was something I was scratching my head on for a long time going like I don't see what the problem is if we take the world's best and consolidate them here in our country. And to be honest, you're an example of that. I'll take both sides of that because I feel like I really do have a view of it, which is few people should argue with this idea of taking the world's best, but so much of the H-1B program has also been abused to take average. And so then you lose the moral high ground on the entirety of the program.

Something else that you touched on that I wanted to dive in with fusion. What is fusion?

S

Shyam Sankar1:36:28

Well, fusion, so fission is how do you split the atom?

H

Host1:36:29

Fission, excuse me.

S

Shyam Sankar1:36:30

So, so fission, nuclear fission is how do you split the atom to generate power? Fusion is what our sun does, which is how do you jam hydrogen molecules together to create helium, but in doing so, it also releases energy, huge amounts of energy. We don't have commercial grade fusion yet. That's more R&D. But fission is a tried-and-true technology. All of our nuclear that when we think about nuclear, we're really talking about fission. And we are experimenting with what's called small modular reactors. How do you go from what is otherwise a huge $30 billion multi-decade power plant and make these things smaller, more modular? They're essentially preassembled so you can put them where you need them. They require less infrastructure, substantially less time to build, and the designs are modern in a way that it's default safe. You're not going to have a risk of a meltdown. The physics just don't work the same way that these legacy old systems do, which frankly we've had the technology for for a while, but because of our understandable fear around it, we backed away from the atom and it became politically we just started investing in other things. How far do you think this goes? Do you think that communities or even households will have their own power supply eventually?

I think it'll be harder for households to do. I'm hoping that the tech company's enormous appetite for cheap power is going to provide the necessary demand stimulus to the economy to go build these things again and provide the necessary stimulus for the government to reform the permitting process so that we can be clear-eyed and focused on the cost of power, the time it takes to build these things. But you're going to need, you know, talk about another industry that lacks founders like these public utilities are basically also run like state-owned enterprises. So where is that innovation going to come from? Well, it's going to come from the small modular reactor company or the non-traditional power provider who's behind the meter. And that means that they're just providing their power directly to this data center. They're not trying to put it on the grid for everyone else to use. So there's less regulation, less bureaucratic coordination as a consequence of doing that. But by doing that, eventually that power is going to be there. And any excess power, you're going to want to connect to the grid at some point. So that's going to drive the stimulus to modernize the grid infrastructure as well. We've really underinvested in the grid. We probably have a couple trillion dollars of investment we need to make, but we haven't been able, it's been this chicken or egg thing. As we get economic value out of being hopefully the world leader in the application of AI, I think it will make the other side of the equation clear of why the modernization needs to happen.

H

Host1:39:26

I would love to see that happen, but what do you think? I mean, you're going up against a big machine with the utilities and how, with all the lobbying that goes on and all that kind of stuff. I mean, how is that even possible?

S

Shyam Sankar1:39:44

Step one is competition. You know, I like to quip at some fundamental level. You either believe in free markets or you don't. And especially when you look at the government having post-Cold War, everyone has given up on communism including the Russians and the Chinese except for Cuba and the US government essentially. We have five-year centralized plans in DoD we call it the FIP, like literally we have a 5-year plan that looks very Soviet in terms of how we think the world's going to work. It's this centrally unplanned approach. So if we can start building stuff behind the meter, and if we can do the permitting reform that's necessary that this administration is focused on, it's going to enable new entrants to start creating power and reduce the monopoly that historically the utilities have had, which as a theory of change means they have to react to this. So they're either going to slowly find themselves shriveling and shrinking or they're going to reinvigorate themselves and show up to compete and be like, 'Okay, these guys were the first movers and we can do it.' There's a theory of the economy that at any given epoch, there's only maybe five to ten live players, founder-driven institutions, really innovative, they set the pace, they define what's possible, and the other companies in the economy are sort of mimetically copying. They're imitating them. And that's okay because it provides the necessary stimulus for the whole thing to kind of work. And I think the problem we found ourselves in in the last 20 years is...

Outside of tech, largely there have been no live players. These parts of the economy have shrunk and shriveled, becoming only dead players. Reinjecting live players is how we reinvigorate this. Hardware defense primes are live players, and other primes must respond. Some may not reinvent, but those who want to survive will. Similarly, in utilities, small modular reactor upstarts are the live players driving change. It's an exciting time as live players emerge, people come out of their shells, and capital markets back these founders. It's a great time for the American revival.

H

Host1:42:08

I mean, wouldn't the utility companies just buy the smaller companies and bury them?

S

Shyam Sankar1:42:17

What usually happens is at first you just laugh at them. We're in the phase of 'it's never going to work.' The fish in water doesn't understand what's outside. For the utility company, with their rules and bureaucracy, it is never going to work. But these guys are throwing away the rule book, not following the same slow processes. Once it starts working, they'll have to respond. Three of the five co-founders worked for me; they are world-class talent. The primes love to say Anduril is the Theranos of defense and a fraud. I was scratching my head—it's obviously not true. These guys are crushing it. My conclusion: they can't imagine a different way, so they think it must be a fraud. As Anduril keeps crushing it, they'll realize there's a different way and have to respond. That's the reinvention stimulus the economy needs.

H

Host1:43:42

Makes sense. Makes sense. All right, let's move into the future of warfare. What's it look like?

S

Shyam Sankar1:43:49

I think it both looks exactly like the past and completely different. The fundamentals of the OODA loop—decision advantage and speed—are not changing. The most valuable application of technology is towards that end. Why is lethal autonomy so valuable? We've had it for a while. In a fighter jet, the computer tells you about an enemy you can't see; you trust the computer. That's autonomy. Terminal guidance is autonomous. So it's not a difference of kind, but of degree. We're supercharging it with a much shorter decision-making lifecycle at greater scale. You see that with FPV drones. The Russians are losing roughly 1,500 people a day to these Ukrainian drones.

H

Host1:45:12

100 people a day.

S

Shyam Sankar1:45:14

Wow.

H

Host1:45:15

It's tough.

S

Shyam Sankar1:45:16

That's effective. So if you start thinking about that, it's the equivalent of small arms, but doctrinally. The Ukrainians treat it like an E-3 or E-4 with fire control. For us, not at war, we'd treat the authorities like a Tomahawk cruise missile, going way up the chain. If the balloon goes up, we'll throw that away and reinvent doctrine. We should get ahead of that now and think about what small arms are now—it's not just your M4.

H

Host1:46:00

Mhm.

S

Shyam Sankar1:46:01

So that's one piece. It also implies the fighting force must be more technical—not coders, but with proficiency like Green Berets have with their guns. They'll need that for technical capabilities decisive on the battlespace: electronic warfare, cyber, space-based access, communication, all the way to lethal effects. We need to invest in an Apple-like experience. Yesterday at Bragg, a special ops medic said his job was best, the weapons officer said his was best, but the commo guy said his was worst—when everything works, no one knows he's around; when it stops, it's his fault. That's cognitive burden. How often does your internet go down? Your iPhone just works. We do a great disservice to commo officers and NCOs by the burden we place on them. We need to redraw the front line so they can focus on decisions that matter on the battlespace.

H

Host1:47:50

You know, I talked to Palmer a lot about this too. I'm curious: how much of the military right now is obsolete with all the new tech and autonomous vehicles and weaponry?

S

Shyam Sankar1:48:04

No doubt a meaningful portion is. The question is how to know what that portion is. There's good debate needed. Take the tank: some think it's obsolete, but I'm not so sure. Maybe it's obsolete on the first island chain. It's about the conditions and how to reinvent hardware to stay relevant. I view that as productive competitive stimulus. Everyone who owns a platform should think about why it's still relevant. The bureaucratic impulse is to dig in and protect the program. The tank of the future may need to be different, and that opinion must be earned. We don't have enough competing force structures. It would be better to have groups thinking about future relevancy and groups trying to make it irrelevant. The Ukrainians, without a navy, could conceive of things differently. Maybe we should have a Navy 1 and Navy 2. The tank was invented by the UK Royal Navy, not land forces, because it was heterodox. They would have lost WWI without it.

H

Host1:49:44

What about personnel?

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Shyam Sankar1:49:47

That's one of the most important reforms. First, the person is the program. Stop thinking of programs independent of the right human to lead. Once you get the right human, don't let them leave. The head of the nuclear reactor program in the Navy has an eight-year gig, while most military gigs are two to three years. There's increasing returns to expertise. If you're in a role for two to three years, you don't even know you've made a mistake. At Palantir, I've screwed up many things over 19 years and learned from them. If we swapped every two to three years, we'd be far behind. With AI, it's going to make the median person better, but the very best person superhuman. In defense, that's all that matters: who are the best people? Give them decision advantage. One combatant command has a major, a former police officer, who does the work of 100 people—kinetic strikes driven by his work. The military has never been that asymmetric. That has consequences for force structure. Also, Palantir thinks of itself as an artist colony, not a factory. A factory has a linear ladder, rules, mapped experiences. That deprives you of understanding what each human is world-class at. In JSOC, you see that thinking: smaller, higher stakes. The big machine loses that qualitative sense. The most important projects involve commanders who are like Silicon Valley product managers—they have the vision and will critique mockups because they see the software as an Iron Man suit that must fit them perfectly. They are founder personalities. Much goes wrong when you think of software independent of the human wielding it.

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Host1:53:42

I understand all that. I want to dive into autonomous vehicles. Palmer talked about putting an AI brain in tanks, planes, subs. For a tank, it takes three to five people to operate. When we make them autonomous, how much military personnel does that cut out?

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Shyam Sankar1:54:29

It's one example. It'll make you a much smaller, leaner fighting force. Let's call it half—you can make everything half as big and more lethal. With tanks, clearing the range of fire, the commander pops his head up and gets on a phone. That should all be software. Once you unpack how many things we cover with human labor, you realize it's going away. Humans do it slow and make mistakes. It has a huge training burden. You have to earn it by shipping innovations to the force. At NTC, a division using this technology got their footprint down to 26 people from 400+. The red team couldn't find them in the desert.

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Host1:56:13

No kidding. I don't want my kids going to war. I think it's a good thing. I'm just trying to wrap my head around it. There are 450,000 active duty in the army. Would you need anybody in any of these vehicles?

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Shyam Sankar1:56:42

You definitely want first contact made by entities with no blood in their system. The front line of troops, but also a front line of robots further forward. We need less risk to force and improved mission outcomes. The tail is where the immense opportunity is—tooth to tail. You have more people in the acquisition corps than in the Marine Corps. The human processes are latent and slow, obfuscating what's going on. The most important missing strategic asset is an integrated view from the factory floor to the foxhole. Articulate the threats, work backwards from what we're spending and building. The DoD has divided supply and demand. Integrating them is the beating heart of a commercial company. In the department, services build things (supply) and combatant commanders do warfighting (demand). They don't get a vote. We need to integrate so we understand that buying a less capable weapon system seven times faster at a lower price point might be better because the other stuff won't be ready in time. That becomes the first way to have meaningful conversations about jobs in districts versus American prosperity.

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Host1:59:16

With Palantir, you guys aren't only in software. You have vehicles, like the Titan. Can you go into those?

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Shyam Sankar1:59:26

The Titan truck is a satellite ground station on wheels for long-range precision fires. It enables deep sensing of the battlespace. We were the first software company to win as a prime contractor. It's a physical thing, but we don't think of ourselves as a hardware company. We built a team of super friends: Northrop Grumman, L3Harris, Sierra Nevada. The truck is a commodity; what's in the shelter is the AI finding the enemy using national technical means, with a two-man crew. We built it software-first: what does the software need to do? That's the lethal capability. Then we make it amazing for the warfighter. Historically, we design hardware first and constrain software. That's backwards. With software, you build the kitchen first and the house around it. That culture is entering defense—Tesla, SpaceX. Now platforms start with software: what do I need to sense and affect? Build compute first, which takes months, not years. Then you have constraints for the airframe or vehicle. You avoid situations like the frigate that won't float because you didn't start with software.

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Host2:02:11

What about the boat?

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Shyam Sankar2:02:14

Same concepts apply to surface vessels, submersibles, and airframes. Our big challenge in the Pacific is getting inside the weapon engagement zone. The enemy has air defenses and hypersonics. We need attritable, autonomous systems without risk to force to create maneuver space. With the ship, we use commoditized approaches to building ships, adding exquisite, classified payloads modularly. It's a family of capabilities across space, air, sea, land—a software-defined approach to warfare.

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Host2:03:27

Does anybody else have these technologies, any adversaries?

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Shyam Sankar2:03:33

Software is a unique American strength, rooted in culture. There are zero Indian or Chinese enterprise software companies competitive globally; Europe has a few legacy ones. It's cultural. Silicon Valley didn't import this culture from India or Israel—it came from Iowa, from Bob Noyce, co-founder of Intel, co-inventor of the transistor. He brought a Midwestern culture of positive-sum games, open communication, transparency. The 'open door policy' is a Noyce-ism. Silicon Valley is the progeny of that Noycean culture. That's why we build software at a world-beating scale. Israel is second best, but they can't scale collaboration like we can. Israeli founders often move to New York for their second company. We should lean into that. You don't win by shooting bits; you have to bend metal. Our hardware should be way smarter. Even DeepSeek required distilling from OpenAI and some clever optimizations, but it's a refinement. All frontier AI labs are within 50 miles in San Francisco—that density of talent and culture is American superiority.

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Host2:06:06

What could go wrong? Could an adversary hack into our hardware and software?

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Shyam Sankar2:06:14

As much as they could today. It doesn't change the nature of the risks. We still need cyber protection. The biggest risk is inaction. The AI safety conversations were overdone; Skynet fear is wildly overblown, almost a conspiracy to slow things down. It's about who implements best. AI supply is the model; demand is the economic value or decision advantage. AIG used 85 AI agents in Palantir to automate insurance underwriting. It used to take 3 weeks; now 1 hour. But the real value is they could only price 10% of requests; now 100%. They take the best risks and leave competitors with worse ones. That's decision advantage. We need to be the best at implementing AI. Europe is asleep at the wheel. In America, people are rolling up sleeves, experimenting, iterating. AI is not something you think your way through; you need experience.

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Host2:08:28

Who else should we be watching out for other than China and the cartels?

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Shyam Sankar2:08:33

The coalition China can build. Iran wouldn't be as successful without China buying oil. China supported Russian operations. North Korean soldiers are on the front lines in Ukraine. What trade is happening? North Korea has 300 submarines, all diesel and loud. We must prevent proliferation of technologies that make them harder to see. It's a coalition of adversaries, maybe weak with frictions, but at root the CCP wants to be the sole superpower and undermine Western prosperity.

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Host2:09:37

Are you worried about BRICS? Are you familiar with BRICS?

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Shyam Sankar2:09:40

Yes, I view it as an economic threat to our prosperity. We have the exorbitant privilege of the dollar as a reserve currency. We need to fight to maintain that. Economic alliances that undermine that will weaken us.

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Host2:10:03

Let's wrap up. The premise of winning defense reformation thesis number five: only requirement is winning.

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Shyam Sankar2:10:14

We have the most Byzantine acquisition process. You shared that you bought a $10 skateboard helmet as your combat helmet because the standard one was too heavy and uncomfortable. Yesterday at Bragg, soldiers said they come back with marks on their head. One requirement for the legacy helmet was it must withstand a Humvee wheel on top. Who decided that? You get an overly heavy helmet that doesn't work. The requirements process is divorced from application. The only thing that matters is winning. Work backwards from winning. Where requirements get in the way, get rid of them. Don't be so wedded to the playbook that you lack common sense. Hyman Rickover could decide his own requirements. Gene Kranz changed what he needed for Apollo. John Boyd on the F-16—the original requirements document was seven pages. When you get 2,000 pages, it's crap. No one has had the clarity of thought on what's essential.

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Host2:12:38

I love that you're integrating all over. I wish I had that when I was in. How open is Secretary Hegseth to making that happen?

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Shyam Sankar2:13:07

Incredibly open. This is a common sense administration. They recognize the value of dual-purpose companies. People put their own capital at risk. If the customer doesn't like it, you're out your capital. That's how American industry works. The new team understands the value of a commercial first approach, speed, and that things should get cheaper over time. It's an opportunity to reimagine the industrial base, and there's tremendous support.

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Host2:13:47

Are you integrating with law enforcement? Maybe on the border?

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Shyam Sankar2:13:55

Law enforcement is not a market we've historically focused on. But Make America Safe Again is a huge priority, so Justice Department and federal law enforcement will be a focus in the next couple years. Probably not state and locals.

H

Host2:14:13

Well, Shyam, I think that wraps us up unless there's anything I'm missing.

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Shyam Sankar2:14:18

No, I think we covered everything. Thank you, Sean.

H

Host2:14:20

Thank you. I really appreciate you coming. It's kind of fun, fascinating. So, thanks.

S

Shyam Sankar2:14:24

Perfect.

H

Host2:14:25

Thank you guys.

S

Shyam Sankar2:14:26

Absolutely.

#190 Shyam Sankar - Chief Technology Officer of Palantir: The Future of Warfare

About Shyam Sankar