I think you've said a number of times that you believe the U.S. is still leading in the AI race, but there are a number of factors to consider, particularly on biotech as well, which we'll get to a little bit later, but take that and run with it. You know, your current attitude to this market, I mean, you're just talking about distillation. China for the last few decades has been very good at doing whatever they can to copy and steal our IP and our trade secrets. And this is no different.
Right. And then unfortunately, we are I don't know if it's six months ahead or 12 months ahead or what it is. We are significantly ahead. And, you know, in a world where the agents are doubling capabilities every few months, that's a very, very large gap, which means we're way ahead in cyber. It means we're way ahead in other critical areas that will allow us to compete with China. So it's a great spot we find ourselves in and we got to make use of it. And, you know, I think it's almost silly to expect the government to be able to stop them from stealing. We haven't done that for years. It's going to be up to these companies to figure out how to detect and stop these attacks, because that's the only way it's going to happen.
You're an adventure investor, but also a serial entrepreneur founder. Call it what you will. It's interesting to read some remarks by Palmer Luckey the other day saying, basically, stop patenting things because the moment you put something into a patent, it becomes vulnerable to theft, is how he would put it. You're just educating.
You're just educating our adversaries. I mean, the patent office is completely broken at this point. You will have things in China, in the biotech world, for example. In biotech, you kind of have to patent certain things because you have a molecule you put all this money into and don't want someone else to be able to obviously sell that molecule. But China will within 24 hours, someone in China will see a new target for patenting, and they'll see the results and they'll start their own programs and even file other patents themselves right away that are similar but just different. And it ends up the whole thing is a mess.
Right now you are very focused on biotech in the context of US versus China. I think you've had some strong feelings about it, but raise the alarm on it. What is the sort of core of your concern?
Well, you know, obviously we work in defense and we work in health care. We work in other areas. And, you know, biotech is a very exciting area right now, in particular, because AI is going to allow us to cure a lot of diseases. It's already making some really, really big breakthroughs. This is one of the most exciting new areas. But China has been successfully stealing our sector over the last seven years. And so we've gone from being the vast majority of new therapeutics and drugs in the US, and now China, if you look at the curve, it's come up to well over a third of all the new ones, and in some cases more than half of what you can measure earlier stage. So they're basically taking over the sector. And one thing, if they were purely doing this on a competitive basis, that's, you know, if people are really talented and they're doing a fair play, that would be fair. But it's not like that. What it is, is it's taking US firms and kicking us investors and getting them to be able to do things cheaper and better. And China is stealing things. Using a patent office is stealing. Thing is using PhDs for people who come over here and are forced to send things back. The whole thing, it's a very active kind of rape of the sector, which is also exacerbated by the fact that our FDA is slow. So, for example, in China, if you want to take a drug to a phase one trial, it takes some place. You can just do it right away for certain areas. In some places it's 90 days for the PRI, and in India it's called to go to a phase one in the US, the PRI, and in India over 700 days. So we have to accelerate this if we're going to compete.
What about through the lens of AVC? So I think you wrote recently that America needs to beat China and unleash cures. Yes. How does your activity as an investor and what AVC focuses on reflect that? What's in the portfolio that you think you're supporting to enable that?
I mean, listen, there's so much exciting stuff going on. We had really great news in the last couple of weeks. Orca Bio was officially approved, got their label. So that means it went through phase one, phase two, phase three, and the data was so strong that it got through a little bit faster than normal and is able to basically do bone marrow grafts, which are used against blood cancers much more safely, much higher survival rate over the first year. And then this also has lots of potential applications against autoimmune diseases like Crohn's and multiple sclerosis. So that company is very exciting to me. There's a whole lot of other stuff we're doing with AI and antibodies, antibody platforms. Without alloy, for example, there's just a lot of new discoveries being made. The problem is, if we have a new discovery made where it's going to save a lot of lives, if we invest in it and China is able to copy it and go faster, it stops our ability to invest in it. So what we're fighting for is I want the ability to make profitable investments where the business is built in the US and not stolen to China because our system is broken.
You raised an interesting point about oversight. You know, earlier in the program, we had FCC Chairman Brendan Caron talking about regulating space. That's the FCC. So in this case, it's the FDA. And how much you feel the FDA should have direct oversight of how AI is used in that field.
It's a good question. Listen, I think there's a spectrum here. Right? And I'm not some kind of wild-eyed radical that wants narco capitalism and no government. That's not what I'm arguing for. There's a spectrum where I think Europe, we all see, has gone way towards safety, as am towards a culture of proceduralism where nothing gets done and everyone attacks new things and they take forever. Right. Europe from the regulatory perspective. I was just over there. Like none of the bottle caps come off as their big innovation. Right? Which is but everything's very slow. And they've had far fewer big wins in the last 50 years because of that. And so that's obviously a failure case. And I'm not arguing to go all the way to no regulation. But right now FDA is very slow. It's very unaccountable. It's like a mafia where if you criticize it too much, they might just decide to make you wait a year. You know, it's unaccountable, unchecked power. We shouldn't have that in a free society. We should have multiple bodies. They have to compete. We should have multiple paths, and they should be held accountable to going faster.
Let's go back from the focus of the vertical of biotech to broadly AI in America. Where do you see America's biggest advantage right now?
I mean, our biggest advantage is that we are still the most free society with property rights and checks, power and the ability to have what we call creative destruction. So when we come up with new technology with AI, there's a lot of new possibilities for higher productivity in every industry. It's changing how defense works, changing how manufacturing works, changing our healthcare works. And we do have in some areas too much regulation. But overall, we still have a society unlike China, where it's going to be much easier to redo our industries and to shift them in ways they're much more productive. So not only are we ahead in AI, we're also ahead in deploying it to a bunch of areas.
Later in the program, we're going to zero in on defense tech. You know, you co-founded Palantir in 2003. That's right. 23 years ago. So take that experience, but specifically to AI software side. Right. How does this administration facilitate success differently to prior administrations? What is your experience present day 2026 versus what it was like when you guys started Palantir and you were trying to get this into the real world, the software itself.
Well, listen, I think defense in America is not a very partisan thing, which is great, by the way. I think this is a question about even this administration, which is doing a great job. But I think it's a shift in the mindset of the Pentagon, which has been reflected for the last several years. And what you've seen is that Palantir in space, and then later Anduril and Saronic broke through, and when they broke through and showed these better solutions, showed what was possible, it was ten times better than what was there before. The admirals learned, the generals learn. And people in procurement said, wait a second. We can't just keep giving these giant documents written by Raytheon and Lockheed and all the other primes the full power to block everyone else. We have to actually say, let's have more open competition. Let's let in new possibilities, and you're seeing that cultural shift happen pretty dramatically over the last 5 or 6 years. You have our friends, like Emil, who's under secretary for engineering or research, and people like Jeff Feinberg and the secretary and others who are being a lot bolder and pushing things in the right direction. So you're definitely seeing the culture of the whole place has been moving in the right direction for years now.
Big recent news is that AVC closed a $1.5 billion fund, the firm's largest to date, and I think we just start there. I don't think you've said very much more about the fund than what's in that post on the screen on X.
Yeah. Timing. Why? What for?
I mean, you know, we're in the middle of the most exciting revolution, industrial revolution, I'd call it, in a very long time in the United States. And we've had our best couple of years ever at the firm. There's just a lot of things happening that are possible now that were definitely not possible a couple of years ago in the economy. And, you know, Palantir as an example, I think before I was probably worth 30 or $40 billion and now is valued over $300 billion, I think. I think this is a bigger wave similarly than anything we've seen before versus the SaaS wave. And we have companies across the board going 5x, 10x. It's a really fun time.
When you and a VC get into those, what stage do you principally deploy out and how do things kind of cross your desk? I always find that part interesting.
Yeah, you find them. So this is AVC's seventh core fund. And you know, we're a little bit different in that about 30% of our money goes towards things we help found ourselves and build ourselves. Companies like Saronic, which we'll talk about, companies in healthcare and logistics and other areas as well. And, you know, we're usually seed, series A, some series B, so we're earlier stage investors. But these days, a series A could be a 60 or $100 million round. And we could be doing 50 of that from the fund. So it's a lot bigger checks. So having a $1.5 billion fund in venture capital today, I would say, is sort of like having a 4 or $500 million fund a decade ago, where the market in terms of how much you do and the size... Yeah, it's not... if someone were to tell me 15 years ago I was doing a $1.5 billion fund, I'd feel like that's ridiculous. That's so much money. Now it's like a reasonably normal sized top venture firm.
What about from the LPs perspective? I appreciate that there's value in discretion. Right. But what is it the LPs ask you about their interest in? I broadly what they sort of, they're investing with you because they want exposure to something specific.
