Former DoD Advisor on How Silicon Valley is Rewiring the U.S. Military

Key Takeaway

Dictatorships appear enormously strong yet are fundamentally weak due to their illegitimacy. Unlike democracies built on esprit de corps and mission belief, authoritarian leaders trust no one and constantly fear betrayal. This structural weakness—where leaders must be stronger only than outlawed opposition—is a critical asymmetric advantage for democracies in geopolitical competition. Understanding that adversaries are simultaneously powerful (controlling state apparatus) and vulnerable (lacking legitimacy) is essential for strategic thinking.

Episode Overview

A deep dive into modern geopolitical strategy, examining the fundamental weaknesses of authoritarian regimes like China and Iran despite their apparent strength. The discussion explores military doctrine from Eisenhower's massive retaliation to Taylor's flexible response, the importance of industrial mobilization and 'magazine depth,' and why America's fundamental legitimacy remains its greatest strategic advantage against illegitimate dictatorships.

Full Transcript

Transcript of Former DoD Advisor on How Silicon Valley is Rewiring the U.S. Military from Invest Like The Best. Auto-generated from episode audio; may contain minor errors.

Dictators are enormously strong and enormously weak at the same time. A dictatorship can be enormously weak because they're illegitimate, right? And at the same time, they're strong because they control the apparatus of the state. When you have power and you ascend to power in a fundamentally illegitimate structure, who do you trust? The answer is no one. High trust comes through a spree decor and believing in the mission and the legitimacy of what you're doing. That is like one of our enormous strengths. We are fundamentally legitimate.

I think to begin you have to define what it might mean for us to win some of these open theaters of war in the world right now. We came through this period where anyone that was a macro type person that I would have in that seat would talk about how the US this multipolar world in the US is retreating from the global stage and is not going to be the world police any longer and we don't need the interaction with the rest of the world. Seems like we're in a very different world now and everyone's wondering what winning would even mean in a theater like Iran and I'm curious for you to just riff on that.

Winning is politically defined. you know, the straight of Hormuz was open before this contingency at the end of the day. And so if all we get is the straight of Hormuz back open, you know, strategically maybe was a juice worth the squeeze for lack of a better term. I would argue that we've you've degraded an enormous amount of Iranian military capability, which is what the department's internal fragment fraggo their order was to do. And so you have degraded that. But the straight of Hormuza as an economic choke point has has to open back up in order for commerce to work.

But you know, we're sitting here today. The straits functionally closed. The economy is still ripping here in the United States. Markets high. You have high inflation. But I think the conventional wisdom is that America that America that America can um can withstand less pain than the counterparty. There's this hybridization that happened in certain parts of the Shia Muslim world through the works of Shiriati which is a hybridization of Marxism and martyrdom together which is kind of like an absolute control of of an environment and to say if you martyr yourself you're winning you're ascending.

And so it's such it's such a satanical philosophy because it promotes internal destruction and sacrifice to the limit as evidence that you're winning. And so we were talking right before we sat down of like you know Gaza has been leveled right by by any stretch of the imagination and there are still elements of Hamas operating but have they won? Well, in their mind, in that shiriotti form of of of red Shiaism, they're winning. So, you can you can bring people to the precipice of their own destruction and in that ideology, that form of religious ideology, they're winning.

So, it's like you're going to have to bring an enormous quantum of hurt. And the problem or the challenge with democracies democracies are how much of our moral rectitude will we compromise in order to achieve the political goal if we don't feel the existential threat sitting here today in in New York. Yeah. Yeah. Yeah. So that is that is tough. There is you know there's the tailor view of flexible power of this kind of proportional response to threats and then there's the Eisenhower school of massive retaliation.

But you know, I love Cotkin because he talks about if you don't know history, you're, you know, everything is unprecedented. But the Japanese had a martyrdom culture that they memorialized into their force structure, right, through kamicazi. They they would chain people up in trees in Okinawa. And so why did we drop two bombs on them? We dropped the first bomb. Enormous mass destruction. They refused to surrender and they were prepared to fight to the death. we dropped the second bomb and it was only Emperor Hirohito that broke the tie and if he didn't break that tie if he said continue they would have sacrificed themselves.

sacrificed themselves. sacrificed themselves. So it's extremely hard with a martyrdom culture to have regime change. And then the question is is that what are you going to defect to, right? You need an alternative power structure there to defect to. You can defect from which is you leave, right? But to defect to to get a to get regime change even if 85 or 90% want the regime to change, you need an alternative force structure to do it. And so the IRGC controls half of the economy and they have all the guns.

And so they have all of these elements of power. They're very hard to replace. And so can you co-opt them successfully between all the assets that they own in Western Europe? They own an enormous quantum of assets in Western Europe. What kind of assets? Homes in London, villas, billions of dollars that they've exfiltrated from the country. And Abas Milani has kind of documented this in in voluminous detail. He's wonderful scholar on the topic, but really think of the average Iranian. The limit at the ATM is $7.

That's how much you can pull out. And you had the second largest bank fail about 2 months before this recent contingency. You know, Milani calls it a um a mafia style regime, and it's true. like the the quantum of corruption is absolutely enormous but you know dictators are enormously strong and enormously weak at the same time. This is actually like a good frame for for our entire conversation which is to say we have to be able to hold two competing ideas in the same vessel and both can be true.

A dictatorship can be enormously weak because they're illegitimate, right? They haven't been tested. they only have to be stronger than their strongest opposition and opposition is outlawed and so they're weak right and at the same time they're strong because they control the apparatus of the state and so this is the cauldron that you have in the people that you're fighting and I believe there is a growing body of evidence that suggests that Ayatollah hominee martyr bartered himself a he like allowed himself to be above ground and to be targeted to die to solve a whole series of problems.

What? That he killed potentially 30 or 40,000 of his own people. That he was sick and succession was unclear at the end of the day. Maybe there would be some infighting. And so martyrdom in the Shiriotti school of redeeism is like this beautiful solution, right? He was sick and ill. And so there's a growing body of evidence that suggests he he wanted to be killed. Like these are the adversaries here. So I think winning at the limit and the way we think of it in almost like a documentary for World War II is really hard.

And but we experienced that in World War II as well, right? The bombing of Dresden. There was, you know, there was this horror that we would firebomb a city and kill 30,000 people under the premise that they have to know that they lost. And this is what happens when you deal with fanaticism. with fanaticism. with fanaticism. It makes you question the kernel of your moral fiber as a democracy and you have to go really far. I just think the analog with Israel and Hamas and Gaza is like a perfect example.

Israel has annihilated Gaza. It has been leveled. You can't say that Gaza from a technological standpoint that Hamas from a technological standpoint has any kind of military capability compared to the Israelis. It's like comparing a toaster oven to the sun, right? oven to toaster oven to the sun, right? Is the analog I like to say. But in order to win it, look how far that they've had to go. And I don't know if Netanyahu has the support in the Knesset for the purposes of doing this last leg in the ground work, but it's what's necessary for his condition of winning.

You have to have a design on a on a concept of positive propaganda, right? propaganda has a has a bad connotation to it, but it's just it's your marketing. It's marketing. It's your political worldview. And so, look, Israel has just not spent the calories on it, right? And so, the question is, should they should they should they believe the answer is yes, right? In a finite pie, how much of the pie should they spend on it? It's not immaterial. And you know, their adversaries are spending enormously on it because it's working.

But also the martyrdom culture has has has because it's hybridized with religion to create a higher form of fanaticism. It allows you to run for so long. And so the design to co-opt American universities can be traced to a single hotel room in Philadelphia by the FBI listening with laser microphones where after the Oslo Accords, the Palestinian Authority with Arafat is brought in and Hamas is considered left out in the cold. They go to Hamas to go, "Guess what? You're not in this deal." And so now this is a political organization with no home.

And so they laid out in the single conversation that the FBI has transcripts of of their plan to co-opt universities and co-op university teaching and institutions for the express purposes of changing western opinion over the course of 20 years. I think Bezos has attributed the quote that if you have a seven-year plan, you win because most people give up. These guys had a 20-year plan and it totally worked. But, you know, to make it seem like it was this um this just kind of natural formation out of the ether through moral will is is to downband the sophistication of of what these people in the Muslim Brotherhood and Hamas set out to do.

They set out to do this. They were so committed to it and they saw it through. We're talking about people advocating for a society that brutalizes their own people and denies the rights for the, you know, and you have a series of people, you know, advocating for them that would be denied those same rights there, right? It was done with intent. It was by design. And so I would say this administration is moving the gold posts in the popular vernacular of what winning means. But my view is if you have a straight open and you have a degraded Iranian military capability that can't reconstitute itself very quickly through oil profits, then that will be a win.

And if it can quickly reconstitute its export network of terror and the straight is closed, then strategically it will be a failure. Most software companies try to maximize your time on their app to juice engagement. RAMP does the exact opposite. RAMP understands that no one wants to spend hours chasing receipts, reviewing expense reports, and checking for policy violations. So, they built their tools to give that time back, using AI to automate 85% of expense reviews with 99% accuracy. And since Ramp saves companies 5%, it's no wonder that Shopify runs on RAM, Stripe runs on RAM, and my business does, too.

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It's just us. Yeah. us. Yeah. us. Yeah. And the rest of the world is really to a large extent watching save for the Gulf Arab states. The amazing thing is the Gulf Arab states have a much stronger will to fight. UAE has left OPEC, right? That's that's kind of big. And then they said they will participate in uh projecting force with their own forces at the end of the day. That's pretty big, too. They are very concerned that we will lose our will to fight by virtue of the fact of whatever economic pain in the interim basis that it generates.

But, you know, the concept of overcoming the blockade is going to need like more magazine depth, more forces in the region. We're going to need an amphibious force on the shore for sure. That is a, you know, that is a major escalation. And so, that's where Taylor's theory and Eisenhower's theory begin to merge. Can you can you describe those two? It's such an interesting interesting history. So Maxwell Taylor is a four-star general as is Kennedy's uh chairman of the joint chiefs of staff was great military leader but also you know could be blamed for the escalation of the Vietnam war.

Eisenhower's warning about the defense kind of the military defense industrial complex really came out of this concern of we now have this new super weapon and so that should really work as the maximal deterrent for any of these things breaking out and so why spend all the calories on building all of these proportional capabilities proportional capabilities proportional capabilities when through a chain of escalation it's just ultimately going to lead to the big red button right those are kind of the competing theories Eisenhower's theory was theory was theory was kind of maximal deterrence.

If you do anything, we're going to use the really special stuff. And Taylor's was we're going to use proportional force. And he had had viewed it as a deterrence gap because are we really going to go nuclear for small incursions, small footfalls? And I think to an extent that was right, but all of it leads towards escalation, right? And so if you don't embark with this very clear directive internally of what you want to accomplish from a political standpoint and you're not crisp about it, then you lose political will and then you lose the ability to do it.

You lose Congress, you lose the budget, right? You ultimately lose the executive. So that becomes more and more important. But you you have to paint the target of what you want to accomplish. And so all these things are political. So, who is more right do you think between Eisenhower and Taylor? And like apply those two lenses to today's stance for the US like what is the US doing not just in the Iranian theater but like in general with its military with the department of war. What are they doing?

What should they be doing that they're not doing? What are they doing that they shouldn't be doing? I think it's fair to say you need both, right? Otherwise, if you took an exclusive kind of maximalist view of Eisenhower of having this nuclear deterrent at the end of the day, your only response is nuclear deterrence. Can you imagine the world that we'd be living in? Now, [clears throat] you'd say, there are some people that say, "Well, great. That would mean we wouldn't get involved in any of these contingencies and we wouldn't have gotten involved in Vietnam.

We wouldn't have gotten involved in Iraq. we probably wouldn't have gotten involved in Afghanistan because we wouldn't have this flexible projection of force to correspondingly respond and maybe we wouldn't have the temperament to drop a bomb on someone at the end of the day. Maybe we would. But the binary choice would be so stark, right? And so flexible power has all these gradations of capability that Taylor outlined and that have been modernized for the new concepts of warfare. And that's how we build magazine depth in all of these things.

Tom Hawk missile is not a nuclear weapon. Himars is not a nuclear weapon. It's the concept of being able to enforce the smaller infringements, if you will. And so, you probably need both. I ju I just think it would be a very scary world if all we had was a nuclear button in order to prevent uh a full-scale contingency. How would you compare the state of our military capability and prowess today to when you were in the Pentagon? We're we're the best, man. We're we're so someone asked me earlier today, they they had said, "What's the grade that you give it?" And I said, "It's not fair to do this huge compound grade because one, this is a government organ, right?

So, how great can a government organ be?" our ability to train and equip the forces and what they [clears throat] deliver. It's the best fighting force in the world that the world has ever known. And you have to do some relative comparison to the rest of the militaries around the world. We are number one, but it is a body of government. And so because it's a body of government, it gets what? One-year money from Congress. You have deck chairs that constantly change. You have these features of government that make it suboptimal at the end of the day.

But as a grade as a military, right, and its capability, I give it a super high grade. You know, is the bureaucracy a problem? Yes. Do we have to modernize it? Yes. Do we go through it every 20 years? Yes. Because we recognize how important it is. But our ability to project force is so good. And I think having a pacing threat is unto itself is valuable to make sure that we are serious about maintaining capabilities. I love the works of Darter because he's so clear about how strong and weak China is at the same time.

Who's Dart? Who's Dart? Who's Dart? So Dart is a well- reggarded historian on China and has a theory on how China is not a superpower just by virtue of how illegitimate and how weak it is and how how tense the the the plenary in the party is. and he has good points. The Chinese equivalent of the chairman of Joint Chiefs of Staff has disappeared. He went to kindergarten with Xi Jinping. Like these guys are close. And so when you when you have power and you ascend power in a fundamentally illegitimate structure, who do you trust?

The answer is no one. You are [snorts] constantly worried that someone's going to put a bullet in the back of your head. And then that form of illegitimacy cascades down through the immediate organs of that government to include its military. Right? And we've talked about their lack of jointness, the corruption internally within the force, the corruption in the missile crew. I mean, they have turned over their senior meter military leadership like like three or four times in the last three years. That is not a high trust environment.

High trust comes through espree decor and believing in the mission and legitimacy of what you're doing. That is like one of our enormous strengths. But their magazine depth industrially is so enormous. So the calculus becomes can the magazine depth overcome their institutional weakness at the end of the day. And it's a good question and that's why we are embarking on this enormous we as a country [clears throat] are embarking on this enormous effort to industrialized in order to add magazine depth to to the capabilities we have.

You wouldn't add magazine depth if you had the the the maximalist view of of nuclear deterrent. You have magazine depth when you believe in the concept of flexible power. I talked to Sham from Palunteer about this. he had just come out with this book about I think it was called mobilize uh the book about this exact thing of increasing magazine depth. I don't think he used those words but it's it's what he meant. How would you grade us on that specific thing and like what is the state of it today?

Like are we doing a good job? Who is doing it? How's that going to unfold? We're in a democracy and so in a dictatorship if you don't build magazine depth and that's your job, you're dead. And so that mechanism of enforcement is is pretty compelling. Here we balance things like will it be profitable, right? Will it have duration? You know, and Congress is giving one-year money. And so there are new efforts to create multi-year contracts for ordinance, which we've never done before. We really need it.

It's great. So we're we're changing the the architecture to allow us to do more to add to magazine depths. We need to go faster for the purposes of also having filling the deterrence gap, right? So we can stop small incursions, you know, on the margins, especially with the Southeast Asian nations that we have cooperative peacekeeping agreements with. You know, these these bilateral agreements where we have to protect them and they're being violated right now, like the Philippines, for example. So we have to do more there.

It's getting better. And compare it to anyone else in the West, we're still the best, right? It's just your adversary has a political structure that allows them to bring people to the precipice. But the illegitimacy illegitimacy illegitimacy of the Chinese, fundamentally an illegitimate power, is also our advantage. And we are making enormous strides in the clandestine services of co-opting that environment. Say more about that. She doesn't know who's on our side in his standing committee or on his side. Every day he wakes up with the thought of maybe I need to kill someone off.

That is our edge. Our edge is that he is fundamentally illegitimate. The monopoly of power that is communism. Their form of of Marxism of communism is extremely powerful because the appar the apparatus of an enormous economy to pay off all these kinds of people. But they are illegitimate and our ability to recruit and retain and train it had it had really degraded and we had lost a lot of capability through a series of assets that were caught but we have rebuilt that in a in a very meaningful way and you know I I don't think she sleeps well at night.

Is that very recent that change? No, these things are are built brick by by brick, right? You know, we have these these government agencies that everyone goes into work every day, you know, Monday to Sunday and their job is how am I going to infiltrate this political this illegitimate political structure for the purposes of making it weak. You know, we have people they drive their car in and they have their sack lunch and this is what they do every day and ultimately we break through. Why?

Because Because Because every Chinese person in the standing committee has a relative somewhere in the United States, how many degrees removed that owns a small business that is doing well and is able to fundamentally live free, you know, and so like we can't forget what makes us, you know, special. Yeah. Yeah. Yeah. And that we are the bugout point for the world. Even for the people in the standing committee standing committee standing committee that are worried if they're on the outs, right? They have a plan to get here.

So, we have weaknesses, but we also have enormous strengths. And their weaknesses are also enormous. It doesn't mean that they can't bring us to the precipice. Their mass is so much greater than us, right? Like their population size and what they can do industrially. Look, it is a dictatorship, right? It is a totalitarian regime. I don't even know how this is up for debate. I just think the threat of that is lost. That's that's what we're talking about here. And so And so And so they are fundamentally strong and weak at the same time.

We can hold both of those in the same vessel. But look, I believe in our lifetime China will fall. I believe in our lifetime Iran will fall. fall. fall. What does it mean for China to fall? I know what it means for Iran to fall. I believe it will be run like Taiwan. I believe it will fall. Now the Soviet Union like we grew up with this concept of the Soviet Union. It had this enormous technical capability. It's this monolith. monolith. monolith. It lasted several generations and then all of a sudden it fell.

It looked super strong right up until the last moment. There were planning documents circulating at the Pentagon about how strong they were like two weeks before they fell because the their constitution their concept of the constitution is fundamentally corrupt. Right? That monopoly of power saying that these people are going to permanently be in charge. You know it to be wrong. And so the question is does it last 50 years? Does it last 100 years? it does fall, right? Cuz it's fundamentally illegitimate. The Chinese Communist Party is illegitimate.

They are an illegitimate dictatorship. And so I believe in the natural order of humanity and freedom that at some point it's the natural state and that ultimately it prevails. But you know, our enemies use our freedoms so successfully against us. And I think the real issue of our time will be as they use these freedoms against us, how will we have to fence them in to prevent them from being completely polluted? Like the SCOP of social media on us, what they do against us in that it's like enormous.

And we're kind of allowing it under the rubric of our freedoms. So are we going to have to degrade a portion of our freedoms in order to protect ourselves? This this is going to be the real hard part, you know, against a very motivated and sociopathic adversary that's illegitimate. illegitimate. illegitimate. What's the example of a degradation of our freedom for protection? This concept of when you're in the four walls of the country, there's a there's the general expectation of a freedom of speech. And so that creates the freedom for disinformation.

for disinformation. for disinformation. And now that you can amplify disinformation through the concept of freedom of speech, do you create this alternative alternative alternative world where people are disconnected from reality? Think about where people get their news from that there are no gates on any of this anymore. It's it's not something founders could have ever contemplated but they are they are they are true geniuses in that they made our grid the the gridlock is super intentional right so compare us to every other parliamentary democracy in the west every parliamentary democracy pretty much in the west has a ceremonial Senate the UK it's the house of lords they don't have real power at the end of the day of commons has power and then when the party of power is in power is a monopoly of power because they also choose the prime minister.

You don't vote for the prime minister in a parliamentary democracy. So in the United States, our upper body is completely separate with a different term that's longer by design. So right there you have a separation of powers and then the executive is technically voted on by the people. It is the purest expression of democracy. You vote for the president directly and the vice president. is put you put them down. And so you have an executive branch that is separated from the party and this president and previous presidents do things that the parties don't like.

And you do not get that in parliamentary democracies. And so parliamentary democracies are more susceptible to being overtaken in these mass hysteria moments into things like fascism like these these directions where the gridlock was designed for to prevent someone from co-opting the activity and it makes us slow to respond. Right? But we have the like the overarching architecture is we are fundamentally legitimate and these guys are not legitimate. When people talk about some of these things of like, oh, you know, their society's eclipsing ours like, dude, are you high?

You are not free there. You can't say what you want. A very popular book these days cuz and justifiably so, it's a great book is Freedom's Forge about the mobilization around World War II and the story of how our industrial base moved so fast to arm, you know, companies retooling themselves. It's a great book. The history of peacetime mobilizations in democratic societies is mixed or bad. Yes, Yes, Yes, I guess we're not in peace time right now, but we're not in some like global scale war.

scale war. scale war. What do what what are the things that you hope happen from here for the US to be the best overall positioned in the world? Well, we clearly need a change in how we fund the department so we can have longer visibility for capitalism to answer the call and build the and build the stock piles we need for that depth of of whatever instrument of of projecting force. And so one-year money or a 10-year contract but subject to the availability of funds is scary.

We have on average four or five continuing resolutions a year. the the pecadillo of CRS is no new starts are allowed. So if you think the iteration of new technology technology technology is going faster and faster technically if you have a new start you can't do it. We're going to have to change some of the laws and the rules of procurement and we're going to need these multi-year authorities in order to be able to build this stuff. There are these things that happen when we design the joint structure where we say okay we're going to make a joint strike fighter you know between these branches of service.

we elevate it to this, you know, to this catalog of joint weapons. And so the manufacturer has a reasonable expectation that you're going to keep on ordering even if it's one-year money. You're going to, you know, we're we know there's going to be a multi-year authority here at at some point. We need to do it for the stock piles that we believe are critical for rejecting force. We need to do it across the board to include ordinance and all these other things, the Tomahawks, the 155s, all of these kinetic articles warfare.

It's politics. We need you need a fundamental change in in how we appropriate and then we need to create billets that lessen the political influence over the things that we all agree on as a country are non-negotiable. non-negotiable. non-negotiable. If you look back at the entire Ukraine story now, what are the main things that you've observed or learned like that your main takeaways from watching the whole thing unfold? the rate of technological change in the commercial world becomes this direct input into the capabilities that you can um uh project for mass.

Drones have been used since the Vietnam War, [clears throat] right? But you wouldn't think that, right? It's just drones became commercially viable and cheap and by virtue of that became a new article of war because they were so inexpensive. It's the cost of losing one is low. They gave you a lot of signals intelligence at the end of the day. You could deliver some lethality through the weakness of some of these systems. But it was the commercial viability and the commercial pervasiveness of that product that made it a great input into into a military for mass.

And so the commercial world has so much influence on the rate of change that will happen in warfare because it's about your ability to produce and your ability to sustain and withstain. And so I just think these wars actually work faster than markets sometimes. Like the evolution of a Ukrainian drone from three years ago to today is like it's unbelievable. There's like 50 iterations. There's all these new capabilities. And that's because you can sit in your garage through commercial supply chains and build the capabilities. We think of war in this top gun style way and you don't think about something that you could buy at Best Buy as being important into the projection of force.

But things that become permissive and inexpensive in a commercial world have these have these enormously valuable inputs into you know into fighting kind of asymmetric war clearly. What does this whole last six months do to the likelihood uh or impact of of something happening in Taiwan, do you think? you think? you think? So the likes of Kevin Rudd and and and the kind of the real scholars of the area. So Kevin Rudd used to be the Australian prime minister um is fluent in Mandarin by the way has PhD in Mandarin is really a she watcher.

He said that she's a risk taker. I think, you know, you know, you know, if you've come to the end, if you've gotten to a certain age and you view it as the apotheiois of your life's achievement in order to complete the journey, which is to say Imperial China is is is what Taiwan is. And the takeover by the the CCP is not complete until Taiwan falls. until that counternarrative of how a Chinese society can be run. And I don't think she needs to go if KMT wins the election um coming up.

You know, KMT almost won last time and that is a rapush mom party to the CCP is clearly they like we don't want war, we want peace. It's an accommodation party and I believe a bullet may never need to be fired in order for China to get what they want. So, and I think that's the more likely outcome. It keeps with their strategy. Like, why go? That terrain is hard. You know, it will ostracize them in the world. I just I don't see it strategically. If they were running out of options and they felt they had to do it and she was near the end of his life, I think the the likelihood would increase.

But, you know, the appetite grows with the eating. And so if Taiwan is overtaken in a military exercise, is there any doubt that these other countries that have a real historical beast will be next? I mean, and that's why Japan has been so viciferous at advocating for strong defense now under this new prime minister. She's tough lady. She knows what happens. There is just there's a real historical beef between China and Japan. And I think that would be exercised. You know, it it would not stop at Taiwan.

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See what Ridgeline can unlock for your firm. Schedule a demo at ridgeline.ai. There's been this thousand flowers blooming thing happening on the entrepreneurial side of defense companies here in the US. uh lots of appetite after a long long drought like basically no new companies and is is of course the most famous um but tons of companies doing something drone specific companies submarine boats uh missiles all basically everything it's 10 years from now right a whole bevy of neopimes have been hugely successful their stuff is great in the sense that it's used and it's the thing we rely on you know more so than the old primes and which from my understanding is still the vast vast vast majority of what gets used in war.

Um, so these new companies have won and that's a good thing. What do you think has to happen for that to be true? We have to exercise so much of this and so so so there's a part here where you only really know what's really good until you go to war with it. That's why the Warthog keeps on being reused. It's just so mission capable. This thing has been we we are supposed to we were supposed to kill this thing like 30 separate times and we we remobilized it for for the Iranian contingency and so you know theaters of war are the laboratories for these products and so to a certain extent we don't really know how good these things are until we have the contingent environment in order to exercise the capability.

So, we run exercises in the training equipment, but the proof in the pudding is when we actually fight. And that's why drones have had this huge iteration because they're being used in an actual contingent environment. And so, that's why we've had so much iteration, so much improvement, and now they will clearly be this like important part of the fulcrum of war. So, these other things are are going to have to be used to really know like the limit of the capability in the cat- mouse game.

But my advice for Congress is is that we have a $ 1.5 trillion dollar have a we have a $ 1.5 trillion dollar designed FY uh 27 budget, right? I don't think we're going to get all that money. But in in that enormous surface area of a budget, you can continually allocate a lot more towards the concept of risk in order to to maintain technological superiority. I think the FFRDC budget needs to be a portion needs to be repointed towards industry so we can encourage you know the iteration of these commercial developments to see how how good they can get and exercise them in our own way to simulate war to see how good we can get them.

So we need to allocate a portion of the budget. It needs to be exclusively and it needs to be more coordinated. So it can't be spread out as much as it we federate the research and development portion of the budget in so many different ways. We're going to have to take a concerted effort here for these legs of future power and we're going to have to continually reinvest in them even if we don't get a great business out of it because we may not get a war in order to test all this stuff and you don't obviously you don't want the tail to wag the dog for the purposes of just exercising the equipment.

So we need to allocate a more meaningful amount to try and then Congress needs to create multi-year authorities across the stack. like these continuing resolutions are they kill industry and that is something I consistently worry about because we are going to lose these companies through CRS and through the absence of multi-year authority because right now the capital markets are working for these businesses and they are able to outpace the innovation of the department and the congress in order to move faster but capital markets aren't things that Yeah, trees don't grow to the sky.

And so there has to be return and exit at some point. And so if you get that and you get that flywheel, then great. Maybe capitalism can be the exclusive solution. But we're going to need Congress to make more multi-year authority money available. And then we're going to have to allocate the budget as a percentage for higher risk and reward. The Manhattan project was 1% of GDP. you know, that project like we're gonna have to have our own couple hundred, you know, bips of GDP levels of effort in in these certain areas.

We're going to have to make those kinds of investments and have multi-year kind of world view as to how we get there. Are some of these companies have been around? Is any of the stuff produced by these places being used? And if not, why not in the like if if we only know if it works in in actual battle, right? We're in a bunch. There's a lot of battles in the world right now. A lot of military equipment being used. Is the neopime stuff being used?

If so, how? If not, why not? Some of these companies are are relatively new and haven't fielded systems of record. And then look, the way we build our military and the and the promise we make to our GIS, soldiers, sailors, airmen, marines, is that we are going to train and equip you on these things at the end of the day for the express purposes of of of giving you the chance to win. And [clears throat] so it it's part of our moral code and the way we train and equip the forces.

And then we have to simulate it in the joint doctrine of warfare. And so just because I make a new widget doesn't mean I can ingest it so easily. We have to exercise it and impute it into this into this joint concept of warfare with all these other things. So it's not easy. And look there clearly on the targeting side these technologies are being used. The signals intelligence clearly that stuff is being used. The elements of projection of force outside of drones hasn't really gotten there yet.

But targeting is pretty important right? You think of World War II, we would carpet bomb an entire environment. And so people are like, "Well, we produce so much mass in World War II." But look at the efficacy of the mass. It was super low, right? And so what we have now is you have highly precise, but we don't have the quantum of mass because of the precision and the sophistication. And so now we're going to need to bring it back a little bit more to the center to increase the mass.

And maybe these these targeting networks and some of the software and the knowledge that we've built in signals intelligence can augment the cost of the precision that we have to have on board in order to make them cheaper at the end of the day. So it's not a fair criticism to say not a it's not a fair criticism to say oh the neopimes stuff's not being used at the limit in war. It's because we have to integrate it into the joint concept of warfare. back to where we started of what it means to win, right?

right? right? The war in Iran is extremely unpopular in polls or whatever of US citizens. You said we live in a democracy like the will of the people matters. What what what can be done to win? I think the popular or the percentage of the Iranian population, it's like 10 out of 90 million or something are are loyal to the existing regime. like is there anything short of actual regime change that can cause a win to happen and how do we do that if so or how do we affect that outcome?

that outcome? that outcome? Well, I mean if I knew the answer, you know, the red phone over there would be ringing pretty quickly. These regimes can last for a very long time and so how do we muster the political will to have staying power that outlasts the political cycle? It's so hard, right, against a red Shia culture of martyrdom. But at some point, we have to agree as a society that the value system of some of these cultures has been hijacked and they are fundamentally incompatible with modernity.

modernity. modernity. This is a clash of civilizations. [snorts] [snorts] [snorts] And And And who wants to tackle it when you don't have to? But it's, you know, there's a risk in going always and then there's a risk in not going. And the provalactic always feels worse because the clarity of when to go wasn't wasn't decided for you. Like America didn't enter World War II because of the concern we had over Germany. We ultimately end entered World War II because the Japanese bombed Pearl Harbor. They made it crystal clear.

But with the benefit of hindsight, obviously the provalactic probably would have been better to prevent, you know, the adversary from accumulating all this power because they had a value system that clash with our worldview of modernity. And I would argue the red Shia martyrdom Shia martyrdom Shia martyrdom cult, the fanaticism is incompatible with humanity preserving itself. Can you imagine if that fanaticism got its hands on the ability to project nuclear weaponry? And so I get why it's unpopular. Doing something in advance of something becoming existential is not fun because you can always second guess when to go.

What have we not talked about that you have your mind on these days? Well-known ambassador to the United States. He said something to me that I thought was so profound. He said, you know, Democrats are obsessed with process and Republicans are obsessed with outcome. with outcome. with outcome. And that's the challenge between these two sides of the aisle right now. It's a very good mix, right? Because, you know, if you have someone that that spends a lot of calories on form and someone that's very outcome focused, too, and you can bring the concept together, you should get the optimal outcome.

You know, presidents have declared or have functionally created contingencies without the consent of Congress since Truman. So, it's just, you know, when the opposite side of the aisle is doing something, it's an affronttery. And so I think that statement is actually very profound because you can kind of see it in the current contingency right now. We're not we're not following a process that's conventional. What would be conventional, right? Conventional would be you go to the UN, Security Council resolution, resolution, resolution, buildup to the war, this kind of diplomacy, shots fired.

shots fired. shots fired. That would be the conventional way that it would happen, you know, but obviously if it's devoid of the outcome at the end of the day, what was the purpose of it? Think of the Iraq contingency. And so here it's like there hasn't been any of that process. Could you get the outcome that you wanted? And then history would forgive you at the end of the day. And so I think you're seeing the strength and the weaknesses of both of those worldviews play out over the last, you know, 25 years, right?

Gulf War II, it was this we tried to remake the environment in our image instead of remaking it in our interest, right? And then now we're operating almost exclusively to try and remake these environments in our interest and not in our image. Venezuela is a perfect example of that. That environment is functionally remade in our interest. You know, I know a whole series of members of Congress that just went to Venezuela for a trip, former members of Congress. Yeah. A lot of people are gone. Yeah.

for like a business trip, right? I mean, like, can you imagine that four months ago? It's kind of amazing. And so, but the power structure there hasn't changed, right? We've just we've chopped off the head and we've remade the environment and our interests, not in our image. I think that's probably a good natural evolution of where we've been. The question is, will it be enough to change the behaviors of these martyrdom cultures that point towards their suffering as as a as a test of faith that they're winning?

I'm like, how do you win that? Pretty tough. I realize I didn't ask you about AI. What wrench does that throw in the works of all of this stuff? I'm so fascinated by how it can be co-opted. So, I don't know if you've read these stories about people producing fake academic papers for the purposes of and leaving them out there on established sites that require, you know, the established sites say like this isn't peer reviewed, but it exists in the ether and we're going to get to it and here's the access to the paper and then the models pick it up.

And one in particular, one test of this was someone invented a phenomena or I think they invented a medical condition and left it out on an academic website posted for about 3 months and then asked a large model about it and and then and then it said, "Oh, you have this disease and you made this you have this disease and you made it up." And so we're like we're talking right now about the power of AI and its ability to do all this comput and it's smarter than us but if we co-opt it like the danger of co-opting these models when they become part of the loop of decision-m in these important like military system military system military system can you imagine if you can create a foundation of fact that is wrong for a model right model right model right I I could see an alternative universe where the models become complete towers of babel.

We've lost them, right? Because of what they've imputed through the junk that we've posted. Interesting place to leave it off. Darren, [snorts] thanks for your time. Of course, beer. You know how small advantages compound over time. That's true in investing and just as true in how you run your company. Your spending system is your capital allocation strategy. Ramp makes it smarter by default. Better data, better decisions, better economics over time. See how at ramp.com/invest. ramp.com/invest. ramp.com/invest. As your business grows, Vanta scales with you, automating compliance and giving you a single source of truth for security and risk.

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