The video explores Palmer Luckey's innovative journey and his impact on the defense industry. Luckey, known for his development of the Oculus VR headset, has shifted his focus from consumer technology to defense, bringing Silicon Valley's rapid innovation to the Pentagon through his new defense company, Anduril. The video follows him steering his personal warship and delving into his motivations and challenges in modernizing defense technology.

Anduril's approach to defense technology is unconventional, aiming to tackle inefficiencies in military systems by applying commercial technological advancements like AI and autonomous systems. Luckey addresses concerns about the ethical implications of AI in warfare and discusses the company's mission to Reinvent military strategies, adapting them to current global threats like those posed by China and the ongoing conflict in Ukraine.

Main takeaways from the video:

Please remember to turn on the CC button to view the subtitles.

Key Vocabularies and Common Phrases:

1. Reinvent [ˌriːɪnˈvɛnt] - (v.) - To change something so much that it appears to be entirely new.

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

2. Incumbents [ɪnˈkʌmbənts] - (n.) - Entities or individuals currently holding an office or position.

That is, if they can beat the Incumbents and convince the top brass that a billionaire founder sporting hawaiian shirts is just as serious about rebooting America's arsenal as they are.

3. Caricature [ˈkærɪkətʃʊr] - (n.) - An exaggerated representation of someone or something to create a comic or grotesque effect.

I am a little bit of a Caricature, but it's because I just haven't changed.

4. Militarization [ˌmɪlɪtəraɪˈzeɪʃən] - (n.) - The process of preparing for war or conflict by amassing military power.

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

5. Splintered [ˈsplɪntərd] - (v.) - Split or broken into small, sharp fragments.

The relationship between Silicon Valley and Washington Splintered after the cold War.

6. Consolidated [kənˈsɑːlɪˌdeɪtɪd] - (v.) - Combined into a single, more effective or coherent whole.

The defense industry, Consolidated power around five big primes to supply the military's hardware and software.

7. Unmanned [ˌʌnˈmænd] - (adj.) - Not having or needing a crew or staff on board; operated remotely.

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

8. Oligopoly [ˌɒlɪˈɡɒpəli] - (n.) - A state of limited competition, in which a market is shared by a small number of producers or sellers.

It's a large, complex Oligopoly with a strict chain of command...

9. Venture capitalists [ˈvɛnʧər ˈkæpɪtəlɪsts] - (n.) - Investors providing funds to startups and small businesses with perceived long-term growth potential.

Venture capitalists plowed in $100 billion between 2021 and 2023.

10. Proprietary [prəˈpraɪətəri] - (adj.) - Owned by an individual or organization under a trademark or copyright.

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

Driving Innovation From Silicon Valley To The Pentagon

I'm driving Palmer Luckey's personal warship. And we're all about to die. Sorry, guys. So this is a Mark V special operations craft that I purchased from the Navy. Are you sure I'm not gonna flip the boat? Yeah, you're gonna be fine. It's the fastest boat that the Navy ever built. It was designed specifically for Navy SeAL insertion and extraction missions. It runs really fast, and it's a lot of fun.

While this boat may be part of the old Navy, Lucky is trying to bring Silicon Valley speed and innovation back to the Pentagon. Well, some of the United States technology is very bad. It's also extremely expensive and not necessarily adapted to the types of conflicts we're going to see in the future. The United States has a lot of investment in legacy weapons systems that are not necessarily having China quaking in their booze.

He's betting his new age defense company can take a slice of the Pentagon's $850 billion budget and Reinvent how they do business from the outside in. That is, if they can beat the Incumbents and convince the top brass that a billionaire founder sporting hawaiian shirts is just as serious about rebooting America's arsenal as they are. You're not the typical Silicon Valley founder wearing a black turtleneck. Nor are you walking around and talking like a buttoned up defense contractor CEO. Like, how does that play? I am a little bit of a Caricature, but it's because I just haven't changed.

It was really easy when we started Anderall to say, conflict is over. We're living at the end of history. This idea of putting our best brains towards things that can kill people is a waste of talent and a waste of money and unethical, and that's not what anyone's saying anymore. The war in Ukraine and China's rapid Militarization have renewed fears that the us defense industry isn't much modernizing fast enough. That's brought a controversial handshake between tech and defense back out in the open.

The military has a long and storied history with the tech industry. Post world War two, billions in defense funding transformed California into aerospace and technology boomtowns. The first company to manufacture microchips that guided missiles, satellites and helped Silicon Valley get its name was funded by the Pentagon. Founders of that very company pioneered modern day venture capital and helped cultivate a vibrant tech industry. Today, there's a new generation trying to bring back America's past, proven by Palmer Luckey's collection of unusual vehicles.

You sure it still works? It should. It should. So this is a 1967 Disneyland autopia designed by Bob Gurr and Walt Disney. As far as I know, mine is the only complete autopia that is outside of the parks. Mine has the original mechanicals, original gearboxes, original wheels, the whole deal. When I got it, though. Uh oh. Technical difficulties. Got a. Got a flathead screwdriver. Oh, there we go. Look at that. We gotta get moving. All right. There we go. Back invented. So are you sure this is street legal? We're on the street, aren't we?

You grew up in Long beach, right? Not too far from here? That's right close to the port. And it was a place with a lot of car culture, a lot of aerospace culture, a lot of defense activity. I grew up watching the Marine Corps practice right offshore in their helicopters, watching navy ships do exercises, and, you know, it gets in your brain, and it doesn't leave. Southern California, unlike a lot of places, is a place where almost everybody knows someone who has served in the military or has a family member who served in the military when that's the case. Because of the density of military population here, you don't really have the crazy political ideology that you get in places like the barium.

But when I started Andril, of course, it was a totally different world. Defense was not cool, and it was definitely not the hottest thing. Before launching Anduril, Lucky worked on virtual reality headsets in his parents garage. By age 18, he had a prototype that kick started the modern VR movement and caught the world's attention, including Mark Zuckerberg.

Zuckerberg bought Oculus for $2 billion. Lucky was later ousted. The thing is, I'm actually not nearly as political of a person as people think I am politically. I mean, people think you got kicked out of Silicon Valley. Yeah, I got kicked out of Silicon Valley because I made a $9,000 political donation. The reason that people pay attention to it at the end of the day is because it's novel for a person in tech to have supported the person who became president that year. To be clear, he means this guy. Meta disputes that Lucky was fired for his political views. But whatever the reason, the result was a rift between Lucky and the valley.

So he turned his attention to defense and set up shop in southern California. This is my extraordinarily tall door. The house was built in the 1980s, and I've kept all the bones the same. I think it's a pretty cool place, has some good Miami vice vibes. I've got my two inch teal shag carpet. This is my fish tank. It's about a 6500 gallon aquarium. This looks like a dungeons and dragons table. Oh, no, this is just my coffee table. Although it does have a map of our dungeons and dragons campaign. What kind of character are you in dungeons and dragons?

I'm a chaotic neutral wizard named Nilrim five. He's from the lost nation of Atlantis. How much success have you had with that? Pretty limited so far. Pretty limited so far. I know you're a big gamer. What are the connections between navigating a virtual battlefield and a real battlefield? Probably the main similarities are some of the technology that we're applying to things like heads up displays and augmented reality for soldiers and airmen to allow them to see where the danger on the battlefield is. It's also worth noting that really, virtual reality came out of military research in the first place, and the games industry and the military industrial complex have always shared kind of back and forth.

How'd you get interested in defense technology? I briefly was able to work as a lab technician on an army project called Bravemind. It was treating veterans with PTSD using virtual reality exposure therapy. And that was actually before I started Oculus. I kept in touch with a lot of friends in the defense industry, and what I heard over and over again is that it was broken. The incentives were wrong. They were being punished for doing the right thing, rewarded for doing the wrong thing. They made more money when they were over budgethouse, and that really got me worried, especially in a world where we were running a new experiment as a country. An experiment where, for the first time in american history, tech companies were not working with DoD.

The relationship between Silicon Valley and Washington Splintered after the cold War. Top talent caught the.com wave, ditching government jobs in windowless rooms for positions at shiny tech firms. Everybody used to work on Capitol Hill or the government military. Now everybody works for Internet, that startup. The defense industry, Consolidated power around five big primes to supply the military's hardware and software. It's a large, complex Oligopoly with a strict chain of command that filters ideas through layers upon layers upon layers of bureaucracy. For tech startups looking to get a piece of the action, welcome to the valley of death.

The government tries to nurture new ideas, but the amount of time it takes to go from prototype to adoption puts most startups in the defense market graveyard. It seemed impossible for outsiders to compete, until SpaceX and Palantir sued the government, claiming the bidding system unfairly favored the Incumbents. Palantir co founder Peter Thiel's venture firm was the first to invest in Anduro. It's no coincidence that the only two companies to break through in the last 35 years, since the winding down of the cold war, really were both founded by billionaires. It's unfortunate, but it reflects the reality that we've created this muscle we used to have as a country, of turning small, innovative defense companies into large scale providers of weapons.

We lost it. And the only way to bypass that was to already have made billions of dollars somewhere else. As a country, we need to do better. So this is the old LA Times printing plan. It was the old LA Times printing press. I started Oculus in Orange county, and it was a place where I could hire people from all over the country. When I moved up to the Bay Area, actually, it became a lot harder to hire people who weren't already in the Bay Area. But this is a place where you can build great companies that draw from all of America, not just from that one tight little isolated bubble.

Well, I was actually wondering, is it hard to poach people from sort of big tech companies? Oh, no, no. The way that you poach people from big tech companies is to tell them that their career is meaningless and that they're wasting their lives on something that doesn't matter. A decent chunk of people, when you can kind of shock them out of the matrix, be like, what are you doing with your life? There's big problems in the world, and you're not part of solving them. That's been behind a lot of the people who leave. Big tech companies come to work at aneral. Anduril has been clear from the get go to come here is to build weapons and surveillance systems.

They started with this tall autonomous security tower that sits on borders in the US and abroad. Launched in the early days of the Trump presidency, they've expanded their arsenal to autonomous submarines, counter drones, and other robots that are cheaper to build with menacing names. This is a half scale model of fury, which is an autonomous fighter jet that we're building. This is Wisp. This is scanning infrared imager that's able to detect aircraft by building a 360 degree sphere that it integrates as it scans. And this is an electronic warfare system. It can jam and hack and make sure that you're able to talk and that the other guy isn't in a whole bunch of really powerful ways.

You're trying to run a defense tech company like a startup. How does that compare to, like, Lockheed Martin and Boeing? And how do you get Washington to accept that most new R and D is done on a cost plus basis, meaning the contractor gets paid for their time, their materials, and then a fixed percentage of profit on top. Of course, that incentivizes you to come up with expensive solutions and to drag it out as long as. As long as you can. We're the opposite, because we're a defense products company that makes things that work and sell them rather than getting paid to do work.

It means that when we do something faster, it helps our profit margins. You're building products that the government doesn't even know it needs yet, right. Very often. It's pretty rare that we work on something that is consensus in the government, where there's widespread belief that what we're doing is the right solution to the problem. Often we're building things that they've written off as not feasible or not viable. There was a lot of skepticism about applying artificial intelligence to defense, a lot of skepticism about artificial intelligence in general. Chat GPT was one of the most helpful technologies to us because it helped convince people that AI can do things they didn't believe computers could do.

Are we getting to a point where battles could be fought by AI and counter AI only? We're not going to have systems that are acting entirely on their own without human direction. But will we see dogfights between AI fighter jets that don't have people in them? Yes, absolutely. In fact, in Ukraine, there's been a variety of engagements where you had Unmanned systems destroying other Unmanned systems. It seems like what's happening in Ukraine has marked a shift in warfare strategy. What's happening in Ukraine is fascinating because they can't afford to treat warfare as a thing to be think tanked or as a thing to be debated in white papers.

They have to actually win today. And that means that a lot of barriers to trying new ideas have been lifted. And that's one of the reasons you've seen, for example, the proliferation of small, Unmanned armed quadcopters. It's why you've seen the proliferation of a lot of really interesting counter drone systems, things that were not nearly mature enough to be deployed, let's say, by the United States, but they are willing to deploy them in a very early stage of maturity because they know they can't win. Doing things the old way.

The old way meant having the biggest, most expensive weapon on the battlefield. Now it's about having a swarm of commercial technology available quickly and cheaply. To that end, the Pentagon recently announced the replicator program to fast track thousands of low cost autonomous drones. Startups and Venture capitalists who historically shunned military work declared it's time to build, to get in on the action. The old school way of working through five, six large primes and developing technology just doesn't work. You have to work with the private sector to bring new technologies in. Big tech firms have had more long term success offering hardware, AI and cloud services in exchange for billion dollar deals.

But there's been friction on the tech company side from engineers who don't want anything to do with the military. Some tech employees have pushed back on working with the us government and the us military. Yes. Do you see where they're coming from? Fundamentally, I think it's an emotional thing. They came to a company to work on consumer tech. They weren't told that their work would be used for potentially violence, and they don't like that. And I empathize with that because to them it feels like a little bit of a bait and switch.

Critics see the technology you're building worry it could be misused on american citizens, for example. Are they right to worry? Oh, of course, anything can be misused. But if you want to point to things that can be misused against american citizens, I mean, the military has a lot of guns, the military has a lot of aircraft. You have to have trust in the system. You have to believe that democracy works and you have to believe that the right way to control these is on the policy side. There are actually things I would like to build that the DoD would not use and would not deploy that they do think are beyond the pale. And that's the way that it should be.

Us foreign policy and military policy shouldn't be in the hands of corporate executives. The heart of Anduril's technology isn't its hardware, but its software. Engineers here have developed a Proprietary AI driven system called Lattice that acts like an intelligent control center for the company's hardware. Lattice is our AI system for controlling distributed robots. We're doing processing and computer vision machine learning on that data and producing an operating picture of the world so we understand the chessboard, so to speak, and then the autonomy can apply those very logical decisions about what to do and move forward and act.

So walk me through the process from identification to decision or decisions. So we've got a manned crew that's going to try and fly in and land somewhere. They have some mission they need to do on the ground, but there's threats that are unknown. So we're going to send the autonomous systems forward. They're going to try and draw out any enemy fire. And with these autonomous systems, you're okay. If they die, you're okay if they get taken out, because that tells you more information about the battlefield so that you can make informed decisions.

Interesting, but there's still a long way to go, still a lot to build. Yep, there's the old saying, hardware is hard. The United States used to be able to build things that would fly twice as fast as our adversaries, and we'd be twice as fast for a decade. Those days are gone. Hardware advantages like that are going to be quickly copied by our adversaries. So a lot of the most durable advantages we build. For example, using software to make decisions twice as fast or ten times as fast, is a capability that I don't think our adversaries are close to copying.

Lattice is just one example of the military's increasing use of AI. The Pentagon has been developing Project Maven, an AI system that analyzes images from military drones and helps suggest targets. Google initially won this contract in 2018, but backed out after thousands of workers protested the deal. Palantir, Amazon, Microsoft, and Anduril are currently among the main contributors.

Maven is now deployed, but there are still open questions about AI's combat readiness. At the end of the day, you just have to be correct, and you're doing it from afar. And so, yes, I would still submit that that is one of the toughest things that my organizations have encountered, is that idea of distinguishing enemy from non enemy or combatant from non combatant. And the scale of it is impressive. There are concerns that AI could deepen the fog of war. What do you think about that?

No, I super disagree. I think AI is gonna be a tool to put all the cards on the table for everyone. My hope is that you're gonna have dictators who make better decisions, because even they have better information from AI. Let's use Putin as an example. I don't think he would have launched this invasion in Ukraine if he would have understood what was actually gonna happen. Remember, they believe this is like a three day special operation. They were gonna roll in. It was gonna be over very, very quickly. If he had had a better understanding of what he had and what they had, I think he probably would not have made the play.

There are a lot of thorny ethical questions. We're talking about a possible future of self guided bombs and killer robots. Who is liable when a human isn't in the loop? The key is that a person is responsible for the deployment of those systems. The existence of an algorithm cannot replace human responsibility for deploying that weapon system, and it has to be a person who deeply understands the limitations of that system and who's going to be held to account when it goes wrong.

But war is hell, and it's not going to be perfect. There will be people who are killed by AI who should not have been killed. That is a certainty. If artificial intelligence becomes a core part of the way that we fight wars, we need to make sure that people remain accountable for that, because that's the only thing that will drive us to better solutions and fewer inadvertent deaths, fewer civilian casualties. I don't want AI to do these things, but a lot of times, the existing technologies are much worse.

China and Taiwan, how does this play out? It can play out in a lot of different ways. Everything that Anduril is working on, on the R and D side is oriented towards that fight right now. China believes that they can take Taiwan. They believe that the United States is some combination of won't stop them, isn't willing to stop them, won't win. If we do try to stop them, they believe Taiwan is in a similar position with their own military. We have to change their minds.

I'm probably going to eat these words, but if China ends up invading Taiwan, I'm going to feel like we've really failed in our mission. You actually spent a lot of time in China working on Oculus headsets. What do you know about China's capabilities in AI? What don't you know? I spent time in China back in the Oculus days because that's where we did our manufacturing, and we didn't really have a choice.

I deeply understand how dependent our country has become on chinese manufacturing, chinese engineering, chinese supply chain materials. It's really extraordinary how they've pulled themselves up from almost nothing to being an economic superpower. And we did this, too. We're the ones that gave them the blueprints. We're the ones that gave them the tech. We're the ones that shipped it all overseas. And I'm part of the problem. I'm one of the guys who did it.

What a call. Do you worry that China is outpacing the US on technological innovation? Like, could the us military lose its edge to China? Well, depending on who you ask, China has between 50 times and 300 times the military shipbuilding capacity of the United States. This is a huge problem, especially if you're fighting a war where you lose all your ships and it takes you decades to rebuild. They lose all their ships and they rebuild the same year. This is really inarguably an area where China has outpaced the United States.

Now they haven't outpaced us everywhere, but in a lot of the areas that matter for a fight in the Pacific, they are kicking our ass. And the United States is not going to be able to win by following the same strategy they do. We're not going to be able to build enough shipyards and train enough welders to build 300 times more ships. That's off the table. So we have to win with our brains.

Despite all its innovation, Anduril and other defense tech startups are still bit players in the world of military suppliers. Venture capitalists plowed in $100 billion between 2021 and 2023. But only a handful of companies have won meaningful contracts. Right now, Anduril is very much in a high growth stage. We've done a lot of things that I'm very, very proud of, but I'm very aware of the fact that we are not a profitable business. We are living on borrowed time.

And so it's hard for me to come and feel like I've made it when I know that anyone can raise money from VC's, buy a really big office and fill it full of people. The question is, are those people building the right things, and will those things pay off? It's not your average Newport beach boat. No, it's not. Most of my neighbors like it, and a handful hate it, but that's good enough. We've got a mach M two heavy barrelled 50 BMG machine gun. I have real ones that I can throw on, but I keep the fake ones on most of the time.

One of the other cool features of the boat is these shock mounted seats. You'll notice they bounce up and down. So we're gonna go below deck into the navigator's room. This is also where we run all of our communications gear, processing gear, computer gear, radio gear. You've got all of your rifle racks here so that you can rack them up. So these are twin MTU engines. The boat's got a little over 5000 hp. This whole thing's basically a big, giant jet ski. So what else do you have in your personal arsenal? Oh, I got a whole bunch of stuff. Got a UH 60 Blackhawk, 1985, ex Marine Corps Humvee. How many helicopters? I used to have seven, but I only have six now.

I do hear that you have a vault where you have every video game ever created. A while ago, I purchased the world's largest video game collection, and I also collect us Air Force nuclear missile bases. So I put that in one of my missile bases 200ft underground. Where is that? Oh, I can't tell you. All right, we're gonna do some turns. Everybody hold on. All right. What was that?

That was one of our own wakes, but we're gonna go find one of the other ones. Hold on. Do you want to try steering? I'm good. All right, we'll bring this down to zero. So as we accelerate, you're going to hear first, the first turbocharger kicked in, and then after we get at about 20 knots, you're gonna hear the second turbocharger kick in, and that's when the engine changes pitch. I'm gonna try a starboard turn. You're gonna move your stick over to the right, and then watch your positions here. I'm turning a warship when I say, center, center, center. Now. There you go. We're going fast.

The beach is approaching. All right, we're gonna do a little bit of a fast stop. You're gonna fall on the throttle, Paul. Keep going. Keep it. Here we go. All right, leave it there. There you go. Oh, my God. So am I hired? No.

You started enduro in 2017, and you've lived through Silicon Valley in the era of zerp and easy money. Sure. What do you think about the frenzy, the zero interest rate phenomenon? Yeah. There's a lot of companies that shouldn't have existed. They never should have been funded. All that money went to paying people to do things that were a waste of time. I know lots of young founders who were working on crypto art nonsense and a fifth delivery app or a 10th delivery app. And now that money has become harder to come by, you know what they're working on? They're working on energy, they're working on national security. They're working on transportation. And I think that I see people working on real problems because the market forced them to.

And that's a good thing, in my opinion. So it's time to build. It's time to build the war in Ukraine. It's been two years now. How are we going to look back on it? Well, I think that we're going to look back on it as one of the best examples of the hubris of the modern era, thinking that we lived at the end of history, the end of conflict. That large scale war was a thing of the past. That artillery is irrelevant. That manpower is irrelevant. That sternly worded letters from the United nations mean anything at all to expansionist dictators like Putin or Xi?

That's, I think, going to be the legacy of this fight. Is the us government working fast enough to, like, foster the agility we need to survive or win global conflicts. It depends on what kinds of fights we fight. Hopefully we have enough time. We might not. Why not? Well, let's say that China starts making moves on Taiwan and moves on other countries. In the next 24 months, I think we're going to be in trouble. I think in 36 months, 48 months, we're actually still kind of in trouble if it takes long enough. I think that the United States military has recognized the problem. But, you know, like you're steering this boat. When you turned, how long did it take for the boat to respond? A while. It was a bit of a lag time.

The US military is the same way. It's a large machine. It takes a long time to move. Even once you've applied the control, even if once you've applied the input. I think that's the phase we're in. The government has realized the problem. They've applied the input, but we're waiting for the system to adjust.

Technology, Innovation, Military, Artificial Intelligence, Palmer Luckey, Defense Industry