Is the U.S. Is Losing Its Edge? — Here’s How We Win It Back | Joe Lonsdale PT 2

Summary

Podcast Summary

Podcast: Impact Theory
Host: Tom Bilyeu
Guest: Joe Lonsdale
Episode: "Is the U.S. Losing Its Edge? — Here’s How We Win It Back | Joe Lonsdale Pt 2"
Date: May 28, 2025

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Episode Overview

This episode features a candid, high-stakes conversation between Tom Bilyeu and entrepreneur/investor Joe Lonsdale (co-founder of Palantir, founder of 8VC) about America's declining edge in the face of rapid Chinese progress, internal dysfunction, moral confusion, and cultural shifts. Drawing on deep experience in the emerging tech and defense sectors, Lonsdale argues for pragmatic patriotism, revitalizing meritocracy, and the urgent need to "grow up" as a society—offering bold, sometimes controversial takes on defense, immigration, education, manufacturing, AI, and leadership.

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Key Themes & Discussion Points

1. Moral Complexity & Ethics of National Defense

• The Silicon Valley Shift:
  • Lonsdale discusses the change in attitude toward defense work in Silicon Valley. He admits to youthful "squeamishness" about weapons but says global threats like China changed his mind.

    “We saw Xi Jinping as a crazy Communist. We saw China building all of these really advanced new things...We said, wait a second, this is a really big crisis.” – Joe Lonsdale [01:19]

• Changing Zeitgeist:
  • Initially, involvement in defense was seen as "evil" by peers focused on life sciences. The Russia-Ukraine war shifted public opinion, making defense tech more acceptable.
  • Lonsdale frames the debate as: "Mercy for the evil bad guy is cruelty to the innocent." [03:27]

2. Threats to the West: Internal vs. External

• Empathetic Suicidal Empathy (Douglas Murray's concept):
  • Tolerating illiberal newcomers and ideological monocultures in institutions is "killing the West."

    “If a liberal place tolerates illiberalism, then it becomes illiberal...the university should be a warning sign for our entire society.” – Joe Lonsdale [07:14]

• Top Threats Ranked:
  • Dysfunctional government and polarization ("internal own goals")
  • Rise of China as an adversary
  • Islamist extremism and mass illiberal immigration

    “It’s the government issue is the biggest. If we don’t solve that, you just get swamped like Europe.” [08:05]

3. China’s Strategy and Thucydides Trap

• Great Men Theory vs. Systemic Decline:
  • Despite the historic pattern where rising powers clash with established ones, exceptional leaders (Trump, Musk, Palmer Luckey) can shift national fortunes.

    "I deeply believe in the great man theory of history, Tom...I'm optimistic that it's possible to avoid this kind of nasty decline." [10:42]

• Peace Through Strength:
  • The U.S. must cultivate a culture of confidence, impatience with bureaucracy, and “boastful, masculine” entrepreneurship to keep up.

    “Can we...wrangle [our culture] back towards merit...the more traditional American...just gonna build...not gonna wait for permission?” [13:25]

4. Industrial Base and Manufacturing: Friend-shoring and On-shoring

• Critical Needs:
  • Rare earth refining (on DoD land to bypass environmental delays)
  • Shipbuilding, drone components, biomanufacturing (e.g., penicillin, laboratory monkeys for drug testing)

    "We need millions of motors...right now we're still somewhat reliant on rare earth refining." [16:16]

• Policy Prescription:
  • Enable full capital expenditure write-offs for manufacturing; encourage startup investment.
  • Recognize biomanufacturing as a national security priority.

5. Asymmetric Warfare, Subversion, and Bureaucratic Decay

• China’s Information War:
  • Funding divisive U.S. movements and NGOs to increase polarization.
  • Lonsdale: "I wouldn't be surprised if China was behind some of our more aggressive environmental orgs." [19:49]
• U.S. Bureaucratic Decay:
  • Intelligence community is less effective, more politicized, more risk-averse than believed.

    “These people are retarded...these things have fallen first." [21:13]

6. Government, Incentives, and Talent

• Keys to Building World-Class Teams:
  • Gather the best talent, give them resources and high-stakes accountability.
  • Use clear, outcome-driven incentives, not patronage or seniority.

    “You have to identify gaps...what’s the conceptual gap in the world where something can be done so much better?” [24:58]

• Culture of Ownership:
  • Equity for all, outsized rewards/promotions for outsized results.

    “Everyone should have equity...people who do really well should get a lot more equity.” [27:41]

7. Innovation, AI, and the Next U.S. Advantage

• Deregulation and New Industrial Revolution:
  • Cheap energy, breaking up crony business-government alliances, removing red tape in construction, healthcare, and education.
  • Cites optimism about new waves in AI/automation—building roads with driverless construction equipment.
• AI’s Trajectory:
  • Skeptical of the “singularity,” expects a powerful productivity wave, but not superintelligence.

    “It keeps getting a little bit better...a happy medium.” [33:00]

8. Courage & the Crisis in Masculinity

• Elon Musk as Archetype:
  • Acts with courage and virtue, willing to risk unpopularity and danger for civilizational goals.

    “He has virtue...you have to have temperance and wisdom and justice and courage...courage is obviously a central one.” [35:09]

• Masculine/Feminine Balance:
  • Society has veered too far from celebrating masculinity (strength, courage, action) and must “bring back” these values; this is crucial for leadership.

    “You don’t tell young men to be more manly...just not lauded. So I think our culture has moved in a very feminine direction.” [36:46]

9. Education and Cultural Rejuvenation

• University of Austin Project:
  • Create space for truth-seeking, dissent, and “courageous” leadership; resist ideological monocultures.
  • Model strength and values through curriculum, role models, cinema, and popular culture.

10. On Heroes and Human Flaws

• Who Lonsdale Admires:
  • Lee Kuan Yew, Ronald Reagan, Margaret Thatcher for transformational leadership.
• Reconciling Heroes' Flaws:
  • “People are subject to their culture at the time”…admire greatness, recognize imperfection. [40:38]

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Notable Quotes & Memorable Moments

• On Hard Choices in Defense:

  "Mercy for the evil bad guy is cruelty to the innocent. And I think this is a very important part of being an adult." – Joe Lonsdale [03:27]

• On Western Institutions:

  "If a liberal place tolerates illiberalism, then it becomes illiberal...the university should be a warning sign for our entire society." – Joe Lonsdale [07:14]

• On the Real Threats Facing America:

  “To me it’s the internal own goals and lack of merit and dysfunctionality...” – Joe Lonsdale [09:03]

• On U.S. Culture:

  "Can we shift it back toward that kind of entrepreneurial dynamic, frankly, more masculine culture versus waiting around...if we can't, then the civilization is going to decline." [13:25]

• On U.S. Bureaucracy:

  “These people are retarded...they make things confidential...not to get caught being stupid because they're so dumb that you can't criticize them if it's confidential.” – Joe Lonsdale [21:13]

• On Leadership Talent:

  "You take the talent that's the best in the world, and you give them resources and you give them accountability." – Joe Lonsdale [24:58]

• On the Need for Courage:

  "Courage is obviously a central one. Without the rest, you don’t...you don’t get the rest without courage." – Joe Lonsdale [35:09]

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Timestamps for Important Segments

• Defense Ethics & Silicon Valley’s Shift – [01:19] to [03:27]
• Empathy and Decline of the West – [04:49] to [07:54]
• Top Threats Ranking – [07:54] to [09:03]
• China vs U.S. Strategic Outlook – [10:42] to [12:00]
• Culture’s Role in National Strength – [13:07] to [14:27]
• U.S. Industrial Policy, Friend-shoring/On-shoring – [16:16] to [18:23]
• Information Warfare, Bureaucratic Issues – [19:49] to [21:49]
• Building High-Talent Teams, Government Reform – [24:58] to [27:41]
• On Courage & Masculinity – [35:09] to [38:34]
• Education, Heroes, Flaws – [39:35] to [40:38]

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Conclusion

Joe Lonsdale urges a return to meritocratic, courageous leadership to address existential threats—from internal decay to foreign adversaries like China. His arguments center on pragmatism, incentive-driven systems, and openly celebrating the constructive elements of capitalism and culture. Above all, he argues that the nation must become serious again—rediscovering its edge in entrepreneurship, manufacturing, education, and values—if it is to thrive in the coming era.

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Follow:

• Joe Lonsdale on X: [@JTLonsdale]
• The American Optimist Podcast
• For more, see the University of Austin and Cicero Institute initiatives.

Transcript

[A]

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[B]

I'm Tom Bilyeu and this is Impact Theory. Welcome back to my conversation with Joe Lonsdale. If you haven't already listened to part one, I highly recommend that you start there and then join us here because we are about to get deep into the real stakes of how China's building faster than we are, a lot faster, how our own systems are breaking down, and what it takes to build a team, a business or a country that can actually win. Let's dive right back in. Now. You guys got into this when the prevailing attitude was that working for a defense company was immoral one. How did you think, in a contrarian way, what facts were stacking up and then what are the ethics and morality of building weapons?

[A]

Yeah, no, this is, this is a great, this is a great point. So when we started Palantir, of course we were more on the software side. And even I have to admit, growing up in the western culture in Silicon Valley, in California, I was very squeamish about weapons. I mean, you've seen all the bad guys in the movies make weapons. And so Palantir is like, well, we're going to stop the bad guys. We're going to protect civil liberties. We're just doing software, so we're okay. We kind of got around that problem. And then we saw Xi Jinping as a crazy communist. We saw China building all of these really advanced new things with the top engineers. And we saw our defense companies were declining or not hiring any of our best and brightest friends. We said, wait a second, this is a really big crisis. And so three of our former Palantir guys partner with Palmer. Lucky start, Andrel and kind of clicked like, wait a second, if we're patriotic and America is going to be around and be a dominant force and not fall the next 20 years. We have to do this. And it. And it was really hard. Even for a lot of my team, it was hard. We do a lot in like bio innovation, which I was talking about earlier, we do a lot in other areas of tech that not related to defense. I think some of those people, especially the people in the bio world said if you guys are going to do defense, we don't want to be your friends anymore. It's just evil. We're trying to save lives. You're trying to destroy lives. And it was like, no guys, like actually it's good for the, the good guys to not lose the bad guys. And so I'm going to work on this. And it was, it was a tough conversation to have. And you know, it wasn't really until the Russia, Ukraine thing that the Zeitgeist really flipped and that people realized that, that you need to do this. But it was, it was interesting for a few years there. It was, it was very contrarian. Mm.

[B]

Yeah, there's no doubt. How do you personally think about the idea of maximum lethality? I recognize that this is a fact of the human existence that people are going to come and take your life and your resources if they can. That's just history bears that out over and over and over. And at the same time, like yesterday there was something, I think it was Trump or the White House that posted and it was like, don't worry, we haven't forgot about jihadis. And then it just showed a video of like, like yeah, 10 of them or whatever getting taken out by presumably a drone or something. And it's like, damn, like that was just 10 people that just, they existed and then they stopped existing.

[A]

We helped do that thousands of times with Obama and, and others because you know, if mercy for the evil bad guy is, is cruelty to the innocent. Right. And I think this is a very important part of being an adult is to be able to grapple with these things. And I think we have very few adults in our society versus 80 years ago. I think during World War II it was very obvious like what you had to do. And I think a lot of people now, they have this like extended adolescence. They never really grow up, never really have to make these tough choices. And is, this is important for, for war, it's important for terrorism. But Tom, it's also important in our cities. I mean just here in Austin, just last week, there was this 30 year old Indian kid who was a straight entrepreneur. He'd turn down to top jobs to be here building his company. He went on a bus and a homeless guy who'd committed over like a dozen felonies in the past stabbed him in the neck and killed him. And why was a homeless guy who committed a dozen felonies out? For the same reason that people are afraid to kill the jihadis who are going to kill us. Right. For the same reason they're afraid to work on defense is that they want to have mercy for the guilty. They feel bad for the bad guys. I'm sorry, but once someone's committed multiple felonies, you got to put them in jail. And once the jihadis very clearly trying to kill us, you got to kill them. Otherwise, that poor innocent kid, his family's distraught, his friends are distraught, and he was just killed for no reason because we're too afraid to put bad guys in jail. And it just. It drives me crazy.

[B]

I saw a video the other day of a Muslim who was like, we are specifically coming into liberal countries because we know that we can come in and we'll be welcomed and then we will slowly become more of the population. He didn't say politically and economically powerful, but that was like the idea. We're just going to grow and expand and essentially take over the space. And the interviewer said, well, how would we be allowed, as a Christian, to go to your country and do the same? And he chuckled and was like, don't think because you're liberal that we're liberal. We would never put up with that. And I was like, oh, damn, like that's a thing. So what do you think about what Douglas Murray calls the strange death of the West? The way that there's the notion of empathetic suicidal empathy?

[A]

Yeah, yeah. No, Douglas Murray, honestly, is a good friend. He's someone I really admire. I think he's written some of the most important books on these topics. And suicidal empathy is obviously a massive problem coming from the left, especially right now, although I think a lot of our people make the mistake, too. And. And it's a paradox of liberalism. We've been talking about this for a century or more. You want to be a liberal society, but if you tolerate illiberalism, if you tolerate the authoritarians coming in and pushing things, then it's going to break you eventually. By the way, I'm a chairman of a new university that is attracting a lot of very top students, very top professors, and we debate this a lot because the goal of a university, just like the goal of how you run your country, it's to be open, it's to be liberal in the classical sense. It's to pursue the truth, it's to have dissenting viewpoints in, learn how to have humility and debate. And you want to include everyone. Like, I don't mind if there's a professor who's a communist next to a professor. Who's a free market person as long as that communist professor isn't trying to stop people he disagrees with from coming in. And so as soon as you have that illiberalism, as soon as you have that attempt to block others and to conquer, and this is what's happened by the way, at all of our universities, because it's the same idea you just talked about. If you look at the top 100 universities in the country, the vast majority of their departments got to be 51% or more illiberals, some version of communists, some version of socialists, whatever. And then they don't let anyone else get hired who doesn't agree with them. And suddenly you have departments that are like 18 kind of commies to, to maybe one moderate and, and, and there used to be one Republican there, but he died, right, because he was the old history professor or whatever. And now you have a whole departments with only one point of view. And, and they're brainwashing our kids. And it's like these places are broken. And so if a liberal place tolerates illiberalism, then it becomes illiberal. And that the university should be a warning sign for our entire society. We have to be very careful. We should not be letting in immigrants from these places that are illiberal. It's crazy to be bringing people from Somalia who have those views. It's crazy being people in general from a lot of other parts of the world with illiberal views. And they're very misogynistic cultures. They're very broken cultures. So I, you know, and Europe's basically committing suicide. It's very frustrating.

[B]

If you had to rank order the threats to the US specifically, but the west in general, top two or three. What, what would you rank order them?

[A]

This is really hard. I think. I did this like quiz on my, on my ex the other day and I think the, the one that people voted as the biggest problem was the immigration Islamist issue. And I do agree that's really big problem. What's really tied to that is the polarization and dysfunctional government issue. I tend to think if we can actually make more functional and we can find a way to collaborate between the moderate sides and have this like merit based kind of common sense government, I think that we'd be able to work together to like solve all the other issues. Right? Because I mean, listen, there's AI threat we can talk about and I'm very bullish and optimistic on AI, but there's obviously ways people could use it to do terrible things. But I think, I think to me it's the government issue is the biggest. But then if you don't solve that, you're just going to get swamped like Europe and you're going to lose your liberal society.

[B]

So you're more worried about internal own goals versus rise of China, rise of Islamism. You're more focused on we got to get ourselves right internally.

[A]

Listen, the threat, the threats are very clearly, very clearly, to me it's the internal own goals and lack of merit and dysfunctionality is probably China as an adversary and the problems there, because it's just this very active, rapacious adversary that's destroying things actively right now. Longer term is probably the Islamists and the immigration stuff. And, and you know, we had this crazy activist party that Elon and have talked about a lot where every part of the government's funding migrants secretly to come here and to swamp things and to shift things more towards the kind of leftist, authoritarian direction that other countries tend to vote. And so, so, yeah, so all of these are very big problems. They're all tied together and, and my, my goal. So I have something called the Cicero Institute, you know, where I have teams in over 20 states. I have a lot of people working and helping in D.C. and this is all about just like moderate common sense, incentives, accountability, fixing things we're very public online about. You know, I think we have over 50 laws that already passed this year in different states and just like making government smarter and more functional and less stupid. And I think that's actually like the prerequisite for solving the rest of these problems.

[B]

And so I think a lot about China that is admittedly my personal obsession. There's two things I worry about. Money printing because of all the downstream consequences, including war. And then I think about China, their rise, Thucydides Trap, where the US as a declining power just is not going to accept that China as a rising power is not going to accept it. We see the clash with the tariff war and China saying, cool, we're here for any kind of war you want. Now, I'm sure that some of that was bluster, but how realistic is it? Do you think that tensions could escalate in Thucydides Trap between us and China?

[A]

You know, Thucydides Trap's a great model to think about history as a system level thing. I, I agree these systems really matter, but I, I guess I deeply believe in the great man theory of history, Tom. And I think thanks to a small handful of great men shifting the conversation, changing what's Possible. Men like President Trump, who's really shifted the entire nation around this China issue, if we're honest about it. Men like Elon Musk who have made us completely dominant in space, which is critical for warfare. Men like Palmer Lucky, who took the stuff we did with the Palantir talent and has this whole new thing he's built out, which is a dominant defense company which is running circles around everyone. It's just amazing stuff. Men like Dino Mavrukus, who's actually, you know, partner with us. He's actually going to build thousands of ships that are more advanced in China, is happening. And, and men like our Navy secretary, Secretary Feit and others who step in and say, I am going to fix how the Navy works. I, I'm going to actually rise to the occasion. Take my. This billionaire who could do anything you want to do from the private sector going in, you know, basically no money, just doing a service. You have a lot of really great men, great people obviously in, in America who, who are going to shift this. And I think who can shift this and, and so I'm optimistic that it's possible to avoid this kind of like nasty decline, destruction, but we really have to fight for it.

[B]

Up next, Joe explains what it takes to out build China in real time.

[A]

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[B]

All right, we're back. Let's get into it. Okay, so is that a combination of peace through strength and we can pull out of the decline economically by just getting our shit together, not letting ourselves be taken advantage of by China or by Europe not paying their share, et cetera, et cetera?

[A]

It's peace through strength. And then this is the big question. Can we get our shit together? Can we take this culture and wrangle it back towards merit? Can we clean wrangle it back towards kind of the more traditional American. A little bit boastful, a little bit arrogant. We're just gonna build and we're gonna, we're gonna do it ourselves. We're not gonna wait for permission, you know, we're not gonna wait for the committees to tell us what to do. We're not gonna have a government gets to decide everything and slow everything down. Like, can we shift back towards that kind of like entrepreneurial dynamic, you know, frankly, more masculine culture versus waiting around and being really careful not to offend everyone. Right. So I think, I think if we can shift it back in that direction, we're gonna win. And if we can't, then the civilization is going to decline. And it's, it's really tough because obviously it's nice to be nice to people. You know, it's nice to have kindergarten, you know, types of situations where you don't make people feel bad. And we're prioritizing feelings and we're prioritizing, you know, waiting and being really careful. But that's great for kids and it's great for maybe certain things, but that actually destroys the culture as a whole. If we're going to make it be based on that, we're going to lose if we base it around that we need to have great men in charge and that, that, that's where we have to be.

[B]

All right, now I'll try asking a very pointed question. Do you think China will make a move that we will have to respond to militarily in the next five years?

[A]

I think the jury is still out on that. It really depends on what we decide to do. I think there's a, there's these system level things that frankly, people in Russia think about as well, where, like, is there a stable system of deterrence and is there a situation where both sides don't feel, you know, forced into anything? Or are, are some of our moves so dominant, you know, with the golden dome and with AI, that we have some kind of tech supremacy and they have to respond sooner? And these are kind of like this like really weird high level game of chess that both sides are playing and both sides are, are we keeping them comfortable along the way or are we exposing ourselves by not deterring them a certain way while showing that if they don't attack, we're going to be dominant. Right. So there's all these games they're playing in their heads to figure out and how we manipulate the chessboard and how we, how we work on it. You could steer it correctly towards peace and you could steer it accidentally towards kind of tripping them off and, and you know, I think, I think Biden's administration was very sloppy with Russia and Ukraine and did trip them off because they, they had this chessboard signaled in all the wrong ways and they weren't even thinking at these high levels. I think they weren't very smart. I think the President wasn't even there as a whole, not conversation and so, so they screwed that up with Russia, Ukraine. You know, hopefully we have some very smart people with Rubio and with the President and with, and with others around him right now, the National Security Council, like I hope they can actually get this right with China and not have any kind of battles like that. But I think China is definitely looking to do something to try to shame us and to try to break through

[B]

if necessary in the piece or strength angle. What elements, if any do you think from a manufacturing standpoint we absolutely must either onshore or friend shore.

[A]

There's a lot, there's a lot of probably like refining for rare earth metals. Like we need millions of motors talking earlier about engineering. You need to be able to build, you know, not just thousands, but millions of some of these smaller drones and smaller other ships and, and other types of things. And a lot of that right now we're still somewhat reliant on the rare earth refine. It's a very messy, nasty thing. I actually think the right way to do this, Tom, which we might do is actually have the DoD itself partner to build some on their own land because otherwise the environmental regulation is going to be too tough. So this is like one of those catch 22s and anyway we probably should build that. So it's rare stuff. There's just obviously shipbuilding and then there's, you know, just other parts of the drones other than that is really key. I think Eric Schmidt has a great program to try to help in Ukraine and he's building hundreds of thousands of drones drones per year in Mexico because there's no supply chain in the US that works for it and it needs to use some of China. So, so, so yeah, so just reshoring a bunch of that stuff. And you know, in general I really like the idea of letting people write off capital expenditures for manufacturing as opposed to depreciate over time. And I love the idea of startups being able to kind of like take those write offs and sell them to big companies. And so what that does is it would allow us to invest in a lot more manufacturing with new companies. And so there's there's, there's, there's programs like that they might do, which would then like create the ability for me and others to put billions of dollars to work from funds into new advanced manufacturing, which is what we need. I guess the other thing I'd say is biomanufacturing. Absolutely critical. All of our penicillin is relying on China. All these things we need in a crisis we can't make right now. We should definitely be putting more money into advanced biomanufacturing. So there's, there's things like that that are national security threats. We're actually working on monkeys. It's like, this sounds crazy, but China stopped sending us the monkeys. And this is a really controversial one by the way, because here's someone's working on monkeys. Like that's an evil person. What are they doing to those poor monkeys? This is terrible. But you know, but I asked my 5 year old, I say, listen, if mommy had a bad disease and we could try to test curing the, the cure on mommy and it might kill her or might help her, or we could test on the monkey first, make sure it doesn't, wouldn't kill anyone. Do you want me to test it on mommy or the monkey? They say test it on the monkey and that's, you know, China stops sending us monkeys. So we're not, you know, so we need things like this too for biosecurity.

[B]

Interesting. Was that a clapback for the tariffs, why they stopped sending monkeys?

[A]

It was after Covid. They use it as an excuse. No, if, if you look at the data, I could send it as a, on my ex where it's like their number of drugs being approved is going up exponential versus us. And so they're really focused on this like big bio plan to just take over that sector. And this is a really key input to that sector. And so they've really started to grow massively the last four or five years in that sector. So I think quietly they use Covid as the excuse, but quietly they're trying to take out certain parts of the supply chain to bring everything to China and really kind of compete with us in that sector. So it is a strategic move they're making as they, as they start to dominate more. There's. And it's something we really got to be smart about and we're working on it with executive orders and others. Hopefully we fix it. But you know, of course PETA delays these things for years or two here. There's no PETA over there to delay them from from the monkey supply chain. It is what it is. It's like. It's like these, these.

[B]

It's.

[A]

I don't mind some delays from a democratic system, but it's just ridiculous, man. Sometimes how long things take to get through that you obviously need.

[B]

Yeah, that's interesting. I didn't realize. I'm sure there must be a ton of areas where we're competing that I'm just completely unaware of. But that sounds like us trying to keep the chips from them coming out of Nvidia to try to slow them down on AI if they're making a big bet on bio, trying to slow us down in any way that they can. That's really, really interesting. Are there other battles that we have with China where it's a very meaningful industry and we're. Each of us are trying to block the other.

[A]

It seems like China tends to fund, and I know they've been caught funding like BLM and other things. I think they tend to fund things that are divisive in the US Really. There's just.

[B]

There's all sorts of ways, but I hadn't heard.

[A]

Yeah, yeah. So. So I think I wouldn't be surprised if China was behind some of our more aggressive environmental orgs. You actually found out that Russia was behind some of the UK environmental orgs that were blocking certain things in order to, like, keep Russia's energy dominance versus the uk. This is. This is a true thing. Right? It's very smart. So I think China and Russia take these radical parts of the left and no doubt radical parts of the right as well, that wouldn't even exist in some cases, and, And. And put lots of money into them and play them up to cause divisiveness. Yeah, that.

[B]

That is brilliant. And I have no doubt that we're doing the same. We certainly have.

[A]

No, we're not.

[B]

Changes and all that.

[A]

We're not, Tom.

[B]

This is.

[A]

We used to do the same. We used to do the same Hunter. And we did all sorts of, like, crazy things in the past. We're not really doing the same now. I mean, the problem is all these orgs around our government since 1980, like I told you, they've gotten stupider. Like I used to think, like, there must be genius things going on on our side and we're amazing and we're doing all this clever stuff and. No, these people are retarded. The best thing that happens for a lot of our intelligence agencies with their making. They make things. They make things confidential on top secret in order for them not to get caught being stupid because they're so dumb that you can't criticize them if it's confidential. And these things have fallen first.

[B]

So they've fallen. We, we now even suck at like causing distress in other nations.

[A]

We are much worse at like the Voice of America started being more progressive. This whole thing was supposed to be like patriotic, like how great we are. And you get like trans shit on the progressive Voice of America, which was supposed to be, it's like, it's like the opposite of what it's supposed to be. It just drives me crazy. No, this stuff has gotten dumber and it's, and this is, it's a big problem. This is why you need to completely revert, redo a lot of parts of the government with a merit based framework, with an accountability based framework. Because, I mean, it's gotten a lot dumber, man. It's a big problem.

[B]

Wow. Well, that's not what I wanted to hear. I at least admittedly held in my back pocket that, okay, they do this stuff, but we do it back and we're sort of the kings of it.

[A]

I don't think so.

[B]

Apparently that's distressing. Well, what do you think about like USAID? Was that U.S. doing this kind of thing just really stupidly or was that sort of the last bastion of US manipulating the rest of the world?

[A]

I think USAID had done some things very cleverly a couple generations ago. And then I think usaid, by the way, did save billions of lives in Africa and a pretty efficient way during the Bush administration. And I think that's something you have to give them credit for as whether you're Christian or Jewish or believe in God in some other way. Like I think that like a good thing to have done in Africa, it helped a lot of people. If you look at USA Today, it was extremely politicized. The vast majority of money was going to NGOs and others that had no accountability, in many cases making a lot of people rich who ran African governments. A lot of money coming back to NGOs and leftist orgs in the US and so the whole thing had gone to just be extremely corrupt. The problem with other people's money is that there's no accountability. Over time, people just take more and more and more of it. And you know, it was tied to this other culture. I think it's an important context. Tony West, Kamala's brother in law, was, was, was working in the Attorney General's office for Obama and they came up with a new idea under Obama that whenever There's a big settlement. Rather than the companies having to pay the settlement to the government, they could pay half as much to an NGO. And then they had this big list of NGOs that the government made, but all of them were run by their friends, were run by the Democratic Party activists. And so this was like the first, like, $15 billion insertion into these NGOs in a way where it's like, wow, this is really great for our power and our friends and our. And our influence and culture. We're going to support all these new things. And this is really a start of the WOKE movement with all this money, and they got addicted to it. And so when Biden came back in with Kamala, they turned it up. It was all of a sudden hundreds of billions. And USAID was like, part of that trend. We're like, let's do whatever we can. It's like a new business now to fund all of our friends and all of their influence. And Stacey Abrams gets several billion dollars to do what she wants, and Democratic people in California get $8 billion for all their environmental stuff, which is just all their friends orgs. And. And so. So USA was part of this massive grift scam and massive influence scam that, thank goodness we're able to come in and. And turn off. And we still haven't turned off most of it. The judges are desperately trying to defend it, the activist judges on the left, but hopefully we'll be able to turn off most of it, because it's just. It's just. It's trash, man. It's just horrible.

[B]

All right, so if we're trying to inject a better way of thinking into the government, you have either founded or been a part of a absurdly long list of HYP successful companies. You've talked about Elon and Palmer Lucky as having an ability to make things in the physical world that. That is pretty unparalleled. What is it in the way you think? And I'm not looking for the humble answer. I'm looking for the answer I can steal that the. The government can bake into the soul of what they do. What. What is that thing that makes that success so repeatable?

[A]

Well, you take the talent that's the best in the world, and you give him resources and you give them accountability. Like you said, the lion chasing him. I think. I think you said it really well. Like, who are the. Who's the top talent? How do you build a very, very top culture that inspires the other top people to be there? And it's chicken and egg. You start with, you know, you start with three of our best guys from Palantir and Palmer. Then a lot of great people want to join them and they know great people too. Right. And so, and here's what you have to do is you have to identify gaps. Tom, that we're confident or gaps. Like it was very obvious when Andrew started to those of us on the inside that there's a massive gap like what a top group could do versus the decadence and kind of government bureaucratic nature of the other primes. It was obvious, it was, it was a great thing to go after. So, so that for me that's really the two biggest things in everything I do. It's, it's, what's the conceptual gap in the world where something can be done so much better and how do you build a truly great technology culture, which is a culture of merit. It's a culture of extremely hard work. It's a culture where people are rewarded for success. You know, it's a place where like the engineers and the technical side are helping run it. It's very important. I think in the old days, you know, the business guys in charge and you tell the dork in the basement what to do and that doesn't work ever for a big business. This is like a mistake everyone always makes. I'm going to find an engineer and I'm going to tell them what to do and I'm going to have a big business. And like no, no, no, doesn't work. You need the engineers running it with you. You need them understanding deeply the possibility frontiers based on the technology frameworks. Then you have to have a culture where these best people want to come there, that are inspired to be there and, and you know, it's really hard to do without upside. I think the government should be doing more things with top startups where people do have upside. And, and, and then when there are things in the government, if you can create incentives, if you can create accountability where people get rewarded. So one of the things we're trying to do for acquisitions in government is if you do work with something, that's the new 10x thing and it works and you have a much better result, that's how you should get promoted. Right? So you should just change the frameworks for the acquisition personnel. Not just to be super risk averse and always choose the old thing, but, but let's have competition by the way. Let's have two different groups that choose different things and let's have the one if you know there's someone else who's gonna be choosing something different. All of a sudden you're like, wow, this is ten times better. I better look at that. Whereas if, you know, you're the only person in charge, like, I can't get fired for choosing Raytheon. I can't get charged for choosing Northrop. Even if our thing's way better, it's risky. I'm not gonna touch it. But it's, it really comes down to the, to the talent and the cultures.

[B]

All right, I want to talk about some of the pillars of those cultures. So as somebody that's run companies with thousands of employees, I know how important the culture is, but the culture at some point has to become quite specific. So you talked about one element that I'm going to assume you actually do, which is, hey, if you're the employee delivering 10x of results, that's exactly how you get promoted. What does a culture that rewards excellence actually look like?

[A]

For me and for the companies I've seen that do really well, Everyone should have equity. Everyone should be aligned. People who do really well should get a lot more equity. And you should do it farther out, too. It should be a place. These places, these things take seven, eight years to build. So maybe you start with four years, but then you quickly add on a lot extra in years 5, 6, and 7. You know, some, some people are really great. They end up getting twice the equity, three times the equity, four times the equity. And then there's bonuses for things. You know, you want to really reward people for bringing in other great people who, who, who work out. I think that's like, one of the most valuable things you could do. Like, I, I might think I'm really smart and really amazing, but if I hire five of the best people in the world who are, like, just delivering and are crushing it, that's probably more important than anything I could do otherwise myself, even though I invest in strategy or whatever. But it's like, these people are so amazing that that was the most important thing I did in some cases. So, you know, you just got to incentivize the things that are going to make you win. And, you know, you, you want to have cultures of ownership. Palantir is really good at this. It's a very good culture of ownership. You'll throw people in the deep end. You give them a lot of responsibility, and if they can't handle it, then they can't handle it. They're not going to work out. But I think really having that ownership and you have people, mentoring them, helping them, teaching them, but you want to have people, as much as possible, own things.

[B]

Coming up. Why courage is the one thing we can't afford to lose. We'll be right back. And we're back. And what about somebody like Palmer? What does he get that has allowed him to run circles around the other primes?

[A]

I was just talking to him about something last night. He's just. I mean, he's just such a bright, energetic, optimistic, creative thinker who really inspires people around him. I think it's first principles thinking, like, what's possible here that wasn't before. It's like, what.

[B]

What is first principles thinking?

[A]

Just going back to how does the world work and how these things work And. And why do they work that way? And, like, what's. Why were they. Why was it done the way it was originally? And what. How could it be done differently now based on what's possible? And. And I think he just has a joy for, like, engineering and how things work, and it's a contagious thing when you talk to him. You want to get in there and try to help figure it out, too. And. And just. It's a. It's. It's a very. It's like this creative spark of energy of how things work and how they could work. If you go back to the very core of why they are what they are, it's a really powerful and kind of generative, creative, fun energy. I think, with him especially.

[B]

Okay, so assuming that we can get the government thinking in the right way again, we're building all the things that we need to build. If we wanted to make sure that the US Is set up to thrive, what would be the small handful of things? Is it that we need a navy so that we can keep shipping lanes open again? Is it that we need to win AI? Like, is that, like, one of the most important things that we could be focusing on?

[A]

You know, at the end of the month, coming up soon? I'm interviewing Mark Andreessen at this Ronald Reagan Economic Forum. I'm on the board of the Reagan Library. And. Yeah, really impressive guy. And, you know, he. He has this framework for, like, different eras that we're in, which I think is, like, partially true. Right. So you had this, like, material industrial era for a long time, especially with the industrial revolutions. They accelerated when we built a lot of things. And starting in the 60s and really accelerating in the 70s, all the way through Obama, you basically had the services economy that just grew massively. It changed education. It changed a Lot of things. And, and unfortunately a lot of things. That's when a lot of this stuff leaked in that made it harder to build things. But that stuff didn't get challenged as much because the richest and most powerful people were focused on the services side for quite a while there. And now you have of course this energy based era of like intelligence and robotics and you know, all these new possibilities, they're just really accelerating right now, right? So I have like one of my favorite companies is like guys for Waymo, right, The self driving company, A bunch of them left and they're, they're using AI and robotics to basically like take Caterpillar machines, like construction machines with no one in them and build roads and build buildings. And it's like this is clearly already starting to work. It's clearly coming. Like there's so much stuff that's gonna, it's be very disinflationary, right? It's gonna bring down the cost of everything in our society. If we can make this work. It's gonna, it's gonna make people in the middle class live way better. It's just this great energy, but we have to power it with energy. And so I think cheap, cheap energy is really important. I think deregulatory stuff to like allow us to actually build things, allow us to make healthcare cheaper. Healthcare could be so cheap, Tom. We can compete like all these things that are kind of broken, education, health care, housing costs, those should all be much cheaper the next 10 or 20 years if the government allows them to be. If the government allows that competition attacks the crony capitalists that are running everything right now and that are locking in laws against us. So I think, I think that's some of the most important stuff to thrive and then yes, deter the bad guys. Have, have a smart functional government. Like I don't actually want war to be a thing I think about every day. I, I have lots of other things I do. The reason like you know, 20% of our fund and a lot of my time goes into defense is that if we don't deter the bad guys, that's like the worst possible outcome for all of us and, and, and then stop the illiberals from breaking things. So I mean, listen, there's a lot of battles to fight, but I'm very optimistic on this new wave that's coming that you know, we're talking about with Mark, where we're both kind of investing in this new wave where it is going to make everything so much better. If we can get the government not to break things.

[B]

How good is AI going to be, really?

[A]

And my intuition has been that it's like an asymptote, right? Where it just like gets a little better, a little better. But. But it hasn't yet. It's like kept making these jumps and so I. I'm both. I'm really excited. I'm a little bit scared. My intuition is that it still does like kind of hit a wall at some point or at least slow down a lot because there's. I don't think the universe works in exponentials. I think it works in S shapes where like, goes up for a while and comes over. I just don't think the universe is that simple, that we've just figured everything out and then we're going to have this crazy super intelligence in like 5 or 10 years. My view is that it keeps getting a little bit better and that it's good enough to like raise productivity a lot. And it's a very good kind of happy medium.

[B]

But.

[A]

But, you know, a lot of my smartest friends think we're kind of birthing the Messiah, basically. And it's like this religion for them. And. And that's. That's really fascinating and scary.

[B]

Speak in that language, or you just

[A]

get the vibe some of them speak in that language. Most of them don't use that term because they're. Because they're. Because they're secular. Right. This is like. This is a. But. But for me, it's messianic in the way they do speak about it. Like, that would be the correct adjective to describe how they're speaking about what's coming in the next 10 years. And a few of them use it. Most of them don't. But. But again, this is not my view. I think. I think it's just this might majorly important productivity wave, but that doesn't actually completely, like, you know, create a God that's a thousand times smarter than us, but that there are some people who think that we're going to get something like that, and if we do, then we're living at the end of times. But that's like a. Is what it is. I don't think that's the case.

[B]

Wow. Crazy. I want to talk about courage. So you've started a university. It seems the University of Austin. It seems partly out of a sense of the value system of education has become warped. But I want to look at Elon Musk through that lens. Somebody who you've said has put his own life at risk, that he obviously didn't need to do any of this stuff for money. But he's made himself wildly unpopular with a certain part of the world, and that's literally become both very costly and dangerous for him. When you think of him through the lens of courage, what is courage and why does he exemplify it in your mind?

[A]

Elon is obviously motivated by what he thinks is best for our civilization, and he's trying to make our civilization be able to exist on two plants as a backup. He's trying to make our civilization more functional and not captured by illiberal forces. I've seen a lot of really smart friends go into government with him, and he's very, very clear. He's about the moral lines, about the ethical lines. He cares about these things, and he cares about what's right. And yes, you're right. I mean, I think maybe we're not supposed to talk about it too much, but, like, people keep threatening his life, and he's had a lot of people try to do a lot of horrible things, and it's really changed and hurt his life and really tough on him and. But. But yeah, he has courage. I mean, he has virtue. Right. The idea of our classical civilization is there is the four classical virtues and the three religious virtues. And these things really should be taught, by the way, in school. And we're like, I don't know what the hell we're teaching kids nowadays, but you have to have temperance and wisdom and justice and courage. And I think courage is obviously a central one. Without the rest, you don't, you know, you don't get the rest without courage. And this is. This is a big part of what I'm trying to do with University of Austin is we need leaders in our society, obviously, who are educated, understand stem, understand philosophy, obviously. You know, I think pretty important, understand, like, the great debates of the west over the last thousand years, because there's a lot of wisdom in those debates that if you don't have those, you make really dumb mistakes today. But, but more than anything else, to have leaders who have the courage to speak up, who say, no, this is wrong, or I'm not going to be part of this. I'm going to speak up. It's so rare nowadays. You just have one person with courage in a situation, it can completely change everyone else. And you have a few people with courage. You know, it goes right.

[B]

Why do you think it's so rare? What's happened?

[A]

It's something we used to talk about a lot in the 19th century. I think there's, like, really important Balances between masculine and feminine energy in society. I have five daughters and one son, by the way, and I have amazing daughters. And. And I think the world would be a very dark place without feminine energy. Probably didn't have enough feminine energy in some of the ways. We were too cruel 100, 200 years ago. I would never want to return to being that cruel. But I think it's really important, like yin and yang, that it's imbalance. And what's happened is. Is maybe in reaction to the fact that we were too cruel as a civilization, I think we've thrown out a lot of masculine energy to the point where. Where you're mostly you. You talk about toxic masculinity, you talk about something to attack, but you don't lot it. You don't celebrate it anymore. You don't. You don't tell young men to be more manly and to. And to look up to, you know, Julius Caesar or Alexander the Great and being strong and, And. And. And fighting for their values, like, just not. It's not lauded. So I, I think our culture has moved in a very feminine direction. I think, I think women are. Young women are outperforming young men and based on everything. As schools work towards the feminine angle. And again, you want healthy feminine energy. I'm very proud of my daughters. I think some of them are hopefully going to be great leaders. But, but, but we need in our culture a healthy mix of the masculine and the feminine. And I think we got to go back towards celebrating masculinity, celebrating strong men again without just attacking them and without having to be apologized for being a strong man.

[B]

No, I very much agree with that. How do you. This word might be the wrong choice, but how do you indoctrinate people with that? Like, how do we really message out? Is it just people like you, people like Elon, they get up and they talk about it openly and they do things that are obviously courageous. Or are you going to bake this kind of thing into the University of Austin where it's like, we're bringing this back to the forefront.

[A]

Yeah. You know, you have to be role models first and foremost. You have to have admired figures who act this way. It has to be a cultural shift. You know, I mean, Mark Zuckerberg, of all people, you know, was talking about this as well, which, I mean, even he realizes his work, this. His workplace, had become way too focused on the feminine values and totally discarded the masculine. If even Mark Zuckerberg saying it, I mean, this is obviously an issue. You know, our schools need to have this too. I think. I think schools have become extremely on the other side of this, and I think we need to rethink about. I think school choice is great. Let's innovate and try new different structures for schools that can celebrate. Celebrate, you know, both sides of this again. I think the movies we make have to celebrate it again. I think right now, any kind of TV show and media, there's always like the goofy, embarrassing dad. There's not like a celebrated, strong, courageous, like, male figure. That's not something that we look up to right now in our culture. We have to start making, you know, things again that, that, that show that strength and model that strength in our pop culture as, as well as our everyday lives. So I think you, you are seeing a push back towards that a little bit. I think we got to take it and run with it and be proud.

[B]

Who, living or dead, do you admire?

[A]

Oh, gosh, all sorts of people. I, I was lucky to have, you know, Secretary George Schultz as a mentor. He's a little more of an institutionalist than me. He passed at 100 years old a couple years ago, and he introduced me one time to Lee Kuan Yew, who I think was like, probably one of the greatest leaders of the 20th century. Someone. Someone. Just a lot to learn reading the memoirs of this guy who built Singapore from. From third world to first the poorest country, made the richest country. So much wisdom there, so much strong leadership. Very easy to criticize unless you're in his shoes, seeing the nuances he's dealing with. I think it's a really fascinating what he had to do. You know, Ronald Reagan is someone. I really admire his courage. Margaret Thatcher, the Iron lady, how she took Britain when it was just completely down and out and turned it around again. None of these are perfect people, but they, but they did extraordinary things. They had courage, they had wisdom. They brought great people around them. They fought for what they believed in. I think these are all things we should aspire to.

[B]

How do you deal with the imperfection of people? So take somebody like George Washington, who I admire to a freakish degree but obviously held slaves. What do you do with that?

[A]

People are subject to their culture at the time. I think we all make the mistakes that our culture makes at our time. And that's something that you have to understand. It's like people are not magical beings that exist outside of time, outside of culture, outside of place. I think he was someone who showed extraordinarily courage. He was just a great leader in so many ways. And yes, people are flawed, and people are always caught up in the medic nature of their civilization. I think we all are. I think we all have to be more honest to ourselves about our own flaws and our own ways we want to improve and to constantly be working on those. If you want to be greater, Very fair.

[B]

Joe, this has been incredible. I pray to sweet baby Jesus that at some point we get to do this again. Where can people follow along with you?

[A]

I'm J.T. lonsdale on X, and I have an American optimist podcast and Thomas, an honor to be on. Thank you, brother.

[B]

Thanks for. For being here. It's incredible. All right, everybody, if you have not already, be sure to subscribe. And until next time, my friends, be legendary. Take care. Peace.