Shyam Sankar: World events remind us that there is actually evil out there. Just horrendous barbarism is still possible. When a country goes to war, it's not enough to just have the department of war fight these wars. It is actually the whole country. The idea that somehow the American people are not capable of this. It beggars belief. I think our biggest risk as a country is suicide, not homicide.

Katherine Boyle: How do we win the AI race, particularly as it moves towards more physical AI and robotics, etc.

Shyam Sankar: The things that we did to win in the past, we accidentally turned our back on. And there's an opportunity to reclaim that with vigor. In the moment right now, you could say we need to build more weapons. We need to do this. We have Yes. But the most important thing we need to do is...

Katherine Boyle: So, Katherine, when we were talking about guests that we had to add on, Sean was at the the the top of your list. Why was that? Yeah. Well, I you know, it's it's I think people are, you know, after the Jeremy Stern profile and Colossus and a lot of um I think you know, stories that have come out recently or podcasts that have come out about Sham. Um it he he's one of these people that if you were in the know several years ago, you knew he was the OG like fixer for everyone. You know, I I think Trey Stevens, who's you know, the co-founder of of Andreal, came out um on Twitter and said like he's single-handedly responsible for my career. And I, you know, John Doyle, so many of our founders have pointed to Sham as the person who made their career and introduced them to Palunteer, supported them in Palunteer, but also sort of um, you know, gave them wings to fly away from Palanteer and to start something new. And you hear that story time and time and time again. But it wasn't until, and Eric, you and I were talking about this, it wasn't until a couple years ago that I think Sham actually became more of a public figure. He was sort of the behindthescenes guy, the behind-the-scenes picture. Um, and I think the thing that really changed it was Sham, and I'd love to to talk to you about kind of what was the inspiration for this. You you sort of um wrote this seminal piece about First Breakfast, about defense reformation. Um, and we're the first person to really start talking about it. Um, but again, this was like 17 years into the journey of Palunteer that you decided I'm going to be, you know, a strident voice for what needs to happen in America. Um, so I'd love to talk to you about this, you know, going from the behind-the-scenes person, the the guy behind the guy in so many of our companies, uh, to saying, "I need to come out and and be a voice for this movement." What What was the kind of impetus for that?

Shyam Sankar: It was kind of equal parts an act of desperation and act of optimism. Um, you know, I I felt like after years of just seeing uh the the the building, the Pentagon from the inside, seeing how defense was operating, I felt this frog boil that continued to happen uh set in a historical context. But the reason to say something is actually I thought this was the moment that it could all be fixed. that alongside of that happening, seeing what was happening outside of the building that the founders were reemerging, there was a huge amount of energy, people wanted to build in the national interest, uh, and and it was a moment to kind of crystallize what at least put forth what I thought the fundamental diagnosis was that really the things that we did to win in the past, we accidentally turned our back on. And there's an opportunity to reclaim that with vigor. Uh, and we needed to do so quickly. That time was running out. there was a shot clock here that we have frogboiled our way to a place where we've lost deterrence. You know, it's any one of these items in isolation you can write off. You could say, okay, the Russians annexed Crimea in 2014. That's just one thing. Then you have the militarization of the Spratley Islands in the in 15. You have the the failure of GC JCPOA to keep the Iranians from getting a bomb. You have a pogram in Israel. And certainly after October 7th, I I I it was kind of a radicalizing moment that like what is going on here? Uh we we need to act. And I think we we've only had more things since then. Now, I think the good news is in the last year, more has changed in the department than I've seen change in the prior 19 years. And and people are are seizing that moment for reformation. Um, and it's it's been it's been rewarding to kind of get it out there, get people to rally behind it, and uh all of us building in the national interest.

Katherine Boyle: Yeah. I mean, what what is it because I think you get this question probably all the time. What is it about the last I mean as you said it wasn't a single moment but there is some change in the culture and the zeitgeist and I think you know you have a unique understanding too of of of culture and and kind of how these mimetic shifts happen but what was it about you know 18 months ago where it's like everyone seems to agree on the thing that was so contrarian uh for for many years where you were sort of banging your head against a wall saying like this is you know this needs to happen.

Shyam Sankar: Well, maybe unsurprising for my worldview, it all comes down to leadership. You know, I I we call them the founding fathers for a reason. There is something special about the American spirit. Uh that is, you know, every founding story is is equal parts heresy and heroism. And um we had the right people who kind of saw like, hey, this is not working and we're the shock clock is running out and we have to do something. And we had those people both inside the building and outside the building. So, it's kind of a conspiracy coalition of the willing, co coalition of the capable to go do that. Um, so it's it's hard to point to any one single moment. I I think the the kind of the election is a big part of it. Not to not to make it political, but just being able to get in uh leadership that viewed it with clarity and set the conditions uh to to make this change happen.

Katherine Boyle: Yeah. So, you've been busy. Um you you know, you've you've joined the army. Um you're you've written a book that's coming out. Um, I'd love to get into to mobilize, but first, why did you decide now's the time to sort of write the write the canonical book of what needs to happen in America and then maybe we can talk about sort of the the sort of fundamental thesis too, but why why now? Why why write a book, join the army? Um, and also uh be leading palunteer.

Shyam Sankar: Yeah. Well, they're all there is a there's a cogent kind of thread through that, which is like how how do we mobilize to prevent a bigger conflict? And if you're if you're really paying attention, it's hard not to think that we're kind of in the late30s here. That things are are brewing. They've been brewing for a while. Um people talk about great power competition. Uh and I think we're kind of coming out of the malaise of having won the Cold War or the Soviets having lost it perhaps more accurately and that kind of led to a lot of of bad behaviors. It allowed us to believe a lot of lies about the future that that were kind of now working to market. Uh and so part we we will not have the luxury that we really had in uh in World War II of letting the adversary attack us first and then deciding to mobilize. And I think a more cleareyed view of what actually happened in World War II is that's not it. It's not this fil thing that we just flipped a switch and the automotive industry decided, okay, after Pearl Harbor, we're going to make all this war material. What really happened is that leadership from FDR realized in the in the 30s in the late 30s that we needed to mobilize but there was not yet a national will or popular mandate to do so. uh and len lease provided the mechanism to do that that we it took us 18 months to build factories and retool them and we were able to create capability deterrence that we we sold to the Brits and to the Soviets such that when World War II really kicked off for us when Pearl Harbor happened we were at full rate production and the way that we mobilize you know when a country goes to war it's the whole country that goes to war it's not enough I think part of the legacy of having won the Cold War is thinking like it's enough to just have a defense industrial base it's enough to just have the department of war fight these wars. It is actually the whole country. And I think that's the the most um stark thing. It's like we all as American citizens need to be invested in both the prosperity the country gives us but also the freedom that underwrites that prosperity. And we have come a very far away from that world. You know in 1989 only 6% of spending on major weapon systems went to defense specialists i.e. companies that were exclusively in the business of defense. That's not that long ago. That's when the Berlin Wall still stood. Now that number is 86%. So really the what we think of as normal is an aberration from the past and mobiliz seeks to set that story in context of one hey this is the industrial base what I like to call the American industrial base that won World War II. Chrysler built Minuteman missiles and minivans and every camera car serial box that an American consumer bought was actually also subsidizing our national security. And that's really important. We see this with the hyperscalers. We see this with technology. The amount that our private sector spends on R&D dwarfs what the government is capable of spending. And you want to get on that price performance curve as a way of delivering capabilities to our brave men and women in uniform.

Shyam Sankar: Uh the so how do we get back to that you know and I oh so the second part of it yeah so we had the American industrial base but who was the American industrial base today? We think of it as north of Grumman. We think of it as Loheed Martin, but actually it was Glenn Martin, it was Jack Northrop, it was Leroy Grumin. They were people. They were founders. They they were kind of not thinking about, hey, what's the performance going to be next quarter? They were building something way bigger than themselves, way bigger than their their companies. And those founders weren't just outside of government. They were inside of government. It was the Heimman Rickovers, the you know, against the will of the Navy building the nuclear navy. And I love that story, too, because it takes a lot of hutzbah. Oppenheimer, the father of the bomb, said the nuclear navy wasn't going to work. He told Oppenheimer, he told Heyman he was going to fail and he still p he still proceeded. And that's something I think in the valley we recognized as the classic founder personality. And a big part of what happened, you know, after after the end of the cold war, we we wanted a peace de dividend. We started spending less in defense. We had this famous dinner, the last supper. We went from 51 prime contractors down to five. I think the conventional explanation of what happened uh is wrong. This people think hey we had consolidation. Consolidation means we lost competition. That's not yeah okay maybe at the margin but that first of all it's always been a monopsiny you know the nature of the competition is not what people think. It's not these companies competing against each other. The competition's always been the services competing. It's been competition inside of government that drove innovation not competition from industry. What really happened from the last supper is that consolidation bred conformity. It was the beginning of true financialization of defense. These companies really could no longer think about growth. They thought about financial metrics, dividends, buybacks, cash flow. And it it kind of became very narrow and that conformity is not an environment that founders can thrive in. You know, the the heretics h were expuned. They left. They went to other parts of the American economy like tech. Uh but the those heretics are required. In fact, if you look at part of the book, we catalog all these amazing defense innovations almost to a tea. Every single one of them was a heretical idea. You know, the the institution was against it. The bureaucracy was against it. The process tried to kill it. Uh and these determinative outcomes, you can think about the Higgins boat, the boat that won World War II. The Navy didn't want to buy the boat. The Navy tried to steal the designs for the boat. In the end, 92% of all boats in World War II were Higgins boats. Think about where we'd be if this Scots-Irishman wasn't just willing to just almost pathologically commit himself to making this happen. The boys that would not have landed at Normandy.

Katherine Boyle: Yeah. No, I mean, and that's super interesting. Yeah. Because I think that, as you said, it's always been, you know, that this sort of force consolidation that we've picked the winners there. You know, we're we're we're post now, like we we don't actually need to build for for wartime. So, it's your view that that really that just expuned all of the talent that used to go to defense. And it's interesting because it's also I mean it's in some ways it's it's sort of serendipitous that that's exactly when the internet's rising. So, it's like if you're this kind of weird personality, you're going to go work on this new thing that's so exciting. You know, I think of like, you know, Mark Andre, right? Like he's he could have been in the defense industry maybe 20 years earlier, but it's like, you know, the people who were building the internet in the '9s, they want to build the new thing. So I guess like is is that sort of the fundamental problem is that like it just became a place where anyone who was interesting or anyone who had a different view just could not thrive.

Shyam Sankar: Yeah. Exactly. And then we compounded on that problem by you know the the nature of the monopsin. So unlike a monopoly where you have one seller over a thing, a monopoly is where you have one buyer over a thing that the department of war is a monopsy. Um the nature of the monopsin is it forgets it starts imposing all sorts of constraints on its suppliers and how they behave and what they need to look like. And that led to it's like putting we put all of these companies on the Galopagos Islands. Uh they're not on the mainland anymore. And so what do you get on the Galapagos? You get these exquisite giant tortoises. They're really amazing. Like like it's like alien life. It's it's very cool. Except when you take the tortoise back to the mainland, they're not competitive. They're going to get eaten alive by the wolves. Yeah. Uh and so we started creating a huge number of barriers for these people who even when they had ideas that could those ideas come back into defense. Uh I like to say like when we started Palunteer there was no front door in the department of defense. You know you had to the only front door. There was exactly one. It was in the intelligence community. It was Inkutel. If you were an outsider there was no other way in. The only people that worked here were insiders. Uh of course now that is that's part of the sea change that happened starting really in 2015. But that means putting forth the 18 thesis and the defense reformation and 2024 makes a lot of sense because we have 10 years of heretics who have been knocking at the gate ready to to come help the department.

Katherine Boyle: Yeah. No, and so much of the book I mean you talk about these sort of heretical heroes, you know, in doing the research and I mean you're you're now sort of like the walking encyclopedia for the defense industry um in tech. Who who are the most exciting heroes? Like who's the person you look at and you say like gosh that that is that is the person that people don't know about. They need to know.

Shyam Sankar: Well, I I think u it's hard to pick only one. The a new profile that we put out there, which is so some of these figures are historical figures. Bernard Shriber, Edward Hall, Heyman, Rick Ober, James Boyd, John Boyd, sorry, but the one that's new is Colonel Drew Cukor. And Kukor is the father of Maven. And here you have this uh Marine Colonel, you know, uh born raised by a single mother, Southern California, uh very modest background. found his only way of going to college was ROTC, joined the Marines. Lots of incredible experiences there, but he he had a a seminal experience where he was trying to evacuate Yazadi refugees who were fleeing ISIS and a a young Marine looking at ISR made a call that he thought he saw RPGs and that would make made it unsafe for the Marines to land and Xfill these people. And there there actually wasn't one. As a consequence, you have order of thousands of people who were tortured, enslaved, and raped because of this failure of operation. And it just it just changed this man. And so when he had an opportunity in the basement of the Pentagon on a project with no resources to go after bringing AI to the department, he leaned all the way in. And you can see the the journey of the heretic here where everyone hated him. Everyone tried to kill him. Every service thought they were doing AI. Uh people tried to throw IG investigations and like one of the the details we document is that someone said that Colonel Cukor is housing Iranians in his basement. So they they actually sent out criminal investigators to his house to look at this. And here here's a a Mormon devout Mormon, four four daughters, 1400 foot home that doesn't have a basement by the way. Uh and you know the investigators were just completely dumbfounded. It shows you sometimes that what you know are you are you willing to put it all on the line? Are you so committed so incorruptible in what you're trying to deliver or is this just a career? And that's one of the things I think I draw a lot of inspiration from these folks is just seeing you know if they can do this we can too. Seeing that these people exist inside of government they exist outside of government. And I think it's that's in the moment right now you could say we need to build more weapons. We need to do this. We need Yes. But most the most important thing we need to do is inspire the latent heretics to actually step up. This is the moment your country really needs you. Uh what what's been exciting over the last year or so is I'm seeing those people. I'm seeing them inside the building. I'm seeing outside the building. And that's that is you know what is driving the change is the leadership is setting the conditions to empower the heretics. They're protecting them. John Boyd who was a famously difficult fighter pilot. His own service the air force hated him. But the Marines learned everything they could from him and all of his heresy. He was really the father of the F-16. All of his heresy was proven correct in Gulf War I where we destroyed the fourth largest army in the world in days. It just everything came to bear. His high low mix, his udaloop. Um but you know John Boyd said to be or to do. You can be somebody or you can do something and but you can't have both and you know how committed are you to this? But he was so difficult he gets a lot of credit. I think the other person who deserves credit who I don't even know the name of is a three-star Air Force general who protected him because people like that do not survive in these bureaucracies on their own. It's not like hey he's difficult and we somehow tolerated him. It's no someone realized there's something special here and despite that we tolerate him. You see that with the dynamic between Bernard Shriber who built um our intercontinental ballistic missiles and Edward Hall who specifically built the Minute Man. Shrivever um fired Hull once and then hired him back realizing there was no way we were going to get to solidfueled intercontinental ballistic missiles without this notoriously difficult human. And I think um that that's that's great leadership.

Katherine Boyle: You talked about AI being like David's slingshot in a world where the Chinese Goliath has been this giant sucking sound of American prosperity. Um how do you think it's going to impact the economy?

Shyam Sankar: The first bit is what always irks me about how we talk about AI is as if somehow we have no human agency. AI is going to do X. No, that's not right. Humans are going to use AI to do X. There's a choice here. My view of this is we have a historic opportunity to fix the fundamental breakdown that happened in the 70s between wage growth and GDP growth. uh that this should be if we look at just the the example we have about the intel warrant officer who's suddenly able to do so much. Well, I see that playing out on the ICU floor. I see that playing out on the factory floor. There is an opportunity to give the American worker superpowers with AI. It's David Slingshot in a world where the Chinese Goliath has been this giant sucking sound of American prosperity. uh if we do that, it's a basis for underwriting the re-industrialization of the country and that we're not going to do this symmetrically. That's why it's a slingshot. It's not like, hey, this is how they do it there. We're going to do this here. It's it's actually we're going to do this in entirely new ways. Like Hadrien is a perfect example of that, right? We are re-industrializing using technology, making these people 50, 100 times more productive than it could be otherwise. And it's going to lead to all sorts of of new possibilities in particular because I think the great lie of globalization is that we can do the innovation over here and we're going to have the production go over there. Well, guess what? Innovation is a consequence of productivity. If you don't make the thing, you can't innovate on how you make the thing and what the thing is. You see that with SpaceX. There's a reason the R&D engineers are colllocated on the production floor. What is the feedback loop and cycle time they expect to come out of that? And you see that in the negative where we used to think Wooi was just some cheap set of pipe heading arms for contract pharmaceutical research and now 50% of all clinical trials are being done in China. Uh and and so I think we should view this as a national emergency and a national opportunity uh around AI. And what what concerns me a bit these these technology revolutions are usually by like the vast vast majority are tool revolutions not concept revolutions. It was not Galileo who invented the telescope. He used it to discover planetary motion. It was the the future of these technologies, the microscope, the power loom, the telescope, the personal computer. Uh they are determined not by the inventor of the technology but by the people who wield the technology. Today when we listen to the AI dumerism, we're listening to the inventors who are incredibly smart. But just like their creations, they have their own jagged intelligence. you know, just because they were smart at building the model doesn't mean they're going to be right about the implications of it. Uh, and then we are implicitly giving up our own human agency and how to steer it. It is us as the wielders of it that are going to determine the future course of this technology.

Katherine Boyle: Let's get into the the SAS apocalypse. Uh you know there there's a line of thinking that says hey um now that the switching costs or now that AI is here the switching costs are very low you know there's no code moat there's there's no data mo there's no UI moat and there's a set of SAS companies that are on the conveyor belt on the way to the guilty um and you know maybe it's Monday.com first and then maybe it's Atlassian and you know companies that aren't systems of record and then maybe it's it's coming for them too.

Shyam Sankar: I think both things are true. So I have a I would give you a different rubric to think about it, which is um what software is really fundamentally about beta and what software is about alpha. And I think that that the software that's about beta is going to really struggle that you know this is this is software that made you more similar to everyone else. And this has been my historical critique of the software industrial complex which is that the feedback loop for the people building the software is can I sell it? not did it did it add value which is downstream of can you sell it uh and and so the you could think of almost like vibe coding the the advent of AI it allows you to make software that's specific to you it's inherently alpha focused if you do it right uh but I so I think that the platforms that are already focused on alpha are going to continue to have an advantage it's like actually going to be uh a wind that fills their sale up on the other side the stuff that's beta is is really going to struggle. And you can almost argue like maybe the beta wasn't that valuable to begin with. One one of the jarring moments for me was in COVID if you really look back at what were CEOs talking about in their earnings calls about software. They no one talked about the $5 billion ERP implementation they did that saved their supply chain because all of them fell over like paper tigers in two weeks. And what they were talking about was Zoom and Teams and how that enabled them to go remote. And you cannot think of like that's crazy. That is that that should have been a sputnick moment for the software industry to say, "Wow, we haven't built that's valuable." How depressing. Um and on the flip side, for us at least, CO was a huge tailwind because specifically because we were able to help our our customers adapt to this reality at the speed of the disruption. It it I think it kind of separated the wheat from the chaff. And I think we'll kind of see that, you know, maybe there's a lot of things we've been spending on almost mimemetically, like, well, other people use it for this. This is a standard industry solution for X. Those things are going to feel a lot of pressure. And on the on the flip side, they're going to be software that's almost almost like a toolkit, an approach that allows you to express how you're more different than other companies. It's almost become software that allows you to express your competitive advantage, your strategy is going to be a premium on the day two stuff like vibe coding. you can't do. I think that's actually true. Like I think it's actually true that day two is much harder. A lot of it's unsolved and you're going to have to figure that out. But I don't think that's going to preclude the pressure on the beta on the beta software.

Katherine Boyle: You have now been investing in film uh which is totally different than what you do at Palanteer. So I would love to understand you know why did you start a a film production company?

Shyam Sankar: Well, my it really starts with my own assimilation journey. You know, I I came to the US as a as a young child. I settled in Orlando and my assimilation journey as a four-year-old, 5-year-old was watching movies with dad on the couch. And what were the movies of the 80s and 90s? It was Hunt for Red October and Red Dawn and Rambo 2 and three. And, you know, I like to say as a 5-year-old, I knew what it felt like to be an American before I knew civics. That was way, way down the line. Uh, and I think a lot of people experience that again after a long period of time when they watch Top Gun Maverick. And so for, you know, we sometimes overintellectualize these things like there's a feeling to it. Uh, even subtle things like I I heard from the the guy who made the movie 300 that after 300 came out, Navy Seal recruitment went through the roof and he was kind of perplexed. Obviously, it's it's a movie about Spartans. Like, what does this have to do with Navy Seals? But it clearly inspired so many people to be like, I want to look like that. I want to be that strong. I want to be that heroic, you know. And so the the virtue of entertainment as first of all, it's got to be entertaining. It's not Pravda here. But then it it lets us reflect on ourselves and who do we want to be and what do we want to be like? And if our entertainment is all Terminator, AI ruins the world, technology is a force of evil. It's all dystopic future scenarios. That sets a sort of condition which I would juxtapose to my youth in Orlando growing up in the shadow of the space coast which was just like science and technology is amazing and it's we're going to be living on other planets and you know as a sixth grader write a report on how are you going to get to Mars and it just inculcates a fundamental belief that the future will be better and that science technology the will to invest in these hard problems is worth it. It's worth it. Uh, and and I so I think we we have a moment to reclaim storytelling in a way that's both entertaining and inspiring.