Productivity, Innovation, and the New American Golden Age with Joe Lonsdale

Jon Hartley and Joe Lonsdale discuss Joe’s career, co-founding Palantir, Addepar, and OpenGov, venture capital investing, defense tech, DOGE, Elon Musk, regulation, and the prospects for generative artificial intelligence.

Recorded on December 12, 2024.

ABOUT THE SPEAKERS:

Joe Lonsdale is the founder and managing Partner at 8VC, an early-stage venture capital firm managing over $6 billion in capital. In 2003, he founded Palantir Technologies (NYSE:PLTR), a global software company known for its work supporting US and its allies’ defense and intelligence. Since then, he has founded more than a dozen prominent companies, including Addepar, a wealth management platform with about $5 trillion, and OpenGov, the leading cloud software provider for local governments. He continues to create and scale companies through the 8VC Build program. 

As an investor, Joe was an early backer of companies like Anduril Industries, Oculus (acq.FB), Guardant Health (NASDAQ:GH), Oscar (NYSE:OSCR), Illumio, Wish (NASDAQ:WISH), JoyTunes, Blend (NYSE:BLND), Flexport, Joby Aviation (NYSE:JOBY), Orca Bio, Qualia, Synthego, RelateIQ (acq. CRM), Yugabyte, and others. 

Joe and his wife Tayler are active in a variety of philanthropic and institutional pursuits. In 2018, they founded the non-partisan Cicero Institute, which crafts and advances policies to promote effective and accountable governance, and is now successfully battling special interests with teams in over a dozen states. In 2021, Joe became the founding chairman of the board of the University of Austin(UATX), a new university dedicated to restoring the pursuit of truth in higher education. He also sits on the board of the Ronald Reagan Presidential Foundation & Institute. ​ 

Joe, Tayler, and their four daughters live in Austin, TX.

Jon Hartley is the host of the Capitalism and Freedom in the 21st Century Podcast at the Hoover Institution and an economics PhD Candidate at Stanford University, where he specializes in finance, labor economics, and macroeconomics. He is also currently an Affiliated Scholar at the Mercatus Center, a Senior Fellow at the Foundation for Research on Equal Opportunity (FREOPP), and a Senior Fellow at the Macdonald-Laurier Institute. Jon is also a member of the Canadian Group of Economists, and serves as chair of the Economic Club of Miami.

Jon has previously worked at Goldman Sachs Asset Management as well as in various policy roles at the World Bank, IMF, Committee on Capital Markets Regulation, US Congress Joint Economic Committee, the Federal Reserve Bank of New York, the Federal Reserve Bank of Chicago, and the Bank of Canada. 

Jon has also been a regular economics contributor for National Review Online, Forbes, and The Huffington Post and has contributed to The Wall Street Journal,
my name is Jon Hartley.
I'm host of the Capitalism andFreedom, the 21st Century podcast.
It's an official podcast of the HooverInstitution Economic Policy Working Group.
For those who are not familiar with ourdistinguished guest today, Joe Lonsdale.

(00:35):
Joe is one of the world's leadinginnovators in venture capitalists.
And to say the least,
it's really unbelievable all the sortsof things that Joe has started.
I mean, he's the co founder of Palantir,founder of 8VC, a venture capital firm.
He's also the founder ofthe University of Austin and
is trying to really disrupt education.

(00:57):
He's also the founder andchair of the Cicero Institute,
which is a think tank that's focused onstate policy, and it's based in Austin.
Joe also has his own podcast, which iscalled the American Optimist Podcast as
well, and definitely recommendthat you guys check that out.
Welcome, Joe.
How are you?

>> Joe Lonsdale (01:14):
Thank you, Jon, for having me.
Thanks, Francisco.
It's nice to see all of you, I'm great.
I'm here in Miami fora day and glad to come by.

>> Jon Hartley (01:21):
Awesome, well, we're so excited that you decided to stop by and
talk to us here.
I want to start with the 2024 election andthe Trump transition.
I think it's definitely something that'son a lot of people's minds right now.
I mean, what are you most excited aboutwhen hearing about all these various
nominees and Elon Vivek starting Doge,and how are you helping, and
how are you planning to getinvolved in the next four years?

>> Joe Lonsdale (01:44):
Well, it's definitely a very exciting time.
It's a huge weight off my shoulders forour civilization.
I was very,very worried where things were heading.
And this is a much, even though,even though it ended the way it did,
is election was much too close, giventhe implications for our civilization,
it was very scary for me.
And you know, I'd say I'm probablymost excited about the fact that,

(02:08):
that we have an opportunity withlike this vibe shift in our
civilization to push back ona lot of the illiberalism.
To push back on a lot ofthe authoritarianism,
to clean up a lot of this, like massivecorruption with hundreds of billions of
dollars going to NGOs that are run byactivists that are not accountable, and
that are pushing the wrong ideas thatpush our civilization the wrong way.

(02:31):
And I think I was saying outside, I wasexchanging notes with Mark Rowan earlier,
who, you know, someone I met, someone whoruns School of Finance, obviously, but
someone who's very involved,in advising Trump on these things.
And I think he's right,I think if we make the right cuts and
when you model it out, I think you'dhave enough growth that you actually can
get the deficit back to below zero andpay it off.

(02:53):
Especially that plus Doge.
And the thing I guess I'm most excitedabout, obviously active things going on,
of course, is Doge.
I'm friends with Elon andVivek for a long time.
And this is awesome, this is stuffthat I've been posting about,
and writing about and obsessed about.
Just like this broken thingthat's just been this cancer,
it's been growing out of control andeveryone's been ignoring.

(03:14):
And I feel like a crazy person.
Like, this is this cancer,we have to get rid of it.
And everyone's like, well, yeah, about,we're busy with our everyday lives and
we don't want to talk about it.
And finally all these smart peopleare like, yeah, we have to get rid of it.
And this is like, awesome,let's do it, there's like,
we can talk a lot moreabout that if you want.
There's just all this stuffto fix in government.
It's just, just incentives are misaligned,things are unaccountable, things are being
stolen, things are, are, are being wasted,things being managed terribly.

(03:37):
It's just like, yes, let's finallyfix this and it helps everyone.

>> Jon Hartley (03:40):
No, it's amazing.
Yeah, we'll see, I guess, you know,there's still a lot of uncertainty,
I guess, with how, how Doge isgoing to work, and I think Elon,
Vivek are still figuring it out.
I mean, do you think thatthe best way to go at it is,
I guess the bureaucracy that reallysort of fights against change,

(04:01):
and you can't really fire public employeeshas been the case since the 70s, is that?

>> Joe Lonsdale (04:09):
Yeah, I mean, that's one really important thing.
Solicit, soit's both about cutting wasteful spend,
it's about cutting unnecessary and
wasteful bureaucracy, and it's aboutcutting unnecessary regulations.
And all, all of those are related andall those are very important.
So I think one of the issues that I wishmore people would talk about when they

(04:29):
talk about that is that there's reallytwo things that happened in the late 70s.
First of all, it was actually itWasn't even Jimmy Carter himself.
We don't remember this, but Jimmy Carterwas actually famous in Georgia for
consolidating a bunch of bureaucracy.
I don't think he was a great president,but he was famous for
consolidating bureaucrac.
And he ran on wanting to cut red tapefrom the left and saying, listen,
I agree with the right.

(04:50):
This is bad, his Congress wascompletely captured by the unions.
The Democratic Party was completelycaptured by the unions in the late 70s,
and they're the ones that passed in 7980,these, like,
crazy protections that makeit impossible to fire anyone.
So that's one of the problems thathappened to our government, and
that was really bad.
And then the other thing that happenedin the late 70s was the activist courts.
And so, the activist courts basicallysaid, so let's stop for a second.

(05:13):
So you go back to 1883,you had the Pendleton Act.
And so what happened in the US Isthat we had a very small government.
Civil war happens,
we start growing the government massivelycreate all these new departments.
Just it just if you graph it out, thegovernment grows a lot from that point on.
There's a lot of federal power createdmaybe for good purposes, but, you know,
it's something that I don't love,obviously,
having lots of extra federal power.

(05:33):
And by the early 1880s, both sides,everyone agreed this is a mess.
People are coming in, they're hiring10,000 friends, our government's running,
run by cronies is totally a broken thing.
So there's a Pendleton act, which putin some basic protections, which,
by the way, are fine.
I'm fine with some protections forcivil service that aren't crazy.
And it put in tests.
So from 1883 for about 100 years,
there was like a really hard test if youwant to run something in government.

(05:57):
So, when we went to the moon, when wefought World War I and World War II,
when we did some things that frankly, werepretty competent in our government that we
should be proud of in our civilization.
You know, in the mid to early20th century, the people running
those things had to pass hard tests tobe running those government departments.
Come to the late 1970s, these courtsrun by crazy activist people on
the left basically said,these tests are racists.

(06:19):
And then, they said, bo, butthe tests actually predict performance,
that's not racist.
They said, well, no, just by definitionof the fact that different races have
different outcomes on these tests,they're racist.
You must get rid of them.
And so we completely Got rid of the tests.
And so, so, sonot only can you not fire people who.
Which makes them a lot lazier, by the way,in any business, in any organization,
if you can't hold them accountable easily,
you also can't give tests to make sureyou're hiring the smartest people.

(06:42):
So, our government, you know, and by theway, was pretty smart, I think in this,
in the 60s, 70s.
I didn't love big government, butit was at least like not completely dumb.
It's just gotten stupider andstupider and stupider for 30 years.
And then, you got the WOKE stuffcome in the mid 2010s, and
you prioritize identity politics, and thenit accelerates its stupidness, you know,
for the next 10 years.
So just, so now it's just like completelyretarded, it's a broken bureaucracy.

>> Jon Hartley (07:05):
Well, shifting to generative AI,
we'll get back to some of that later.

>> Joe Lonsdale (07:12):
We're allowed to say the word retarded now, by the way.

>> Jon Hartley (07:16):
We'll shift back, so generative AI, you know,
obviously a hot topic rightnow in Silicon Valley.
How in your mind shouldVCs be best positioned?

>> Joe Lonsdale (07:27):
So, I think that, so when you're looking at AI,
to see shifting topics a bit here.
I was going to talk more about Doge,but that's probably,
she got scared of my passion there.
We look at AI,
there's really, I think, five ways peopleare investing in AI at a high level.
There's the bottom level, which isthe chip companies, there's the next one,
which is the data centers.

(07:49):
Pretty much all my friends, family,offices who made Money the last 20 years
in tech have been putting lotsof money in data centers.
It's become a very popular trade,
which is great because you guys arefunding stuff for me to build on top of.
So I appreciate that,keep funding data centers.
I don't know if it's going towork with this much money, but
that's great because it's cheap for me.
And then the level three is the modelcompanies, which is like OpenAI,
of course, famously, which besidesthis for profit company now too,

(08:10):
and XAI and Anthropic and everything.
And then level four issoftware infrastructure.
This is how you deploy AI.
And that's obviously there's a ton of,
I think San Francisco isprobably the center of that.
There's a ton of very, very powerfulsoftware infrastructure companies we're
invested for example, in Ollama,
which like over a million engineersuse to deploy their llama models.
There's a lot of good stuffthere that makes sense.

(08:31):
Palantir does a lot of stuff level four.
And then there's level five,
which is actually this likeapplying the AI to services itself.
Like actually the one doing the healthcare billing, doing the logistics billing,
doing the new legal company, you know,doing the new back end of the insurance or
trust or estate or whatever it is.
And so I'm obviously invested in stufflike I'm proud to be invested in stuff
that like, if Elon starts a companyin level 3X, that's great,

(08:54):
I want to be involved.
Matt, obviously impalance here andlots of level four things, but
most of what I'm building anddoing is level five right now.
And the way to think about level fiveis there's probably about $5 trillion
right now paid out in wages inthe services economy in the US and
about 2 of that 5 trillion,about 40% is in areas of
the service economy that we've alreadyshown we could double the productivity.

(09:17):
This is very important.
This is not like maybewhen models get better.
This is today based onthings we're seeing.
We've already shown these companiescan work at least twice as well.
And this is things like, I have a healthcare billing company that's doing a bunch
of stuff that we're big investors in andit's already got,
I think last quarter waslike 56% margins and
like most healthcare billing companies arebetween 15 and I think 25% margins, right?

(09:38):
So it's already more than twice orthree times as productive of all of our
companies thanks to not justsprinkling a little bit of AI, but
thanks to building a lot of stuff andapplying AI properly.
And so this is a huge fact because if,even if AI gets no better from here,
just by scaling these things,
you should pull like a trilliondollars of spend out of the economy.
And I think it gets better enoughthere's probably a trillion and
a half to 2 trillion.

(09:58):
And you're gonna pull outthe economy in the next 10 years.
That's a massive,massive productivity boost, and
you're gonna make a lot of money.
We're going to make America a lot richer.

>> Jon Hartley (10:07):
So I think a lot of the big generative AI winners so far have been
really the large firms, the OpenAI'sAnthropics, Nvidia, Google and so forth.
The ones that can lay down the fixedcosts to actually build the large.

>> Joe Lonsdale (10:18):
Well, they bet they've been the level one, two, three,
four firms mostly.
And then level five is likejust started to scale still.
That's right.

>> Jon Hartley (10:25):
Really.
And I mean, do you think that it'spossible for AI upstarts to, to really
sort of latch on and without getting sortof outcompeted by one of the big guys?
Like, I feel like I remember there's onestartup that, you know, created this
video, you know, generative AI model andthen, you know, raised $3 million.
And then the next day OpenAI buildsessentially the same product and

(10:48):
releases it.

>> Joe Lonsdale (10:49):
Totally, totally.
I think that's very, very hard.
So there's answer this in two ways.
First of all,
let's just think about the last 15years of tech to put it in context.
So after Palantir started Add a Par,
which is a leading wealthmanagement technology company.
It's a giant SaaS company.
We sold OpenGov this year, which we built.
And invest in a bunch of MY friendsbuilt a lot of SaaS companies.

(11:10):
and the SaaS companiesthat my friends built in,
like the early 2010s hada very high success rate.
And I could say it's because I'm somekind of genius or something, but
what was actually happening with these is,is the cloud was newly possible.
There's new things you do in big data.
And our competition was stuffmostly from the 1980s, 1990s.
So you can kind of be like,
like we have access to the besttech cultures in the world.

(11:30):
That's my background.
So it's kind of like being a bully.
It's like we're taking the verybest tech guys in the world.
We're going and beating up on these thingsfrom poor things from 10 or 20 years ago.
And by the way, it's good forthe economy to do this.
It's not like a morally incorrect thing,but you can kind of think of it, yeah,
you're being a bully versusthese These always doing things.
Now if you wanna start a SaaS company,if anyone in here wants to start something
and compete against something in oneof the major areas of SaaS in cloud,

(11:51):
you're mostly probably competingagainst the stuff my friends and I and
others built in the early 2010s.
And that's a lot harder because there'snot going to be as big of a gap there.
And by the way, all this AI stuff, my,our companies are going to use it too.
So these 10, 15 year old SaaS companies,they're also using AI.
Like good luck trying to starta new AI SaaS company against them.
They also have 300 million of revenue anda thousand people and
they're already able to customers.

(12:12):
So that's really hard.
So that's a dumb thing to do.
That's really hard.
So the question is, what is there to do?
So you go back to those five levels of AI,a new chip company,
that sounds really hard.
It's probably possible for some,
a couple EE geniuses to figure somethingout new but that's really tough.
It's very expensive to do these things.
The data center is fine,everyone's gonna invest in that.
I'd like you to do that for me.
Like level three is like,

(12:33):
like the only person I would have everbacked with a new one of those was Elon.
That's great cuz Elon is Elon.
So of course they're gonna back Xai eventhough it was a ridiculous price when
he started.
But whatever, it's Elon andthen he has the top talent,
he's probably gonna figure it out.
But yeah,I would not suggest trying to do that.
So the question is level four, Level five.
Level four is really hard.
And the problem of level four is thatthere will be some things that win,

(12:55):
there will be some things that get bought.
But it's like the smartest peoplein the world are all doing it.
And you're right, what you just said.
Level three is trying to eat level four.
All these level three companies, theyjust want to own level four themselves.
And so it's really hard.
Like how do you dosomething that OpenAI or
X or anthropic or somebody's not justgonna eat, I'm just gonna do themselves.
It is possible, but it's tough.
And you better be reallythe best in the world and

(13:15):
you better be really running fast.
And it's not even clear to me yet whathas to escape velocity and what doesn't.
So that's a very Fair question.
Level five, I think is by far the bestrisk reward place to build because you
have a lot of otherthings we're doing there.
And going back to the model I just gaveyou of those SaaS companies that were
beating out from 20 years ago.
When I'm starting a Level5 company right now,

(13:35):
my competition is these guysfrom the 1970s, 1980s, 1990s.
We're literally competing againstLogistics Biller in Baton Rouge for
a thing we just won, which is in there.
Sure, they're great people,they've been doing this for 50 years, but
they just don't have the same ability tobuild and apply tech the way we do and
to service the customer the way we do.
And so if you can build a greatoperational culture, you can compete and

(13:57):
win there.
And I do think there's moats and barriersto entry at having great operational
cultures that build and apply AI.
So I think level five isa great place to build.
I think level four fora few geniuses is going to be great.
But man, that's hard.
I wouldn't want to try to do that.

>> Jon Hartley (14:11):
Definitely not something I could do, that's for sure.
So outside of AI,
what other sorts of startups are youmost excited about right now?
Is crypto dead?
Anything in fintech?
Interesting other places that,that you're looking at?
Obviously, Jenna->> Joe Lonsdale: The thing I've done
the most in these areas are builta bunch of SaaS companies.

(14:32):
The other thing we've done the mostprobably and uniquely is defense, right?
So there's no, I've been luckyto start six different unicorns.
Three of them are indefense right now and, and
I'm working on a couple more there.
And the reason this is really exciting is,
is a Palantir was like the worst thingto build in the sense that it just.
The government was not fair,was not letting a new competition.
We had to be so persistent.

(14:53):
We had to keep trying foryears and years and years.
Even when we won,
they would like use the thing thatcost 10 times as much sometimes.
It's a very frustrating company.
But I think the path that waspaved by Palantir, by SpaceX and
now by companies like Anduril,which was like started eight years ago and
has grown really quicklyto create these new primes.
Has created an awareness withthe generals, with the admirals, with

(15:14):
the people in the House and Senate ArmedServices Committee that the old primes,
cuz all the old primes consolidated afterthe Cold War ended in the 1990s and
they became completely dominant, but theybecame very bureaucratic and slow, and
they lost a lot of talent.
And they're not as dynamic.
And there's still greatthings some of the primes do.
But over overall, there you go.
That no problem.

(15:34):
Francisco's trying to get me here.
Overall, there's just a lot of need fornew possibilities.
And war forwarfare has completely changed.
We can talk more about that if you want.
And so.So I'm building a lot there right now.
Awesome, all right.
We're going to talk a little bit aboutdefense tech in in just a minute here,
but want to first talk about.
We're in Miami.

(15:55):
I want to first talk a little bit aboutSan Francisco versus Austin versus Miami.
Joe Joe, you were one of the first->> Joe Lonsdale: Dangerous
conversation there someonewho lives in Texas.
We'll see if we can maybe convert you here.

>> Joe Lonsdale (16:07):
The people here may be better looking actually I'm not
sure if I'm supposed to say that.

>> Jon Hartley (16:12):
That's high praise, very high praise.
You were one of the first peopleto leave San Francisco for Austin.
And some other people like Peter Thiel and
others from Founders Fundhave resettled here in Miami.
I mean we're about,I think five years into that experiment.
I mean do you see that something that'scontinuing or is a permanent move or

(16:32):
do you see there being a bit of areversion back to SF amidst this AI boom?

>> Joe Lonsdale (16:37):
So I originally moved 60% of my firm to Austin and
I think now it's abouthalf of my firm in Austin.
So we did have to move a few peopleto be back participating in the.
I have to admit there are some thingshappening in San Francisco that are unique
to the entire nation andthat are based there.
That said, there are also some thingshappening in Austin, in Texas and

(16:58):
other states like that that are uniquein the sense that like you know,
the Tesla manufacturing plant thatOmi built with Elon took 18 months.
The biggest plant in the world.
We wouldn't have got, they would havegot that permitted in like five years or
10 years in California, who knows.
And we're going to build 500ships next year with one of my
defense companies in Austin.
El Segundo has some great talent.
I just don't think we could havescaled nearly as quickly and

(17:20):
again had the state kind of work andhelp us move obstacles out of the way for
dumb rules in order to help us scale.
And so there's some things that have tohappen in Austin and have to happen in
states that are kind of more aggressiveabout helping us with these things.
Miami seems to be attractinga lot of amazing talent.
I was saying earlier, I used tocome here like every year or two.
I think now I'm here four orfive times a year.

(17:41):
There's amazing people here to see.
There's a lot of the best investors.
I think one difference, you know.
So I think there's lots of things wecan talk about where Florida is run
very, very well.
I think you guys have like the bestlegislature because everyone terms out
after eight years.
And soyou get the Speakers of the House and
leaders of those senate here thatare really aggressive their last two years
they get put in andthey just do amazing work.
So I love your guys government here.

(18:02):
One of the differences is there'sprobably not as many engineers or
engineering culture.
So Austin has a top engineering school,has a history of, for 70 years of like
lots of big companies in tech worldbeing built there for tough engineering.
And so, so there is more.
It is easier I think.
I think having it makes moresense that Elon's there and
people like that are there because we'rebuilding lots of things with engineers.
I think if I was want to be around liketop investment minds just investing,

(18:26):
I think this would be a reallycompelling place and Absolutely.

>> Jon Hartley (18:29):
Well, if there's anyone from the University of Miami here or
from other schools,
I know that there's a lot of great effortsgoing on there as well to really invest.

>> Joe Lonsdale (18:39):
It's amazing how these network effects work where like even
though Austin's had great stuff fora keeps getting better.
It's just so hard to compete withthe depth of Silicon Valley's network and
engineering.
And then similarly Austin hatdoes have 67 years on Miami.
So I think Miami's going to build it up.
But it takes a generation sometimesto get that depth of engineering.
But you definitely see a move fromChicago, like you said, like I said,

(18:59):
from California, from New York, bothto Austin and Miami and you got just so
many great people.
It's a really fun time to live in Austin,
as I think it is here too from whatI'm seeing is you just get like so
many cool people constantly comingto town, constantly joining.
I was working out and my friend hasa billion dollar consumer company,
built an awesome headquarters withan awesome gym right near my house.

(19:20):
And like just like the guy who createdSolana just happened to be there like
this week.
He just moved to town.I mean,
there's just all sorts of amazing peoplecoming through Austin, it's really cool.

>> Jon Hartley (19:28):
That's awesome.
Well, you're also the founder andchair of the Cicero Institute.
And it's one of the most powerful groupsin the country when it comes to creating
and passing legislation in states.

>> Joe Lonsdale (19:38):
That's how I know Florida is so great.

>> Jon Hartley (19:40):
Yeah, absolutely.
And you've got teams I think inabout 20 states including Florida.
What are some of the big recentsuccesses there in your mind?
I know school choice and universelicensing recognition are sort of two big
ones, butwhat are the big wins in your mind?

>> Joe Lonsdale (19:54):
Well, school choice is big, I'm a big fan of it.
We tend to work on orthogonalthings that no one else is doing.
So our, our framework is we'refighting special interests,
we're fighting things that are broken, and
we're trying to fix stuff that'sbroken by aligning incentives.
And soI'll give you a few examples really quick.
I know I'm obsessedwith this policy stuff.
I know most people maybe wantto talk about other things, but
just a few quick examples.

(20:15):
Vocational schools is somethingI think really matters.
We used to have a lot more bettervocational schools by percentage
of people in the 60s and 70s.
And instead we started sendingthem to get studies degrees and
whatever other degrees atuniversities that basically
lead them to become protestersbecause they can't get jobs.
And it doesn't make anysense at all to me.
We should actually train them andskills to get them good jobs.

(20:36):
And so that's what vocational schools do.
The problem is people who run vocationalschools if they're not held accountable,
they also start to get ridiculous,they also start to get broken.
And so if you ask an averagepolitician about this, like, yeah,
I want to fund vocational schools andit stops there.
But if the vocational school isrun by an idiot, what do you do?
And so here's what you do.
If you have 20 vocational schools ina state, or 27 high end ones like Texas
does, what you do is you say we'regoing to fund the vocational schools,

(20:58):
proportion to the averagesalary is coming out of them.
And you measure, you give them a numberwhich is their average salary over three
years and then you give them moremoney if they're doing well and
less if they're doing worse.
And you tie their entire budget to that.
And what this does is it meansthe school's incentive is to say, okay,
what skills do we teach to get people goodjobs, what businesses we partner with?
And guess what,having done this in multiple states,

(21:18):
you could double the averagesalary coming out of these places.
Some of them will do worse and get less,some will do better and get more.
It just completely changesthe whole culture of it.
And you take that idea, by the way,and applies to lots of things,
let's do another one is prisons.
Prisons are very controversial right now.
If you're on the left, you're worriedthey're trying to make money with for
profit prisons.
And that's the root of the evil.

(21:39):
It turns out only 10% of prisons are forprofit and
they have just as bad resultsas a nonprofit prison.
So it actually turns outthey're all actually bad.
I think if you're on the,if you're on the right,
you're worried people are not being put inprison enough, which I think is very fair.
And on the left,maybe there's more concerns.
I do think some people have beenpunished for a very long time and
are very unlikely to commit a crime again.
There's no reason to keep punishing them.
I think both sides have somepoints here that are legitimate.

(22:00):
But here's the thing no one's talkingabout is we're not holding the people
running the prisonsaccountable to anything.
These prisons have terrible cultures.
They have no useful goals.
It's a total mess.
Let's say we get together with ten ofyour smartest friends on the left and
the right, what can we all agree on?
We don't want people comingout of prison to go back in.
We want lower recidivism, and we don'twant people to come out and be unemployed.

(22:21):
We want people to actually comeout with skills to get jobs.
Those are two obvious things.
So what we should be doing is weshould be measuring these things.
You should be rewarding the peoplerunning it, doing it well,
reward the programs that are working anddefunding the things that are not working.
And as best I could tell, the bestpoliticians ever get to is just like
coming up with their own one favorite petidea for the prison and giving it to them.
Most of them, unfortunately, aren't smartenough to think of the system level.

(22:42):
Let's create a system that competes andthat measures things and iterates.
So that's the way markets work.
And so it turns out if you apply thissystem, by the way, to probation,
to parole, to prisons,you can massively reduce recidivism,
massively increase employment,like fix these things.
And so that's the kind ofstuff that we're working on.
And so we're trying to do this in a bunchof different areas and doing a lot of
different things with markets andhealthcare and fixing education.

(23:03):
But just trying to put common sense andincentives and accountability.
And by the way,the moderate left tends to agree with me,
the right tends to agree with me,the far left hates me.
And the far left is capturedby the government unions.
And they do not want any accountability,any measurement,
because that is totally againsthow the far left works.
And so.So what we need here is we need people,
both on the right, butalso the moderate left,

(23:24):
to say, listen,we're going to stand up to these people.
We're going to demand there is going to beaccountability in our society because our
government's a huge partof our society now.
We have to hold it accountableto results that we all want.
And that takes courage.
It especially takes courageon the moderate left.
It's mostly not there in our society rightnow, but I'm hoping with this vibe shift,
we're going to get moreof them to come along.

>> Jon Hartley (23:43):
So Chalonsdale disrupted prison warden could maybe be
on the horizon.

>> Joe Lonsdale (23:49):
Okay, you joke.
It's a big deal, man.
Making these systems work.
It impacts hundreds of thousands of lives.
And it's an ethical,it's like something we Is our duty.
We should be doing these things like justallowing like we all know these places
are full of like prison guardswho hate the prisoners,
prisoners who ate the prison guards.
Everyone's miserable, it's a total mess.
It's a broken culture.
And like leadership is about not allowingthose broken cultures, about going in and

(24:12):
fixing them.
And so everywhere in our societythere should be no room for
broken cultures thataren't getting results.

>> Jon Hartley (24:18):
Absolutely.
Yeah, very important issue and thankyou for your leadership in that space.
I want to shift to defense tech Palantir.
Obviously the world's become I thinka more dangerous place in the past
few years.
Russia invading Ukraine, Iran, Hezbollah,Hamas, China threatening Taiwan.

(24:39):
I mean the Assad regimehas fallen in Syria.
It's kind of unclear what's next.
Joe, I mean you're one ofthe co founders of Palantir.
It's really the leading firmin the defense tech space.
And you also have a lot of other very,very serious commitments
in the defense tech space to,to other, other firms as well.
I mean can you explain the audiencewhat Palantir does and

(25:00):
how and how it's a force forgood in the, in the world.

>> Joe Lonsdale (25:04):
So we started Palantir 21 years ago.
I think a lot of you were mentioningyou loved Alex Karp's clip at
the Reagan Library this weekend.
He's very proud to be his co founder.
He's an amazing guy.
Someone mentioned his hair keepsgetting crazier as he gets richer.
So quit he's a character.
He's a PhD too.
He was he not only is a PhD,
he was the star student ofthe top philosopher in the world.

(25:25):
So he's a.
He's definitely, he's definitely wasthe only non technical person who was full
time on the co founding team.

>> Jon Hartley (25:31):
Like a Habermas student at one point.

>> Joe Lonsdale (25:33):
Yeah, exactly.
He was.
Alex is a genius.
He's taught me a lot about people andinstitutions in the world.
It turns out you need kind of thesephilosopher builder types for
these things to work.
And he had,he had a big influence on me on that.
You can't just have the best tech.
You also have to understand the world andbe interested and
curious about how the world works.
Would which Alex is Palantir tooksome of the very, really some.

(25:55):
One of the very top tech culturesin Silicon Valley we created it was
ranked number one for quite a while and
applied it to areas of our society thatdon't have functional tech cultures or.
And didn't have functional cultures fora very long time and solved some very
important problems, helped savethe government billions of dollars, helped
eliminate several thousand terrorists,helped block dozens of attacks, and

(26:15):
then help do that forabout 40 of our allied countries.
And it turns out the hard, technicalproblems we solved by creating these
ontologies and bringing the data andthe workflows together in certain ways
to build on top of actuallyare very useful for AI.
So not only did we do something I thinkthat was very important for the world and
built like a, you know, when I was there,like a unicorn, I think

(26:36):
in some ways we got a little bit luckybecause we have the best tech culture.
We had this thing we built that.
It turns out it's very useful for AI.
So we're kind of in the right placeat the right time with that and
then seize the advantage and built on it.
And so they're now going around and
teaching hundreds of the topcorporations how to do things in AI.
I think one of the thingsthat you show up and
these people have all been spending lotsof time, money on this last two years.

(26:58):
And so the IT guys are sometimes terrifiedof Palantir because you come in and say,
give us one week, and in one weekwe're going to do something that's
much more useful to you andimpressive than the last 18 months.
You just spent time on it.
And we consistently dothat with the pilots.
And then you win it and then you grow.
That's why Palantir isgrowing really fast.
So it's in a really goodposition right now.
But I think that the moral kindof background or the mission for
Palantir was after 9, 11.

(27:19):
Let's make sure thatdoes not happen again.
And you know it's not you can'tonly credit Palantir with Apple.
I think we definitely playeda critical role in making that happen.

>> Jon Hartley (27:26):
That's amazing.
Yeah.And I know, I just.
There's always these crazy libertarians,like, hate the TSA and stuff like that.

>> Joe Lonsdale (27:34):
I hate the tsa.
I'm also a crazy libertarian,though Kelt gone.

>> Jon Hartley (27:39):
You want to keep the TSA though, maybe.

>> Joe Lonsdale (27:41):
No, no.
It's like security theater.
What the hell are they doing?
This is a big waste of everyone's time.
Give the airport back the control andthen hold them accountable.
I don't know.
Keep going.What do you want to say?

>> Jon Hartley (27:50):
Well, well, here instead of tsa, I'd be less concerned maybe, but
it's like such a waste of everyone'stime and money and they don't.

>> Joe Lonsdale (28:01):
Whenever we test them, they always fail.

>> Jon Hartley (28:03):
Do they?

>> Joe Lonsdale (28:04):
Yes. It's like really easy to think things
past the tsa.
You should not try this yourself.
But it is, sorry,you're gonna ask a question.

>> Jon Hartley (28:11):
We won't give anyone any ideas here, but moving on.
University of Austin oryou know what, any other just,
you're such an expert on defense tech.
Do you want to talkabout the other defense.

>> Joe Lonsdale (28:23):
Yeah, I think, just listen what they do listen.
So, yeah, we mentioned this earlier.
Warfare is fundamentally changed.
If you want to fight a war today orin five years,
it just does not look anything likewhat the wars of the past look like.
You know, it's very sadly In World War I,you have this kind of maligned
aristocratic class that had been likekind of beaten by the progressives for
a generation.
It was finally failing it.

(28:44):
Really excited that it got to proveitself because the whole purpose of
the aristocracy in,in the Great Britain and in the past was,
was to be the warrior class andto defend the civilization.
And so these like young mengot on their horses and
they took their swords and they.
And they charged the front andthey were all mowed down.
It was very sad because warfarejust totally, completely changed.
It was a huge mess and there's a lotof things like that today that are,
they're analogous to that.

(29:06):
You.
I mean, I have to be careful what I saybecause I hang out with all the guys who
run these things.
They'll get pissed off at me.
But there's a lot of stuff we'redoing now that is equivalent to that.
And what warfare should look liketoday is you did mass swarms of
autonomous weaponized, weaponized things.
Whether they're drones,whether we're overwater vehicles,
which we're building with Saronic.

(29:27):
We're gonna build 500 ships in Austin nextyear to build these very sophisticated
ships that can coordinate with the fleetand attack together and separately.
And you know,they're weaponized different ways.
Whether it's underwater stuff likethe dive stuff that the underworld is
building, where you're building 200 froma year out of Rhode island right now,
hopefully going to accelerate that.
Whether it's Overland, which is, you know,very best self driving in the country,
winning all the awards.

(29:47):
Rather than sending 30 tanks to Ukraine,which 21 are destroyed, you could send for
the same cost 30,000 of these things thatare intelligently swarming and weaponized.
There's all that stuff.
And then there's things like Epirus,
which is a company actuallyproud to have Helped start.
We kind of anticipated all the drone stuffseven years ago, right after Anduril
started, and way back that we backed,we backed, we started Epirus.

(30:07):
And it's the best.
It's like a force field.
It's the best directed EMP in the world.
So you can shoot microwave radiation in acone and you could turn off like a hundred
drones at once, or you could turn offa very powerful large Iranian drone,
which I don't think these are Iraniandrones over New Jersey, but
we could turn those off too,if someone wanted.
And, you know, so there's things,there's things like that you could do.
They're really critical tothe future of warfare, basically.

(30:29):
Like, it's,kind of like Star Trek.
You do need to be able, if you'refighting swarms of these things on land,
in the air, in the ocean, you also needto be able to turn them off and fry them,
you know, in a distance.
And sothere's all sorts of these new things.
They're just critical to howwar is going to be fought.
And it's critical to getour manufacturing base up.
So this is I am very pro liberty.
I'm very against most industrial policy.
But we do need industrial policy froman economic, from a defense perspective,

(30:52):
otherwise we're gonna lose to Chinaif we ever have to fight them.
We have to be able toproduce more of this stuff.
So this is all really critical.
I'm very against the adventures of wastingtrillions of dollars in Afghanistan.
And I'm very aligned with the kind ofmoderate right, kind of populist right
line that we basically don't wantto be wasting money overseas.
At the same time, you know, you don'twant Islamists to be able to run wild or

(31:14):
you don't want a country withnukes taken over by bad guys,
because that's going to come back andhurt us.
There does need to be a very strongdeterrence in the world and very strong.
If America stays the strongest,it does keep us safer.
And that's something we needto do in an efficient way.

>> Jon Hartley (31:27):
No doubt.
And pager warfare as well.

>> Joe Lonsdale (31:30):
Pager warfare is more Israel's thing.
But they did a great job.

>> Jon Hartley (31:34):
Yeah, absolutely.
Well, it's fascinating.
And also want to talkjust a little bit about.
And thank you for.
I think it certainly should be said,thank you for lending your great mind and
bringing great minds to solvethese hugely important problems.
And certainly, I think there's,I guess, a changing view, certainly on.

(32:00):
Industrial policy and, and rethinkingtrade when it comes to how to deal with
these sort of non economic objectives.
I wanna talk a little bit about just,I guess,
do you have any thoughts on fintech?
You know you started out of par,any fintech thoughts you wanna add?

>> Joe Lonsdale (32:13):
You know it's, it seems like there's going to be, there's going to
be a need for, for better ways of usingstable coins to transact for free.
I think you guys probably saw it cameout how the SEC, not even the SEC so
much as like kind of leftist senatorslike Sherrod Brown, others kill,
killed Libra and killed a lot of otherattempts from large companies to use

(32:35):
crypto to create kind of new differentchallenges and with identity and
payment online, which really isthe obvious long term answer.
I think it's as much as I don't agreewith a lot of what goes on in meta,
I think it's actually really bad forthe world that the, that they kind of,
it kind of used mafia like tactics tothreaten Facebook not to launch this.
It was legal to launch it, but they'relike if anyone works with Facebook and
launching this we're gonna lookinto everything you're doing.

(32:57):
It was a very mafia thingthey did that came out and so
I think that was really wrong.
I think it would be really good forthis to happen on the consumer side.
On the wealth tech side, add a partjust crossed $7 trillion this month.
I'm very proud of the company, $7 trillionthat reported through the platform.
It's a very dominant company,I think about 1,200 firms using it.
And that's gonna keep growing.

(33:18):
There's a lot of really interesting stuffwe're doing with creating new ways that
any RA could offer in aligned way reallysmart alternatives to their investors.
And so I do think wealth tech'sgoing to be smarter, more dynamic.
There's just a lot of funstuff we're building there.
I think the estate stuff'sgoing to be handled way better.
You shouldn't have to knowthe smartest lawyer in New York.
You should be able to you feel to automatewhatever the Jewish guy is telling

(33:40):
you from New York to do for everyone.
It's fortheir taxes instead of having to all pay,
you know I should justhave to pay $100,000.
Everyone should get access to it.
So there's, there's things,there's things,
there's things like this that are that arecoming, which are just like smarter and
better with AI that I'm very bullish on.
But, you know, just, just like everywhereelse, there's just a lot to build there,
a lot to keep fixing.

>> Jon Hartley (33:56):
There's a lot of good accounts and finance guys in Miami too for
that's worht, not just New York.
A lot of our New Yorkers are->> Joe Lonsdale: He moved to Miami,
that's true here.
Just saying.
Just saying.
Why don't you talk a little bitabout University of Austin.
I mean,you're really the chief benefactor,
I think, of the University of Austin.
The first class just began this autumn and

(34:18):
I think just finishedtheir first semester.
How is that going so far in your mind?

>> Joe Lonsdale (34:23):
That's great.
We have 90 something students there.
In the first undergraduate class, a lotof students turn down very top schools,
have very top scores that came in.
They wanna go somewhere,I think that in some ways more patriotic.
But it's a place whereyou can pursue truth.
It's a place where you're taught to be,you know, the philosopher builders that we
want to see in our world thatare going to step up and fix things.

(34:46):
I think there's all these classicalvirtues which are very important,
which we don't talk enough about.
And my favorite classicalvirtue is courage, and
you're basically taughtthe opposite of courage.
Now if you go to Yale or Harvard orStanford, it's basically like, shut up,
go along, don't, don't try to speak out.
Echo what you're told.
If you speak out, if you're virtuesignaling the thing we've told you to say.

(35:08):
But if you disagree with us, don't speakout because you're just gonna get punished
and you're gonna get hurt for it.
And that is like the worst possiblemessage that we could be teaching our
youth.
You should go to college to have debatesand to speak up, but then at the same time
also, by the way, have the intellectualhumility that you don't for
sure know all the exact right answers.
And that you're gonnalisten to the other side,

(35:29):
you're gonna learn that you're gonnabe able to steal man their arguments.
Basically, almost no one on the leftwho comes out of Harvard or
Yale knows how to stealmansmart people on the right.
They literally have been not allowedto listen to that, which is pathetic.
Like John Stuart Mill,one of the great kind of, you know,
classical liberals who shaped all of this,that, you know, if you don't know, if you,

(35:50):
if you don't know the other argument, thenyou don't actually know your argument.
And it's just a dysfunctional set ofaffairs that's bad for our civilization.
We live in a liberal civilization thatis based on these open debates and
it's based on frankly understanding theconversations of the last thousand years,
especially the last 300 yearswith the Enlightenment,
which are also not beingtaught at these schools.

(36:10):
And so there's just a lot of stuff to fix.
And, you know, University of Austin,I think our goal is for
about half the kids to be stem.
I'd say it's about one third STEM rightnow because we are starting really deeply
with the kind of history, economics,philosophy, and great idea stuff.
But, but the, the idea is to have bothgreat thinkers come out of there who
are leaders in policy and politics andother parts of society, but also to have
STEM leaders come out of there, butSTEM leaders who are more well rounded and

(36:33):
who are going to fight, you know, speakup and build cultures that are healthy.

>> Jon Hartley (36:37):
That's great.
I mean, how would you describethe University of Austin?
I guess just like a few sentences.
And like, how would it be different from,I guess, say like Hillsdale or,
I know like Thomas Aquinas Collegemakes people actually read.
Like, listen, I think Hillsdaleis an important institution.

>> Joe Lonsdale (36:54):
I don't want to throw any shade at it.
It's different in the sense that Hillsdaleis explicitly a conservative institution.
I don't know what cancel culture goeson there against the left or not.
But I, but I, but I, I do know Universityof Austin does have people who,
there's people on the moderate left,there's people on the right,
there's all sorts of views.
I think University of Austin has scoresfrom students coming in that are similar

(37:15):
to the other top 30 universities.
So our goal is explicitly to competewith Harvard and Stanford and
Yale and those, and build like the nextgreat university that's based on more
of these traditional values.
And I guess the other thing is differentis we have a talent network with over 100
people in my community who havestarted and built the unicorns and
built the top tech companies whoare engaging with our students,

(37:36):
are helping us design the new programs andare figuring it out.
So I think having, I think having thisphilosophical foundation combined with
the innovation worldis also pretty unique.

>> Jon Hartley (37:45):
Yeah.
Well, it's very impressivewhat you're doing.
I feel like starting school is almostsomething sort of unthinkable,
even just a few years ago.

>> Joe Lonsdale (37:55):
It's a very crazy entrepreneurial endeavor.
They had to do thousandsof pages of regulation,
all these things are set up to stopyou from building new universities.
There's always moatsin everything I build,
these are some of the worst moats I'veseen, we had to be very stubborn.
Fortunately, people like Barry Weiss,Neil Ferguson,
two of my main co-founders in Pano, who'sbeen our president, they worked very,
very hard and pushed this through.

(38:16):
And it's amazing gettingto work with those people.

>> Jon Hartley (38:18):
Absolutely, and finding, I guess, regional accreditation monopolies.

>> Joe Lonsdale (38:24):
It's definitely a big moat.
Well, that's something hopefully thisadministration will also fix for everyone,
which would be great, we'll see.

>> Jon Hartley (38:31):
Absolutely, and
you've really assembled a veryimpressive board there.
I wanna just pivot a littlebit to Wokeness and DEI?
I mean, you've been pretty outspokenagainst Wokeness and I mean, do you see,
obviously, I feel like the electionseems to be America's kind of spoken.

(38:51):
It's the first time a Republicanpresident's won the popular vote in maybe
20 years or so.
I mean, do you see the electionas being sort of a resounding
rejection of Wokeness and DEI?

>> Joe Lonsdale (39:04):
I mean, of course, everyone agrees it went too far, and
it is great, and we won by only,again, a very small amount.
I mean, we won, which is great andit's a rejection.
And I think a lot of moderatessaid this is enough.
A lot of people I know who are moderates,
who support the other sideactually came to me and said,
actually I'm kind of glad we lost becausewe do need to get rid of this nonsense.
And so I do think a lot of peoplein America have had enough of this.

(39:27):
Now, that doesn't mean thatit's going to go away.
I think this stuff.
Listen, these neo Marxist philosophieshave marched through the institutions.
They've taken over mostof our universities.
There's entire departments that are topuniversities, whether you can't even hire
a moderate person, a moderate Democrat,you have to only hire a Marxist.
I mean, these places are completely brokenin sociology, anthropology, history.

(39:48):
You can't have a history personwho believes, not believes in
the British Empire, which would be great,but even believes in power of markets.
I mean, it's just crazy howbroken these things are.
And so.
So yes, America's said it's gone too far,but does that mean it's going away?
No, we actually have to go andlike fight the fights now.
So here's what drives me crazy.
There's something I'mthinking about with Cicero.
Every red state in the country still hasstate funded institutions where they're

(40:13):
paying tax dollars, where there'sliterally departments that everyone in
that department is a neo Marxist of someform who hates markets, hates Israel,
hates America.
Like these are red states wherethe voters don't believe in this, and
they tell, it's academic freedom.
It's actually a freedom to takemy money in this freaking state,
take your money and defund these Marxists.
And that is how powerful they are in oursociety, that we're still doing that.

(40:34):
And by the way, on K to 12, if you'rea teacher in pretty much every red
state you have to go get a master'sdegree from woke you in order to be
brainwashed to hate markets,to hate America, hate Israel,
in order to get paid more than comeback and indoctrinate the kids.
And school choice is great.
Don't get me wrong, I love school choice.

(40:54):
It's important you guysstarted here in Florida.
First things to Governor Bush andothers, and it's just, it's amazing.
And we're gonna try to doit in Texas next year.
But school choice is notenough because no matter what,
in 10 years there's still going tobe a bunch of kids in these schools.
And these red states need to stop tellingthese teachers to go get indoctrinated in
order to get paid more at a workplace.
This is crazy.
It is crazy, and it's like,it's a lack of courage.

(41:15):
They say, well, Joe,people think it's controversial.
It's just really hard to fix these things.
I have lots of other things I'm doing.
I'm like, no, if you were a governor or,or legislator and you are not fixing this,
you are not doing your job.
So we have a lot of work to do.

>> Jon Hartley (41:28):
Yeah, no, absolutely.
And I'm curious,like in terms of corporate America,
which I feel like came to just recently,but I think corporate
America certainly has become a hotbedof wokeness and DEI as well.
I mean, do you see a shift there?

(41:49):
I mean there's been somereports of some companies.

>> Joe Lonsdale (41:52):
No, of course.
Everyone's now just shifting slightly,and they're on the new side, and
they're quietly firing a lot of the teamsthat were obviously totally insane people,
but they couldn't admit they were insanepeople until about five minutes ago.
And there's a big shift, andit'll come back, and they'll do the next
crazy thing because there's no courage inany of these companies, and it's fine.
It's a good thing for our society thatthe people who are the NPCs and the people

(42:14):
that don't have any courage are now goingalong with getting rid of this nonsense.
But, but yeah, it's just the lack ofbackbone in all of these people and
all of these, in all these CEOs just,it's disgusting, and it's nice.
They're coming around.

>> Jon Hartley (42:29):
And I'm curious, what do you think about the tech world?
I mean, I think one of the bigsurprises ahead of this
election was just how manypeople from the tech world.
I think people like Chamath and others,people who were pretty serious card
carrying, toe the line Dems even a fewyears ago, and I mean even 10 years ago,

(42:49):
I mean Elon Musk was I thinka card-carrying Democrat and others.
I mean, do you think that shift is,is a permanent one?

>> Joe Lonsdale (42:59):
Yeah, I think, I think this is a big shift for, for quite a while
because I think you have a part of theDemocratic Party that's completely insane.
I don't know if it's 20 of it or40% of it or what.
It's probably 25, 30 of it.
That is completely insane.
And I think the moderate left, like Isaid, lacks the courage to fight that and
push back on it.
And as long as that insane brokenthing is there and is powerful and
is running any institutions in oursociety, you're gonna have a lot of smart

(43:20):
entrepreneurs who are gonna be pushingback, you're gonna be fighting it.
And listen, the tech world,the other thing that happened,
I think if we're gonnatry to diagnose this,
first of all these people went insane andyou gotta stop them from breaking things.
But secondly,the tech world has intersected
with government brokenness in a muchbigger way in the last decade.
So a lot of the stuff we were buildingin tech was in completely non government

(43:40):
areas that, where the regulation didn'treally affect us that much 20 years ago.
But if you're building in healthcare,if you're building in defense,
if you're building in areas that intersectwith manufacturing or education or etc.,
all of a sudden you're exposed to theselike totally crazy corrupt regulations and
moats and things set up, and you're like,wait a second, this is broken.

(44:02):
This is hurting our civilization,guys, let's fix this.
And you go.And a lot of them like would go and say,
okay, this is obviously wrong,let's fix it.
And then, they'd be really surprisedwhen it just didn't get fixed, and
it was just stayed corrupt andstayed broken.
And you look at all these areas ofour society where the costs have gone
up, right?
You can do this chart where there's thisstuff in blue lines and the red lines, and
you see the parts there,where inflation has gone up.
And these are the parts the governmentis just clearly breaking and

(44:24):
clearly allowing itselfto be captured to break.
I mean, health care is probably the worst,but there's a lot of other ones.
And this is finally something that a lotof the tech world now is exposed to, is,
wait a second, well, let's fix this.
And then they realize it's actually theirside is the Democrats that are the ones
who are not letting them fix it.
And that's been a huge red pill fora lot of my friends.

>> Jon Hartley (44:44):
And absolutely.
Last question, Doge, if you had onerecommendation for them that they would,
you know, implement with 100% certainty,what would that recommendation be?

>> Joe Lonsdale (44:58):
So many things I already mentioned, so I'm not gonna mention,
the cutting NGOs andfraud and everything else.
The one thing I would say is that whenyou look at how Elon Musk has his rules,
like first you go in, andyou like get rid of the dumb requirements,
and you cut stuff that's not needed.
And only then, once can you optimize.
And so I think the optimized thing that'sgonna come next to calling it day one is
all this really cool firing and cuttingand just like stuff get out of the way.

(45:21):
I'm so excited.
But day two, if I had one thing forthe optimize,
is we need to have a,a transparent process driven by tech for
every regulation to have to fight forits life every X years.
And it needs to be something that, becauseit's driven by tech and transparent,
everyone can see it.
Because basically 17 states haveregulatory review processes and

(45:43):
they don't happen because the lawyersare busy and no one sees.
But if you make it transparent, you forceregulation to fight for its life and
you make it really hard to stay around.
I better be doing really good things thatwould stop this cancerous growth of just
infinite regulations over time thatare suffocating the growth of our
civilization.
So if we do that right,that could change everything.

>> Jon Hartley (46:01):
Well, Joe, Joe Lonsdale, thank you so much for joining us.
This has been really amazing.

>> Joe Lonsdale (46:05):
Thanks, Jon.
[APPLAUSE]>> Jon Hartley: All right,
if you like to line up over here,
you can ask some questions aslong as we have some time.

>> Daniel (46:21):
Fantastic talk.
I'd like to hear how you would.
I have two problems to solve.
How would you tellTaiwan to defend itself?
And how would you takeout the gangs of Chicago?

>> Joe Lonsdale (46:34):
Daniel, thank you.
[LAUGH] I always forgetwe're being recorded,
hoping to say anything inappropriate.
You know, listen, I think with Taiwan,
I think the Hellscape thing isbasically right in some form.
Taiwan is a very hard island to attack.
I think there were plans for
how it was going to be invaded because Ithink Japan had taken it in World War II.

(46:57):
And then we had to map out whatwe're going to do with China.
And it was just like horrible thingthat was gonna cost, 5,000,000 lives and
just tons of ships, tons of boats.
And that was even back then.
And I think it is quite well defended now,more than people realize.
So I think it's more likely that theyuse other methods to keep it, co-opt it.
But if they were going to attack it,slash defend it,

(47:17):
you probably want tens of thousands ofautonomous weaponized vehicles above and
below and around the water.
And you want to be ready to destroy anykey ports of entry if they do get a hold
of them, to stop them from capturing andbringing them in.
So as much as that's kind of scary,you got to buy bomb your own,
have bombs in your own areas,in your own ports if necessary, and then.
And then have the Hellscape.
And I think that makes it just not worthtaking it, makes it so they have to find

(47:41):
other ways to co opt it, which theymight do in terms of gains in Chicago.
These things are always hard to do.
I strongly support the US Constitution and
our rights,which makes these things very complicated.
But listen,basically you need a really strong DA.
Any really strong judges that actuallywanna be really hard on crime.

(48:01):
And then, you need probably some newform of like the Illinois Rangers.
I don't know what theycall them in Illinois.
They call them the Texas Rangers thatbasically are trained probably by special
forces to do honey pots andto do honeypot operations.
And just whatever kind of crime is goingon, like make it a competition and
figure out how to.
How to entrap them and legally,of course, and get them.

(48:25):
But it has to be.
It has to be an effort with greatleadership and great talent, and
it has to be somethinga state wants to do.
And right now they don'thave that leadership at all.

>> Daniel (48:32):
There's no tech.

>> Joe Lonsdale (48:35):
Well, sure.
If we're doing.
If we're doing all this like once, once.
I mean, once you get warrants, you could,you could track all these people.
You could listen to everything going on.
If we're allowed to turn Palantir on thepeople who were there, once we know that
they're guilty, and then use that tofind others and everything, sure.
There's all sorts of thingswe could do with that.
We do that with Mexico as well.
By the way.If we want to really get rid of

(48:56):
the cartels that are bothering everyoneis probably use whatever we used on
terrorists in the Middle East.
We should probably pointto the cartels in Mexico.
Same thing.
We have to be very carefuldoing that in our own homeland.
I'm very pro civil liberties, and so
we just have to figure outwhat's allowed with that.
And at some point,if it becomes a big enough problem and
Illinois decides to do it inthe right way, that's great.
But until then,until we have that leadership,

(49:16):
I think the best solution isto move to Miami or Austin.

>> Jon Hartley (49:20):
All right, next question.

>> Speaker 4 (49:23):
Hey, Joe, how are you?
I have a quick question.
We recently.
Let's see if I can pick this up.
I'll just hold it like this.
We recently had an event with the Economicclub about the next generation.
And sothere's like a transformative shift.
Trillions and trillions of dollarscoming to our generation soon.
You're seeing baby boomers wantingto get out of their typical mom and
pop shops selling them out.

(49:44):
How do you see this unfolding and
how would you say we can best prepareourselves for something like this?

>> Joe Lonsdale (49:49):
Yeah, this is a huge trend in our society.
I agree.There's trillions of dollars of
small businesses, where peopleare going to retire and pass it on.
I think probably the right way to do it,and
I've talked a lot about this witha few other friends as well.
Is we need an distributedmethod of getting advisors and
training operators and of partnering withoperators to buy these and back them.

(50:11):
Tech's gonna play a big role in that.
It's gonna play a big role intransforming these businesses and
making them more efficient.
But you still need operators onthe ground willing to run them.
I don't think private equity in atraditional sense is always the right way.
It doesn't always make senseto go into small towns and
just roll up everything intopart of something, of 30 things.
But I actually do think you need likedistributed training and talents and
finding smaller entrepreneurs,and a movement for

(50:32):
more people to be kind of small andentrepreneurs.
And there's a lot to build there.

>> Jon Hartley (50:38):
All right.

>> Speaker 5 (50:40):
Hello.
Thank you very much forthis awesome conversation.
Have a quick comment before the question.
I'm from Spain and I want to go back toTSA, where a socialist country in many
aspects, much more socialistthan the United States.
And we figured out a wayto privatize the TSA.
And believe me,Madrid works much better than MIA.
So I think there's muchprogress to be done there.
The question, though,has to do with AI and politics.

(51:00):
Right now.Most AI I've seen in politics has to do
with elections.
In your expertise, have you seenany AI being used for lobbying and,
or strategy andpredictive predicting how meters will act?

>> Joe Lonsdale (51:12):
Sure. And thank you for that TSA comment,
actually, not only becauseI was right against Jon.
But secondly, because this is what's greatabout the United States is we have 50
states where you try experiments and
this is why the federalgovernment shouldn't do things.
It's also what's great about the factthat we don't have a global government.
So we should,as United States constantly be learning.
Even if something's more socialist,they could be doing something smarter.
So I think, I think competitive governanceis very important thing that we keep

(51:33):
learning from.
So I love you guys in Florida becauseyou guys do a lot of great things here.
We all, we all copy, you know,in terms of AI and elections,
I learned a hell of a lotabout politics in elections.
I don't even really want to know in thislast one because I got more involved in,
like, I'll tell you, there's things likeAPIs that are available within 24 hours
where you can see if someone's voted ornot.
You can't see who they voted for,but you see if they voted or not,

(51:56):
which then changes how you follow up withthem to, like, remind them to vote again.
There's rules in different states forif you request an absentee ballot at one
election, they just keep sending it toyou forever because that was good for
whoever the party was in charge there.
There's all sorts of crazy new rules,crazy new things.
And it is a giant, big data problem,and a lot of people are trying to use

(52:16):
data in AI to map it out to, to predict,to see where to put their resources.
Listen, I think Elon dida very good job of this and
was very critical to thiswhen he put money and
time into this last election witha lot of his smartest people.
It's something the left waswinning at by far before, and
now I think it's a little moreneutralized in terms of the exact tricks.

(52:36):
I can't say too much more, but yes,there's lots of stuff there that's key.

>> Jon Hartley (52:40):
All right, next question.

>> Speaker 6 (52:43):
I stood in line first so I could ask the last question.
What do we got time for like, two more?

>> Jon Hartley (52:48):
We've got a couple people behind you.

>> Speaker 6 (52:51):
As long as you still cut me in.
Not a hard stop at 7.

>> Speaker 7 (52:55):
Hi, Joe.
I have a question about autonomous agents.
A lot of people are saying 2025 is goingto be like the year of the autonomous
agents.
Microsoft, Salesforce, Google,they're all building autonomous agents.
I just thought whatyour opinion on it was,
if it's gonna be the yearof the autonomous agent.

>> Joe Lonsdale (53:13):
Yeah, well, listen, I'm obsessed, like I said,
with the AI services at level 5,I was talking about,
of directly applying AIto solve these things.
And a lot of these problems are thingswe do with agents at different types.
I'm not sure a lot of the agents are quitegood enough to do everything on their own.
But that is how you do these thingsis you create different agents and
you stitch them together and you practiceand you iterate and you use them.

(53:35):
And so, yes, I definitely think there'sgonna be a lot more sophisticated types of
agents designed to do different tasks andto complement people and
replace people in different ways.
And so, that's a great area to work in.
All right, next question.

>> Speaker 8 (53:49):
Hi. I have actually a couple of questions.
The first one.

>> Jon Hartley (53:53):
One. One would be great.
Sorry.

>> Speaker 8 (53:55):
Okay, well, I want to try to formulate it in one, then.

>> Jon Hartley (53:59):
Okay.

>> Speaker 8 (53:59):
So when you have kids like me, I have a 4 year old.
I'm trying to do something about givingthem the tools to know what is good and
what is bad before they get a computerto code at the age of 5 or 6.

(54:20):
Your Cicero Instituteis working on policies.
Is there something going on inany of the nine states where you
are working to, to,to help our kids to have a better future?
And, and also, I mean it's related also tothe level three that you were mentioning.

(54:42):
We all have access tolarge language models, but
don't you think that there isan opportunity in the niche and
in the small language models andnot just for someone like Elon.

>> Joe Lonsdale (54:57):
So on the education front, there's a lot of cool new
companies like Angel Studios has madea ton of content this pro liberty.
It's Christian liberty bias.
I think it's very interesting companyTuttle Twins was partnering with them,
which I was a tiny supporter of,
which is this really funkind of libertarian cartoon.
I don't know if you've seenas they've done a great job.
I actually enjoy watching the episodes andmy kids enjoy watching the episodes.

(55:19):
I have like a four, six andseven half year old who watch it with me.
So, I think there's a lot ofgreat content being created.
I think there's some people trying tobuild various things about walled gardens
for kids and there's like a lot ofstuff there that makes a lot of sense.
It is a really hard problem.
I personally don't trust letting youngchildren on a lot of these types of

(55:40):
social media.
Or a lot of these types of like certaintypes of more modern games that use AI to
kind of harness dopamine mechanisms inways that they didn't when we were kids.
I think these are a form of drug,I think and I'm very pro liberty, but
I think these are a formof drug where it's like.
It's like, it's like it is doing somethingto your brain and how, in terms of how it

(56:01):
interacts with you and addicts you andharnesses you and finds out how to figure
out how to get your attention whenthey're really sophisticated.
And I think that's fine foran adult to opt into.
I probably too much time addicted to X orsomething like that, but
I don't think we should, at least for me,
I don't want to use that on my kidsbecause I'm not sure I trust them.
In terms of, in terms of the languagemodels, I think you could train large
language models to act likesmall ones in different ways.

(56:23):
So, I'm not sure if you need small ones,but
there's lots of ways that you can trainthem and create context and specify.
But I'll have to learn morefrom you about that later.
Thanks.

>> Speaker 8 (56:30):
The education.
I was actually referring to AI guidelines.
We're actually draftingnow the AI guidelines for
Miami Dade County withMiami Dade County Digital Commission.

>> Joe Lonsdale (56:40):
My suggestion is don't draft those.
That's, that's really bad.
Like you don't want tocreate any rules at all.
And if you, if you're creating rules foryour school, that's fine, but
don't create rules forwhat people do with their kids.
You should, we should,you should not create top down rules.
I think that's really bad, and we shouldmake Desantis stop it if you do that.

>> Speaker 8 (56:56):
It's happening.
So.>> Joe Lonsdale: Okay, well,
Desantis is going to stop it and I'm goingto stop you, but thank you very much.
Don't do that.
Don't do that.
That's, that's, that's authoritarian andit's not your job and
it's not your business and this isa free state and they shouldn't do that.
And anyone, they try to do it,DeSantis should step in and stop them.

>> Jon Hartley (57:11):
Okay, next question.
Joe Lonsdale, titled Twins Watcher.
That I didn't expect.

>> Joe Lonsdale (57:18):
It's great tonight.

>> Jon Hartley (57:20):
Great.
Next question.

>> Speaker 9 (57:21):
Thank you for your time, Joe.
Shifting to the banking sector in a worldthat's very relationship driven and
client facing and you know,building the relationships is,
tends to be the backboneof business development.
Do you see or knowing where AI is at andwhere it could be, do you see AI either
augmenting those client facing roles orpossibly replacing them down the road?

>> Joe Lonsdale (57:44):
I don't think it's going to replace them for a long time.
I think people like meeting otherpeople and trusting other people and
seeing other people, it's definitelyaugmenting them in new ways.
It's definitely completely changing,outbound sales,
is definitely maybe doing some firstscreening calls and things like that.
There's definitely a huge role forlike augmenting with AI.
But I think what's happening is rightnow the AI is playing that role for

(58:07):
like first emails and forfirst chats and stuff.
But I think as that gets more and morepopular, it's going to get too annoying
for people because they're goingto get like infinite inbounds and
then you're just not going to want tointeract with something if it's not like
a person you know in your network ortrust or have somehow met somewhere.
So, I think it's like we're in aninterregnum right now where this stuff all
works better because it's sonew and because it echoes a person.

(58:28):
But as soon as we all set up ourselvesagain to protect ourselves from this like
increasing deluge of AI, we're allgoing to face, I think you're going to
need to find ways forpeople in relationships to come back in.
And so, so I, I, I'm, I guess I'm verylong people in relationships still
mattering for most things.
If it's a very simple transaction,maybe the AIs figure out themselves.
But for bigger decisions, I, I think,

(58:48):
I think this AI stuff that's getting likegrowing really fast in certain areas there
is not going to work long term becauseit's just too spammy and too weird and
people, people wantother people is my view.
Maybe I'm old fashioned,but that's my view.

>> Speaker 9 (59:00):
Completely agree.

>> Joe Lonsdale (59:01):
Great, thanks.

>> Jon Hartley (59:02):
Next question.
We're going to do one question each.
You're going to be the last person.
We're going to get youout of here on time.
And ideally, quick with the ends withthe question mark would be great.
Thank you.

>> Speaker 7 (59:13):
So, thanks for Ollama.
If I took the entire corpus of yourdigital data, these recordings,
every recording public and private,all your messages, emails, and
I threw $10 million at compute and I madea model of you and then I benchmarked
both of you, do you think youcould still outperform your model?

(59:34):
And bonus question,what would you ask yourself?

>> Joe Lonsdale (59:38):
I think there were certain tasks at which the model would
outperform me.
It'd probably be a lotmore eloquent in knowing,
having all the context of things I wasthinking about and saying them well.
So, there's if I want to just soundimpressive at quoting things or
saying things I've said before.
It would outperform me if Iwanted to write a new piece.
I just wrote a piece on this AI serviceswave I've been talking to you guys about.

(59:59):
It's on my mind.
You can go on our site.
We published it a month or so ago.
And like, I don't think the AIcould have written that piece, but
now that I've written it, maybe it does.
Maybe in some ways it'smore eloquent about it.
And that's where we are right now.
Because it has the abilityto do all these things and
have all these things in its mind at once.
But, but, but for new creativity.
We're not there yet.

>> Jon Hartley (01:00:19):
All right, next question.
Would you mind using the microphone?
Thank you.
We just need you to speak into itjust because we're recording it, and
it feeds into the video too.

>> Speaker 10 (01:00:28):
Sure.
So my question is, you have interestingpolitical views and based on that,
do you think that the government shouldgo towards the direction of AGI building
artificial general intelligence, or shouldit be solely a private sector thing?
And if government has that,so how do you envision this?

>> Joe Lonsdale (01:00:51):
So right now, in the US, as I explained earlier,
the government is run mostly by idiots.
And so that'd be very hard.
There are some smart people in thegovernment, but like SpaceX for example,
there's, there's like no chance they couldhave ever built even anything even close.
Palantir.
No chance anything even closethe way it works right now.

(01:01:11):
And so, I think asking ifgovernment should do it itself,
I think you don't understand wheregovernment, what it is today.
Maybe you have a model of governmentthat comes from the 1950s, but
that's not where we are.
We'd have to, we'd be living ina completely different civilization if
the government actuallyhad the capability.
And then at that point I'd beable to answer differently.
Maybe if somehow there's someextraordinary cultural merit,

(01:01:31):
somehow was in our government thatmade it deserve to do these things,
I'd be very open to learningabout that civilization.
But we live in a civilization where it'slike, it's not like a little bit away or
a lot away, it's just likeinfinitely away from doing that.
And so I think that's a joke,unfortunately, and
with respect, it's just not howgovernment works in America.
And it probably should not try to dothese things because it will end up just

(01:01:53):
spending lots and lots of money oncronyism and waste and silly stuff.

>> Jon Hartley (01:01:59):
All right, second last question here.

>> Speaker 11 (01:02:03):
Thank you for being here.
I'm the dean of the business schoolat Florida Atlantic University.
We have 9,300 students inthe business school alone.

>> Joe Lonsdale (01:02:10):
Cool.

>> Speaker 11 (01:02:11):
I've hired some really great people.
You hired one that I was tryingto get you hired at Austin.
What advice would you giveme in the practical world?
I can't start over.
How do I handle those 9,300 students andthe 150 or
so full time faculty that I've got?
What do I do to improvethat the best possible way?

>> Joe Lonsdale (01:02:28):
That's cool.
Well, you know, thank you formanaging something that important.
I would say you should probably havemore exercises where you force people to
engage with debates and controversialideas and different perspectives and
to learn how to steal me on the other sideand learn how to be part of conversations
and thought pieces around this stuffthat they're not exposed to enough

(01:02:51):
about how the world actually works andabout how people like Elon and
others view the world andwhat the great debates are of our time.
And I think a lot of these schools,I think one of the highest ends for
professors is not to be controversial andnot to engage in these things.
And I think that's exactly the opposite.
I think they should actually beforced to expose these things.
And I think having these debates aboutuncomfortable topics is actually makes

(01:03:16):
people grow and be a lot stronger.
So, it's something I think about.

>> Jon Hartley (01:03:20):
All right, our last question.

>> Speaker 12 (01:03:22):
I'll go with a question first.
Let's say if I want to take my manualheavy business to the next level,
leveraging AI,what are the steps do I take?
Like, do I go get computerscience at MIT or
like, is there like a breakdownof the steps you should take?
And I mean the staffing industry,I run a very small boutique domestic

(01:03:43):
staffing firm and as you like,very similar to what you said,
there's not many smart peoplein the staffing world and
people are still from the 70s,like using handwritten letters.
So that's pretty much where.

>> Joe Lonsdale (01:03:59):
The human touch has a lot of, has a lot of good things about it.
So, there's definitely, like I wassaying earlier though, there's wisdom
where people are going to really wantthose letters and notes and human touch.
So, I don't think thoseare going away fully.
If you're not technical yourself,
it's probably not obviously good to startover and try to go become technical.
I think you want to find otherpeople who are technical and
listen in any industrial wave like this,there's going to be some people who

(01:04:21):
are trying to build new companiesentirely, and then there's going to
be other companies trying to arm you andtrying to give you things.
And there's a lot of companies out thereright now trying to give you software,
trying to arm you, trying to allow you.
So I think experimenting with the mostadvanced new AI platforms out there,
I think finding a smart technical person,helping them help you experiment,
having them do tests, is very worthwhile.

(01:04:41):
And you may actually find there'sways to make it more efficient.
So I don't think you have tobuild something newly yourself.
I think you can use what's there, and
you can still probably dosome cool things with it.
Thanks.

>> Jon Hartley (01:04:50):
Joe, thank you so much for joining us.
Let's give Joe anotherround of applause here.