No More Hustleporn: Palantir's Alex Karp on needing to be within one standard deviation of talent to recognize it

We pulled out the highlights from Palantir CEO Alex Karp's recent interview with Joe Lonsdale. Transcription and light editing by Anthropic's Claude, curation by Yiren Lu :-)

Highlights:

Joe Lonsdale: It's an interesting point about talent that I think you framed in a way it was very helpful to think about. That you actually have to be within a couple of standard deviations to even appreciate this. And so I think a big problem with a lot of our institutions, for example, around the Pentagon, is if you have people who are only one standard deviation above, they can't even tell a difference between four and five, and they have no idea what's even going on at those levels. So you need people who are good enough to even appreciate this.

Alex Karp: America's changed a lot, but in every environment I went into, I was an outsider. But on the other hand, I was also a deep insider. So it's this insider-outsider. My family is just so highly educated. So it's not just the case that I was an outsider, but I was an insider in terms of understanding art, science, to some extent, math through my father, but anything historical or cultural through my mom. I mean, I spent every weekend in museums, at cultural events. It took a decade after leaving the home, before I could even go any museum, because we just had to spend so much time. And so that insider, outsider, insider of what I would call the fundamental structures of Western thought and art, which then later refined in grad school, but while simultaneously not belonging, but at the same time believing. And I believe this still - the only way in which non belonging people belong is in the context of a Western society that protects the rule of law, that protects the right of free expression, that protects your property rights, that de facto protects unpleasant people. Our societies are still the best, though flawed, at protecting people who are unpopular because of their views, because of their habits, because of who they are. And that resonates with me on all fronts.

Alex Karp: The most famous VC firm had its most important partner just doodling. My fantasy is he was doodling some erotic little picture he was fixated on. But to be fair, if we had stood up and walked out, saying "f*** this, you're wasting our time," the chances of them investing would have been much higher. Entrepreneurs need to understand that if you're not aggressive in representing yourself in the Valley, they'll assume it's not real. Ironically, we were too modest with them but too arrogant with government people.

Alex Karp: Usually when I've spent 20 years going to important institutions of all kinds, and there is often, but not always, a moment where you're in a small room with someone and they're like, yeah, but the truth is I don't agree with so and so. I don't believe I think my leader is beyond or something. Yeah, there was none of that in Ukraine. The amount of kind of deep patriotism. And again, I'm talking about all sorts of people. I like talking to people, quite frankly, who are unimportant.

Joe Lonsdale: This is not because they're afraid of expressing a different viewpoint.

Alex Karp: The Ukrainians, it is not a place where people are particularly afraid of expressing any viewpoint. You are going to hear a lot of free speech. They are fighting because they believe. And you can debate a lot of things, and there's a healthy debate about the Ukraine war in this country. But I can tell you from my experience on the ground, these people are fighting and they are willing to fight. And at a general level, without going into details, some of the places that have used our product have been bombed, people have died, and the same day those people are back at work. Same day. And they're also very technical at a high level.

Full Transcript:

Joe Lonsdale: Alex is one of my favorite people. He's one of the most interesting minds I've met in the world. He's a leader in business. He's a philosopher. He's also going to share a lot of his backstory that people haven't heard before in public. You know, it's really exciting to talk to Alex about Palantir. Palantir is unique in that it's 20 years old, but it's doing some of the most important, innovative work in the world right now. Some of the new stuff they're doing in AI you have to check out. It's really extraordinary. Probably the most important AI company in the world. It's very rare to see this kind of innovation from a company that's 20 years in and it's already had such a big impact globally. Really excited for you to get to know our leader and CEO there, Alex Karp. Alex, thanks for joining us for the show.

Alex Karp: Very happy to be here, Joe. We have a long and windy road together and it's been great to have you as part of my life.

Joe Lonsdale: Well, let's start with the big picture. Palantir, we talked a lot about different philosophies that you do teach us and talked about dialectics. And one of the animating dialectics is between pessimism and optimism. And what's the best case for an optimistic view for the United States right now?

Alex Karp: America produces outside-the-norm, driven people not constrained by intergenerational risk-taking like other cultures. We push responsibility to first-generation achievers. We reward outside-the-box thinking more than other cultures. We have a successful culture of technical accomplishment, especially on the West Coast, born out of universities and financed with alignment between entrepreneurs and investors. The tech community on the West Coast is more important than all others combined. We're a beacon for talent. Our education and cooperation allow choosing your community with its rules. You can start your own culture. The U.S. is the top choice to build something interesting. We forgive success. Success elsewhere can be dangerous. We lead software in enterprise. It's hard to replicate even 10% elsewhere. We're so successful we don't notice. We focus on weaknesses like infrastructure or healthcare. We do some things best but not others. I saw this re-immigrating. Other places envy our success.

Joe Lonsdale: I want to hear a little bit more about your background for everyone. Alex, where did you grow up and how'd you become an entrepreneur?

Alex Karp: I think my road to being an entrepreneur broadly defined, so building things, began with, like many things, something I didn't want and was not overly forthcoming about in public, which was my dyslexia, which I hid. So I was very good at certain things, and I would say still am, that other people are not as good at. My brain was structured differently than other people, and I was able to perform at a professional level in certain areas, even as a young kid, but then really was hindered in other areas. We had this weird family structure where my mom was in grad school as an artist, and everybody was an artist, so they were outside the norm. My mom is black. We were pro-Israel and super erudite, heavily Jewish environment. Everything about my life was further outside the norm than I realized. I was an extreme outsider, for there's no insider bias with that. I would have loved to be an insider somewhere. The minute I could be an insider, I'm like, "Shit, I'm dyslexic." So it's like, I used to wonder as a little kid, how could this get worse? Not in a sense that I thought that it was bad, but I was like, this is just, and I always thought from the beginning, and this is why, despite what people thought about Palantir, sometimes I view Palantir as a civil liberties juggernaut. I always thought, if fascism comes, I will be the first or second person on the wall because you're, like, the most outside.

And this is before I had like, no matter what happens, if something goes wrong in society, I'm done. America's changed a lot, but in every environment I went into, I was an outsider. But on the other hand, I was also a deep insider. So it's this insider-outsider. My family is just so highly educated. So it's not just the case that I was an outsider, but I was an insider in terms of understanding art, science, to some extent, math through my father, but anything historical or cultural through my mom. I mean, I spent every weekend in museums, at cultural events. It took a decade after leaving the home, before I could even go any museum, because we just had to spend so much time. And so that insider, outsider, insider of what I would call the fundamental structures of Western thought and art, which then later refined in grad school, but while simultaneously not belonging, but at the same time believing. And I believe this. Still, the only way in which non belonging people belong is in the context of a Western society that protects the rule of law, that protects the right of free expression, that protects your property rights, that de facto protects unpleasant people. Our societies are still the best, though flawed, at protecting people who are unpopular because of their views, because of their habits, because of who they are. And that resonates with me on all fronts

Joe Lonsdale: And so how did this lead? You went to law school and you got a PhD in philosophy. Why law school and philosophy?

Alex Karp: I mean, law school was I thought I could actually help people with a law degree. What I discovered quickly is hard to help people if you have no interest in what you're doing. So that was this weird thing where in business, one of my theories is a lot of the best decisions happen for the wrong reasons. I had a reason for going to law school. It made no sense. But I spent a lot of time fighting with Peter about political issues, and that made a lot of sense.

Joe Lonsdale: Peter Thiel is in your class at Stanford law school.

Alex Karp: We were in the same dorm and in the same section at Stanford Law School, and we both had heterogeneous, nonconformist views, his leaning to the right, mine, more classically, but not completely classically on the left. I spent no time doing anything there except for reading books and running into people and arguing with them, Peter being the primary one. So that made a lot later the Stanford thing, really. Stanford is the premier university for tech in the world.

Joe Lonsdale: It is what connected all of us, I guess, ultimately, in the end.

Alex Karp: Stanford is a fascinating institution in itself, but it is the tech university of the world, and I didn't think of it that way when I went there. I certainly was not at all part of my thinking. It also made me think I should go do something I wanted to do because I was unhappy there. And what I wanted to do was write about basically Germanic post-war thought in whatever field. I didn't really care that much. But I didn't want to do a PhD in the US. Because that would have meant doing a master's degree and doing three years of already done. I've already had a three year bid. Got it. I've escaped my three year bid. I want to go do what I want to do.

Joe Lonsdale: And you ended up studying under Jürgen Habermas. Was he somebody you'd studied previously or were excited to work with?

Alex Karp: The longer version is I went over to study with him. I was in his colloquium, and I studied with him. Then we had a falling out, and then I finished my PhD with someone else, but not on bad terms. It's just I discovered while writing my PhD that the stakes were very low and the personalities were very difficult. And I also discovered partly by proximity to him, but in proximity to other people who were kind of world class, one meeting with Luhmann, watching debates between Habermas and Luhmann that I had certain abilities. They didn't have to be an academic builder. And while I was good enough to be in the room with them and argue with them on where I was a technical expert, dedicating myself to reading and writing all day was not what I wanted. And they did not seem to understand I wouldn't have put it in these terms because I hadn't built anything, but they didn't have the right personality for building.

Joe Lonsdale: Well, there's a certain from the business world perspective, there's a certain dysfunction to a lot of the smartest academics that they're very good at some things, but they can never come out into what we see as the real world. I guess, for them that they're in their own real world.

Alex Karp: Yeah, this is true. I would say in fairness to people at the level of like, Habermas, Lumann and others that I ran into Bella, came to a speech, gave a speech at Harvard. I think they would have succeeded at yeah, there is a level now, maybe it would have to be low on human management, but there are entrepreneurs who are low on human management.

Joe Lonsdale: They're just so smart. They'd iterate and figure it out with their wisdom.

Alex Karp: The level of talent that just - take Nicholas Lumann, who, for the audiences, is probably the most important thinker of social thought post World War II, wrote more than most of us read in a life and developed this kind of theory, systems theory, which was a way of explaining how humans and systems function. - there's just a way in which the gears are different. And while I don't think they would build or run Palantir particularly well, I do think that they could materially advance an institution. They might have to have someone below them who could actually interact with the people. But these are people who are just like when we were building palantir together, our engineers.

Joe Lonsdale: Yeah, the very best in the world.

Alex Karp: The very, very best in the world are, the brain structure is different. One of the things that our institutions underestimate but we have an advantage in America because we have this tech scene, is people think they're within a standard deviation of the best if you're the second best. But it's just a different universe. It's not true. And you see this in software and building software products. The very best in the world. The people who built the PG, the brain structure, the way of solving problems. It is not at all similar to how, you know, I don't want to mention their last names because I think one of them is happily not famous.

Joe Lonsdale: I think a picture comes out for.

Alex Karp: There are very few people who could have pulled that off. And I would say if you took Ryan and Bob and put them in an academic context, I don't think Bob McGrew minds. I'll leave Ryan's last name out but they would do very, very well.

Joe Lonsdale: Yeah, well, Bob obviously went on to OpenAI to do very important work there. It's an interesting point about talent that I think you framed in a way it was very helpful to think about. That you actually have to be within a couple of standard deviations to even appreciate this. And so I think a big problem with a lot of our institutions, for example, around the Pentagon, is if you have people who are only one standard deviation above, they can't even tell a difference between four and five, and they have no idea what's even going on at those levels. So you need people who are good enough to even appreciate this.

Alex Karp: We have a huge advantage. Let's just take US commercial. This is a really true thing and really not understood that to appreciate talent, you need to be within standard deviation of that talent. Unless you have some specialized weird. This is where, for whatever reason, I think I have some kind of weird ability where I have picked some of the best and managed some of the best engineers in the world, consistently. Larger institutions struggle in some cases because they think they can't tell the difference between I think it's almost like.

Joe Lonsdale: Those cultures reject these people who are extremely good. Right.

Alex Karp: But again, to your American optimism thing, which I share, and we have a culture that nurtures them, allows them to be managed, provides capital, teaches them. One of the things I think people get wrong is you don't learn to win by failing. You learn to win by working with people who have ups and downs and then win. So there's a deep understanding whether they work with you at HBC or they work with others, some of whom I like and some of whom I don't. But you do learn what it means to build business.

And in the American commercial context especially, you have this high turnover. So it's like people really do, the people running these institutions. On the tech side, five years ago, CIOs didn't buy our product. Now they do, because it's like there's this plasticity of learning in the US. Which is something that I think other countries struggle with. That it is true that identifying the difference between Bob and Ryan and any very strong, normal engineer is something that takes specialized. Quite frankly, I think it's very similar to music. Very few people can hear the Blue Note. Almost no one can play it to be what we do in tech is we hear the Blue Note on the tech talent side, which very few people it's like you roll three crazy people into a room and a very talented, normal person will pick the one person who's moderately talented. Whereas if you roll those three people into Palantir or to your VC, we'll be like, no, we want that one, and that's great. Then you have to be able to manage that person that's also basically that's.

Joe Lonsdale: Like my karma to have to manage these people now after you had to deal with us when we were kids. That's how we're doing it.

Alex Karp: Well, I have a lot of stories about our times together. Our times together are some of the best of my life.

Joe Lonsdale: Well, Alex, you said you left academia in part because it was a bit self-gratifying, you said earlier. And so obviously you had this skill, you could be a builder. Academia wasn't where you wanted to be. How do you transition into the business.

Alex Karp: Our times getting Palantir off the ground were just crazy, magical, dangerous, scary. We almost went out of business a lot of times. And in fact, except for the fact that we were so maniacally focused on getting this thing to work, it would never have worked because no one wanted to invest in us. All the top VCs were like, it's a crazy idea to be interested in data working with large institutions.

Joe Lonsdale: We did have a little bit of an attitude that I think you and I shared, which was like the famous Timis Caesar vius, which is, why are you afraid you're carrying the people who are going to be successful to the famous boatman with Julius Caesar? There's something like that, which I don't think it was necessarily arrogance. It was just a sense that we had to win.

Alex Karp: Maybe we were arrogant, but in some places we were too arrogant. In some places we weren't arrogant enough. If we had gone into the VCs and been like, "Fuck you, we're going to win," they probably would have given us money.

Joe Lonsdale: Do you have any favorite stories from some of those VC meetings?

Alex Karp: Well, we had so many.

Joe Lonsdale: Obviously too many.

Alex Karp: The most famous VC firm had its most important partner just doodling. My fantasy is he was doodling some erotic little picture he was fixated on. But to be fair, if we had stood up and walked out, saying "f*** this, you're wasting our time," the chances of them investing would have been much higher. Entrepreneurs need to understand that if you're not aggressive in representing yourself in the Valley, they'll assume it's not real. Ironically, we were too modest with them but too arrogant with government people.

Joe Lonsdale: Like me as a 22-year-old, I was probably not the right person to sell to the government. That was complicated.

Alex Karp: But to be fair, the government has changed a lot. There are a lot of problems, and I have some ideas to fix them. But we were the first to break in, and now many other companies have come in, some doing very well.

Joe Lonsdale: Thanks to Palantir, now SpaceX and others can work in defense. Well, we showed up.

Alex Karp: We succeeded, which none of this matters if you're some academic project. We sued the government not to buy our product but to ensure people bought products that worked. The most important thing is for the U.S. military to be by far the best in the world.

Joe Lonsdale: What are a couple of things they could do to fix it and be better?

Alex Karp: They've improved. In business, it's really important to go back to things that are kind of obvious. But one of the obvious things that's not part of every structure of the US. Government is almost all enterprise software that works in America or in the world has two characteristics. It's built in America and it's built as a product. And it has a third characteristic, quite frankly, that it's sold commercially. So if you just say the rebuttable presumption is if a product is world class, it is a built in America. Again, rebuttable doesn't always mean, but very likely you could drill down on that. It's built by this. But just it is a product and somebody commercially has bought that product. It is very nonplausible that you would have the best software product in the world and you've never sold it commercially because you don't have time to make your company be worth $50 billion. It is not a product. Okay? So that means you will never scale it. And by the way, there's a lot there because you want the world's best engineers to work on something, the ones that can do things no one else can tell them.

Joe Lonsdale: But the insiders are all doing, like, cost plus contracts, right? They're still doing that.

Alex Karp: If you want to reform institution, you've got to start by reforming parts of it. So I would just say, starting now, 1% has to go for this. 1% of $900 billion is roughly the budget, and then every six months, it goes up by a percent. Or you could even say every year, because in the end and by the way, that would change the number of people selling to the DoD, because even now, I'm sure there are, like, a lot more people.

Joe Lonsdale: Early on, when we were trying to sell the government, the services things would capture the vast majority of the revenue, and they'd toss us like, a really tiny piece, and that was the only way you get in. And I was talking to people today, and obviously people in the government have realized that we work. Some of the services companies just seem extremely jealous of palantir. It's like we thought they were dumb, and apparently they think we're bad or something like that. I'm wondering if it's because they're jealous.

Alex Karp: I think there's some huge jealousy with I think I shouldn't mention the names of these companies, but these big companies that would do all the ontologies and get paid tens of millions of dollars, something useless. This seems like an extreme jealousy or something from the outsiders.

Alex Karp: You're a warrior for justice, and I am, in a different way, a fighter for western values. If you want to reform these institutions, the best thing is to not engage in why they may like us, we may not like them, but to say it is clearly in the best interest for the country that produces this unique thing. By the way, the thing that is the most valuable thing in the world that no other country is producing, we.

Joe Lonsdale: Should be using that in the DoD.

Alex Karp: That there should just be a minimal part of the budget. And it's minimal. It's 1%, by the way. The other thing we need to do is every single thing that is not being present is being presented to people at any level that is not actually running on real data. There should be a flag. This is a video. Because what you'll see across large institutions, not just the DoD, but commercial institutions, people get presented things that are literally videos. It's like well maybe someday they'll work. But purely intuitively it's very hard. It does not correspond to anything that people believe because you would think 5000 people being paid a billion dollars would produce something more valuable than five people working for equity. Just purely intuitively. But it's not true.

Joe Lonsdale: It used to be true with like maybe tanks or something but it's not.

Alex Karp: True with well one of the things, one of our advantages in software is that the hardware cultures are really struggling with software because these things are true for tanks and they're true for other things and big metal things. They're not true for software. But again it's also true that software is the most important asset and our adversaries are going to be much better at building these big metal things than they are at software. But to this point the way to reform the system is say a certain percentage that's small must go to these things. I love it. That's a great and then the second thing is just as an addendum when you show off if the products are working the financing should be triggered at some point was like oh it worked.

Joe Lonsdale: Pay for it for working, not pay.

Alex Karp: For paying what works, there should just be a minor thing in every bill. Oh by the way, we are going to flag every time something is a video and not working. So that every senior leader and by the way every institution, not just every institution in the world should have a mandate. It's okay to do things that are notionalized or things you're going to build in the future. That's part of innovation. You have to be honest about. But you have to force honesty on your institution because otherwise again to the beginning of this people will buy from the people that they like, that are like them and sometimes that's valuable. But in software, a lot of times you're buying something from the freak show and it works. And the future of the west depends on buying things from people that are sometimes not always outside the norm or unlikable to you, are not going to conform to your thing.

Joe Lonsdale: Calling us unlikable.

Alex Karp: Alex, I like myself, I'm just saying.

Joe Lonsdale: Otherwise, the insiders always win every time.

Alex Karp: Look, reform won't work by blowing up the institution. You've got to say we're going to pick here and then the institution, especially in America, will adapt because once you see a tiny sliver is going to this thing, it's working. People are like, "It not only works, it's the best in the world." This thing is scaring our enemies. Americans right now are very motivated inside the DoD to scare our enemies. And I'll tell you what scares our enemies using software that is actually a product that's almost invariably built here and that someone on this planet has actually paid for commercially.

Joe Lonsdale: So, speaking of that, let's move on to AI because this is obviously tied into this. You said recently, Alex, that some tech leaders are calling for an AI pause because they don't have a product ready. How much of AI right now is innovation in theater? What's real and what's hype? What should we be paying attention to?

Alex Karp: Well, we have to avoid dampening AI and its utilization by people who don't have a product. Luckily for us in this country, it's a much smaller deal than say, in Europe, where they're discussing how the data is used, where it flows, if the algorithm is discriminatory. Some of it is just theatrical because there aren't many companies providing AI in the form of advanced machine learning or large language models.

We have a slight bias here at Palantir. We build software that allows you to process large language models, rebuild their output into what we call an agent, which is a safe algorithm you can run across your enterprise. It interacts with large language models so the algorithm understands your enterprise, but you don't outsource the knowledge of your enterprise to the large language model. I believe this will be the future. Implemented correctly, large language models and AI provide a crazy advantage over those without them.

You could take very simple examples of margins, business efficiency, resource allocation, rebuilding your enterprise so the most efficient parts are in the right place at the right time. Figuring out asset and resource allocation is one of the most important uses of AI for America. We're seeing it in manufacturing where algorithms and AI allow you to control production so you get an American workforce with the advantages of being in the US, exactly like you would have in Japan or Taiwan. That is not theater. You're going to watch America's GDP compared to the world.

Joe Lonsdale: This is what I wanted to ask about. It seems AI could affect productivity, the input to GDP, in areas like healthcare, education, and more. If we disagree on politics, we can agree those areas are important for our country. Productivity there has stagnated for decades. Will AI finally help?

Alex Karp: We have a few education clients. On healthcare, pharmaceuticals, hospitals, we had basically no clients last year. Now we power allocation between 13 to 14% of all hospital bed allocation in the country.

Joe Lonsdale: Wow.

Alex Karp: And it's simply because the people in these industries know that they need instruments to increase efficiency and productivity. Part of the reason why it was hard to do this is that their use case is very difficult because they have to increase productivity with low margins under harsh conditions, meaning they can get sued. They do get sued. There are privacy protections that are the most stringent in the world. There are issues around resource allocation that involve class and race, which means those issues where they need to track what goes into the algorithm, how the algorithm is used, and how that algorithm then leads back to efficiency without getting into hot water, either morally, institutionally or legally. Palantir is ideal for that, but again, it's precisely because one of the amazing things in business is that no one believes Palantir's deep understanding of the technical issues involved in data protection and civil liberties generated our product. If you're dealing with this use case, there's only one engine you can use because we've spent 20 years thinking and building products for this. Interestingly, the kinds of things you use to identify adversaries with software also presuppose a data protection civil liberties bias. It's not just find the enemy, it's find the enemy. Is this the stupid general we want to keep alive, or is this the general that's smart?

Joe Lonsdale: Okay, speaking of that, we got to talk about Ukraine, then speaking of stupid generals to keep alive. That's great. Let's change gears to that. You were the first Western CEO to visit Zelensky in Ukraine. I thought that was a very bold thing to do. It was very cool. You went over there very quickly. Can you paint a picture of Ukraine's capabilities pre and post Palantir in the Ukraine stuff?

Alex Karp: I have to be super general, both because every government first of all, and again, this is what I should say, but it also is true. The Ukrainians are courageous in a way that it's almost unfathomable when you're sitting here. Like, you meet people who are going into battle, the Ukrainian people. And I realize there's a lot of debate in our country, and I welcome debate as, like, kind of very much on the side of the First Amendment and kind of all the way up to it being as expansive as it can be.

Joe Lonsdale: We used to have this debate inside of Palantir, by the way, early on, on a lot of issues. Right. So that's something it's always part of the culture.

Alex Karp: The right to express yourself, including things that will upset other people, is core to a functioning democracy. And the fact that you're being offended shows you're living in a democracy. I try to empathize with the other side of that issue because I think you have to steal, man, all these arguments, but in the end, the rights you give up will be used against you. And that's something that, you know, it does place a high burden on people who have to listen to speech that they find offensive. And I engage all the way to the margin and engage with people whose speech I find offensive, and I talk to all sorts of people in all sorts of small rooms where, by the way, there's a bobcat behind you. A really nice you guys should get that on film. That is nuts.

Joe Lonsdale: In Ukraine, you went to these.

Alex Karp: Usually when I've spent 20 years going to important institutions of all kinds, and there is often, but not always, a moment where you're in a small room with someone and they're like, yeah, but the truth is I don't agree with so and so. I don't believe I think my leader is beyond or something. Yeah, there was none of that in Ukraine. The amount of kind of deep patriotism. And again, I'm talking about all sorts of people. I like talking to people, quite frankly, who are unimportant.

Joe Lonsdale: This is not because they're afraid of expressing a different viewpoint.

Alex Karp: The Ukrainians, it is not a place where people are particularly afraid of expressing any viewpoint. You are going to hear a lot of free speech. They are fighting because they believe. And you can debate a lot of things, and there's a healthy debate about the Ukraine war in this country. But I can tell you from my experience on the ground, these people are fighting and they are willing to fight. And at a general level, without going into details, some of the places that have used our product have been bombed, people have died, and the same day those people are back at work. Same day. And they're also very technical at a high level.

Joe Lonsdale: What's Palantir able to do that other systems are not able to?

Alex Karp: Palantir is useful for Ukraine. Some of it - it's public, is obviously documenting war crimes, but war crimes are hard to document because of data protection issues, to take it to court, where the evidence comes from, who's touched it, chain of custody issues. So that's kind of what we're doing. Understanding who's doing what. On the other side is a classic use case for Palantir Foundry. So how is the adversary? As a matter of theory, you can just go through the products. So there's kind of the civilian prosecution there's in the Palantir Foundry constellation. There's an ability to understand what the adversary is doing kind of with their operatives, who's doing what. How is it doing it with segmented data access, which is crazy important in the warm up. It's funny that people don't understand. You need segmented or high data protection because the knowledge that these people have is so valuable. Meaning, people will die if it gets out that you have to control who sees what. Gaia allows you on the battlefield to be able to see where in real time what plan out your battle. Attack. Retreat. Understand the adversary. And then the most powerful use of our product currently, again of one of our products, is being able to identify an adversary over a large line mass using AI. And that, obviously, it's been reported, has led to a different level of ability to acquire the adversary's position. And there are so many lessons that we need to learn in this country, and we'll learn, but one of the obvious lessons is we are in a software world. It was the case that this was the ramblings of a couple of people 20 years ago that people didn't think should have been in this business, including you and me and our other co founders and early employees. It's just a banality. And the other thing is our adversaries now are awake. China and Russia realize this. They didn't realize it before, and that is going to change where they invest their money, and we'll give them ability to catch up if we're not on top of this.

Patrick Collison: This was a thesis 20 years ago. This would clearly become by far the most important part of the defense world, which it seems to have become now. It's a little scary that they're aware of it too, but it's nice to have a lead for now. Zooming out a little bit. I want to ask about Silicon Valley before we end. You said our problem in the west is not technological, it's organizational. And can you expand on that? Is that true of government and technology? How do you think about that?

Joe Lonsdale: Again, we build these incredibly valuable things. We build them in a way no one else does, with small groups of exactly the right people managed aggressively against a goal that could take years, where we split the proceeds equitably across the people who build it and where people can be involved from the outside. We have a general culture that embraces, extends, and tries to insert that into institutions with all its flaws. And there are many, and we've lived under those flaws. That is unlike any other culture in the world. But we could obviously become much more efficient. And then we are also very misaligned on some of these issues. We have a significant number of people in the west who believe if we disarmed, the world would be a better place. This is a belief structure that, in my view, is theological in the sense the assumptions can never be problematized because there's no evidence this is true ever in the history of humanity. But it does conform to the way we would like the world to be. I would like the world to be there. It also conforms to a certain derivative of our philosophical and religious systems. It also happens to be completely untrue.

Those of us who want to have believed that you will get a better world, not a perfect world, but a better world, by making Western institutions, especially the United States of America, stronger, especially on the battlefield, we confront an ideological system that will never agree with us. They confront a reality that will never conform to their views. And we as a culture have to navigate that. Now, I do think Russia and China's actions in the last five years have made it much harder. And even in Silicon Valley, it's woken up everyone.

Joe Lonsdale: They actually all want to do defense with us now. This is very funny because even when I was starting a new defense thing 7-8 years ago, people thought you're kind of quirky. I thought you weren't doing that anymore after Palantir. Like, why would you do defense? And they still didn't get it. But I think now people actually get it a little bit.

Alex Karp: Well, one of the ways that our lives have changed is 20 years ago, this was like from Mars freak show, all these views. The west must defend itself. The people producing software must be aligned with our government. We should not allow institutions, software institutions, to sell to our adversaries, but not sell to the US government. The world would become disjointed and more violent simultaneously. Startups would rise and become very large in terms of market captain and footprint. And that these software companies, Palantir and I hope others someday, will change the course of history, as you've seen, in ways that no one believes or some ways that are classified, but simultaneously, and that you can get people to believe by seeing the success and the impact. And last not least, our adversaries will completely act up because without them acting up, I still think people would not believe us. We've come closer to the norm. And so now all these things are like, you walk around and people are I don't think everyone's saying believes it, but they are beginning, and that's kind of very gratifying. And it's probably good that they've forgotten that they all called us assholes 20 years ago.

Joe Lonsdale: It was really interesting to live knowing, obviously Palantir had helped stop some really major attacks that were not public, and people just thought we were weird and didn't appreciate it. And so you're finally getting some public appreciation, I guess, after maybe not for everything we've done, but for some of the new.

Alex Karp: Well, a lot of the things we've done can never be publicized. And I do in some ways, wish they were more well known, both for Palantirians and because these institutions that I revere, like our military institutions and others, would get even more support if people understood the impact they were having. And clandestine services, positive impact. Now there are reasons they can't talk about these things and probably shouldn't. It has changed from we are like essentially the x men in a very deep cave and then being shuffled back into the cave and told. But there's still a lot of that. I always get in trouble for saying the obvious fact that without Palantir, europe would be completely different politically, and this is just a fact.

Joe Lonsdale: I think the US might be as well. We probably shouldn't talk too much about this because you don't see it as big of a problem. But I think a lot of the battles we're having there are cultural wars right now over things might not be the battles we'd be having if there'd been multiple successful attacks. Right. I think the culture could have transformed in a very different direction.

Alex Karp: Yes, the Americas. There's a lot that has gone into some of the luxuries we have, including certain dialogues that are clearly luxury products.

Joe Lonsdale: So, Alex, we started American Optimist to push back against cynicism and pessimism. You've seen a lot of parts of our country. What innovations and breakthroughs make you most excited about the next 20 years? What gives you hope for the next few decades?

Alex Karp: America is by far the best at enterprise software. You saw this before AI and large language models. I think at this point, it's kind of hard to ignore. We continue to attract and retain the best talent in the world. We have cultural and cultural systems for managing that talent and turning that into productive companies like some of the ones you support in finance, and I would say most notably Palantir. And then there's a way in which our adversaries, who are really focused on hurting us, galvanize and bring the best out of America and allow us, in many cases, to look past divisions that are quite obviously less important than us unifying to outmaneuver and be stronger than our adversaries and leave them so scared that they act up less and quiver at the idea that rule of law, free speech, protecting property - in general respect of humans - as a basic human right.

Joe Lonsdale: Awesome. I think that's a great note to end it on. Thanks, Alex.

Alex Karp: Thank you.