>> i'm driving a personal warship and we are all about to die.

>> this is a mark 5 special operations craft i purchased from the navy. >> are you sure i'm not going to flip the boat? >> you are fine. >> it was designed for navy seal extraction missions. it is really fast and it is a lot of fun. >> while it may be part of the old navy, palmer luckey is trying to bring speed back to the pentagon. >> some of the united states technology is very bad and extremely expensive and not necessarily adapted to the types of conflicts we will see in the future. they have a lot of investment in legacy systems that o not necessarily have china quaking in their boots. >> he is betting his new age defense company can take a slice of the pentagon budget and reinvent how they do business from the outside in.

that is if they can beat the incumbents and convince the top brass about a billionaire founder sporting a hawaiian shirt. >> you are not the typical silicon founder nor talking like a c.e.o. how does that play? >> it is because i just haven't changed. it was easy that conflict is over. we are living at the end of history. this idea of putting our best brains toward things that can kill people is a waste of talent and unethical and that's not what anyone is saying any more. >> the war in ukraine and china's rapid militarization have created fears that the u.s. is not modernizing fast enough. the military has a long history with the tech industry.

post world war ii billions in defense funding transformed california into aerospace and technology boom towns. the first company to manufacture microchips that guided missiles, satellites, was funded by the pentagon. founders of that company pioneered modern day venture capital. today there's a new generation trying to bring back america's past proven by the unusual vehicles. >> are you sure it still works? >> it should.

this is a 1967 disneyland utopia designed by walt disney and it is the only complete one outside of the park. original gearboxes and wheels, the real deal. when i got it -- uh-oh. >> technical difficulties. >> got a screwdriver? look at that. got to get moving. there we go. >> are you sure this is street legal? >> we are on a street, aren't we? [laughter] >> you grew up in long beach,

not far from here? >> that's right, close to the port. it was a place with a lot of car culture and aerospace culture and defense activity. i grew up watching the marine corps practice offshore, watching navy ships do exercises. southern california, unlike a lot of places, is a place where almost everybody knows someone who served in the military or has a family that served in the military. when that's the case, because of the density of the population, you don't have the crazy political ideology like in other areas. but when i started anduril it was different. defense was not cool and not the hottest thing.

>> before launching anduril he worked on virtual reality head sets in his parents' garage. by 18 he caught the worlds's attention including mark zuckerberg. zuckerberg bought the company for $2 billion. luckey was later ousted. >> i think people think you got kicked out of silicon valley. >> that is because i made a $9,000 political donation. it is for the person to be president that year. >> he means this guy. disputes he was fired for political values but it was a rift so he turned attention to defense and set up shop in california. how did you get interested in defense technology?

>> i was able to work as a lab technician on an army project calle brave mind teaching veterans of ptsd before i started oculus. i heard over and over that it was broken and they were being punished for doing the right thing. they made more money when they were over budgets and that got me worried in a world for the first time in american history tech companies were not working with d.o.d. >> the relationship between silicon valley and washington splintered after the cold war. >> everybody worked on capitol hill and now everyone works for an internet startup.

>> they consolidated around things to supply hardware and software. it is a large complex group with a strict chain of command that filters ideas through layers of bureaucracy. for tech startups looking to get a piece of the action, welcome to the valley of death. the time it takes to go from prototype to adoption puts most startups in the defense markets grave yards. it seemed impossible to compete until spacex saying it unfavorably favored the incumbents. >> the two that broke through 35 years. it reflects the reality where there is not what we used to have as a country turning small companies into large scale providers of weapons, we lost

that and the only way to bypass that is already have made billions somewhere else. as a country we need to do better. >> so, this is the old "l.a. times" printing plants? >> it was. i started oculus in orange county and i could hire people. this is a place where you can build great companies that draw from all of america, not just in that one tight isolated bubble. >> is it hard to poach people from big tech? >> no, the way you do it is tell them that their career is meaningless and they are wasting their lives on something that doesn't matter.

when you shock them, what are you doing with your life? there's big problems and you are part of solving them. that is the part of the people leaving big tech people. ♪

>> anduril has been cleared to come here is to build weapons and surveillance systems. they started with this tall security tower on borders in the u.s. and abroad launched in the early days of the trump presidency. they have expanded it to autonomous robots that are cheaper to build with menacing names. >> this is a half scale model of fury which is a fighter jet we are building. this is wisp. it is scanning infrared imagery able to detect characteristics by building a sphere that integrates.

this is a warfare system that can jam and hack and make sure you are able to talk and the other isn't. >> you are trying to run a defense tech company like a start-up. how does that compare to lockheed martin? >> the contractor is paid for time, materials and a fixed percentage of profit. that incentivizes you to come up with expensive solutions and drag it out as long as you can. we are the opposite because we are a defense products company that makes things that work and sell them rather than getting paid to do work. it means when we do something faster it helps our profit margins. >> you are building products that the government does not know it needs yet, right? >> very often. it is rare we work on something where there is widespread belief

what we are doing is the right solution. often we build things they wrote off. there was skepticism to applying artificial intelligence to defense. chatgpt was helpful because it helped advance people that ai can do things they didn't believe computers could do. >> are we getting to a point where battles could be fought by ai and counter ai? >> we can't have have systems without human direction but will we see dogfights between ai fighter jets without people? yes. in ukraine there's been a variety of engagements with unmanned systems destroying other unmanned systems. >> it seems ukraine has marked a shift. >> what is happening in ukraine is fascinating because they can't afford to treat warfare as the thing is a think tank or debated in white papers.

they have to win today. so a lot of barriers to trying new ideas are lifted, so you see the proliferation of small unmanned systems and things that were not nearly mature enough to be deployed by the united states but they are willing to deploy them because they know they can't win doing things the old way. >> the old way meant having the biggest most expensive weapon on the battlefields. now it is having a swarm of commercial technology available quickly and cheaply. to that end the pentagon announced the replicator program to fast track drones. startups who historically shunned military work declared it is time to get in on the action.

>> the old school way of working and developing technology doesn't work. you have to work with the private sector to bring new technology in. >> big tech firms have had more long-term success. but there's been friction in tech from engineers who don't want anything to do with the military. some have pushed back on working with the government and military. do you see where they are coming from? >> i think it is an emotional thing. they came to a company to work on consumer tech. they were not told it would be used for potential violence and they don't like that. i empathize with that because it feels like a bait and switch. >> critics see the technology where it could be misused on american citizens. are they right to worry? >> yes, anything can be misused. >> the heart of the technology

is not hardware but software. engineers here have developed a proprietary a.i. driven system that acts like an intelligent control system for hardware. >> there's a saying that hardware is hard. the united states used to be able to build things that would fly twice as fast and be twice as fast for a decade. that is gone. hardware advantages will be quickly copied by adversaries. so using software to make decisions 10 times as fast is a capability, i don't think our adversaries are close to copying. >> the pentagon has been developing an ai system to analyze images from military drones and suggest targets. google initially won this contract but backed out after users protested.

others are among main contributors. >> at the end of the day you have to be correct and that is one of the toughest things my organizations have encountered is distinguishing enemy from non-enemy and it is impressive. >> concern that it could deepen war? >> i super disagree. i think it will put all the cards on the table for everyone. my hope is that you will have dictators that make better decisions because they have better information. use putin as an example. i don't think he would have launched this invasion in ukraine if he had understood what was going to happen. remember, they believed like a

three-day operation, it would be over quickly. if he had a better understanding of what he had and they had he probably wouldn't have made the play. >> there are a lots of thorny ethical questions. we are talking about self-guided bombs and killer robots. who is liable when a human is not in the loop? >> this existence of an algorithm can't replace human responsibilities for deploying the system. it has to be a person who deeply understands the limitations and will be held to account when it goes wrong. and it won't be perfect. there will be people killed by ai who should not have been killed. that is a certainty if ai becomes a core part of we fight wars. people need to remain accountable to lead to fewer casualties.

i don't want ai to do these things but sometimes the existing technologies are much worse. >> china and taiwan, how does this play out? >> everything that anduril is working on is oriented toward that fight. right now china believes they can take taiwan. they believe that the united states is some combination of won't stop them, isn't willing to stop them. won't win if they try, they believe taiwan is in a similar position. we have to change their minds. i will probably eat these words but if china invades taiwan i will feel like we failed in our mission. >> you actually spent a lot of time in china working on oculus head sets. what do you know about their capability in ai? >> that is where we did our manufacturing.

i understand how dependent our company is on chinese manufacturing, engineering, chinese supply chains, materials. it is really extraordinary how they pulled themselves up and we gave them the blueprints and tech and shipped it. i'm one of the guys who did it. >> do you worry china is outpacing the u.s. on technological innovation? could the u.s. military lose its edge to china? >> depending on who you ask, china has between 50 times and 300 times military ship building capacity of the united states. it is a huge problem if you are fighting a war where you lose your ships and it takes you decades to rebuild. they lose them and rebuild the same year.

this is inarguably an area china has outpaced the united states. they have not outpaced us everywhere, but for a fight in the pacific they are kicking our ass and the united states can't win by following the same strategy. we can't build enough shipyards and train welders. so we have to win with our brains. >> anduril and others are bit players in the world of military suppliers. venture capitalists plowed in $100 million but there are only a few contracts. >> we have done things i'm proud of, but i'm aware of the fact that we are not a profitable business. we are living on borrowed time and so i -- it is hard to feel like i have made it when i know if we can raise money to buy a real big office and fill it full

of people the question is are they building the right things. >> what else do you have in your ♪

>> what else do you have in your personal arsenal? >> i have a bunch. blackhawk, humvee. >> how many helicopters? >> i used to have seven but i only have six now.

>> i hear you have a vault with everything collected. >> i collect u.s. air force nuclear missile bases so i put it 200 feet underground. >> where is that? >> i can't tell you. >> you started anduril in 2017 and you have lived in silicon valley in the era of easy money. what do you think of the frenzy? >> there's a lots of companies that never should have been funded. it went to paying people to do things that were a waste of time. i know lots of young founders who were working on crypto art nonsense and a fifth delivery or 10th delivery app and the money is harder to come by. they are working on energy and national security and transportation, and i see people working on real problems because the market forced them to.

that is a good thing. >> so it is time to build? >> it is time to build. >> the war in ukraine has been two years now. how are we going to look back on it? >> i think we will look back as one of the best examples of hubris of the modern era, thinking we lived at the end of conflict, and manpower is irrelevant, and doesn't mean anything at all to dictators lake putin or xi who will be the legacy of this fight. >> is the u.s. government working fast enough to foster the agility we need to survive or win global conflict? >> it depends on the fights. hopefully we have enough time. we might not. if china moves on taiwan and

other countries in the next 24 months, we are in trouble. if it takes long enough the military has recognized the problem but like you're sharing this boat. when you turn, how long did if take to turn? the u.s. military is a same way. it takes a long time to move even once you applied the inputs. that is the phase we are in. the government has realized the problem and we are waiting for the system to adjust. ♪