Joe Lonsdale argues AI will spark a productivity revolution, citing 7 million unfilled U.S. vocational jobs and Palantir's role in detecting Medicare fraud while criticizing left-wing "third worldism." He advocates for Kevin Warsh as Fed chairman to measure growth, supports Joby Aviation and the Boring Company, and insists on outcome-based incentives over free resources for homelessness. Highlighting Altos Labs and peptide investments outpacing AI revenue, Lonsdale urges young investors to prioritize learning AI over capital, concluding that honor must return to public life despite political divisions. [Automatically generated summary]
It's obvious, thanks to what's happening in AI, both on the new therapies to cure diseases and on how you run healthcare administration and services, we can make healthcare so much better and so much cheaper, like so much cheaper, like less than half cost, where everyone does better.
But what's the most money in government?
It's healthcare entitlements, right?
That's by far the most money in government.
So, of course, they start hooking up some of like, you know, Medicare, Medicaid to the NGOs.
And then I think we have to make Watch all the data at the NGOs really carefully with using Sec Treasury.
See the data at CMS for what they said they were supposed to be doing.
You're going to find tons of fraud there.
All this stuff that would have been like the 2030s, 2040s, 2050s, it's all being accelerated into the next few years.
We also have a policy institute in 20 states, the Cicero Institute.
But yes, those, you know, and this week it was very big for Palantir.
You saw yesterday, we can think, you know, I don't know if you saw the net income of the company this quarter is higher than the revenue was a year ago.
So it's growing so fast that it actually, it's like net income, gap net income was higher than revenue.
Yeah, and it does bother me that the right has this weird third worldism that's kind of like coming up on its side, too, because we know the left is that way, but it's like partially encroaching into what should be like the pro liberty positive side.
Listen, like what is working?
Productivity growth is just really getting going.
You're seeing it very dramatically in smaller areas that are scaling quickly.
So, you know, in my view, Kevin Warsh is going to be the new chairman of the Federal Reserve.
I'm very excited about it.
He's a friend.
And he's going to spend a lot of the time at the bank trying to quantify these things, which I think is very important for us to quantify is that productivity is finally going way up again, which, by the way, that's the only way we all get wealthier is you do more with less, right?
It's applying better ways of doing things, which, I think we're in the early innings, very clearly, of an industrial revolution.
We've been through these before.
We've seen what they do.
It's just massively good for the average person.
Like, you can troll people and try to pretend that they're bad.
I think our schools will still teach that robber barons were evil and that was an evil period.
But if you look like 1870 to 1900, look at the median American working class person, they're more than twice as wealthy in that one generation, twice as wealthy in real terms.
And this is probably going to happen even faster this time.
And we're seeing that.
We're seeing lots of new job creation.
We're seeing lots of growth.
And I think it's just going to accelerate the next couple of years.
So, how do we break that paradigm or the mentality around that?
That the robber barons were evil, even though, as you pointed out, they were giving all these people jobs and then within a generation, their lives changed.
And that there's going to be aversion.
I get why I can do all the dystopian things.
We did it last time here.
I can do all of the horrible ways that tech and AI and the future can go awry.
I'm just not interested in it right now.
What I'm interested in is in the positives, but that's what we're going to have to work for.
So if we're painting that, if we're trying to paint that positive vision, the easy version, I guess, on the other side is oh, but robots will take our jobs.
They will do all of our tasks and there will be no meaning left.
You hear a lot of this, mostly coming from the left, but A little bit from the right.
So, but what, what in terms of the easy version is like, okay, but the Amazon delivery guy is going to be replaced by a robot or a drone and that, you know, you're going to go to McDonald's and instead of paying someone $15 an hour, it'll just be a robot, which that's already happening with iPads and that kind of stuff.
Like, so how do you, how do you refute stuff that people are going to kind of see first, right?
So, what do you think the relationship between the people that want to lean into all of this and the technologists behind it should be with the government right now?
I think government should be smaller in general because whenever you give government power, it gets captured.
Now, there's exceptions.
We need defense to be functional.
If you're going through an industrial revolution and it completely changes what's possible in defense, then we have to be investing a lot in that right now to stay ahead of the bad guys because there are bad guys in the world.
This is the top.
Thing about being a libertarian if you're like very pro liberty, right?
I don't know if I'm a libertarian, but I'm very pro liberty, yes.
Uh, and I want government to be small, but I also want to like crush the Islamists and the commies, which means we have to invest in it.
So, you need some relationship to build and invest, which we're obviously doing on the defense side.
You need some relationship to teach the FDA, for example, how to use AI to approve all the new therapies that are coming from this industrial revolution.
Uh, you need some relationship to right now, Palantir is helping them find fraud across the board, working with SBA, with Kelly Leffler, and with USDA, with Secretary Rollins, and all these really talented leaders.
And we're finding tons of fraud, and that's important for us to help them.
But in general, I'd say you want the government to be smaller and not to be involved in most of these things.
So, since you brought up Palantir there, so one of the things that you said to me about Palantir last time was that in some ways the success of what Palantir and companies like it accomplishes is that people think we don't need it because there are things that you guys are doing to stop certain levels of terror and things like that, and then we don't hear about it.
So, everyone's like, oh, everything's fine.
However, under the hood, a whole bunch of stuff happened.
It destroyed all the competitors to PayPal, basically, because if you opened it up enough, That anyone could send money and steal from it really easily, then it wouldn't work.
And if you tried to ask them for enough information, no one wanted to use it.
So it was this really hard problem and figured out how to build all these investigative tools at PayPal.
I was an intern there.
I get no credit for PayPal, but I learned from this area.
And then we partnered with my roommate Stefan, who I'm seeing down here in Florida, and Peter Thiel, and I brought Alex, and we built this thing and we applied it after 9 11 to the government.
And the idea was how do we build platforms that solve the really hard problems to allow you to use all the data the government gathers?
It was almost $40 billion a year being spent to gather data then, but they could.
Couldn't use the data.
They weren't allowed to see things.
If they'd had Palantir, it would have been very easy to stop 9 11.
That was the whole point.
And then, and then the goal is to build it to catch all the terrorists and the threats.
And you're also just allowing people who might not have a computer science degree themselves, who might work for the, one of the parts of the government.
There's like a million analysts in the government in different parts of the CIA and NCTC and FBI and NSA and, and the DIA, right?
There's always places where people's job is to look at data and stop the bad guys.
And they didn't have the right tools.
They didn't have the right permissions.
So how do you build the best possible technology for them to do that?
And it turns out we had to solve a lot of very hard technical problems to do that.
And then a lot of the problems we solved that kind of built these ontologies and like made the information work together, it actually made it so you can apply AI very easily on top of the data.
So Palantir was in a really strong position.
You could say it's lucky as well, had a lot of talent, but it was lucky that when AI came along, it was able to then take that and help companies, help governments use this new AI stuff.
How do you, I asked Peter the same thing when he sat in the chair, but how do you balance your libertarian ish ideas with that you're working with the government when it comes to data and, you know, people's private?
So I think a lot of people don't realize that Palantir.
Was founded as a civil libertarian company, right?
So Palantir was replacing systems that were just taking all the data and letting anyone access whatever they wanted.
So if you say without Palantir, what was there before us, it was these systems without track, they weren't tracking things, didn't have audit trails, couldn't watch the watchers, didn't have really clear rules about who's allowed to see what, weren't enforcing the law.
And Palantir was a way to bring everything in a way to enforce the law and to make sure you're only allowed to see what you're allowed to see.
And, you know, the law changes, Palantir changes what you could see.
But that was, you see what I'm saying?
Like more sophisticated technology actually enforced.
Forces civil liberties.
People don't get this.
We actually had a civil liberties group in the company that we launched in like 2006, 2007.
And we were explaining, like, here's how we're going to make it so you can catch the bad guys and follow the law and stop letting people break the law.
The way the company's set up is it has full audit trails for who did what.
And the point is that you have to have these things that can't be deleted that are kept somewhere that other senior people can see to watch what people were doing, right?
So the whole point is.
It makes it much, much easier to see what everyone in the CIA and you're part of the CIA that you have access to is doing if you're the leader, and then for the leaders to then see that.
So, I mean, there's no perfect solution in the world, but when technology is smarter and better and more innovative, it actually does help secure these things.
As an analogy, for example, in the regulatory state, technology helps get rid of a lot of really dumb stuff.
It makes it more transparent, it makes it harder for regulators to do corrupt things, right?
So, there's all these ways in which technology is just like making a more efficient solution for what is enforcing civil liberties.
And, you know, Palantir, I think one thing that it's public that Palantir is doing is this is like Palantir's run a lot of the targeting systems for the U.S. government for a very long time.
And it's helping deploy AI through there.
So I think it's public that Anthropic was deployed via Palantir.
Palantir has all the frameworks and.
All the tools and all the ontology and stuff.
And then the LLM underneath powering it and whatnot was anthropic.
And that combination was able to help people iterate and figure out what's going on.
So just imagine, I can't give you the exact, but imagine like Israel hacked all of the cameras to watch what's going on in like Tehran or something.
And then they also broke into maybe companies doing logistics and they have all the data for what shipped where.
And maybe they have other sources of data as well to kind of give a sense of who people are and what they're doing.
You can bring all of that data in, use Palantir's ontology.
Use anthropic and then help figure out oh, wait a second.
Based on everything going here, this is clearly a missile storage facility that's 300 miles outside of Tehran.
Wait a second.
Based on this, this is probably where these bad guys are all.
People in the West just don't understand how bad these guys are.
They just executed another guy who's like a father of twins for owning a Starlink, which I feel very guilty about because a lot of my friends and I sponsored trying to give Starlinks to help the counter revolution movement inside of there.
And they're just doing horrible things.
But yes, so Palantir is public, it was used to take all the data and help.
Now, it's not like Palantir's making the final decision.
There's people making decisions.
I get all these trolls online, like, you killed a girl's school.
Like, no, Palantir and Anthropic together helped get all the data.
Now, there might have been some case where there was a mistake made, where there was a fake radar.
And it's with the Palestinian sort of thing where they get you to attack in a sense, which is terrible.
Is you get all the data together and you figure out what's going on.
So, you know, I think FDA, There's lots of SNAP benefits they give out, and there's all sorts of things they're working with.
And then some of the data might go through NGOs, and then the NGO data might be in Treasury.
So you'd need to have somebody that hooks up and talks to IRS and Treasury about what the NGOs are reporting, and then see what the SNAP data says you're supposed to be giving based on what the NGOs are doing, and then see if it matches and see if it's legit or not.
One I'm really excited about right now is hopefully doing that with CMS with Medicaid, because a lot of the Democrats hooked up all these NGOs to get the most money in the country in healthcare entitlements.
And so they hooked up hundreds of 100 billion plus to their NGOs, to their friends, right?
We saw this.
This is public.
The California Democratic leaders got $20 billion for their green NGOs.
You know, Georgia, Stacey Abrams got what, $2 billion to give out free appliances to inner city people?
This is the whole thing's a joke, right?
It's all just like money laundering to their friends.
And so, and they got addicted to this money from the Obama administration.
That's when they first started doing this.
And so now you say, so you're addicted to the money.
They want as much as possible.
What's the most money in government?
It's healthcare entitlements, right?
That's by far the most money in government.
So, of course, they started hooking up some of like, you know, Medicare, Medicaid to the NGOs.
I think we have to watch all the data at the NGOs really carefully with using Treasury.
See the data at CMS for what they said they were supposed to be doing.
So let's say we get a more peaceful world and we get some of the fraud out, and via AI, the mundane tasks that people don't want to do so often are taken care of.
And they can still find some dignity in work.
There's still something they're doing.
But we've taken care of most of those things, and we're basically feeling safe, and we have a more functional government.
What do you think that actually looks like as a society?
It's almost hard to envision if things really were better.
The Trump administration approved 12 states for this year.
We're going to be flying people around, testing it.
So, it's real.
It's happening.
It's great.
It's going forward.
These are some of the best airplane designers in the world because this company is so exciting.
And, you know, Joby and everyone's just a whiz.
So, people there used to do things with.
Aerospace that took three months to redo an airplane design.
Now, with AI, you're doing it in an afternoon.
So, I think what a lot of people don't realize.
So, this company, for example, already has flown and tested hydrogen fuel cell powered flight, which is like six times more efficient per weight overall, if you look at the conversion and the lightness, which is perfectly safe.
And so, this is just a much better version of fuel we're going to use for airplanes.
And then they've already started testing with way more efficient planes.
So, stepping back, just all this stuff that would have been like the 2030s, 2040s, 2050s.
It's all being accelerated into the next few years.
It's like things are just going to start growing again.
Like for since 1970s, our planes haven't gotten that much better.
It's been annoying.
We've kind of been, we've kind of been stuck in this like lawyer dominated, like kind of like just sclerotic kind of civilization that's like slowly crumbling and we can't build things.
I mean, it's going to, I think it, I think it just breaks the woke right.
It breaks the law of the left because people are just going to be part of a civilization that's working and they're going to be positive because it's just going to be growing.
I mean, you sort of reference this, but that the cyclical thing is just It's baked into human society, sort of, that it gets good and it gets bad and it gets good and it gets bad.
Do you think there's like any way around that?
Can you really run one that goes for a longer period of time?
I think the fiat currency thing in the early 70s is bad.
There's something about how we empowered lawyers that's not necessarily great.
There's just all this stuff that seemed to happen in the early 70s that really made the returns go to capital instead of to labor, which is not what you want.
I mean, I have a lot of capital.
I like the capital against returns.
I think it screws up our culture and our society when labor.
It's like, I think when you print too much money, right, it's not fair to labor in terms of that.
So I think there's all these things we did that were just kind of broke and made it more bureaucratic starting in the 70s.
And I think this new AI wave should allow us to break out of that if we fight really hard and don't let the left take over.
And I spoke there, and it was only a few months after speaking at Oxford, doing an Oxford debate, which is thought of as the world's best debate.
And I'm not blowing smoke up here, but I was so much more impressed with the students that you guys had there than Oxford.
It wasn't, it was completely night and day.
I mean, 180 opposite.
Those kids were so impressive.
The question during the QA, you remember it was like they asked some really hard questions and they were poking and prying and sitting with them after.
And it was very, very different than what I experienced at Oxford.
We're watching Cali and New York disintegrate on a million.
Well, first off, do you grade either one of them better or worse than the other, or do you think they're like, Their sort of level of degradation is complex.
It's funny because you're also a hell of a tequila drinker, my friend.
Like, if we weren't, well, it just everything that Gavin's done that has just pushed all these people out or celebrating that Elon left, he celebrated literally.
You've got Mom Dami standing outside Ken Griffin's Pay to Terror basically saying, This is the place you want to burn down when the riots begin.
Like, when they're doing this stuff, what do you think their end goal is?
So, not even steal man, unless there's two different versions here.
So, for the Gavin version, if you've watched well over a million people leave your state, if you've watched the billionaires now all flee and you still want everyone's money, do you think?
I just want to know if he thinks that he's doing good.
I guess he really does.
I mean, the road to hell is paved with good punishment.
They would guess that California is more sophisticated, taking care of the black kids better, because that's what we've all been told.
But it's actually the opposite, because these people are actually, you know, they don't care about results.
The outcomes is not the goal of the Democratic Party in California.
The goal of the Democratic Party in California is to reward the special interests that are going to get you elected because they're completely in control of the state.
There's 2 million people who work for the government in California.
Each of these people have to basically give money to the union, which then gives money to the far left.
So in California, there's three parties.
There's the right, which is anemic.
I love Steve Hilton, but it's just like you'll see.
And then there's the moderate Democrats, and there's the far left.
And the far left, which is about at least a third, gets by default like several hundred million dollars a year from the government workers required.
So that's a very specific California has created these conditions.
The New York version of it, which if you just look at it from the financial standpoint, that Wall Street is there and that It should have remained the epicenter of the world.
And now everyone's coming down here to Florida, literally within miles of where they are.
What challenges do you think that presents to a place like Florida, where obviously we have no state income tax, we're building, it's safe, blah, blah, blah, but we're getting this massive influx?
What challenges do you think it presents to this state?
I think the right is always very uncomfortable with infrastructure because it's government, like, tight government, and you have to do it efficiently and build it out.
This is why I love Boring Company.
We should be building lots more tunnels to get rid of traffic.
But there's going to be infrastructure challenges.
There's going to be school challenges.
There's going to be things you got to build.
And, you know, the biggest difference between Texas and Florida on this stuff is that Texas has a lot more of, like, a build engineer culture.
There's a lot more engineers per capita.
There's engineering schools.
There's companies that have existed there for.
80 years in the chip industry and the software industry, and a lot more depth.
And so, I think people, if you're a great investor and for lifestyle, it's like Miami's great.
If you're a builder like I am, where I'm creating all these companies and you kind of have to go to Austin, but in both cases, we're going to need to fix the infrastructure and scale it up.
I'll tell you what matters, Dave, is we need, and this is something red states need to fix too, by the way, is we need our cities.
To be functional centers of our civilization.
Like, we need actually to prove that in the 21st century, with the politics we have, that we can make cities great.
And this is something Republicans are very afraid of.
Republicans prefer just to point at the city and laugh at it.
But guess what?
These are the centers of our civilization.
And so the fact that Austin is dysfunctional in the core of the city council and that we have a DA who's not arresting criminals, that's a problem.
And the fact that murder has not gone down there nearly as much after spiking, or, you know, because this guy is acting incorrectly.
And you know what?
The state could be fixing these things.
So I think it's going to be very hard to fix it in blue cities first, but I think we have to show sorry, in blue states, we're going to be really hard to fix these things.
But I shouldn't have to show in red states we can fix our cities.
We have to create the precedent and then we have to take that and bring it to these cities on the coast because it is important for our civilization, for San Francisco and New York not to be destroyed.
So what do you think in a red state like Texas you have to do in a blue epicenter like Austin?
Because when I was there seeing you guys, I spent a couple of days and I saw more homeless people in Austin in 24 hours than I've seen in Florida in all of my years here.
But then, as everyone pointed out, everyone said the same thing.
It's very controlled and very centralized and this kind of four block radius.
And then, of course, there are amazing areas of wealth and safety and all the other things.
And you could sue them, but that takes a long time.
So here's the next version of what we're going to try to get the red states to do.
It's if there is an illegal encampment, which my definition is illegal because it's illegal, a person who lives in the city should be able to take a picture, put it on a portal.
If it's not fixed, say within two days, then they should get discounts on their property taxes.
There's a lot of battles that I like to get involved in, which is a problem, of course.
The big battle I fought previously in the last 10 years, especially, was fixing our defense industrial complex.
It's not fixed by any means, but it's a hell of a lot better.
A lot better.
A ton of people who built with me, a lot of our guys from Palantir built Android, Serotics building things better and cheaper, going to build thousands of these autonomous warships.
Chaos is doing $5,000 interceptors versus millions of dollars per drone.
So we've made that cheaper and better and functional.
And there's so many things happening with Secretary Driscoll in the Army even today announcing basically we're going to let people integrate with everything and get rid of all these interests.
So we fought this defense battle.
It's going right.
It's going to work really well.
The other really broken cost plus area of our society, other than defense, I'd say it's healthcare.
And healthcare is probably, in some ways, like it's at least as important.
Obviously, defense is important when you get conquered, but healthcare is going to make a socialist if they don't fix it.
And it's a really cool time right now because it's obvious, thanks to what's happening in AI, both on the new therapies to cure diseases and on how you run healthcare administration and services, we can make healthcare so much better and so much cheaper, like so much cheaper, like less than half cost, where everyone does better.
And this is great because this is our main debt in our country, right?
The reason we're bankrupt, the reason we have $100 trillion, if you actually measure it correctly, of entitlement debt is healthcare.
So, this one to me is like the final frontier of special interest that we just.
There's going to be all sorts of new therapies that are even more advanced in peptides coming.
But I think peptides is the big thing in the next five years and healthcare on that side of it.
And I think people are going to be a lot healthier in their 80s, 90s.
Like, I don't know, maybe you lived 120, but you live healthfully.
There's these new treatments for these rats that they're doing because they test things out on animals.
And we figured out how epigenetic aging works, and it makes the rat live like 30% longer, but it looks like it's young until it dies, which is pretty good.
I will ask you one final bonus question because I've mentioned before you've invested in a couple things that I've done.
I think I've done all right by you.
And I've said this every time you've been on the show, but the best part is not the money that you've invested, but that you always pick up the phone and you've given us great advice on certain things over the years.
So let me ask you this just for anyone that's watching this that just they want to get involved a little bit more, they want to invest a little bit more, they want to do some things with their money that's a little bit different.
They get all at least some level of what we've talked about here in terms of where the future is going and everything else.
How would you say to somebody who's like, You know, maybe in their 20s, has a little money, just wants to start doing more interesting things with their money.
I think I'd say mostly to that person, my first thing I tell you is your time's worth a hell of a lot more than your money.
And so using the money that you have to be safe with the money to then free up more of your time to learn AI, to try to practice building something, to try to take risks.
Like that's the most important thing, first of all, is learning and taking risks.
Now, if you do really want to invest your money, Uh, in some ways, first of all, you have to be an accredited investor to invest in funds.
So I, I actually think if you're only, if you're not accredited, you should be investing to make sure you free up your time and like leave your money in an ETF.
Like it's fine.
If you do have extra money beyond that, um, I think you should be very careful at first.
You shouldn't put too much of it illiquid.
But there are platforms, uh, Zambato, Z-A-N-B-A-T-O is something I helped friends start over a decade ago.
And, and there's, there's billions of dollars that go through that to access kind of interesting tech companies, for example.
And people, But I think you just got to be really careful about these things if you're an outsider.
Like, start with a much smaller amount and learn from your mistakes.
That's what I will tell people because this is dangerous if you're just starting to get involved.
And final question What would you say to an investor like yourself who was drinking great tequila and was like, man, I should probably invest in a tequila cup?
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