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Save up to 40% your first year. Visit lifelock.com slash podcast. Terms apply. Catherine Boyle joins us now, a former Washington Post reporter turned venture capitalist, a general partner at Andreessen Horowitz, and the co-founder of the firm's American dynamism arm, which invests in companies that build to support national interests. Catherine, welcome to The Brian Kilmeade Show. Brian, it's so nice to be here.
Thanks for having me. So Catherine, in particular, tell everyone what your focus is now, because I think one of the main things our country needs is to expand the military industrial base. We've learned since Eisenhower to fear it. There's nothing to fear right now. It's too small.
That's what I fear. Yeah, no, no, I think I think it's a great point. So so we founded the American dynamism practice at Andreessen Horowitz three years ago, and we defined it as companies that are actively supporting the national interest. It's a broad category of companies. But aerospace, defense, national security, it's a huge part of it. And this is a story of what has been happening in Silicon Valley for the last 10 years. It started with SpaceX. Frankly, it started with Elon Musk saying our aerospace, NASA is not capable of doing the things that it needs to do, building companies with private capital so that we can build, reuse all of these things. We can build usable rockets, build products that are really important for the national industrial base. And one of the things that we've seen in the last few years is founders in Silicon Valley want to build and support their country by building companies that work with the D.O.D.. And so there's a lot of work to be done. But the most important thing we're seeing is these these companies are building better, faster and cheaper. And the cheaper component of this is what I think we're going to see in the next few years of the of the next administration. So, you know, there was worry around the Bush era, the second term when Google and other firms said, Apple, I don't want to be associated with American military.
I want to be what they thought was politically correct or separate. They didn't care about investing in China. You think there's been a change of a change of thought in that way?
Absolutely. So it actually goes back to twenty seventeen, which was the sort of peak point where Google, you know, one of the most successful American companies, a lot of their engineers or a small portion, actually, was probably a thousand or so signed a letter saying we do not want to work with the Department of Defense. We do not want to work on important things that can protect the warfighter. And that led to, I would say, an outcry among a small portion of people in Silicon Valley. It actually led to the founding of a company called Anduril, which I would argue is the next SpaceX. But for the Department of Defense and that Palmer Lucky, who was the founder of Oculus, he had been fired from Facebook. He said, I want to build a company that creates products better, faster and cheaper for the warfighter. And I'm going to aggregate the talent that cares about defense in Silicon Valley and build a new company and the likes of SpaceX. And what has happened in the last seven years and particularly since covid, the war in Ukraine, young engineers who frankly don't even remember September 11th, that some of them weren't even born or they were young. They realize the importance of defense technology now. They realize that it's not a theoretical thing, that we could be in a war with China. They realize we have to build better defense systems for the U.S. military and they are building them. So, you know, I always say we sort of did a 180 in Silicon Valley where, you know, in 2017, people said, oh, I'm terrified to invest in defense.
And it was very controversial. It is now the most, I would say, the most hyped, the hottest sector in Silicon Valley to invest in. And young founders are saying, I want to support my country. And I think it's a wonderful thing. It's going to have incredible benefits across the U.S. and it's particularly going to help the warfighter. So, Catherine, is your company picking and choosing where to invest?
Who's got the most promise? And it's for profit. I'm for that. I mean, you've got to put the profit into this. The innovation necessary to be successful in this.
Yes. So I mean, one of the things about American dynamism is America has something that no other country in the world has. And we have a system of risk capital where people are willing to put capital into young, brilliant minds. Many of these kids are just coming out of college or they went to the best engineering schools or they went to the University of Elon Musk, worked at SpaceX for a couple of years. And they say, now I want to build a hypersonics company. Now I want to build a drone company.
And they get together with their friends and they build a company. And my role as a venture capitalist is to give them capital, to have them move as fast as possible, to iterate and do the research and development that frankly isn't being done at the large prime contractors anymore. When you look at the large public companies, Raytheon, Lockheed Martin, Boeing, they are not doing the research and development that incorporates artificial intelligence, that incorporates the bleeding edge of what we need to do to defeat China. And so what is happening is Silicon Valley has really taken on that research and development role for the country. And we are we are helping to build these products, to finance these products. Now, some companies are going to fail and that's OK. Our system is developed to let companies fail. But a lot of these new companies are going to succeed and they are going to be the companies that really protect the warfighter in the coming years, in the coming theaters and hopefully prevent war through deterrence. Wow.
I mean, that's certainly encouraging. Now, from what you talked to Joe Lonsdale, too, for a while, he said that when I first brought up the fact that, you know, Elon Musk is going to get in there and people want to help out. But do they really know how government works? And he says they're perfect because they know exactly how it works from the outside and the frustrations that private contractors feel in dealing with the government. And then people come forward in the Pentagon and say, yeah, I'm as frustrated as you are. Certain people don't do certain things.
So maybe the outsiders are perfectly built. So broadly, when you come up with these innovative techniques, the R&D necessary, do you find a open and coachable Pentagon on the other side that is open to this innovation? Yeah, I think I think what you said is very important. A lot of the people on the inside are just as frustrated as the American taxpayer is, as the people who are working with the Department of Defense, they often say, you know, they can't say things on the outside, but we can be their megaphone. And so I think there's a lot of people inside the Department of Defense who've been pounding the drum, saying we need to change our defense industrial base. We need to invest in cutting edge technologies. We need to take advantage of this 40, 50 billion dollar subsidy from venture capital every year that goes to the Department of Defense through investment. So as Joe said, as you mentioned, these are companies and people that really understand how the government works. But to your point, I think it takes outsiders to really push meaningful change. And so, as you said, with Elon Musk and others who know how to sell to the Department of Defense, who know what it's like on the outside, they can bring a really thoughtful perspective because they haven't worked inside of Washington for 30 years.
They understand what the problems are with an outsider's perspective. So Marc Andreessen, your partner, was on with Joe Rogan. He said this about AI and the current administration, which in my view, can't leave quick enough.
Cut 35. The AI thing was very alarming. We had meetings this spring that were the most alarming meetings I've ever been in, where they were taking us through their plans.
And it was... What kind of, can you talk about it? Basically just full government control, like this sort of thing. There will be a small number of large companies that will be completely regulated and controlled by the government. They told us, they just said, don't even start startups. Don't even bother. There's just no way. There's no way that they can succeed.
There's no way that we're going to permit that to happen. Wow. They just said, this is already over.
It's going to be two or three companies and we're just going to control them. And that's that. This is already finished. Oh my God. When you leave a meeting like that, what do you do?
You go endorse Donald Trump. So I guess that's not news to you. It's probably news to our audience.
So that was the feeling. We're so worried about AI or we want to control AI or they tend to be more conservative than the typical, than the social media companies. What are your thoughts about what Mark said? Well, I mean, it's, it was very worrying because the truth is that the thing that keeps the American economy, the best economy in the world is American dynamism and our competition. So the role of a venture capitalist is to invest in small companies that compete with big tech, that compete with the big companies and to force them to change. You know, we like to see little tech, we call it, become big tech and then we keep investing in little tech.
And this is the cycle of innovation, the cycle of innovation that brings us the next great app on our iPhone or that brings us a reusable rocket is small companies competing with large companies. And so when the government says, actually, no, we're going to engage in regulatory capture and we're going to stop all the innovation of the little tech and just let the big guys do what they want to do. That is really bad for the American consumer. It is really bad for the American taxpayer when it comes to defense and anything related to selling to government.
And so it was very concerning for us. And I think Mark, Mark said it beautifully. You know, it is, it is the cycle of innovation that keeps this country going and we have to continue investing in it.
And by the way, we're talking to Catherine Boyle, who's at the cutting edge of all this innovation. So Catherine, do you think, in talking to Mark, it was because people are so worried about what AI could do, start thinking on its own and reduce the capacity for humans to play a role in our lives? Because I watched David Altman's interview two, two, three years ago on ABC and he said, I'm a little scared of this. Do you think it's from a safety standpoint or is it from a government should control everything standpoint? So I think the sort of naive or the sort of optimistic view would be that because it's a new technology and we don't know that a lot of people are open to sort of those, you know, maybe, maybe it's very scary or but I'd say like the sort of realist perspective is that government engages in regulatory capture very often. Businesses engage in regulatory capture very often where they don't like young companies or other companies to come in and try to compete. And we know that the best part about American capitalism is competition. And so having the government overregulate new technologies actually leads to the big tech cartels that we've seen in previous years where they get too much power.
And so we're a huge believer in little tech. We're a huge believer in companies that compete against the larger companies and force them to innovate, force them to provide services to the American consumer and cut off those companies because something scary might happen. You know, that is exactly what regulatory capture is. There's many examples in history of when we've done that to innovative market and squashed innovation.
So we can't do it to AI. So Catherine, we know that China is not slowing down. They don't care.
And they love the fact that maybe the government here will try to slow them down. Here's what the former Google CEO Eric Schmidt said. He has a book out. He doesn't feel like he should go on Fox.
I don't know why. Here's what he said about China. I used to think we were a couple of years ahead of China, but China has caught up in the last six months in a way that is remarkable. The fact of the matter is that a couple of the Chinese programs, one, for example, is called Deep Seek, looks like they've caught up.
And this is even after these extraordinary efforts by the Trump and Biden administration to withhold high powered chips. The Chinese are clever and they understand the power of a new kind of intelligence for their industrial might, their military might and their surveillance system. So did you know that? And you concur? I think it's interesting. He said the Chinese are clever.
I'll say it more clearly. The Chinese are very good at IP theft and have been for the last 30 years, particularly in Silicon Valley. And so anything that we do, it certainly makes its way over there a few weeks or a few months later.
And so we have to constantly be moving faster. That will always be the story of our relationship with the US and China is that they will steal our IP. And so the scary thing to me is when you have people saying, well, let's put a six month pause or let's let's engage in regulatory practices that slow the innovation in the US.
Yes, they will catch up. And that's what we have with the previous administration, administration that very much wanted to make sure that open source AI and open source technology was not engaging in the conversation, was not able to build. And we very much need an innovative ecosystem around AI to make sure that we outpace China. So, you know, why do you think he said clever?
Why don't you why didn't you just say steal? Is he worried about some China investments? You know, I'm not I'm not entirely sure. You know, maybe he was just being polite or but but but I but I do think that there is definitely I mean, we are in an arms race with AI.
Like this is this is a very serious moment. And it's it's not just AI that exists on on our phones. It's not just going to improve the lives of consumer. It is an arms race, a literal arms race for the Department of Defense. And so we have to be engaging with the best technologists in America, we have to make sure that we fast track these technologies into the Department of Defense, because China has no qualms about telling its best engineers, you will work on this product, and you will support the government.
And we need to make sure that we encourage the same behavior in the US. So let's talk about this plant that's being built, the Taiwan semiconductor manufacturing company is building a plant in Arizona. Is this through the CHIPS Act? And why should we care about this? Yeah, so I think it is very important. And yes, some of it is through the CHIPS Act. Some of it is through sort of, you know, there's a there's a massive opportunity. But I also think like the the thing that we have to understand is that reindustrialization in this country is the it is the most important thing that we can focus on in this in this administration in terms of technology, ensuring that we have a strong manufacturing base, ensuring that the defense industrial base is not aging people who, you know, have no one to take over their plants or no one to take over their machine shops, because there isn't enough space. We have to make sure that we're investing in reindustrialization. And it's not just making sure that great companies come and build in the US.
It's investing in talent. It's making sure that the next generation of machinists, of manufacturers really understand how to work with with with software, with AI to produce products faster, that there is a push to build these kinds of companies, not only in the defense industrial base, but across the the, you know, the entire industry, American industry. So I think this is an important policy in the United States. It's an important policy initiative. And it's and it's not just focusing on bringing companies back or investment, you know, at a top down perspective, but also making sure it's bottoms up that we are training the next generation of manufacturer in this country. So keep your eye on that, because Taiwan has most of the chip factories there.
And if they're taken over by China, the whole world security is really in the balance. But the other thing is, I heard with the chip back, there's so many strings attached, you have to have a certain amount of gender and ethnicity. And sexual choice.
And that people say, you know, I don't know if it's really worth it. Have you heard that? So there have been reports that have said there's a lot of strings attached or that they're, you know, and that's kind of I'd say that the way that kind of Washington often works right when you have a bill or an idea, a lot of different sort of, you know, DI initiatives get attached to it. And I do think like that is something when you look at what Doge has been talking about in recent days and what Elon Musk and Vivek Ramaswamy have been looking at, making sure that the initiatives that are good ideas actually be brought to the forefront without all of the bells and whistles and the pork and the things that are attached to it that dilute a good initiative.
And so I do think that this will be an administration, particularly when you look at the Doge Commission, that really focuses on streamlining good ideas and making sure that we can implement them and actually see results. How do you feel about this cyber currency, the cyber currency, the cryptocurrency, what am I saying? Cryptocurrency, AI czar, David Katz. Do you think he understands it?
Absolutely. So David Sachs, you know, we've known David Sachs for a very long time in Silicon Valley. He is a fantastic builder, a fantastic investor.
And what I'll say about him was that he was part of the original PayPal mafia, which was founded in the late 90s. So he has been building companies in Silicon Valley for his entire career. He's a dear friend of Elon Musk. He's been an investor in SpaceX since the inception. And so he understands what great companies look like. He understands cutting edge technology. And what's different about having someone like David Sachs involved versus lots of people before who've worked in academia or maybe they're theorists and they've written books is he actually understands how to get his hands dirty and build a company.
We don't have that history of people like that going into government, people who are really doers and not talkers. You're pumped up. I can see it, Catherine. You're pumped up. And I met David for the first time over the weekend at the Army Navy game and talked to him for a while. Very impressive.
And I know he's pumped. Catherine, I hope we could do this a lot. You're so impressive and best of luck. I'm so glad you're doing this for the country and you're a part of this because we need all hands on deck right now.
The challenges are great. Catherine Boyle, thank you. Back in a moment. From the Fox News podcast network, subscribe and listen to the Trey Gowdy podcast. Former federal prosecutor and four term U.S. congressman from South Carolina brings you a one of a kind podcast. Subscribe and listen now by going to Fox News podcast dot com. Listen to the show and free on Fox News podcast plus on Apple podcast, Amazon music with your prime membership or subscribe wherever you get your podcasts.
