"I think like starting a second or a third company is like fundamentally sort of an insane act after you've been successful because you're already obviously like have the money you need so like what are you doing because these things are so hard" - Joe Lonsdale [00:01:04]
"It's like so sci-fi it's a heroin right it's like it's really scary like you can use you can use AI to beat your heroin you can use AI to not have to do much at all you can use AI to lose all your agency there's like a very negative version of it and then there's like this extremely positive version of it" - Joe Lonsdale [00:09:07]
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"If you haven't yourself gone all in and built a startup and gone through the pain of that over years then you probably have no idea how to actually build a startup and you just shouldn't be doing it." - Joe Lonsdale [00:02:58]
"I don't think America loves AI right now I think not enough people... I think they're scared." - Joe Lonsdale [00:12:38]
"This is like one of the most accurately fought wars with least civilian deaths and the most bad guys falling so fast which is amazing." - Joe Lonsdale [00:17:35]
"I think human life is more important than even though I feel bad hurting a monkey." - Joe Lonsdale [00:23:18]
"The billion dollars for San Francisco to NOS's is not to help the homeless it's to help a very powerful political class of people who control things you don't realize that you know that the the government worker unions here just really run the state and really just light insane amounts of money on fire." - Joe Lonsdale [00:41:07]
Speakers & Credentials
Jack Altman (Host): Investor, Founder.
Joe Lonsdale (Guest): Investor and Founder. Founder of Palantir, Addepar, OpenGov, and 8VC. Co-founder of The Cicero Institute.
1. Executive Summary
Lonsdale shares his perspectives on building companies, arguing that launching a second or third startup is an "insane act" due to the inherent difficulty, though he remains compelled to fix broken systems.
He advocates for AI, viewing it as a massive productivity accelerator that compresses decades of progress into just a few years, but warns of its potential negative uses if not coupled with human agency.
The conversation explores the need to reshape the public narrative around AI, emphasizing its potential to bring down costs in sectors like healthcare and increase the middle class's wealth, contrasting this with the current societal fear of job displacement.
Lonsdale defends the defense tech sector, arguing that it's crucial to support unpopular but necessary industries, like primate testing for biotech, and criticizes incumbent defense primes for their broken cultures and inability to attract top tech talent.
He expresses concern over the detrimental impact of social media algorithms on society and discusses the cultural differences between Silicon Valley and Texas, highlighting Texas's more practical regulatory approach and the challenges of California's entrenched political systems.
2. Chronological Table of Contents
[00:00:33] - The Mindset of a Serial Builder & Investor
[00:12:28] - Marketing AI to the Public & Reducing Healthcare Costs
[00:16:58] - The Defense Tech Boom & Standing Up to the Zeitgeist
[00:22:42] - The Primate Testing Controversy & Investing in "Taboo" Ideas
[00:26:54] - Expanding Beyond Software: Robotics, Bio, & Energy
[00:32:17] - The Venture Landscape & The Advantage of Youth
[00:35:45] - The Rise of Peptides and Anti-Aging Treatments
[00:38:35] - Cultural Contrasts: California vs. Texas Politics
3. Detailed Thematic Summary
The Mindset of a Serial Builder & Investor [00:00:33]
Lonsdale believes that starting a second or third company is an inherently "insane act" because builders already have financial security and know how painfully difficult the process is [00:01:04].
He sold OpenGov for $1.8 billion after 14 years of grueling work, comparing it to "paddling through the dirt," which contrasts sharply with the rapid growth of today's AI startups [00:01:34].
His motivation stems from an inability to ignore "gaps" in the world where broken systems cause harm; his philosophy at 8VC is, "the world is broken, let's fix it" [00:02:11].
Lonsdale argues that investors who haven't experienced the pain of building a startup shouldn't be advising founders [00:02:58].
Lonsdale observes that AI companies are reaching $100 million in revenue much faster than previous generations of software companies [00:03:59].
He advocates for focusing on AI applications that enhance productivity, suggesting this area is underexplored and represents the "grail" for the industry [00:04:53].
He notes that much of the successful AI implementation involves applying an "ontology of workflows" and the "Forward Deployed Engineer (FTE)" motion, strategies pioneered at Palantir [00:06:10].
Lonsdale feels that the pace of AI advancement is compressing decades of progress into a few years, bringing 2030s and 2040s technology into the near term [00:07:27].
Lonsdale highlights the dual nature of AI, comparing it to "heroin," noting it can be used positively to enhance agency or negatively to diminish it [00:09:07].
He stresses the cultural challenge of ensuring people choose to get dopamine from "iterating and winning" rather than passive consumption [00:09:22].
He strongly criticizes social media platforms like TikTok, calling the financial incentives of the attention economy "evil" because they encourage distraction and polarization [00:09:32].
He admits to blocking TikTok and Instagram to manage his own impulses and focus [00:09:45].
Marketing AI to the Public & Reducing Healthcare Costs [00:12:28]
Lonsdale notes that AI suffers from a public relations problem, driven by fears of job displacement, and argues the tech industry needs to market AI better to prevent restrictive regulations [00:12:35].
He compares the U.S.'s ~30% positive view of AI unfavorably with China's ~75-80% positive view, suggesting the U.S. is lacking optimism about wealth creation [00:14:28].
He predicts that if allowed to function, AI could make the working class 4-5 times wealthier over the next 30 years, outpacing the 2.4x growth seen between 1870 and 1900 [00:14:48].
To benefit the middle class quickly, he is pushing for an "AI sandbox legislation" through the Cicero Institute to test AI workflows in primary care, aiming to cut healthcare costs significantly [00:15:37].
The Defense Tech Boom & Standing Up to the Zeitgeist [00:16:58]
Lonsdale defends the recent involvement of tech companies in defense, claiming the current conflict using AI is "one of the most accurately fought wars with least civilian deaths." [00:17:35].
He recalls facing intense backlash and threats of "excommunication" for investing in Anduril early on, highlighting the necessity of pursuing unpopular but critical ideas [00:21:48].
He praises companies like Saronic and Anduril, predicting a dozen "neo-primes" will emerge to challenge incumbent defense contractors [00:25:01].
He attributes the failure of incumbent primes to innovate to their "broken" cultures that cannot attract or retain top computer science talent [00:25:35].
The Primate Testing Controversy & Investing in "Taboo" Ideas [00:22:42]
Lonsdale discusses his investment in a company that breeds primates for biotech testing, a supply chain need exacerbated when China cut off supply during COVID-19 [00:22:42].
He frames the ethical dilemma simply: testing on animals is preferable to testing unproven cures on humans, asserting that "human life is more important" [00:23:18].
Despite the business "crushing it" financially, he notes that other investors are too "cowardly" to touch the controversial sector [00:24:32].
Expanding Beyond Software: Robotics, Bio, & Energy [00:26:54]
In robotics, Lonsdale highlights an investment in Bedrock, an AI-driven excavation company that he believes could disrupt the massive construction and mining sectors [00:27:03].
In biotech, he points to the rapid discovery of protein structures via AI as evidence of massive potential, moving from mapping 213,000 proteins over years to 200 million suddenly [00:28:14].
He details his firm's framework for AI investments, categorizing them across six levels: Energy (0), Chips (1), Data Centers (2), Models (3), Software Infrastructure (4), and Apps/Services (5) [00:30:58].
The Venture Landscape & The Advantage of Youth [00:32:17]
Lonsdale believes the current venture market is chaotic but highly opportunistic, describing it as the "best time" to be investing compared to the sluggish period around 2022 [00:32:27].
He stresses the importance of backing young founders, noting that 18-to-22-year-olds who are "AI native" have a distinct advantage because they don't have to "unwind" older paradigms [00:33:30].
He shares an anecdote about a 22-year-old CEO tripling revenue in a quarter, illustrating the rapid pace at which young founders are executing [00:34:55].
The Rise of Peptides and Anti-Aging Treatments [00:35:45]
Lonsdale discusses his personal experience using peptides to heal physical injuries and highlights their transformative effects on health markers and weight loss [00:35:55].
He reveals that his firm is backing a new compounding pharmacy, "No Labs", to provide safe access to these treatments, predicting a massive market opportunity akin to GLP-1s [00:36:34].
He calls for the NIH to actively study these compounds, arguing it's a failure of government not to research substances already used by thousands of Americans [00:38:09].
Cultural Contrasts: California vs. Texas Politics [00:38:35]
Relocating to Austin, Texas, has given Lonsdale a clearer view of the skepticism middle America holds toward tech, while also revealing Texas as a "more sane place" with a healthier middle class [00:39:20].
He sharply criticizes California's political establishment, claiming government worker unions "run the state" and that a 75% budget increase over six years has yielded little public benefit [00:41:17].
He contrasts California's regulatory gridlock (like CEQA) with Texas's approach, where a new law mandates state approval if cities delay permits past 45 days, leading to a building boom in Austin [00:41:45].
The 6 Levels of AI Investing: A mental model Lonsdale uses to categorize AI investments: Level 0 (Energy), Level 1 (Chips), Level 2 (Data Centers), Level 3 (Models), Level 4 (Software Infrastructure), and Level 5 (Apps and Services). His firm focuses primarily on Levels 4 and 5. [00:30:58]
The "Insane Act" of Serial Founding: The framework that starting a new company after already achieving success and financial independence requires convincing oneself to ignore the known, immense pain of the startup process. [00:01:04]
The "Taboo Idea" Arbitrage: The strategy of investing in sectors that sound morally questionable in isolation (e.g., defense weapons, primate testing) but actually serve a greater moral good or critical supply chain need, leading to less competition and higher returns. [00:22:42]
The "AI Native" Youth Advantage: The concept that younger founders (18-22 years old) have a structural advantage because they learn to build natively with AI tools, unburdened by the need to "unwind" older development paradigms. [00:33:30]
The "Forward Deployed Engineer" (FTE) Motion: A go-to-market and implementation model, popularized by Palantir, where engineers are embedded with the client to integrate complex AI solutions directly into their specific workflows. [00:06:10]
6. Anecdotes
The 22-Year-Old CEO: Lonsdale recounts meeting a young founder he's backing who claimed he was not just doubling, but tripling revenue in the current quarter, highlighting the unprecedented speed of AI startup growth. [00:01:46]
The Primate Testing Conversation: Lonsdale shares a conversation with his 5-year-old daughter to illustrate his defense of primate testing. He asked if she'd rather test a new medicine on "Mommy" or monkeys; she immediately chose "hundreds of monkeys," supporting his view that prioritizing human life sometimes necessitates uncomfortable choices. [00:22:56]
The Anduril Excommunication Threat: When he wrote the first check for Anduril, Lonsdale was told by multiple people they would never work with him again because investing in defense was viewed as "evil," illustrating the cultural risk of contrarian investing. [00:21:48]
Healing with Peptides: Lonsdale describes tearing up his knee while heli-skiing and discovering that peptides not only healed his knee faster but also fixed a lingering back problem, sparking his firm's entry into the peptide market. [00:35:55]
The Fall of Wish: Lonsdale briefly mentions his early investment in Wish, taking it "all the way up and all the way down," blaming its decline on Chinese subsidies to competitors (Shein, Temu), postal changes, and leadership failures, which provided the "lessons learned" to successfully back Quince. [00:29:35]
7. References & Recommendations
People
Peter Thiel: Mentioned as the archetype for contrarian thinking. [00:04:05]
Elon Musk: Referenced regarding investments in X/SpaceX and the timeline for robotics and world models. [00:09:54]
Balaji Srinivasan: Mentioned in passing regarding online debates. [00:10:02]
Dario Amodei: CEO of Anthropic, discussed in the context of the DOD controversy and negotiations. [00:19:28]
Palmer Luckey: Founder of Anduril, mentioned regarding autonomous fighter jets and defense tech. [00:19:58]
Trae Stephens: Partner at Founders Fund, referenced for writing about funding unpopular but necessary ideas. [00:22:12]
Demis Hassabis: Referenced for winning the Nobel Prize for mapping protein structures with AI (AlphaFold). [00:28:14]
RFK Jr.: Mentioned via a rumor that he uses peptide therapies. [00:37:07]
Scott Wu: Hired by Lonsdale at 18 after winning coding medals; cited as an early example of the young, elite tech talent trend. [00:33:40]
Alex Wang: CEO of Scale AI, mentioned as having been in the same early cohort of young talent at Addepar. [00:33:48]
Companies & Firms
Palantir: Founded by Lonsdale; frequently referenced as the pioneer of the GTM models (like FTEs) now driving the AI boom. [00:00:49]
OpenGov: A company Lonsdale was heavily involved in, which sold for $1.8 billion. [00:01:31]
Joby Aviation: Discussed as an example of AI dramatically accelerating aerodynamic design processes. [00:07:49]
Anthropic: Discussed regarding their policy negotiations and eventual friction with the Department of Defense. [00:17:03]
Saronic: A naval defense tech company Lonsdale founded and backed, building autonomous ships rapidly. [00:21:18]
Anduril: Referenced as the largest "neo-prime" defense contractor crushing the market. [00:25:10]
Chaos Industries: Mentioned briefly as a defense tech company doing extremely well. [00:25:22]
Epirus: Mentioned for successfully shooting down drones using directed microwave energy. [00:25:22]
Bedrock: An AI-driven excavation and robotics company backed by 8VC. [00:27:03]
Waymo: Mentioned as the previous employer of Bedrock's founding team. [00:27:03]
Quince: A direct-to-consumer brand 8VC invested in as a "redemption story" following the Wish outcome. [00:29:07]
Wish: An earlier investment of Lonsdale's that experienced a massive boom and bust. [00:29:35]
Shein and Temu: Mentioned as the heavily subsidized Chinese competitors that contributed to Wish's downfall. [00:29:42]
Geopolitical & Political Institutions
Department of Defense (DOD): The central subject of a debate regarding tech companies restricting military use of AI. [00:16:58]
Cicero Institute: Lonsdale's policy organization, currently pushing "AI sandbox legislation" for healthcare at the state level. [00:16:17]
NIH (National Institutes of Health): Criticized by Lonsdale for not actively studying the safety and efficacy of unpatentable peptides. [00:37:58]
CEQA (California Environmental Quality Act): Cited as an example of crippling regulatory bloat slowing down development in California. [00:42:11]
8. The Bottomline (by AI)
The artificial intelligence revolution is accelerating the timeline of innovation, pulling mid-century advancements into the present decade and demanding an entirely new approach to company building led by "AI Native" talent. However, the tech sector's failure to market AI as an engine for middle-class prosperity—coupled with regulatory hesitancy and the lingering reputational damage of social media—risks stunting its adoption. To capitalize on this era, investors must aggressively fund "taboo" yet critical sectors like defense tech and bio-infrastructure, sidestepping legacy cultural and political bottlenecks in favor of rapid execution.
"Brookfield's the largest infrastructure owner in the world... We drew a pipeline and we showed all the different components of the payments ecosystem on a pipeline and said it's like a pipe that moves any commodity except what it's moving…
Projected Wealth Growth
4-5x (Next 30 Years)
Lonsdale predicts AI will drastically increase working-class wealth if allowed to function.