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Trae Stephens’ origin story begins like the first volume of a spy thriller series. Galvanized by 9/11, he vowed as a high schooler to find a career that would let him defend his country. He applied to colleges with programs that could prep him for that heroic role. None were interested in a kid from a hardscrabble Ohio town, so he traveled uninvited to Washington, DC, barged into the applications office at Georgetown University, and talked his way into the School of Foreign Service, where among other things he learned Arabic. After graduating, he joined a US intelligence agency (he can’t say which one), where he used his education as a “computational linguist” to do a kind of desktop counterterrorism. But it wasn’t long before he became frustrated by the red tape—and the lousy IT setup.
Here, though, Stephens’ story diverged (somewhat) from that of the storybook secret agent with all the guns and martial arts tricks. During his time at … wherever he was … he met people at a Silicon Valley startup called Palantir, which set out to use deep data mining to win government contracts. Stephens signed on. After a few years, the venture capital firm backing Palantir, Founders Fund, offered him a job on the investment team. He found himself in the midst of Silicon Valley’s attempt to create companies that sell military and data-science tech to the government. He reports to Peter Thiel, the Valley’s most notorious conservative.
In 2016, of course, Donald Trump won the White House. Thiel was a supporter and had the new president’s ear. Stephens wound up running the Trump transition team for the Department of Defense. That experience set him up to cofound what is essentially a sister company to Palantir: Anduril, a military contractor that infuses AI and mixed reality into defense tech. His key cofounder was VR wizard Palmer Luckey. Anduril started by building “smart battlefields” and later ordnance, including autonomous fighter jets and arms-ready submarine drones. More recently, Stephens launched a less deadly enterprise: a hardware startup called Sol that makes a $350 wearable e-reader.
If Trump retakes the White House, Stephens may end up back in DC. But no matter who wins the election, Stephens has forged a unique role for himself: a tech VC and founder with spycraft cred, and a fervent Christian and conservative who voices his values without judgment. Our conversation covers Silicon Valley’s suddenly cozy relationship with the military, the proper role of AI in weapons, and Stephens’ eerie parallels to Trump’s VP nominee, JD Vance. He also explains why he built himself a bunker.
Steven Levy: Barely seven years old, Anduril has 3,000 employees, is valued at $14 billion, and has won billion-dollar defense contracts. That’s unusual. Did you expect to grow at that rate?
Trae Stephens: Things are moving way faster than we expected. At Founders Fund, we had become accustomed to SpaceX and Palantir, where it was a long run to early wins. That’s the nature of working with the government. But at Anduril we accelerated into a congressionally budgeted program within three years, which is the fastest that’s happened since the Korean War. We’re moving way ahead of plan.
Why?
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We didn’t have to learn the lessons for the first time. When I was working sales at Palantir, we made a lot of mistakes.
What’s an example?
So many. There’s this idea to focus entirely on your product—and like the Field of Dreams, you build it and they will come. So you pitch directly to the end user, the person in the field, and don’t worry too much about the authorizers and appropriators in Congress, agency leadership, or mid-level bureaucracy. At Palantir, we figured out that you had to work every single one of those audiences. It took us way longer than it should have to hire lobbyists. At Anduril, we did that in the first week.
There’s also this hilarious misconception that you should subcontract with the primes—Booz Allen Hamilton and Deloitte and all of those guys—because somehow they’re going to bring you in on their contracts. That doesn’t work. And there’s the idea that you should set up an advisory board where a group of retired generals and retired government officials shepherd you through this process. The reality is, they haven’t gone through it either.
When Anduril started, defense tech was a turnoff for many engineers. Is the stigma still there?
The easy-money startup days are over, and the geopolitical realities have set in. People are looking at what’s happening in Ukraine or Israel, or the potential threat to Taiwan, and they’re saying, “Man, I would love to spend time working on things that are going to move the needle for humanity.” That doesn’t always look like defense, but it does involve harder tech problems. And you’re starting to see investors get more comfortable taking risks that might have been beyond the pale back in 2017.
You still get pushback from the left.
It’s not the left—it’s a very small minority of people at the fringe. It’s much harder in 2024 to have a reasoned, thoughtful opposition to defense tech than it was in 2017, and that has made it easier for us to communicate our mission and to recruit and retain engineers.
Anduril just raised $1.5 billion to help build what it calls a 5-million-square-foot “hyperscale” factory to make thousands of relatively low-cost autonomous weapons. Is that necessary?
During the later stages of the Cold War and after, the US pivoted into a force posture with very high-cost, exquisite systems in low quantities. Things like fifth-generation fighter planes, aircraft carriers, and missiles that cost millions of dollars every time they’re fired. This worked when we had a dominant lead and were deterring large-scale conflict. That’s not the geopolitical landscape anymore. In Ukraine, we’re depleting entire inventories of weapons systems much faster than we can resupply. We need a supply chain that allows us to ramp up manufacturing of core, low-cost systems, so that if we ever find ourselves in a large-scale conflict, we could push weapons out to the front line quickly and not deplete our inventories.
If we churn out many thousands of your fighter planes, wouldn’t that be a disincentive to diplomacy? Maybe we’d use them more and wind up in more conflicts.
That goes against a lot of the core concepts of just-war theory [which posits circumstances under which war can be considered moral]. We need to maintain enough of an advantage so we don’t find ourselves in a situation where people are tempted to use force. I think it leads to people thinking differently about whether they want to get into conflict in the first place.
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When I wrote about Anduril in 2018, the company explicitly said it wouldn’t build lethal weapons. Now you are building fighter planes, underwater drones, and other deadly weapons of war. Why did you make that pivot?
We responded to what we saw, not only inside our military but also across the world. We want to be aligned with delivering the best capabilities in the most ethical way possible. The alternative is that someone’s going to do that anyway, and we believe that we can do that best.
Were there soul-searching discussions before you crossed that line?
There’s constant internal discussion about what to build and whether there’s ethical alignment with our mission. I don’t think that there’s a whole lot of utility in trying to set our own line when the government is actually setting that line. They’ve given clear guidance on what the military is going to do. We’re following the lead of our democratically elected government to tell us their issues and how we can be helpful.
What’s the proper role for autonomous AI in warfare?
Luckily, the US Department of Defense has done more work on this than maybe any other organization in the world, except the big generative-AI foundational model companies. There are clear rules of engagement that keep humans in the loop. You want to take the humans out of the dull, dirty, and dangerous jobs and make decisionmaking more efficient while always keeping the person accountable at the end of the day. That’s the goal of all of the policy that’s been put in place, regardless of the developments in autonomy in the next five or 10 years.
There might be temptation in a conflict not to wait for humans to weigh in, when targets present themselves in an instant, especially with weapons like your autonomous fighter planes.
The autonomous program we’re working on for the Fury aircraft [a fighter used by the US Navy and Marine Corps] is called CCA, Collaborative Combat Aircraft. There is a man in a plane controlling and commanding robot fighter planes and deciding what they do.
What about the drones you’re building that hang around in the air until they see a target and then pounce?
There’s a classification of drones called loiter munitions, which are aircraft that search for targets and then have the ability to go kinetic on those targets, kind of as a kamikaze. Again, you have a human in the loop who’s accountable.
War is messy. Isn’t there a genuine concern that those principles would be set aside once hostilities begin?
Humans fight wars, and humans are flawed. We make mistakes. Even back when we were standing in lines and shooting each other with muskets, there was a process to adjudicate violations of the law of engagement. I think that will persist. Do I think there will never be a case where some autonomous system is asked to do something that feels like a gross violation of ethical principles? Of course not, because it’s still humans in charge. Do I believe that it is more ethical to prosecute a dangerous, messy conflict with robots that are more precise, more discriminating, and less likely to lead to escalation? Yes. Deciding not to do this is to continue to put people in harm’s way.
I’m sure you’re familiar with Eisenhower’s final message about the dangers of a military-industrial complex that serves its own needs. Does that warning affect how you operate?
That’s one of the all-time great speeches—I read it at least once a year. Eisenhower was articulating a military-industrial complex where the government is not that different from the contractors like Lockheed Martin, Boeing, Northrop Grumman, General Dynamics. There’s a revolving door in the senior levels of these companies, and they become power centers because of that inter-connectedness. Anduril has been pushing a more commercial approach that doesn’t rely on that closely tied incentive structure. We say, “Let’s build things at the lowest cost, utilizing off-the-shelf technologies, and do it in a way where we are taking on a lot of the risk.” That avoids some of this potential tension that Eisenhower identified.
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You led the Trump Defense Department transition team, and the Founders Fund seemed allied with the former president. Are you currently supporting Trump?
I think Trump, like any candidate, is flawed, and I’ve never been particularly excited by his candidacy. The question for me comes down to a matrix. Picture a chart with four quadrants: feels-good-is-good, feels-bad-is-bad, feels-bad-is-good, feels-good-is-bad. We can all agree that we like feels-good-is-good and don’t like feels-bad-is-bad. The other two quadrants are messy. The feels-good-is-bad quadrant is kind of like hedonism—
Are you putting Kamala Harris in the feels-good-is-bad quadrant?
You’ll see where I’m going with this. On the other side, you have the feels-bad-is-good quadrant. Law enforcement and defense fit into it. Historically, the flaw with Republicans is that they’re unnecessarily cruel in the way that they talk about these things. But with Republicans we’re more likely to get a thoughtful government that does the right thing, even when it doesn’t feel good. That’s the core reason I consider myself to be right of center—on the left, there’s too much emotion-driven decisionmaking.
So I take that as a yes—you’re going to vote Republican and press the lever for Trump.
I tend to be right of center, and I don’t see any reason to be anything other than that at this point.
Would you serve in a second Trump administration?
The timing on this is bad—I’m incredibly committed to the mission of Anduril. That said, I do believe it’s important that people come out of private industry to work on civil service projects, and I hope at some point I’ll have the opportunity to go back in and serve the government and American people.
Another yes. You were in the same VC circles as JD Vance. What’s your relationship with him?
JD is an incredibly thoughtful person. We have very similar biographies—the towns we grew up in were right next to each other in Ohio’s Warren County. We share a similar tale of our families emigrating from Appalachia into a steel-producing region, and then the steel plants left. I don’t think it’s possible to find a political candidate that you agree with 100 percent of the time, but broadly speaking, it’s important that incredibly smart people from the private sector are open to serving the country in public office, and I’m glad to see JD doing that.
Not everyone is glad about it—he’s getting whacked for his views and his flip-flopping.
The state of discourse in American politics is pathetic. All of the things that JD is being raked over the coals for are memes, made-up stories. People are throwing around comments about him being weird. This is terrible for America. I want a real dialog about policy, and I don’t think we have the ability to do that anymore. I’m incredibly concerned for democracy.
It seems to me that a lot more name-calling comes from the right.
It goes on on both sides. There is no political discourse. It’s just emotional rabble-rousing.
OK, let’s talk about Founders Fund. As one of the top partners, are you involved in portfolio companies like Palantir?
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Yes, day to day, I spend time across the board in our companies. One thing that I love is that they are debate-driven organizations where we are encouraged to disagree, and we believe that disagreement and dialog lead to better decisions.
You also cofounded a consumer tech company called Sol, which makes a reading device that you wear like glasses. How did that happen?
I was talking to Palmer about the future of AR and VR, and he said we’ve reached a limit from a physics perspective, and right now things like really high brightness, resolution, and long battery life are literally not possible. I told him I just want to lie on the beach or in bed and put on sunglasses where I can read and not have to hold a book or a Kindle. He laughed at me and said, “Oh, you can do that!” So I worked with a good friend of mine to build a wearable e-reader. It’s still very early, and we’re still doing marketing tests, but it’s now possible to go on our website and buy one.
How many books have you read using this thing?
Maybe 20, 25.
Founders Fund is closely tied to Elon Musk, with big shares in his companies: SpaceX, Neuralink, even the Boring Company. Has anything shaken your confidence in him?
No. The one ironclad rule in venture is never bet against Elon Musk. He is entitled to his personal beliefs. And SpaceX, Neuralink, and the Boring Company seem to be doing quite well.
To many people, your boss at Founders Fund, Peter Thiel, is Silicon Valley’s Bond villain. What do people get wrong about him?
There’s this weird idea that he’s like this conservative godfather-type guy, and I have not seen that to be true at all. He doesn’t surround himself with sycophants, but with people who push him intellectually and drive him to better decisions.
You are very open about your faith. Do you feel that Silicon Valley is intolerant of evangelical Christianity?
Generally speaking, people in tech are very smart and intellectually curious. When they find out that someone who they respect intellectually is a Christian, they want to understand more. When I gave a talk about tech and Christianity a few weeks ago in downtown San Francisco, it ended up being a packed house.
Would Jesus have liked venture capitalists?
I think Jesus doesn’t care about classes of people. He cares about people.
I’m talking about what they do.
My favorite story in the Gospel is about the rich young ruler who came to Jesus and said, “What do I have to do to receive eternal life, to receive salvation?” Jesus said, “Take all of your money and give it away and come and follow me.” He was saying that this man was a good person but he worshiped money, and he needed to turn away from that idol to receive the wisdom and blessing from God. There’s a lot that venture capitalists do that is directly aligned with abundance—caring about improving humanity. There’s also a lot of ego and greed. If people want to live a joy-filled and abundant life, they’re going to need to turn from those things and see that there’s a better plan that they can step into.
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That happens at Founders Fund?
We care deeply about getting the team right. Peter is committed to having different ideas about creating abundance. That’s where you get, like, the manifesto for Founders Fund—you know, we wanted flying cars; instead, we got 140 characters. Peter gives a ton of money to funding bioresearch projects, the longevity movement, things like that. We believe that people move the needle. Actual people, not companies, not systems, not organizations. Which is why we’re called the Founders Fund. It all starts at the heart of man. The best things in history have come from the heart of man, and so have the worst. We need to find and invest in the people who we feel are on the right side of history.
I thought the essence of venture capital is multiplying your money.
No, the essence of venture capital is creating wealth. It’s not extractive. It’s not zero-sum. It’s the idea that you can make something from nothing, and that is, foundationally, a theological idea. It’s far less extractive than many other parts of the financial community.
So Jesus would have loved venture capitalists?
He cares about the heart of the individual, and some people’s hearts are more aligned. The call that I have been trying to make to the tech community is that we have a moral obligation to do things to benefit humanity, to draw us closer to God’s plan for his people.
Between your belief in End Times and your role in defense, I find it unnerving that you reportedly have a bunker in one of your homes. Is that true?
I have a ranch in New Mexico, yes, and a part of the house is more survival-oriented than others. It’s off the grid. It gives us the ability to get out of the city and be at total peace with nature.
If something horrible happened, how long could you be in your bunker?
It has a lot to do with the quantity of nonperishable foods. I haven’t solved that problem yet. It’s on the list. So the answer is, it could be a really long time if I had adequate food. But if I was actually concerned about these things, my ranch would have been a bad place for a bunker. It’s between Sandia and Los Alamos. Putting your house there is not a true survivalist mentality.
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