David Yulovich, partner at Andreessen Horowitz and co-founder of the American Dynamism practice, joins Molly to discuss the intersection of venture capital, national security, and emerging technologies. Yulovich previously founded OpenDNS and joined a16z in 2018, where he led investments in defense companies like Anduril and public safety firm Flock Safety.

The conversation covers the origins of American Dynamism as both a meme and movement, starting with early investments in Palmer Luckey's Anduril after Google's controversial exit from Project Maven. Yulovich explains how he partnered with General Catalyst's Katherine Boyle to formalize the practice in 2022, eventually raising a $660 million fund focused on defense, space, and public safety technologies.

Key topics include JP Morgan's massive $1.5 trillion commitment to the category, structural challenges in defense procurement, the role of AI in transforming battlefield capabilities, and why private capital offers advantages over traditional government R&D funding models.

From Google's Project Maven Exit to Anduril's Rise

Google's 2018 exit from Project Maven created a watershed moment, with employee protests forcing the company to abandon government AI partnerships for defense applications.

Palmer Luckey had been treated as a 'pariah' after leaving Meta over alleged political financing that turned out to be '$9,000 for one billboard once' - none of the accusations were true.

Anduril's founding team came from Palantir and Oculus, representing a new generation of defense entrepreneurs with Silicon Valley backgrounds building 'the next great defense prime.'

Mark Andreessen and Ben Horowitz supported government partnerships from Netscape days, having 'helped pioneer SSL, like the little encryption icon in your web browser to do secure encrypted communications.'

Building the American Dynamism Practice and Fund

Yulovich joined a16z in 2018 with the pitch: 'if I came to Andreessen Horowitz I could do whatever I wanted' - leading to early defense investments like Anduril's Series B.

Partnership with Katherine Boyle began competitively, splitting Anduril's Series B after both firms wanted the deal, with Boyle 'very unhappy with that outcome' initially.

Flock Safety CEO Garrett Langley brokered their collaboration, calling Boyle the night before her General Catalyst pitch to say 'the deal got done' with a16z instead.

American Dynamism launched in early 2022 as 'a meme that was becoming a movement,' initially borrowing venture dollars before raising the $660 million dedicated fund.

JP Morgan's $1.5 Trillion Commitment Signals Mainstream Adoption

JP Morgan's $1.5 trillion commitment represents 'broadscale recognition that we need to be investing in these areas' with 'incredible returns for the investors.'

The bank 'went out of their way not to use the words dynamism' despite the investment clearly targeting American Dynamism categories.

Supply chain vulnerabilities drive investment need: 'a lot of the raw materials we need for our own ship building comes from China' including steel, metals, and battery components.

Investment categories span mining, manufacturing, supply chain, logistics, robotics, autonomy, plus existing defense, space, public safety, and energy sectors.

Private Capital vs Government R&D Funding Models

Government R&D contracts create 'so burdensome' oversight that 'it's almost impossible for these small companies to cope with that level of oversight.'

Private capital model: 'if you don't pay for the R&D you just buy the finished product. All you have to do is commit to buying the finished product.'

Venture firms are 'better pickers of who's going to deliver great technology than the government is' because 'we've been doing it a lot longer.'

Defense procurement reform needed: shift from 'what have you delivered in the past' criteria to 'bake offs' and competitions where 'if a startup shows up with the best product, just pick that one.'

AI's Transformative Impact Across Defense Categories

AI drives massive energy demand: 'commercial real estate construction is like petered off and dropping but like data center construction is like just ascending' through the roof.

Anduril announced 'Eagle Eye' body-worn headset with 'very advanced AI software in a way that the war fighter has never been able to utilize in the past.'

Drone warfare evolution requires AI coordination: 'as we start moving to swarms of drones, thousands of drones, you're going to need AI to coordinate all those things.'

Flock Safety's AI enables 'free form search' where police can describe 'a silver Camry with aftermarket rims and a spoiler' instead of relying on license plates from 'crappy cameras.'