I'm Josh Lipton and I am here now with Paler CEO Alex karp for this exclusive Yahoo finance interview here at aipc This is the company's customer Conference Alex thanks for taking the Time to Chad very happy to be here so Today there's going to be more than 250 Of your customers and they're going to Be here Alex talking about AIP this is Your Flagship AI platform let's start There Alex for for maybe viewers who Aren't as familiar what is AIP how does It work and how are businesses Leveraging it right now I I I I think What everybody watching this is familiar With is you have a massive he cycle Around large language models and then When you try to use them in your Enterprise you find out that it's more Like self- flatulation and it's Expensive with no output and what we Learned in the context of Warf fighting Primarily but also across the uh 20 Years of building uh software Infrastructure where how do you manage An emergent natural resource called Large language model models in a way Where you actually get value meaning you Can transform your Enterprise you can Change the margins you can turn tech Non-technical people into technical People on the battlefield you can do Things that would have otherwise cost Billions of dollars for millions of
Dollars meaning being very precise in How you allocate troops being precise in How you target people um there's a Fundamental fallacy around large Language miles people could conflate uh Actual data of an Enterprise which is Structured and can be taken apart and Understood with a large language model Which is much more like an emergent Property something that is can be Modeled used but you need precision and All the value in the market is going to Go to chips and what we call ontology And we have this antology and the Antology will allow you to take a large Language model and use it refine it and You then impose it on your Enterprise in The logic of your Enterprise in the Security model of your Enterprise and What does that mean for the 70 70 people Are here presenting talking about why They're using it how they're using you Got to remember we started uh selling This product just over a year ago uh we Started with the claim that we knew a Lot about the precursors of large Language models and large language Models and the general approach of just Buying models is going to be essentially Self-pleasuring for an Enterprise at the Cost of the Enterprise and no one Believed us and now you see 70 people Saying hey we're using this for Construction we're using it for
Hospitals uh the people who are not Speaking but we're using it on the Battlefield we're using it to compress Margins we're using it to build Enterprises that we're only able to Build in Asia and America we're making Engineers uh better Engineers we're Making people are not Engineers into Engineers using our anology and a large Language model and this works very very Quickly and it is substantially changing The health and vitality of every Business here and as opposed to the Alternative which is is that you buy Some large language model you you party With it basically and the next day you Have a hangover and and then and so like And again for for people just looking at This what does it mean for paler it Means we are sitting on the only thing That actually creates uh a Quantifiable transformational value in An Enterprise yes it is not understood Well because everybody understands the Problem incorrectly yes it is going to Transform America and clients are Leaving the way and and by the way it's Like to actually show things that are Not understood you have to actually show Them the whole purpose of this Conference is I can tell you how an Ontology works it's actually quite Simple you have the logic of the Business you including the security
Logic of the business and you have Something that is approximates new Knowledge in a new form called a large Language model and it allows you to take The value of the new form the raw Resource of a large language model Largely powered by chips and put it into A precise organization in the logic of The business I can tell you that or I Can show you 70 businesses saying my Business is stronger healthier and much Better than any other business in my Sector and so what is I bottom line for Investors listing Alex how would you Characterize what is commercial demand Like right now for AIP the way I would Explain it to my most important Investors which are individual investors There's two parts of the market that are Creating value people will pay for chips And antology and you understand the Chips side now and now you're going to Understand ontology and what does that Mean for your business it means you can Actually use this raw resource and Process it into something that actually Works and if you want to see exactly how Watch the people presenting you're going To see people in construction using it To build buildings quicker cheaper more Accurately you're going to see people in The hospital industry saying how could I Possibly ever distribute my patients Ethically fairly and commercially
Relevantly how could I distribute Resources across how can I manage my myy As not abstract units but as a portfolio These are these things are happening Within days what I'm interested in Alex Is because you you can talk a lot of CEOs will say they'll say on find They're interested in AI but actually They're not willing to pull the trigger Yet because they have these questions About privacy security vendors but but You're saying we're crushing it we're Closing the I would tell any of them is How are you doing it well there's a Technical answer which I gave you the Precursor of but again do you want to Know how we're doing it or do you want To enjoy it being done both really great Well first you but no actually first you Want to see it works like the the the The central issue I think I mean we have Hundreds and hundreds of CEOs and by the Way the thing about the 70 people here Presenting is you know they're Presenting to other people I'm not Paying them to present the reason They're presenting is they're like wow I Didn't really believe this could work And now it's working really well so the Most important thing by the way for a Normal user someone who's going to pay Is does it work then the the second Question is how does it work does it Scale what is the commercial model you
Really have to establish it works I Would stand by the thing that it in this Case is people think of large language Models as the value and of itself what They're going to find is the large Language model is much more like a Chemistry experiment the outgrowth of Which is a something that is useful when Refined and the refinement of that for Your Enterprise happens in what we call Our ontology which is where we impose The logic of your business on the large Language model in the security and in Ual logic of your business and this is Transformative and what it means for Investors and others is there is value In this market people you can identify Where the value is very easily are People paying for it will they pay for It and what will there's a pre to Optimality to a lot of this stuff and That PR optimality happens when people Say oh I actually getting value and That's why people are here let me ask You you suggest I want to broaden the Conversation because you kind of Suggested this just give your take on The moment we're in because there's some Alex you've heard it who say listen this Is historic moment internet mobile and Now ai nvidia's Jensen Wong said the Next industrial revolution has begun do You agree with that you agree with Jensen um I think you're going to have
Very Divergent for some people this is The next generation and for others who Think they're doing very similar things It's going to fail who defines the Winners who will be the winners well Come talk to our 70 customers they think They're winning and it's like you know You look it's a lot of this goes back to Basic ideas of how you build things why You got to talked to people who are Getting value and asked them how are you Getting value why are you getting value Are you paying more or less for that Value than you think you should and That's exactly what you're going to see Today you're going to see people saying I'm getting a lot of value it went much Quicker than I thought I'm I'm Outstripping what I thought I could do I'm better much better than the people It happened efficiently and I'm probably I don't think they'll say this but I'm Paying less than I think I should and That's why I'm very happy about it let Me get your tick too when we talk about AI we got to talk geopolitics I'm very Curious to get your answer this question Who is in poll position us or China well We have a very different problem in the US than any other country in the world We are in pole position but we obviously Have to move much much quicker um you See on the battlefield and again uh Without mentioning uh where these things
Are used exactly what I'm talking about Large language model plus ontology is Can be wielded as a very deadly weapon And create enormous efficiencies for uh Especially small armies against large Armies um We have to be myopically focused in this Culture of we are in a pre-war situation With our adversaries and we can no Longer afford Theo theologies about what Works on the battlefield we have to go Very deep and look at what's happening On battlefields and do a diagnostic of It's much less critical but it's the Same thing that businesses have to do What is working what is not not a Theological thing of what would I like To believe is working and what works on The battlefield where our Central Advantage is as the United States of America the leader of the West and the Most important country in the world is Technology venture-backed companies and Especially software and softwar driven Weapon systems and how how do you get The software to control the hardware so That we can we can get out of the Business of trying to compete with People who are better at hardware and Get into the business of producing Something they do not produce as well Comes down to execution the problem we Have in the west actually is again is Pre to optimality the the the products
That actually scare enemies are are just Not products that employ Mill millions Of people they but they still are deadly There are softwar driven hardware Systems moving to softwar driven Autonomous hardware systems one of the Biggest lessons of War and the one of The reasons this is so crazy valuable is The Russians and all of our adversaries Have now learned the value of electronic Warfare by the way again these things Are exactly isomorphic to commercial you Have enormous new headwinds the Commercial your competition has Developed something that renders your Product strategy irrelevant you have to Rebuild it with a new playbook this is Exactly what happens on the battlefield You cannot use a normal missile or Normal tank on the battlefield anymore Because the the electric Warfare Electronic warfare allows you to Suppress the GPS signal and that means These things have to be controlled uh With software to go around map where the Electronic where this suppression Happens and then in the final mile at Some point autonomously completely Different ways of doing AI completely Different new ways of doing all of which Are an advantage to America if we Implement just like in American industry We have something called a chip industry That is the world's leading in this area
And or at least the the the final Product and we have something called Software anology which actually makes All of this crazy valuable do you Implement it do you go talk to people Are doing it or do you read the PowerPoint written by someone who has no Skin in the game and and and the answer To that determines whether America in The west which I view as a superior way Of living because it's fairer better Meritocratic leads to free speech allows For wealth creation does that culture Actually Dominate and win and we by the Way have to get out of the apologizing For our culture thing it's like we are a Better way of living and we have to be Willing to fight for it on the economic Front with growth that's why this Conference is so important we need Growth what makes America different than Our adversaries right now is not just Westman system we have growth where is That growth coming from technology what Is that technology it's compute plus Ontology basically and that can change The very structure of our culture from Manufacturing to weapon systems to how We organize things to our healthare Distribution can have a completely Different way and better way of living Let me ask you this you're talking about Ai and we're talking about the benefits The advantages of the use cases I am
Also interested Alex to get your take on When you think about the risk of this Technology let me put one forward we Have an election coming How concerned Are you as an American Executive but Also just an American citizen about the Very adversaries we're talking about Here deploying AI for nefarious purposes Ramping that for to so confusion and Division yeah and there's only one way To fight a a a deadly adversary yeah With a deadly set of so like if you know If you want to fight our adversaries and By the way my version of fting is you're So you're so willing to fight they don't Fight you so it's like I recently have Gotten in trouble for saying I'm a peace Activist I am a peace activist I'm a Peace activist because I want enormous Growth in America and I want really Deadly weapon systems you want peace in The world you have a lot of growth in America and you have really deadly Weapon isms and you tell your Adversaries you know what I just might Use them I'm not even going to explain Why I'll use them you start acting I Will use them you don't act up peace Through strength peace through strength And a little bit of unpredictability you Know we are in a world where our Adversaries are founders they have the Founder Playbook which is I'm going to I'm going to be aggressive and win where
I can we have a Playbook written Probably at Harvard and Yale and Stanford institutions which are now Simpatic with not producing producing Structures where they don't see Discrimination when it's in front of you Producing structures that and ideologies That are literally built for the decline Of our country we need to get out of the Business of we're declining we're Apologizing we're not going to use force It we need to and the peace activists Are actually us and the PE people who Claim to be peace activists are actually Sewing destruction disorder Discrimination it's an exact inversion Of what they claim to be and we and we But those of us on our side who are PR Growth pro- Amer Pro our economy Transfers and pro having the best Systems in the world we need to organize Build things and then we also need to Have exact understanding of what works What doesn't and implement it very Quickly I I mentioned the election I Want to stick with that real quickly Does it matter to paler who wins Biden Or Trump does that impact any potential Business you're going to have with US Government look we've been in we've Dealt we've been in business for 20 Years I have not seen an impact on our Business depending who's President I Have not I am interest listen we talk
About these conflicts around the world Right now running hot Russia Ukraine Israel Hamas has that changed how the do DOD thinks about spending Alex and what They want to spend on uh the dod is Changing rapidly how it spends so well There's much more of a focus you saw That we won this big Maven contract um These things are a natural growth of Outgrowth of we need to fight better we Need to fight quicker we need to fight On the terms where America has Superiority of course we can move Quicker of course the dod wants to move Quicker our society wants to move Quicker I think unfortunately we are Going to end up moving even quicker Because our adversaries are are are Likely to continue their nefarious uh Acts which aders Russia China Iran I Mean all three are working together you Know one of the things I I just I just I I I travel around the world and Basically wherever you go people are Like well I want you to I want I want You to be strong on this one and appease The other people who believe in Appeasement whether it's Iran China Russia pick your favorite the one you're Sympathetic with they don't understand We have adversaries they're working Together despite what you problems you May have some people don't like the war In Ukraine some people don't like Israel
Some people want an appeasement strategy With China it doesn't work they are Working together against us and we have To work together against them last Question you mentioned Maven I wanted to Get the dod recently disclosing this was A five-year $480 million contract with Paler just walk through what is that Contract what is it and what does it Mean for your company I never know what We're allowed to say about these very Sensitive contracts but I I'll tell you What it means for the nation this Country is focused on using AI to have a Structural advantage in how we deploy And understand the battlefield deploy Our assets and understand the Battlefield and pal here plays a crucial Role in that in that Arena we're going To continue to play a crucial war in That Arena and by the way we're making It possible through our software to Allow other software and Hardware Companies to work off of our platform so This is not just a win for paler though It is and I'm very proud of it this is a Win quite frankly for the tech ecosystem That powers this nation how big is that Ecosystem now which has grown a lot Since we first started talking look the The the Venture Capital world has Completely flipped when we talked the Last time by and large the tech company Community was adversarial to paler on
This issue of supporting our nation now I think the Tech Community is the most Most supportive part of our economy in In in protecting our nation and why did That why did that flip by the way hey You know they stopped hating the player Or the G Alex carp I know you are very busy Today we appreciate your time thank you Take care bye
