America’s Tech Strategy w/ Qasar Younis, Sen. Jack Reed, and Josh Wolfe

How are you attracting talent? How are you retaining them? Do you worry about the China espionage piece as it relates to talent? Are you worried about the immigration policy as it relates to keeping and retaining people?

Yes on the espionage piece. I think it's real. I think in policy broadly, when you're dealing with an adversary which doesn't play by the rules that you play by, you are going to be vulnerable in ways which you're not expecting. And at the same time, we have lots of immigrants at the company. It's the strength of the company, and I don't think there's any Silicon Valley company that's not like that. We have to be very careful not to, you know, the baby in the bathwater. We have to have nuanced policies that specifically address China or other adversaries, but everybody.

Today on Upstream, we're releasing a conversation featuring Josh Wolfe, a founder and managing partner at Lux Capital, Caspar Younes, CEO of Applied Intuition, and Senator Jack Reed of Rhode Island, from the 2025 Hill and Valley Forum held last week. The panel covers dual-use technologies, China's surveillance state, the geopolitics of AI, and more. Please enjoy.

We're, we're going to kick it off. I'm going to give you a heads up that the senator has to run to some important business in about 15, 20 minutes or so. So he's going to get up, but it won't be a surprise. It won't be something that Kass or I said. Caster's going to move over. We'll continue the conversation. And it's a great opportunity.

I'm also very busy, so I'm on stage alone to finish up.

And it's really important because Caster usually doesn't do a lot of public appearances. And this is a very special thing. I will say the theme of this has been AI and autonomy, and this is something we're going to talk about. But the one thing that I'm long more than AI autonomy, because I've never seen this in a room of techies before— neckties. We're going long neckties. I truly have not worn a necktie in a year since I've been here.

Caster, if you watch carefully, I wear the same necktie in every So I think that says a lot about Silicon Valley.

Kessler, I want to start with you so people know what Applied Intuition does, because I just have to say, we have hundreds of portfolio companies at Lux that span everything from cutting-edge biotech to aerospace and defense. You are the only company that for many years has actually been, and we never asked you to be, cash flow positive. So what does Applied Intuition do and how did you do that?

Yeah, so thank you for— thank you, Senator Reid, for your 28 years of service. And Josh, you're the day one investor, so super happy to be here. Applied Intuition is a company that was founded in 2017. We got into defense in 2018. What we actually do is, if you think about AI, you're mostly interacting with AI through your phone and through your laptop. We're bringing all of that AI to moving machines. And so our mission is to bring intelligence to machines. So cars, trucks, tanks, planes. We're a dual-use company, so we work both in the commercial sector and we work in the defense sector. But we provide, you know, kind of a good way, illustrative way to think about this is, If you work in a mine and you're a mining operator, you walk up to this machine, which is the size of a house, that AI should know, that machine should know who you are as you enter the cabin. You can interact with the machine. The machine sees you, you see it, and you work, you team together with the machine. The same kind of technology we're bringing to tanks and to planes and to cars. We provide all that technology. That's what Applied does.

I don't know if you're allowed to say it, but how many of the top major automakers Are basically running on you now.

Yeah. Of the top 20 global automakers, 18 of us use us. It's, you know, and the other 2 also use us, but we are not allowed to say.

They won't. They won't say. So, um, you mentioned something deep in the ecosystem. You mentioned something important, which was dual use. And I want to turn to Senator Reid. That's something that you've talked about, but it's an important topic because when you develop a technology that is commercially available, it also means that adversaries can use it and maybe to our detriment. What is your take on how you deal with this dual use?

Well, it's a problem because our adversaries, principally China, when they get a hold of equipment, it's very difficult to match them, especially if they take that basic equipment and improve it and find different uses for it, sometimes very novel. And my observations of having gone into Ukraine at least twice, and then with our trainers in Germany, every day on the battlefield is a new innovation now because They're improvising on the technology that they somehow got, and it's going and going. So that's one aspect we have to be really particularly careful about. But the— and the other thing too is that if they use it for different purposes than we ever anticipated, that's a surprise to us in the military. And then the other major problem would be, even if they don't take our equipment illegally, usually, is that if they develop types of algorithms with a different architecture, when we sense that on the battlefield where, like, it's going to take a while to develop a response that's effective. So this is almost a minute-by-minute situation.

How do you think that industry plays a role in this? Because many companies would say, look, our investors put money into us, we've got to make as much money as we can. Is this something that we've got to think about? Maybe the answer is no. You're a patriot. I know this from day one, you've been thinking about this. What is industry's role?

Yeah, I mean, I think this— the mistake that we can make is our fear of our technology being used by our adversaries, and we, you know, we focus more on, like, hoarding that So I just, right before I came from Shanghai, I flew from Shanghai here. We applied, the only country we don't do business is in China, but we watch China very deeply for—

And they watch you very deeply too.

Yeah, I'm sure they do. And we can talk about that. It was a fascinating trip. But the kind of punchline there is we met with one of the local autonomy companies and they were strikingly open with us. And then we asked kind of both our employees and folks that we know, like, Why is this company going through all their technical details with an American company who has no business in China? And they said, well, I think we take in— we had some dinner conversations last night, and it was like, oh, well, the Chinese, they all work together for national spirit. I don't think it's that. I think what it really is, is there is a— there's no culture around IP. There is no respect for IP. And so, they not only take from us, they take from each other. And so, the concept fundamentally that I've invented something and my edge is you not knowing it is just completely discarded. started. And so they're very open in the hope that when we— they tell us all this stuff, we're going to respond. There's a lesson for us there, which is us being American companies in a globally competitive environment, is we have to continue to build the best products in the business. And the, let's say, the bastardization or manipulation of those products for ill use is secondary to the primary point, which is we have to have the best products in the business.

So I love this because this is a very market-driven approach. This is let's make the best technology and let It win in the marketplace. The other approach is, of course, policy and using the hammers and cudgels that we can to restrict people or encourage or incent or subsidize or tax to do that. So, taking this from the policy perspective, the China threat, the billions of dollars that they're putting into everything from AI to autonomous systems to hypersonics and military-civil fusion, what are the policy levers that you see are the ones that could actually make an impact here?

Well, the policy levers, first, are resources. Second, and those resources include human capital, probably the key aspect here, getting into our services and all of our ancillary organizations, the really talented young people and not so young people that can do this work. And then, like anything, continually improvise. I mean, one of the aspects of military culture is it's very stable, but that stability is, is not effective when you're going against these types of innovative systems which can change sometimes overnight. But we're stressed resources, stressed human capital, and also we have to look at our— not only our commercial partners, but also our academic partners. And that's why there's a lot of stress recently about sort of the administration's attempts to undo a lot of academic research, et cetera, also threatening people with immigration. That's going to cut down on our talent, and it's also going to cut down on our— institutional capacity to innovate. One of the difficulties in the DOD is that we've tried to address the issue of, got a great idea, we got a prototype, but it's going to take X years to get to the field, put it in the hands of a soldier, a Marine, etc. It's the valley of death. We're trying to get through that. One thing we did, and Ash Carter was really the author of it, was the DIU, the Defense Innovation Unit. It's doing a great job. It's got to do more. And they also have a comparable private equity entity or private buying equity in companies. So we're trying to retool and I can— we're not there yet. We have to do a lot more.

Are there any policy levers that you would push on, whether it's, you know, we had CHIPS Act to encourage stuff here. There's chip restrictions for both Tier 1, Tier 2, you know, countries and beyond. Are there any policy levers that if you could snap your fingers and we know that Congress and government does not work that way, we don't— that you would do today to maintain our advantage vis-à-vis China?

Well, I think really what we have to do is focus more resources into research, into private companies and public entities that are really on the cutting edge of technology.

And—

but then we also have to think beyond just getting them ready to go. We have to think of how do we take that and quickly get it into the hands of a warfighter. And we're We've been trying to solve that dilemma, frankly, every year I've been here, all 28, and we're still working on it.

One of the things that you said, Senator, before was the talent piece. And, Kassirer, I want to get your take on this because you have recruited extraordinarily well. How are you attracting talent? How are you retaining them? Do you worry about the China espionage piece as it relates to talent? Are you worried about the immigration policy as it relates to keeping and retaining people?

Yes, on— yes, on the espionage piece, I think it's real. I think in policy broadly, before I talk about talent, it does matter. I also don't want us to, you know, from my previous point, to have this false sense that we just work hard and it'll all work out. That's also not true. When you're dealing with an adversary which doesn't play by the rules that you play by, you are going to be vulnerable in ways which you're not expecting. And I think we have to be clear-eyed in our, let's say, expectations of China. And so, simultaneously, I do think we need to take action. You can't just say, we just got to work harder and faster and we'll beat them. The concept, though, of talent is, you know, we have Chinese employees. We're a, you know, we have FCL, we do cleared work as well, and at the same time, we have lots of immigrants at the company. It's the strength of the company, and I don't think there's any Silicon Valley company that's not like that. I think, so we have to be very careful not to, you know, the baby in the bathwater. As we try to figure out, we have to have nuanced policies that specifically address China, or other countries, or other adversaries, but not everybody.

Thank you.

The president yesterday was in Warren, Michigan. It's where I grew up and about a mile from my house. And the, you know, it was about the 100 days, but it was really about tariffs in the automotive industry. I grew up in the car business. I went to the General Motors Institute.

And by the way, just so people know, you know, growing up there and then coming to help effectively run YC in the Valley and learning that game and then deciding to basically come back to this industry, to me, this is like the American dream.

Yeah. Yeah. It's extremely, extremely fortunate. I mean, I mean, you know, when I was coming back from China, literally on the flight here, it's like, We do not appreciate the world that we live in, like the country that we live in, purely in the sense of, you know, this— just a little aside, there is an intense surveillance state in China.

Yes.

The first time I went to China was 2005. The big difference between now and today is today the technology exists for the party to really watch everything that you do, every payment that you make, every location you go to. There's cameras everywhere. And so when I left, I had this just exhaling, and you realize, you know, There's only a few lines in the Constitution to really separate us. And these are important things that we can't discard. And so the broad point is policy matters. It needs to be nuanced. The specific point on human capital is the reason we've been successful is we've attracted the best talent globally. And, you know, I think like, you know, the president recently had this idea with the gold card. It's great. I mean, my version would be Let's do something like that for really smart people as well. So not— it's not that you have $5 million, but you hit some academic or IQ threshold. And, you know, I don't have a— the president is much better at marketing. I would call it maybe like the nerd card or something like that. You know, one of you guys can come up with a better thing.

Everybody is going to be competing for the nerd card.

Yeah, exactly. But all the cool kids, there should be a— there should be no question. If you're a doctorate student, you have a PhD in China, you have a PhD in Russia, and you want to come to the United States, we should find ways to attract that talent. We focus on adversaries a lot because of the nature of policy and the defense industry, but broadly speaking, there are 8 billion people, and we need to continue to attract them. That's our edge. It's just like in any startup or any finance, what's our edge? That's our edge. In the process of being afraid of the changes in the globe and technology, We remove our edge, we're going to— that's the true real—

We are big believers, obviously, the history of this country, you know, born in immigrants. You think about the World War II outcome that could have been different had we not attracted incredible German scientists. You think about the Cold War, attracting Russian émigrés who wanted to assimilate. And that's the key thing, is having immigrants that want to come here, want a better life. And I would love to see a program where we were able to get the best and brightest, have a brain drain coming from China and other maybe adversarial countries, give those folks a better life and get their families here, too. Because the families are sometimes a form of leverage that the country has over the worker that comes here. Because if they don't comply, the family's going to be in trouble.

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You mentioned before data security and surveillance, and this is something, Senator, I want to turn to you. When we're talking about AI, when we're talking about autonomous vehicles, the sheer amount of information, petabytes of information that's being captured, mapping terrain, mapping cities, mapping people's whereabouts, stores, all this kind of stuff. It makes our lives easier on the one hand, and there's always this trade-off between convenience and security and vulnerability. How do you think about the security and vulnerability with the mass production and consumption of data that's happening with companies like Casser's and others?

Well, you know, we're running into a situation where the data's accumulating on everybody, every detail of life, et cetera, but we don't have any really good guardrails in place to say you can't use it adversely, et cetera. And one of the things I wonder seriously about DOJ in terms of what are they doing with all that data and where's it going? Are they taking it back to their home or, you know, that's a real question. And we have to deal with that in Congress and the administration. But we have to really be wary of it. What we tried to do in the last Congress with Leader Schumer's direction is establish an AI working group. Bipartisan, that was going to look very carefully at all of these issues— guardrails, the future, how do we, you know, make it consistent with our American ideals as well as effective against everyone, including the Chinese particularly. And we had a series of meetings, we had roundtables, etc., but nothing was able to emerge. And this Congress doesn't seem to be interested at all because they're preoccupied with the current situations and getting people into office, etc. But we really have to do that because looking back, I think in respect to social media, we gave them a free ride and they took advantage of it. And now we're trying to negotiate sort of rules of the road for social media. It's too powerful.

Well, I personally hope that we see some movement on the TikTok bill and, and maybe that, you know, has as part of this grand bargain with China, we see some divestiture because I think it's a great national security threat. On the data side, when I think about autonomous vehicles, these things are effectively giant data centers on wheels. I mean, you know, it's silicon and it's steel and it's software. How do you think about the vulnerability there? You think about adversaries being able to track or capture that data, infiltrate it, potentially corrupt it. What are the things that you're doing? Are there new technologies that they're using or that you're using? Is it internally developed? The threat vectors, are they evolving?

Yeah, I also want to touch on the data aspect because it's a massive part. There's 2, let's say, endpoints on data policy or data philosophy. You have the one side, which we just talked about, which is China, which is there's no expectation that you live— you know, you're in a hotel room, you're being recorded. There is no privacy anywhere. And the far other side is you have Europe. You have GDPR, and we have to accept cookies on every website, and it makes us feel good that somehow, you know, the technology is not being abused. The reality is both of those are imperfect systems. The Chinese system is very, very bad, and I think we're not You know, we cannot go towards that as a country because I think that it'll rot away and it'll really take the underpinnings of democracy away. And we're not America at that point. But the other end where you have policies that Europe is insane, they, you know, it's not random. OpenAI starts in America and specifically in Silicon Valley, right? Why don't these— why don't, you know, the crazy stats are in the last 30 years, there have been $7 trillion companies founded roughly depending on where, you know, you look at the market cap, in the United States, mostly on the West Coast, almost all in Silicon Valley. In that same time, in 30 years in Europe, there has not been a single $100 billion company founded. So there is something that we can't go to this other extreme, that we were so scared of our own shadow and the potential downsides of new technology that we decide that we're going to live in caves. That's not an alternative, and we are in a global competitive ecosystem, and we are competing with people who are not just the Europeans.

All right, so you've got the Anti-Cave Privacy Protection Act of 2026.

So, there's a middle ground, and I think, you know, social media, I think things could have been done better, absolutely and obviously, but what part of our history do we look at that we couldn't have done? In the oil age, you could have done things better. In the steel age, you could have done things better. In the rail age, we could have done things better. So, I think it's a part of the messiness of a democratic capitalist society that we learn things as we grow. Let's just not go overboard. And I'm really, you know, advocate for that middle way. And I think America has done a great job between, you know, these two extremes and many, many policy decisions that we've struck that right way. And generally speaking, I mean, it's, it's, it's, it is the way towards innovation and it's, it's, it's letting us create the best technologies on the planet. Even when it comes to defense, you know, Napoleon, there's a great line from Napoleon, God is on the side with the best artillery, right? And so, for us, as a country, our economy matters, and our technology matters, and those are the things we should focus on. I'm not saying discard privacy. Can't do that. But at the same time, I'm not saying everything should be first decided in DC, and then let everybody kind of deal with those, you know, ramifications.

Senator, anything to add on that?

Yeah, no, I think you've hit the right point, which is we want to find that place in the middle where people feel secure in their personal information, but it doesn't frustrate innovation, technology, which we've always been famous for in the United States, and we're continuing to do it now. We're leading the way, and we are searching for that middle ground. But I think we have to reach something along the way because just unfettered markets in a global economy and unfettered technologies in a global economy will— you go down, you don't go up.

Yeah. And I think that's where the public-private partnership is critical. I think, you know, it's not to toot, you know, the Hill and Valley Forum, but like these kind of things are really important. 15, 20 years ago, 5 years ago, these types of events are very, very uncommon. And so I think this dialogue is important because the other end in China, there is no public and private are one. The government owns all the land. They— all the senior, all the senior, you know, technology leadership are members of the party.

I want to come back to China in a second. But first, I'm going to excuse you because you have to run, sir.

And thanks, Josh.

Great appreciation for you being here. I don't want them playing music and ushering him off. So why don't you guys switch seats? Casser, come closer.

Come on, Casser.

Thank you, sir.

Thank you.

Senator, great to be here.

All right, the good news is Kassirer and I speak really slowly, so, you know, we'll cover an hour worth of content in the next 5 minutes or so that we have. You were just in China.

Yeah.

Are they beating us? Are we losing?

I mean, it depends on which way. I mean, I can tell you, it was an eye-opening trip. This is not certainly the first time I've been to China, but I think the top of the list of what was eye-opening was that the surveillance state, which has been something that the government has wanted to do, is just real. I mean, it is real in every single way. You can't use your credit cards there. You have to use Alipay. You can't use Google Maps. You have to use A-Maps. You can't— there's no Uber, Lyft.

Total state capture.

Yeah.

Yeah. And so everything that you do is, is being monitored. And I think so. I go to auto— I'm there to do Auto Shanghai as we had about half a dozen team members there. I get to Auto Shanghai and the registration, it just— I walk up to the camera and it just turns green. And they said, you're good to go.

And by the way, your kids are okay at home.

Yeah, yeah. And, you know, our Chinese team members were like, isn't China so convenient? And I was like, that is absolutely mind-bogglingly scary. You know, you don't even have to do anything and they know that you're there for this event. And but the real takeaway was Auto Shanghai is supposed to be this very international event. It's 99% Chinese. I mean, the— and when we bumped into the Germans and some Koreans and Japanese who were other automotive executives, This topic came up, like, yeah, this is for an auto show, this is strikingly homogeneous. And Shanghai as a whole, there's less foreigners than I've ever seen in my life there.

Do you have a theory of the case why?

I think people— I mean, I asked and people said companies are leaving because this surveillance state is overwhelming for expats, that you just, you can't breathe. And I think they're—

Are they going to Singapore? Are they going to India? Or are they going to the US?

I don't know, but it was palpable. Yeah, it was the number one thing on my mind. I didn't leave— that flight to Haneda wasn't like, wow, I think the Chinese automotive ecosystem is really going to take us for a ride. I thought, man, this is a ticking time bomb. I don't know where this goes.

Let's look at the geopolitics of this because that's an interesting dynamic. Of course, the world right now is in flux. It always is, but people always have varying levels of certitude and confidence. Right now, confidence a little bit lower, less predictability. In this domain, which you are pioneering in AI and autonomous vehicles and the automation of stuff that moves.

Yeah.

What are we going to see change in the world? Where are there going to be new winners and losers? Who's going to accrue geopolitical power that might surprise people?

Yeah, I mean, I think, I think the, you know, it's kind of like you can use Silicon Valley as a microcosm to that answer. Just extrapolate this to the world. Who are the winners in AI in Silicon Valley? You can take mobile. People thought mobile was going to be a huge proliferation of startups, and mobile is actually won by Apple, by Facebook, by Google.

Incumbents.

Yeah. The youngest FAANG, the youngest of the traditional FAANGs, is now Facebook, which is over 20 years old. And that's a worrying statistic. And so OpenAI's emergence, it's owned by Microsoft to some, you know—

You're not an incumbent.

To some degree. Say again?

You're not an incumbent. You're an upstart.

Yeah, exactly. But I think there is something to be said where the value capture is happening by the big players.

Okay.

So, if you take that at a global stage, it's not going to be a small country that's going to— just the sheer resources required in order to do this specific type of innovation. I think once you get to— this is infrastructure innovation, really. You're in the infrastructure age of AI right now. When you get to the application age, that transition is happening very, very quickly. Then I think you'll see a lot more diversity and a lot more players coming in. But I think the big players are going to have a big stake. And so, at the At the company-wide level, it's the big companies. At the state actor level, it's the big countries. So, it's the United States, it's China, EU, maybe.

In the last minute we have, is there anything in this sector, again, autonomy and AI, as it relates to defense or to the commercial sector, which is quickly being upturned, that you would impart on people as advice if they're entering the space, for the startups and the technologists and the builders?

I mean, the, the, the mic you know, message to the folks here who are, you know, working on the Hill or in the kind of larger, let's say, bureaucracy of D.C., specifically relating to defense, we need to take autonomy specifically. Autonomy is where AI meets the warfighter. Like, that is really what autonomy is. It's the first time AI is actually going to be used and manipulated in the battlefield. And so, we're still a little lagging in adopting this. I think everyone tacitly understands that we need to adopt autonomy in basically every major service, but to the level of degree, it's not there. A lot of times, we get asked this question, you know, whether it's the folks like the senator who say, you know, should we empower the DIU more, or what are the specific things that we can do? The punchline is, like, increased bureaucracy is not going to, you know, broadly, bureaucracy is not going to beat Beijing, and bureaucracy is also not going to make our systems better. That means more processes in the DOD does not make it better. What makes it better? The more senior officials that actually have worked on AI themselves, the better we are. You can use this in the course— and we're a dual-use company, so we go to large companies like General Motors and Volkswagen and Toyota. They similarly look like the DOD. VW has 600,000 employees. It's not a small organization, and they're going through this AI change. We see our commercial partners, the ones that have more senior team members who understand AI, adopting AI faster. So, it's not they just have better procurement processes, and somehow we just get obsessed with procurement because it's an easy, tangible problem to solve. The real problem to solve is how do you find engineers who work on AI to now work at the DOD at the most senior levels and procure this technology? You've got a big few weeks.

I know you're not going to let me spoil any news, but people should watch what's going to happen in the next few weeks. But I think the next few years, you got obviously a big runway with this company, but I'm looking at these American flags behind you and I see some political office in your future. Passer, great to be with you. I think our time's up, but thank you.

Thank you for having us.

Upstream with Erik Torenberg is a show from Turpentine, the podcast network behind Moment of Zen and Cognitive Revolution. If you like the episode, please leave a review in the Apple Store.