Josh Wolfe and Tony Thomas - The Past, Present, and Future of Defense – [Invest Like the Best, EP. 216]

Episode Summary

Executive Summary: Josh Wolf and retired four-star general Tony Thomas discuss how defense tech, geopolitics, and AI are reshaping warfare. They argue the U.S. must modernize across drones, space, semiconductors, simulation, and information operations to deter conflict and maintain moral precision.

Main Topics: Tony Thomas’s career and worldview (Priority: 5/5): T2 recounts his path from underachieving student to SOCOM commander and his anti-war, deterrence-first philosophy. Government as a root of Silicon Valley (Priority: 5/5): Josh argues modern tech grew from Cold War defense research, not garages alone. Information warfare and great-power rivalry (Priority: 5/5): Both say Russia, China, and others exploit disinformation and narrative control as core weapons. Autonomous systems and drones (Priority: 5/5): They discuss the rapid spread of cheap drones and the need for anti-drone defenses and unmanned platforms. Space as a contested domain (Priority: 4/5): Space is framed as both a commercial frontier and a military battleground for communications and surveillance. Simulation, AI, and deterrence (Priority: 4/5): The guests see simulation and AI-enabled systems as key to rehearsal, decision-making, and future deterrence. Semiconductor reshoring and chiplets (Priority: 4/5): They warn Taiwan-centric chip supply chains are vulnerable and see chiplets as a major next architecture.

Key Arguments: Defense tech must enable precision, not carpet bombing or indiscriminate force. Silicon Valley’s foundations were Pentagon- and university-funded defense R&D. Information dominance matters as much as kinetic force; losing the narrative means losing the fight. Cheap drones and unmanned systems democratize power and erode old military cost advantages. Space is already militarized; communications, imaging, and orbital infrastructure are strategic targets. Simulation and synthetic data can train systems for edge cases faster than live rehearsal alone. Chiplets may become the next disruptive semiconductor platform amid reshoring pressures.

Data Points: SOCOM size: 75,000 - Tony Thomas says Special Operations Command is 75,000 strong. Countries operated in daily: 80 - SOCOM operates in 80 different countries on any given day. Continuous combat against Islamic extremism: 19 years now going on 20 years - Thomas describes the long counterterrorism campaign. Varian IPO year: 1956 - Josh cites the first IPO out of Silicon Valley. Fairchild Semiconductor founding year: 1957 - Josh places Fairchild at the dawn of modern Silicon Valley. U.S. defense budget: $700 billion - Thomas references three straight years of this annual budget. Gerald Ford cost: $13 billion - Thomas compares one carrier’s price to SOCOM’s annual budget. Gerald Ford overrun: $5 billion over - Thomas says the carrier ended up costing $18 billion. Carrier build time horizon: one decade - He notes two more carriers will not be seen for another decade. Chip fabrication share in Asia: 75% - Josh says 75% of chips are made in Asia. TSMC market share below 40 nanometers: 30% - Josh describes TSMC’s dominance in advanced fabrication. TSMC Arizona output: 20,000 wafers a month - Josh contrasts proposed U.S. output with current Asian scale. Comparable Asian output: 12 million - Josh uses this figure to show the scale gap. Space shuttle payload cost: $1.5 billion / 27,000 kilograms / 50K per kilogram - Josh contrasts legacy launch economics with modern launch costs. SpaceX Falcon 9 launch cost: 3K per kilogram - Josh cites lower-cost orbital launch economics. Known satellites above Earth: about 6,000 - Josh estimates the current orbital population. Defunct satellites: 60% - Josh says most known satellites are no longer operational. Operational satellites: 40% - Josh estimates the active share. Predator program origin timeline: 1993 - Josh recounts Jim Woolsey’s early drone push. Pentagon drone estimate: 6 years, $500 million - Military estimate for building an early ISR drone system. Abe Karam estimate: 6 months, $5 million - Entrepreneurial estimate for the same capability. Drone attack over Mosul: 70-plus drones - Thomas describes ISIS’s coordinated drone use in 2015. Drone attack payload: little 40-millimeter grenades - Thomas describes the improvised munitions used by ISIS. Nuclear NCV threshold: 10 - Thomas says he could accept 10 noncombatant deaths in one target group decision. Soleimani strike collateral: 10 people in that immediate vicinity were killed or less - Josh cites the precision of the U.S. strike. GPS-cost comparison: $3K per kilogram - Reiterated as a key launch-cost benchmark enabling space growth.

Pivotal Quotes: "better to be fast, get something out there in the information space and recover off that, adjust off that" — Tony Thomas: He argues Western truth-seeking can be too slow for modern information warfare. "we should be the last button you press to press send" — Tony Thomas: He frames military force as a last resort after diplomacy, information, and economics. "it might be the ultimate deterrence" — Josh Wolf: He describes AI-enabled simulation as a way to prevent future state-on-state war.

Implications: The episode argues the next strategic edge will come from integrating commercial innovation with defense doctrine before rivals set the terms.