Booz Allen Hamilton CEO on AI in government: Space Llama, $1.5T defense ambitions, and the a16z partnership

channels, target audiences, and measure sales just like on Meta. Well, we have the president and CEO of Booze Allen Hamilton [music] here. Welcome to the show. Thank you so much for joining.

Hey guys, good to see you.

Good to see you, too. Uh I I love your I want to talk about the partnership with Andre Horowitz, but first I want you to introduce yourself and tell us a little bit about your journey because it's a classic overnight success that we love here on the show.

Overnight success. I love it. Thank you for the special effects. I was wondering if you're going to use some. Of course,

I'll use a lot. As much as you want.

So, uh, born and raised in Argentina. Came here to go to school.

Find my way to Wisconsin, Oakclair of all places. Loved it there.

I went to grad school, joined Boo Allen. Uh, this summer will be 35 years. I was a summer intern [clears throat] with Boo Allen.

Wow. and u and here I am you know and um thought I was going to be here for two years but fell in love with the people with the work with the culture and I kept getting challenged and

uh every time I wanted to leave they promoted me so I stayed and [laughter]

that's amazing

that's a virtuous cycle for you

were there any breaks I know that uh a lot of my friends who were interns in consulting or banking would leave for a couple years do an MBA and then maybe come back was there any of that or were you just there the whole time?

No.

Wow.

Right through. I'm a I'm truly a lifer.

It's amazing. What What advice are you giving to the next generation of folks who might be interns right now at Booze Allen? Uh is that opportunity still there? Do you see the the the lifer path as being one that you recommend to the new intern?

100%. 100%. And look, I mean, I I think you first of all, I I tell everybody, you got to find an organization that where your personal values and what you want to do matches [clears throat] the organizational values and what they want to do. And when you find one,

grab on with both hands because that alignment is what keeps you going.

Yeah.

Uh and then I say to people, look, I mean, I early in my career, I wanted to get promoted and this and that and the other thing, and then I at some point I I said, you know what, I just want to learn stuff.

And then they were like, you got to be a CEO. Yeah. What? Uh, it's kind of

I started getting promoted faster.

Yeah, that's great.

Well, yeah, it's kind of rough if you're really good at getting promoted. It's kind of rough to to kind of you've kind of capped out a little bit here, but uh

not many not many promotions left. Um,

I you know, I I I come to work because I I love what I do. I mean, and this has been true for the last 35 years. And yeah, at the beginning, you know, I I was in a bit of the rat race. I got off of that and literally I just said, "Let's go learn stuff." You know, I what do I not know about? Let me try and go learn how to do that.

Yeah.

How have the last few years keeps me here?

How have the last few years of the AI boom been? Has it turned it more into a rat race? Has there been more green field projects that have been less of a rat race? Uh, how's the how has the AI boom transformed your business? What you're working on, how you're spending your time?

So, this has been awesome. No, first of all, you should know I have a background in statistics. So, I was like doing early work on neural networks and if I'd been born 20 years later, I would have been a data scientist, but we didn't have cool titles like that.

Uh, but I was a big data guy when big data was tiny compared to what it is now.

Let's give it up for big data.

And about years ago, we love big data here.

Yeah. you know, about a dozen years ago, um, I I I I took the strong form view that said, you know, AI really is going to revolutionize everything. We need to get as bus Allen at the at the leading edge of that.

Uh, we built essentially the largest uh we're the largest AI provider to the federal government.

Uh, most of our business is with the government.

We've been the largest cyber player

uh in the federal space going back now maybe 20 plus years. And uh I I've always thought about it as AI and right it's this intersection of AI and cyber, AI and space, AI and autonomy and that that's what we've been trying to build and and you know Ballen really people think of us as a consulting firm because we we were one once

uh that's the company that I joined.

Sure. But if you look at us now, uh our business is we're in the business of taking leading edge technology and bringing it to government missions.

Uh everything from military missions to space to uh payment systems to public health.

Uh we're bringing tech into all of that, which is why we build this amazing partnerships.

How uh you know, because Yeah. How has the last year changed your relationship with the government that that you know if you start 2025? I think about Doge and and a bunch of political energy around reducing cost and maybe reducing budgets and doing more with less which of course software and technology can help with. Uh at the same time I saw a headline that the that President Trump thinks the defense budgets to be 1.5 trillion and that feels like okay expand and we're in a different mode. So has that been whiplash or have how have you processed setting up your business to deliver what you need to to the government across those sorts of narrative arcs that have uh rolled out over the last you know 12 months.

So if you think about our business there's two pieces to it. There's work that we do for for national security.

Yeah.

That's about 3/4 of our business.

Wow.

And then there's work that we do for uh more of the civilian agencies.

Um think about things like the VA, uh human health services,

uh uh Treasury, IRS, th those kinds of agencies.

Um the uh the administration has been pretty consistent on on on the more of the civilian side. They've been looking very hard for ways to reduce cost

on the on the national security side. They've been looking to reprogram against top priorities.

And so this idea that that we're going to spend more on defense going forward uh if if you know that obviously needs to be approved by Congress and all of that. But the president has been pretty consistent about wanting to rebuild the military

uh ensure that that our military continues to be the preeminent one in the world. and and we view bringing technology into that and working with the commercial technology providers to make their technology useful

into those missions which is not a straight translation by any means

as a big part of what we do. So we develop tech that sits on top or together with their tech and together we build things that then neither one of us

could do. Um

so what does that mean for hiring? I imagine that you're you're partnering with the foundation lab companies, not necessarily trying to go up against Mark Zuckerberg and pay a billion dollars for some fancy AI researcher. Let Google deep mind, let open AI, let Anthropic and other labs build the foundation models and then you can go and implement them. So what type of person is really excelling? How technical are they? Are you hiring computer scientists, MBAs, both? Uh who who's thriving?

We're hiring uh largely uh think of it as AI researchers. We have a very large quantum

Okay. Interesting.

Team uh where we hire astrophysicists.

No way.

Uh you know and and and and so we're we're really at the leading edge of these technologies working side by side.

Yeah.

With with all of our partners. Uh I I joke about the fact that I knew Jensen back when he was only worth a couple billion dollars. [laughter] uh and he and our [clears throat] companies have been working together on some of these things since like 2017. So we we've been at this

for a while. I mean you talk about that Mark and and Meta.

Yeah.

Uh we took Lama.

Okay.

And working with them uh translated into something that could be ported onto the International Space Station.

Okay.

Uh so it became space llama which is [laughter] it made for some pretty cool memes. But now on the on the research side of the international space station, there is a a for the first time a large language model there

so that instead of going through all of these paper manuals, every time they need to fix something, they can actually do natural language queries

and and and do all of that. So that's the type of work that we're doing. If you think about it, most commercial tech

Yeah.

is oriented towards the idea that you're going to be in a data center that has perfect access to energy, perfect access to fiber. Sure.

Um, you know, it's 24/7 uptime.

When you start dealing with some of the missions that we support,

yeah,

you're at the edge, you're in the desert, you're in space, you're underwater, you have no connectivity,

uh, form factor matters, power matters, and we need to take the all of this amazing technology and these trillions of dollars in investment

and make it useful in those settings. And for that we build additional tech that is proprietary to us that that combined with theirs uh really does wonderful things.

And we started working with some of the uh companies that are uh A16Z

Yeah.

Porcos

uh and and discover that you know there's a lot we were doing there for the with the companies that were already oriented towards our market.

Mh.

But I know you had Ben on the show on on Friday. uh you know they have 1100 companies or more in their portfolio. The vast majority of them are not thinking about these missions

but they're building many are building technologies that are highly applicable.

Sure. Okay.

So if we grab their tech and our tech and put it together in a different way,

we expand markets, create differentiation,

uh it's all sorts of good stuff that happens.

Yeah. You mentioned you knew uh you knew Jensen when he was just worth a few billion dollars. When did you meet uh the Andre team? how long has this partnership been in the works and then uh I'd love to know more about the nature of the exclusivity of the partnership, how that all takes shape uh and anything else you can tell us about it.

Uh sure. So um we've been working with with uh companies that are in their portfolio for years without actually engaging

at the you know w with az directly. So, uh, Allen and Data Bricks, for example, have done a number of things together in the Department of Defense.

Uh, we we do things with Andreal. We, you know, we we have a partnership with Shield AI.

Oh, yeah.

That makes a ton of sense because we're building our tech and our cyber security tech on top of Hivemind,

which is their core uh autonomy product. Uh and then we about a year plus ago uh I started talking to to Ben and to Mark

and we started shaping this idea that there's more we could do

together uh at their level that that you know we could begin to think about not just the companies that are obviously playing in this market but the broader

ecosystem and thinking about okay how we create a way to even do that. What's that discovery process

look like? How do we create opportunities? How do we vet them? Uh how do we manage our tech? So that you know and and that's been the the over the course of the last year, we've done a bunch of stuff that has gotten us all super excited leading up to this announcement on Monday.

Great.

What are some of the earliest stage companies that that uh would qualify for this program? Are you working with uh like series A stage?

They have they have an accelerator. So they companies that come in with just one or two co-founders and they get a $100,000 check and then you have a data bricks which is a hundred billion dollar business. Uh how do you size the partnerships?

Uh so so we're working you know we're almost working problem back

so what is the problem we're trying to solve and who has a piece of this puzzle? So we even have our own little corporate VC

sure

fund and there's companies in there uh seek is a great quantum company. Elido is is doing uh very low earth orbit.

Yeah, I love

satellites. Um let's see. Scout AI

uh is doing autonomy on the ground.

Sure.

Firestorm is doing uh uh essentially 3D printed drones.

Oh,

and and we think about okay, so what's what is Firestorm doing? What's Shield doing? What are we doing? If we bring all of this together, can we solve a unique problem that that we know exists that doesn't have a solution today?

Uh so so you know we're not so interested in the size of the company so much as we're interested in problem back what can we solve and how do we scale it. So we're working with Mistrial for example

uh which is in their portfolio uh on on NATO type problems and and European ally problems. As you know, Europe is is beginning to spend their fair share on on the defense on their defense budgets. Well, they got a series of issues that we can tackle together that weren't on anybody's

radar screen. Uh so so that's the kind of stuff

that frankly super excites me and I think this is where

there's a ton of energy and and and some really cool stuff coming along.

Sure. Sure. Jordy, anything else?

No, very cool.

Yeah. Thank you so much for taking the time to come talk with us. Uh congratulations on the partnership and we're excited to to hear more. I'm sure a bunch of uh portfolio founders will be on the show. Uh and

yeah, join us again as you guys have more announcements.

Yeah, we'd love to keep

Absolutely. Thank you guys.

Have a great rest of your day. Cheers.

Goodbye.

Let me tell you about Phantom Cash. Fund your wallet without exchanges or middlemen and spend with a Phantom Card. Uh Parker Conrad, the founder and CEO of Ripling, chimed in on the one-time California billionaire tax. He says, "Leave before the series B." Uh I don't think of Parker as outspoken against the the the California Democrats very often. Uh but he's uh quoting Jason Lmin here who has more context.

I can read through this. So Jason says, "My take on California's onetime billionaire tax. It's much worse than it looks. Will it pass? Yes, likely. It only needs uh 50% plus one voter approval. Uh CI, you and CTA have done this before. Prop 551 63% in 2016. Will it get tied up in litigation? Almost certainly. Retroactive wealth tax on a tax type California has never had equals uh due process challenges. Billionaires have the legal budgets for years of fights. But it's clearly only the start that the goal is an annual tax notet one time and the target is 25 to50 million net worth folks including illquid holdings.

Yeah.

Uh i.e. early stage founders raising a series B. And the one-time framing is strategic. Same coalition is already has AB259 written an annual 1% wealth tax at a 50 mill at a greater than $50 million threshold with plans to go to 25 million. It's been introduced three years running. The onetime tax removes the constitutional barrier. Once that's gone, the annual version becomes a much easier ballot measure. California Policy Center said if SEIU hopes to keep medical spending growing, it may need to place repeated wealth taxes on the ballot, potentially lowering the threshold as billionaires flee the risk for founders. At 1 billion, you're taxing uh 200 people. At 50 million, you're taxing 23,000 uh households, including the most successful founders on paper. before any liquidity event. So imagine uh you raise a series B, suddenly you have 50 million of of paper gains and suddenly the government's coming over and saying like, "Yeah, we we need you to uh come up with a piece of that or get on a payment plan." And so then you're effectively like,

you know, just like building up a debt to the California government that as of right now seems like it just doesn't go away. Even if your company fails, it's like you owe that to the state. So what'll happen here is people might uh if this goes through as is uh people will start companies like uh like Parker's saying they'll start the company and maybe they raise like a preede round seed round something like that and then they'll be like okay I I literally have to move the company or maybe they won't even started in California in the first place and uh and Nuome has come out in the last 24 hours and and

uh is against the tax so he is uh on siding with the the tech billionaires.

Interesting. Yeah.

Um but

yeah, when I see names like Parker Conrad, Venode Kosa, like I don't think of these as like the tech, right? I just think of these as like tech people. And so to see them pushing back against this is uh it's less of a political issue and more more of a practical issue about where uh companies will be led from. I saw a different angle that uh potentially the super voting like control could be used to determine how much uh you have to pay and so you could have a founder who uh has super voting shares. They have 90% of the voting shares but they take on

$100 million company.

Yeah.

The bill as the the the way it's written today they'd be taxed as if they have a $90 million position in the company.

Yes.

Which is just insane. And they might have a by that point they might have a 25% you know they might have less depending if they're you know multiple founders. So

uh Pirate Wires has a great uh piece on this. I'd encourage everybody to read it. California's tech industry kill switch from

Mike Salana.

Uh he says it's not a tax on wealth. The union's ballot prop is designed to target the very concept of founder controlled companies. Yeah.

And it will force the technology industry out of the state.

Yeah. It would be very very weird to see a situation where uh a company gets started. They still go to San Francisco because that's a fun place to be. That's an exciting place to be. But then uh slowly the executive ranks are just relocating to incline village or Las Vegas or Texas. Eventually you pull every surprise that Jensen Jensen was like, "Yeah, I don't I don't mind it." It's like, "Were you just trying to earn points right with the with the general population?" And like at what point like so many of his employees would be uh subject to this, right?

At at a certain point, yes. And I don't know, it could be very complicated. Um it certainly seems like a like a Yeah, just very very complicated uh uh position. Uh Austin says, "I wonder how many founders in California know that if you are making 250k a year and move to Texas or Florida, you pay $2,500 a month less in taxes. switching state of residents will save enough to cover rent. And of course, Austin, I believe he doesn't he believe doesn't he live in Utah? I don't think he lives in California, although he is part of the Silicon Valley community. Uh and Newsome did chime in. He vows to stop the tax. Uh where are the prediction markets on the tax? Will this happen? While we look that up, let's pull up Gary Tan. He says it's time for Silicon Valley to actually get involved and organize in California. One, financially tough times are ahead for California. California's government will almost certainly try to loot Silicon Valley. Silicon Valley will flee. Four, this will create a severe loss for the Bay Area and California and for the United States. Five, the only way out is for successful technologists to run and win for office at every level in the two 2026 midterm elections, especially for governor. Um, so,

uh, quotes from Newsome says, "This will be defeated. There's no question in my mind. I'll do what I have to do to protect the state.

Uh the governor has long opposed a wealth tax because of concerns. It would say

all of that is uh just very very complicated. But there's really good news because now you can book a hotel on the moon. A new startup backed by Nvidia NY combinator is planning to develop the first hotel on the moon by 2032. I'm going. I'm going. It's starting at $416,000 per night. We'll see where that actually lands. You can book on their website, but we have the perfect guest to discuss because we have Glenn Fogle, the president and CEO of Booking.com.