Pennsylvania Senator Dave McCormick (R) Talks Current State of War in Iran

**SPEAKER_1** (0:02)
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**SPEAKER_2** (0:07)
Well, at this point, a little public indication that diplomacy is getting back on track as President Trump now threatens wider escalation. He's previously previewed there's a few options on the table, including escalating strikes against Iranian infrastructure, including bridges and power plants, as well as going after what's known as Pickaxe Mountain, a site believed by the US to hold nuclear materials. We'll have to see where it goes from here, because we have to keep in mind that the US is now dealing with another new front when it comes to the Houthis in Yemen and threatening shipping in the Red Sea.

**SPEAKER_3** (0:38)
Tyler Kendall, with the latest down in Washington. Tyler, thank you. The Republican Senator, Dave McCormick, coming fresh off last week's Pennsylvania Defense and Innovation Summit, securing $10 billion in new investments for his state. The US Senator, Dave McCormick, joins us now for more. Good morning, sir. It's good to see you.

**Dave McCormick** (0:53)
Good morning.

**SPEAKER_3** (0:54)
Let's talk about the nature of this challenge and the character of the challenge defensively has changed as well. And the Middle East is a fantastic example of that this morning. What do we need to change when we think about the kind of investments that need to be made in this country?

**Dave McCormick** (1:05)
Well, there's three big changes that have happened. One, the world's getting more dangerous. Two, the nature of warfare is changing dramatically with drones, autonomy, AI.
And third, we've had apathy within our defense ecosystem. So we need to introduce new players into our defense ecosystem, drone manufacturers and all sorts of other unique capabilities. And we need to change the way we procure defense systems. So it needs to be much faster, it needs to be much more competitive. We need to constantly be innovating. And so the focus of the summit was to bring together the traditional industrial base. We've gone from to 1% of global shipbuilding. So we need to go back to the core industrial base, but introduce all these new technologies into the mix. So the goal of that was to bring those players together, have the president, have his cabinet there, have all the major primes, all the emerging technologies, all the big investors, because you need the capital.
And talk about ways to move forward in accelerating our ability to man the battlefield with this next generation of weapons.

**SPEAKER_5** (2:05)
Senator, it's an important conversation to have now because we are relying on inventories when it comes to the war in the Middle East. All that has been given in terms of Russia's invasion of Ukraine, where are we on defense inventories?

**Dave McCormick** (2:17)
Well, I think we're adequate in terms of being able to continue to conduct military operations, but there's no doubt that we need to ramp up our production capacity. Let me just give me an example. In Ukraine, they make 10,000 drones a day.
A day. We have nowhere near that manufacturing capacity here at home. So we need to ramp up that manufacturing capacity in shipbuilding, as another example. In Philadelphia shipyard, we build one ship a year. We need to go to 20, which we're doing over the next five years. So we've let ourselves become more dependent on others, and we've let ourselves locked in to looking backwards at last years for 30 year old platforms, as opposed to embracing this next generation of technology.

**SPEAKER_5** (3:00)
When it comes to the next generation of technology, when it comes to the Iran war, we've heard from Palantir executives, this is going to be the first war that really was conducted by AI. Are you concerned that China is building a model like Kimi K3 off of our technology?

**Dave McCormick** (3:13)
Yeah, absolutely. I mean, China has a tradition of stealing our own intellectual property and using that to their advantage. That's why we need to continue to do all the things necessary to lead in the AI race.
I always like to say that I'd rather have our hand than China's hand, but it depends on what we do. So we need to embrace the compute capacity and the energy capacity needed to be in the lead. We need to make sure we don't overly constrain our innovators because this is really the most important technology race of our lifetimes.

**SPEAKER_3** (3:47)
We are throwing tons of capital at it.

**Dave McCormick** (3:49)
We're throwing tons of capital.

**SPEAKER_3** (3:49)
That's what's different about this moment, I think, for Treasury. I want to make that pivot. I think it's important. The military costs a lot of money, we know that. And the deficit wasn't a problem because we didn't see the biggest companies on the planet raising the capital to the extent they are now.