Who Trolled Amber? - Walter's War: Episode 4 - The confidence game
Episode Date: November 30, 2023Things begin to fall apart. Only a few years after Rebellion Defense’s rapid rise, it appears to be in trouble. The rebellion has failed to take off. In the secretive world of the military and ...big tech, Basia is met with a wall of silence as she tries to see inside the company… until a few former staffers agree to speak to her, revealing what happened behind closed doors. You can find out more about Tortoise:Download the Tortoise app - for a listening experience curated by our journalistsSubscribe to Tortoise+ on Apple Podcasts for early access and ad-free contentBecome a member and get access to all of Tortoise's premium audio offerings and moreIf you want to get in touch with us directly about a story, or tell us more about the stories you want to hear about contact hello@tortoisemedia.com Hosted on Acast. See acast.com/privacy for more information.
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ACAST.com ACAST.com Tortoise So the original term confidence artist comes from confidence, but not in confidence as in, I'm feeling so confident, that inner feeling of being prepared for anything,
but rather confidence in the sense of trust.
The phrase confidence man comes from a particular court case in 1849 in New York.
So William Thompson, who was the subject of this original confidence man trial, he used
the gentlemanly code of conduct. For a few months, a man of genteel appearance traveled around the
city. And he would approach people and say, excuse me, have you the confidence in me to lend me your
watch until tomorrow? And many of the gentlemen, he asked, did in fact give him their watches.
They put their confidence in the honesty and credibility of this stranger. And so he was
taking advantage of this code of gentlemanly conduct, right? Are we the types of people who
would betray each other? No, no, absolutely we're not. So I can trust you. Have you the
confidence in me. William Thompson ended up with an impressive collection of watches before he was
eventually caught and arrested. And for Maria Konnikova, a writer, journalist, poker player,
and a doctor of psychology, William Thompson's story reveals an important part of our social bias, that here before them was a man of a
similar class and social standing who surely wouldn't borrow the watch unless it was for some
good reason. And I think it's an interesting case, because as I peel back the layers of stories and
fantasy, from Star Wars to simulations to killer robots, I feel like I'm coming to understand something
about the confidence game of investing,
of trying to land big contracts with the government,
of trying to build a hot new startup,
and of presenting a story about yourself
that, if you're lucky, few people will question.
We don't want to ask the hard questions. Oftentimes it feels
like we're betraying the trust upon which the fabric of society is built. It is about storytelling.
What they do is figure out how you see the world, what the story you're telling about the world is,
and they mirror it back to you. They tell you what you want
to hear. They tell you what you already believe. They give you the version of the world that you
think is true. I'm Basha Cummings, and from Tortoise, this is Walter's War, episode four,
The Confidence Game. Breaking news, Sam Altman is out.
As I was finishing this investigation,
the mother of all news stories in the world of AI broke.
Sam Altman, the head of OpenAI,
the company that had launched ChatGPT
and had transformed how we think about artificial intelligence,
had been sacked as CEO of the company.
The board of directors issued a statement claiming that Sam Altman, age 38, was not
quote, consistently candid in his communications with the board. It continued, the board no longer
has confidence in his ability to continue leading OpenAI.
The reasons behind his departure are not entirely clear,
but the board said he had been, quote,
not consistently candid in his communications.
Later, they cited a lack of transparency.
So had the man described as a modern-day Oppenheimer
been moving too fast,
or was this a catastrophic miscalculation
from the people who were supposed to be overseeing the world's most successful AI company?
As the news filtered through, it was clear how little we knew about the operations of this company, its internal dynamics, the tech it was working on.
And it turned out that even Microsoft, which had invested $13 billion in the company, hadn't known about what the OpenAI board was about to do.
It was a total bombshell on Friday afternoon.
And so the thread that weaves through this story is artifice.
Yes, from a park bench to Silicon Valley and the Pentagon.
But that other thread is just as important to understand.
Confidence.
The stakes are about as high as they get, not only in terms of cash,
billions of dollars of it in investment, but also the future of the world itself and the way we all
live, if you believe the extraordinary promises made about the power of artificial intelligence.
After being founded in 2019, rebellion was the next big thing in defence technology.
So much so that just a year later, as newly elected President Joe Biden was preparing to take office,
two people from the company were on Biden's transition team.
These were the people who were brought in to prepare for the transfer of power
when Biden took office from Donald Trump in January 2021.
the transfer of power when Biden took office from Donald Trump in January 2021.
The other companies that were represented?
Big hitters from the Rand Corporation, J.P. Morgan and the Nuclear Threat Initiative.
It was a sign of confidence.
And as the COVID pandemic eased,
and as people began to return to the company's Star Wars-themed office in DC, its outpost in Seattle,
and in its London office in Fitzrovia,
there were other reasons to celebrate too.
In September of 2021,
Rebellion announced that it had gained that near-mythic status, the unicorn,
meaning a company that hasn't yet floated on the stock market,
but was already privately valued at a billion dollars or more.
on the stock market, but was already privately valued at a billion dollars or more.
After attracting more than $150 million in new funding,
the company said in a press release that it was now valued at $1.15 billion.
New, impressive investors had joined that second phase of fundraising.
Eric Schmidt, the ex-CEO of Google, reinvested after initially backing Rebellion in 2019, and he had a seat on its board. And James Murdoch also invested and
also had a seat on the board. Chris Lynch said that he wanted to grow the company of 160 employees
by a couple hundred more, mainly engineers. He said there's a new wave of people coming into venture capital
who have the courage and tenacity to support our nation's defence. And soon there were new
contracts to celebrate too, with the US Army, the Nuclear Security Administration and the Ministry
of Defence in the UK. But a lot of the power of rebellion's rise hinges on one very powerful man. And so it's
all the more remarkable that despite his backing, things still seem to have fallen apart.
First off with rebellion defence, I'd like to point out the Eric Schmidt connection.
It's spinning itself out with investment from Eric Schmidt.
Every time I see Eric Schmidt appear in public and talk about military,
my hairs go up.
Telling a good story, but maybe not backing it up.
Eric Schmidt, the most famous investor in the company,
is a giant in the world of technology,
and in recent years, in Washington, too.
And in so many of the conversations I had about rebellion
and about artificial intelligence in warfare, his name came up.
Eric Schmidt, chairman, ex-CEO of Google, a many times over billionaire, one of the most
influential and powerful people in Silicon Valley. And he has made it his mission for the last 15 years or so to get deep into the
U.S. State, first the State Department, and then the Department of Defense and the Pentagon.
Eric Schmidt had for years been critical of the Pentagon's tech failings.
You absolutely suck at machine learning, he once reportedly told a US general.
If I got under your tent for a day,
I could solve most of your problems, he said.
And he wasn't alone in his criticism.
The author of that book, The Kill Chain,
was sounding the same alarm.
As was Parma Lucky, the founder of Angeril,
a competitor of rebellions,
who talked forcefully about the dire situation that the Pentagon had now found itself in.
Despite spending more money than ever on defense, our military technology stays the same.
There's more AI in a Tesla than in any U.S. military vehicle,
better computer vision in your Snapchat app than any system the Department of Defense owns,
and until 2019, the United States' nuclear arsenal operated off of floppy disks.
It was a horror story that captivated Washington and the Pentagon.
And in its main proponent,
rebellion defense couldn't have hoped for a bigger and better vote of confidence
than from Eric Schmidt.
Welcome back. The end of an era at Google.
Show up to Sony with headlines in New York now.
Cheryl.
Yeah, Maria.
Longtime CEO Eric Schmidt
announcing he is leaving the company's board.
After stepping down as Google's chairman in 2017
and with a $20 billion fortune,
Eric Schmidt was seeking a new chapter.
He was already heading the Defence Innovation Board,
tasked with bringing new tech to the Pentagon
so that they could catch up with companies like Google and Facebook
in software and AI.
He was beginning to invest in defence startups too
through his venture capital fund, Innovation Endeavours.
And he'd been appointed to the US government's
National Security Commission on Artificial Intelligence.
By 2021, the New York Times was describing Eric Schmidt as, quote,
the prime liaison between Silicon Valley and the national security community.
But so powerful was his influence in Washington that it began to raise some serious questions.
And now this new CNBC investigation
finds the former head of Google, Eric Schmidt, made investments in AI companies while chairing
the AI commission, raising concerns among ethics experts about a fundamental conflict of interest.
Here's Eamon Jabris. He has had such high positions and so much access that there have been people in the Pentagon questioning,
should we be giving a civilian so much just blanket access to military bases around the world,
to top committees and decision makers in the military?
Questions about a conflict of interest. Was it right that someone with his power and influence, but unelected and a businessman, was simultaneously shaping government policy on AI while being a major investor in that very industry?
Work that Eric Schmidt had carried out at the National Security Commission on AI had even influenced legislation.
Yeah, absolutely, as direct conflicts of interest.
It's something that I discussed with Jathan Sadowski, an academic,
author, and the host of This Machine Kills, a podcast on tech and politics.
And he's working with other people. You know, he has written a book with Henry Kissinger.
Henry Kissinger is also someone who obviously has political interest and a lot of political influence,
but also famously will not release his list of clients for his private consultancy.
To quote the famous philosopher Donald Rumsfeld,
there are known knowns and there are known unknowns among the conflicts of interest that we see here.
Eric Schmidt was brought closer to the government because of his expertise and his vision for what
was going wrong and how to fix it. His judgment, his confidence in companies and in people,
like in Chris Lynch, could help solve the very things that he was warning about,
that the US wasn't developing the tech fast enough.
And the Pentagon was relying on his confidence,
because, after all, what they were now looking for was different.
They knew that they needed more hoodies, more Star Wars,
if things were going to change.
So with Eric Schmidt's backing,
Rebellion's vision of bringing together former government employees
and Silicon
Valley whiz kids, seemed like a good bet. But all along, some venture capitalists in Silicon Valley
were sceptical about Rebellion defence. They could sense the hype, despite the big names attached.
One who asked to remain anonymous told me that, quote,
rebellion was an example of a broader pathology, that just because some people have an exciting
resume doesn't mean that they have the actual experience. Their assessment on rebellion defense,
zero qualifications other than the ability to tell a good yarn. They told me the tech proposition was so hollow.
This is an unremarkable story in Silicon Valley because, I mean,
the valuations are always massively overinflated and they are based not on product, but on
promise, right? Or potential, not even promise, potential. And so, you know,
you have a startup that gets like rebellion, gets $100 million in investment, you know,
or raises $150 million in funding with a valuation of over $1.1 billion. That's a huge gap.
And the idea is that somewhere along the way,
their innovation or their technology will be so amazing,
it will make up that gap.
That's the kind of hot potato of venture capital.
It's about getting in early,
telling a story so other people get in,
and then you get out before the whole thing explodes.
And so that's kind of the story of Silicon Valley. But then when you bring that into the military as
well, you have all these overblown expectations of like, well, this company is worth $3 billion,
which means they must be a $3 billion company, or this company has a devaluation of this or they have the promise
of this or their pitch deck says they can do or hope they can do this it's it's a real like
tinkerbell effect that takes hold in silicon valley where you know tinkerbell exists as long
as you believe hard enough and clap loud enough but as soon as you stop believing and stop clapping, Tinkerbell starts fading away.
But given the context, given the stakes, we're not talking fun word games or celebrity rating sites anymore. The VC investor I spoke to thought that rebellion was something of a cautionary tale.
They said, the toxic dynamics are the same fast money hucksters that hyped things like FTX do companies like Rebellion to the detriment of funding and visibility for companies actually solving critical problems.
It's something that Jonathan Geyer had heard too, the journalist who wrote that article that first got me interested in how Oliver's story connects to Rebellion's.
interested in how Oliver's story connects to Rebellion's. Rebellion's just one interesting example of dozens of companies that are working in this space. And before we got on the horn here,
I was, you know, talking to a defense contractor who said, companies like Rebellion make us all
look bad. There are, you know, many, many defense contractors and technologists who work for military and intelligence agencies who care about ethics, who care about their employees' well-being, who want to create the best products for spies and soldiers.
But when you have a company that, you know, by all accounts is sort of imploding, it is a real stain for a much larger industry
that has some real problems to solve.
So what was really happening inside this unicorn?
Well, beyond the confidence and the press releases, the picture wasn't quite as starry.
I had contacted the co-founders, the company,
and the investors. And apart from the press office for the company itself, no one replied
to my emails or messages. Others in that world were cautious to speak to me too. They warned me
that this is a small community and that I should be careful. So I turned to former staffers, some of whom were willing to speak,
and they told me the company had, for a while, been struggling to deliver on its mission.
Remember that data fusion project? For instance, one tool would use security cameras to track a
quad cab Toyota pickup, which is the favorite pickup of terrorists. Well, another engineer
was rather frank when I asked him
if he had knowledge of that being developed.
Rebellion was a thousand miles from that idea.
Like, not because they didn't want it,
but because they didn't have the discipline to actually connect dots.
Part of it was the infighting.
One group was doing some of those fusion things
that certainly would tie to what you're talking about, right?
But then another team, because they had different managers that wouldn't get along, they weren't really allowed
to collaborate. They were light years from getting anything like that. And there were questions about
just how much AI was really going into the products, how much the company was really able
to build. Another engineer talked to me about Nova, Rebellion's most commercially
viable product. Their Nova product is pretty good from what I understand of it. People really like
it, and that's really the only product that they're able to sell. So it's basically like an
automated red team of secure sites. And it's interesting because, you know, Rebellion touts itself as kind
of like, oh, you're in AI, but that's not really, it doesn't really have anything to do with AI.
You know, that's just good computer engineering.
There were questions among staffers about how viable the other products that they were
developing really were.
There are several products I worked on that work.
They display data.
What I can't say is that the data was real.
You know, where the data came from, I have no idea.
Maybe someone invented it internally, I don't know.
But the actual products, you know, you could do searches on certain types of information.
You could change parameters.
The tools I saw were functioning tools.
But what I can't verify is that the data was real data.
Other things also weren't clear.
One former staffer said that they thought they had joined a software and defence company,
only to be told that the company was actually focused on consulting.
They told me, you would ask different people the same questions about what Rebellion did and get different answers as far as what we were selling.
It was, quote, a bad identity crisis.
And then there was the infighting.
All the former staffers I spoke to mentioned a culture clash,
that the dream of bringing together Silicon Valley types and former government types just didn't work.
You can't build products in a hierarchy, you know?
And you need people challenging people.
hierarchy, you know? And you need people challenging people. People being able to talk to people,
complete openness of information, drop the egos. And what they say at Amazon is, disagree but commit. You go to a meeting and you have a strong opinion that this is not the right thing to do.
But if you get overruled, you drop the ego and you commit 100%.
That was not the culture
of the Department of Defense people, fundamentally.
There's a reason they don't create great software
in totalitarian regimes.
You can't innovate in a hierarchy like that.
And even the military should know that.
These were all people who'd worked at Rebellion between 2021 and 2023, during its stratospheric rise, and they were telling a different story.
And then one of them said, look closer at the contracts.
So I did. I turned to the website Tech Inquiry, which analyses public records for the surveillance and weapons industries.
And in 2022, according to a Freedom of Information request obtained by Tech Inquiry, Rebellion landed a one-year contract with the US Air Force.
The contract value? $625,000.
$125,000. And beyond that relatively low payout for rebellion, it also showed a glimpse of something else, a rather casual, friendly tone of the people involved. In one exchange from a
rebellion employee to a contracting officer, they write, oh my god, you fucking rock.
A second contract, at first glance, looked more impressive. A $46 billion ceiling contract with the Armament Division of the U.S. Air Force,
which handles advanced medium-range air-to-air missiles.
But despite the upper contract amount, it appears that it's only paid out $1,000 to Rebellion so far.
And there, too, the exchanges seem quite jokey. Emails showed one staffer suggesting
grabbing beer with the contracting officers and being stoked about the project. Of all the
contracts that we could see, Rebellion was bringing in something in the low millions.
The biggest and most impressive contract was relatively recent, worth $6 million with the US Army. It was quite the gap from sales
in the low millions to a valuation of more than a billion. And one engineer told me that chasing
contracts was part of rebellion's problem. Solving government problems with tech and AI can be
everything or nothing. Like what does it mean to succeed in that? You have one contract and
you've succeeded, but that's not scalable. They really don't have a clear plan. And they had
interest and there were things that they were working at developing, but at the same time,
even those things changed somewhat frequently. Like, oh, this contract's going to save it. Oh,
this contract. They're really reactive, which you kind of need to be. But they were going after
anything they might get a contract on, which meant that they didn which you kind of need to be. But they were going after anything
they might get a contract on, which meant that they didn't do any of them really well. And they
didn't have a clear vision about how to roll that out. The big contracts just weren't, it seemed,
coming in. Added to that the huge expense on computation, the processing power that the
company needed to sift through data. And by 2022, Rebellion was struggling.
Well, you know, I think they struggled to gain traction in the Pentagon, right? Over the year
that I was there, they had a lot of people talking to a lot of people within the Air Force,
within the Pentagon, etc. They only got through a certain stage and didn't secure any contracts.
etc. They only got through a certain stage and didn't secure any contracts. Basically,
they fired, uh, like 20% of the company. It seems like maybe Chris Lynch went through and just kind of axed people without consulting any of the managers. And they just, from what I understand,
they just kind of made Swiss cheese of the engineering department, where they cut out
people that were really important, and they left some of the, uh, where they cut out people that were really important,
and they left some of the, uh, like, bumps on the log. And so, yeah, it was pretty bad and really demoralizing. And then, um, about two or three months later, they did another round of layoffs,
and laid off, like, another 20-15% of their engineering staff.
another 20, 15% of their engineering staff.
There were layoffs in 2022 and in 2023.
In a blog post, Chris Lynch explained the hard decision in rather oblique terms.
Quote, these cuts will ensure our products have an order of magnitude impact on how they assist the warfighter.
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ad-free with Wondery Plus. At the end of the summer in 2023, as I was in the deep end of my
reporting, rumours began circulating that the original founders of Rebellion Defence, Chris
Lynch, Oliver Lewis and Nicole Camarillo had left the company.
One former engineer told me that people would realize who had been cut
only when their account on the internal messaging network was deactivated.
And then over the summer, as journalist Jonathan Geyer and I stayed in touch about the company,
he received news from a source.
That's so interesting about Nicole and Chris.
I mean, my sense is that they basically got pushed out of their executive roles sometime after that story came out, like early this year.
It was confirmed a few weeks later.
Chris Lynch had officially stepped away from the company that he'd helped to build after almost five years.
And when I tried messaging her,
Nicole Camarillo's email bounced back with the message that she had also left. As for Oliver,
it was unclear. He had apparently left a few months before, after most of the UK team was cut.
And soon, all three co-founders had quietly been removed from the website.
A video from back in 2019 had also
disappeared. We realized we had this common vision. We sat at this coffee shop and we just
started to write down what if we were to re-envision what it meant to build technology
and software for defense and national security. And so it seems today that the once celebrated company,
backed by the biggest name in tech, is fading.
The story just didn't quite come true.
Last year, a U.S. government contracting officer called me up
and basically ranted for about 20 minutes
that Rebellion Defense is the least competent, in their words,
company that they've ever worked with. I have a quote for you here. I've been doing this for
several years. Those guys, it's like Charlie Brown's in charge of the helm and Snoopy's doing
whatever he wants to do. Jack Paulson, an investigative journalist and the director
of Tech Inquiry, told me that inside the Pentagon, the confidence in the rebellion has faded.
It's called the Defense Unicorn.
It became the R in a very popular acronym now called SHARP, which has a silent E on the end.
Those six companies are Shield AI, Hawkeye 360, Anduril, Rebellion Defense, Palantir, and a fairly obscure company called
Epris. Honestly, Rebellion, even though it was valued at a billion dollars, it's questionable
that it should still be in the acronym SHARP. I've reported that perhaps we should call it
SHAPE now instead of SHARP. And. So yes, the investments into companies like Rebellion matter.
When I asked Rebellion directly about what was happening,
they replied to say that they had more customers and contracts
across the US military than at any point in their history.
And I asked specifically,
what was the reason for the almost complete change of senior leadership at Rebellion
and for the cuts?
And was it true that they were struggling to secure contracts?
Their response?
The current leadership is building a new Rebellion,
one that is resilient, focused and outcome-driven.
So it feels like all we're really left with, all that's really visible, is the story.
And maybe that's all it was meant to be.
For Eric Schmidt, maybe Rebellion was a relatively small venture.
I don't know. He didn't respond to my request to speak.
And for Chris Lynch, maybe this was just an exciting vision of a different future,
one closer to his beloved intergalactic fairy tales.
I also don't know for sure. He also didn't reply to me. And so I was left with the sense
that maybe it's the story, the hype, which is the weapon here.
I would say a bigger question to grapple with is, to what degree do they prefer that as a deterrent versus admitting?
Like, they don't want the curtain pulled back
because if it looks like there's this giant functional ecosystem,
that could be seen as a deterrent against, say, China,
whereas if you start to see that these companies like Rebellion
and all these major efforts really just don't do
anything and it's just a giant money pit, does a lot of this kind of discussion of AI being
incorporated into the military kind of evaporate into just a giant piece of theater, a very expensive
piece of theater. The consequences of this tech are too important to be kept secret or hidden from view behind NDAs and denied FOI requests.
Because if even OpenAI's Sam Altman is warning
that this technology could destroy us all...
I think if this technology goes wrong, it can go quite wrong.
And we want to be vocal about that.
We want to work with the government.
If the warning is coming from our very own AI Oppenheimer,
it's worth pushing to find out what's true.
Which takes me back to that park bench in South London.
Throughout this investigation,
I've continued to try and sift truth from fiction in Oliver's own life,
even as I read through pages and pages of military procurement contracts.
That quintuple-barreled surname that he'd claimed,
he'd appeared to have taken it from a friend of his grandfather's, a vicar,
who was related to the Fiennes family.
And he hadn't just told a couple of girlfriends about an invented military
background. To someone else at Cambridge, he said that he'd been in the Combined Cadet Force,
Air Training, Air Corps, the RAAF and the RAF Reserves, and that he'd served with the Special
Forces as a support officer, and that he'd then trained domestic and international special forces in South Africa.
This person told me he didn't just make up stories, he made up his entire self.
But I could find no indication that Oliver had left rebellion defence because of misrepresentations or lying.
In fact, all the former staffers I spoke to said he seemed like a nice guy,
thoughtful, intelligent. One described
him as loyally. When I put my questions to Rebellion about the company and about Oliver,
they said that they would not participate in an exchange around employees who are no longer with
the company, nor around unsubstantiated and otherwise discredited, specious and defamatory
allegations.
After his time at Rebellion, Oliver quickly found new work, joining Gallos Technologies,
which invests in security and tech companies.
The chair of its board, the former head of the UK's intelligence and cyber security agency, GCHQ.
But it seemed that the bending of the truth continued.
On his new job profile, he claimed to be, at 15,
the youngest technologist employed by Oxford University.
In another profile, it read that he'd been hired to bring in cutting-edge technology into academia.
From what I could confirm, he had worked there, but first as work experience, and then not long after, it appeared that he'd been hired as a
design assistant. And in a video, one of the achievements that he was being celebrated for
was setting up a blog. So the new job profile is sort of correct, but the reality is a bit less impressive.
Oliver didn't, in the end, wish to comment for this investigation.
But a few weeks after I contacted him,
I saw a pamphlet for an event where he was listed as the founder of two unicorns,
Improbable and Rebellion Defence.
So I asked Improbable, is that true?
Is he a founder?
And their response, quote,
in no way would it be correct to describe Mr. Lewis as a founder of Improbable or Improbable Defense.
So I kept thinking about the exaggerations and the embellishments.
I thought, how unnecessary they are.
The fact is, is that what he's done is impressive.
He obviously is thoughtful,
inquiring, and interested in what AI will do to the world. And yet, time and again, he's wanted
to present himself as more than he is. It's a pattern, and it goes beyond him to the industry
that he's in, AI and defense, where the capabilities are real and impressive, and, depending on
your view, terrifying too, but where there's a tendency to oversell in the storytelling.
Which brings me back to confidence. How do we know? Who can we trust?
The perfume still hangs in the air, only now, perhaps, we're better able to smell it.
Not just in one man's drawer to stories, but in a whole industry.
From a park bench in South London, this story has traced a thread all the way to a new era that we find ourselves in, where sci-fi stories mash up with nerds of Silicon Valley and the bureaucrats of the Pentagon,
and where computers are becoming lethal and warfare unmanned. That's the future of conflict.
That's Walter's War. The sound design is by Carla Patella. Thank you for listening to this series.
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Tortoise. Thank you. This unmissable evening features Herway and Toronto Symphony Orchestra music director Gustavo Jimeno in conversation.
Together, they dissect the mesmerizing layers of Stravinsky's The Rite of Spring,
followed by a complete soul-stirring rendition of the famously unnerving piece, Symphony Exploder.
April 5th at Roy Thompson Hall.
For tickets, visit tso.ca.