Anduril - The Startup Reshaping Geopolitics

The world is entering a new geopolitical era. For the first time since the Cold War, the United States has to contend with a credible rival, China. There's concern tonight about China's military capabilities amid a report the country recently tested.

A nuclear capable hypersonic missile.

And it's understood that US Intelligence had.

No idea that China had moved this far ahead.

Let's be real, it's industrial warfare.

China didn't just speed up. The United States military stopped innovating.

I think it was the Secretary of defense at the time said, we are going to go through a period of consolidation. Budgets will not be growing.

And left the world in a precarious situation.

There are still people in the world who want to use large scale violence to achieve their aims, but not for long.

Silicon Valley has always been the global hub of innovation, but the real action is actually happening 400 miles south in a nondescript Costa Mesa industrial district. The tech coming out of this tiny warehouse will impact the food you can buy or how much gas you can put in your car.

And.

And if they're successful, they may prevent the USA from going to war. And the craziest part is that it was all started by the guy who founded Oculus VR. This is the story of Anduril. Like any great startup story, we need to understand the founders behind the business first. I was super fortunate to go inside of Anduril. They introduced me to the entire team and I got hours of interview footage that I want to share with you today. So you're probably asking, how does a guy known for gaming headsets become the founder of America's next big defense contractor?

My name is Palmer Luckey. I used to be an outdoor kid. Then I discovered computers and I became an indoor kid. I really like working with all kinds of various hardware systems, so gas, lasers, solid state lasers, optics, displays. When I was 15, I was a PC gamer and so I'd been building my own gaming rigs. I was into modifying game consoles. I ran a game console modification forum called Mod Retro. So I had like an eight monitor PC gaming setup. And I started to think myself, okay, well, what's the next step? It's not just higher resolution, it was clearly VR. All of the headsets that I had tried, I said, these aren't nearly what I'm trying to do. So I decided I was going to have to try and create something myself. So I picked up a lot of old gear from a variety of places that I started to reverse engineer. And I learned a lot from those. I learned mostly what not to do. It took years before I finally made something where I said, okay, I actually can make something that can pull this off. It's not just a cool hobby, a thought experiment. Breaking news today, Facebook just announced it will acquire Oculus VR, creator of the much hyped virtual reality tech Oculus Rift.

There are a lot of reasons to believe that the next major computing platform is going to be connected to more directly to vision.

The explicit deal is that we would be run as an independent company, that we were in control, that it was our vision. And the reason that it could be our vision is because our visions were aligned. It wasn't until later that they really started to centralize control, not just of Oculus, but of all of their acquisitions.

So Palmer was the founder, the visionary of oculus. He was 19 years old. He was 21 when they sold it. He's a brilliant, charismatic guy. He was the face of the industry. And so he also happened to be a Trump supporter. What happened was In September of 2016, Palmer donated a little bit less than $10,000 to an organization called Nimble America. On September 22, 2016, the Daily Beast comes out with an article about Palmer and the headline is Facebook billionaire secretly funding Trump's meme machine.

The latest tech revolving door. Facebook says the controversial co founder of Oculus is out.

Palmer apologized in a post right before the Oculus Connect conference. This is Oculus's big develop conference that.

They hold at the time in March 2017. Facebook provided no explanation for his firing.

Why was Palmer lucky fired?

That is a specific personnel matter that seems like it would be inappropriate to speak.

You just made a specific representation that.

You didn't make decisions based on political views.

Well, I can commit that it was not because of a political view.

One of the reasons that people have tried to turn me into a partisan figure is because it's really good for clicks. The reality is I spend maybe, I don't know, 1% of my time on politics. I spend 99% on tech.

The craziest thing about the Facebook saga is that after the fact, Palmer eventually got a hundred million dollar settlement because Facebook had violated Californian law by punishing him for political activity. Most people who made that kind of money would just sail off into the sunset. But not Palmer. He can't help but look for the next big idea.

And when I left Oculus, it was more apparent than ever that the traditional defense contractors, who were really good at building things like better fighter jets, bigger submarines, bigger aircraft carriers, were not well equipped to build the technology. That was going to matter for the future of warfare. And I realized there was this fiction taking holds in the minds of people, even smart people, that we lived at the end of history, people called it that there was never going to be any more large scale conflict, that economic intertanglements precluded the idea of large scale warfare. And it was also abundantly clear that the technologies that were equipped with the technology and the tools and the talent to make a difference in this space were largely refusing to work with the defense sector. They were refusing to work on defense technology. That is really the reason that I started thinking about what a next generation defense company would look like. What would it look like to build a company that could take those bright people out of the advertising industry, out of the search engine optimization industry, out of the augmented reality mustache emoji industry, and put them to work on things that were more important. I wanted to start a company where really smart people could work on national security problems and work on the technology that is going to keep our values safe.

Around this time, Palmer went to the Founders Fund CEO Summit in Canada and he meets Trey Stevens there. And Trey had worked for the government and at Palantir and was investing at Founders Fund, trying to find the next great defense tech company. At this point, it was clear that they needed to start a company instead of just trying to find another company to invest in.

You know, it was a pretty small group of people at the beginning. You had me, you had Trey Stevens, who was working at Founders Fund.

When I first engaged with him about starting a defense company, he told me that he was building a ramjet in his swimming pool in Woodside.

You had Brian Schimp, who was director of engineering at Palantir.

The other really hard part with being a defense business is, and in particular being a Defense prime is the breadth of skill sets you need to have is massive.

You had Matt Grimm, who was also from Palantir.

We had no ideas. We didn't have a name.

One of the other co founders, Joe Chen, who was a product lead and hardware lead at Oculus, he's also former paratrooper. So you really cared about the military mission.

We originally had this lunch at Palmer's house and we pulled together all of our smartest friends that we had worked with before. And me, Palmer and Grim gave a pitch, like a very, very bad pitch deck in Google Slides. And we were like, this is like, we're going to build a next generation defense prime and we're going to try to convince you over the next 90 minutes that this is the right thing to do. And we went to the pitch, answered a bunch of questions, and then we were like, we need mechanical engineers. We need electrical engineers.

We need airframe Experts with the 10 skill sets you need on that, on propulsion and avionics and controls, and experts on electronic warfare, jamming and communications, waveforms and antennas and all this stuff.

Basically, everyone in that original lunch ended up joining the company.

We all sat around a table and decided, what's this company going to be called? What is our logo going to look like? We literally drew it up on the whiteboard on the first day, and the one we drew on the whiteboard is still our logo. We sat down on the first day and said, okay, we've agreed. We're going to start this next generation defense prime. What are we going to build?

Even though big projects like the F35 were getting tons of attention for going way over budget, the Anduril team didn't want to build exquisite systems. This was for two main reasons. First off, even though they had a great team and access to venture capital, there was no way they could raise enough money to go build something like a new fighter jet. But the second reason was arguably more important. Across the battlefield, more and more systems needed to become attritable, meaning they could sustain losses while maintaining combat power.

And we actually started with two things. One was a firefighting tank called the sentry tank. It was a tracked vehicle that could carry several tons of firefighting foam or water. It teamed with overhead drones looking down at fires that were ongoing so that you could know where the heat was best, coordinate how to respond.

Anduril had gotten the famous Mythbuster, Jamie Heinemann, to sign on to help build it.

The firefighting tank had no customer. Was like, something that we really thought was important that we wanted to work.

On, and it didn't go anywhere. I think primarily for political reasons, which turned then into business reasons. To be clear, the vehicle, like, it worked like we built it, we actually have two of them sitting in a warehouse.

This was a tough moment for the Anduril team. They clearly wanted to help firefighters stay safe and be more effective. But actually getting a contract across the finish line was simply too difficult. In March of 2018, the federal government started working on a funding bill that would address border security. Trump wouldn't get his physical wall, but there was going to be $641 million in funding for alternative approaches. A series of sensor towers could effectively act as a virtual border wall and identify anyone who was trespassing on American Property. So the Anduril team focused on the sensor tower project.

Basically a tower that scans for miles, around 360 degrees, and identifies all the drones, vehicles, animals.

Whether you like the politics of it or not, like, there is going to be a ton of money spent on border security.

You know, it's just very practical. We gotta do this thing. No one's gonna let us go to the, you know, the super bowl yet. We gotta go win in the minor leagues.

Until the user understands what they have, it's very difficult to generate support. And so you need enough towers deployed along the border for agents to have used the towers to appreciate the value they provide.

We made huge investments on our own dime to get it there. We had very little margin for error.

I can't tell you the number of times I thought we were going to fold the company. Like, I was just like, we're betting everything on this, and if we don't win, we're screwed.

Just a few months later, they were ready to demo the product, and fortunately, it was a smashing success. The Border Patrol agents could clearly see how these unmanned towers could dramatically increase their effectiveness without requiring more agents.

It's not an accident that our first important partners were Border Patrol and socom. These are people who are on the front lines. That's what they have in common. They are actually out there. They have a real need. It's not hypothetical.

But working on border security created new problems for the company. All of a sudden, they were being framed as some sort of extension of the Trump administration. Lots of negative news articles tried to make it sound like Anduril was doing something controversial.

Anduril Industries is trying to sell the.

Government on using virtual reality as a solution to stopping people from illegally crossing the border.

These are the people who are extremely close to the specifics of these technologies, who know full well how brittle these systems can be.

Palmer Luckey and his political views are antithetical.

When we got started, was basically like Trumpy fascists because it's, you know, good ragey, clickbaity type stuff.

Trump was obviously the most vocal about border security, but Biden also took the issue seriously.

Biden came in saying that he was not going to support border wall, but he would support border technology.

The reality is everyone agrees that we need to know what's coming across the US Border. There are people who disagree on immigration policy, but immigration policy is separate from awareness of what's coming across the border. And Androl makes technology that we use to track drug trafficking, human trafficking, arms and cash smuggling in both directions. Going across the border.

Political power can change hands very quickly in America. So it was important that Anduril didn't get pigeonholed into only being able to do business with one party. Fortunately, their core team was already equipped to handle this problem.

The way it really works is. So Brian's Democrat and he does fundraisers for Democrats. I'm Republican, I do fundraisers for Republicans. You know, we have our different politics, but we agree on what we're doing here at Anduril. And so it's really nice where he can talk to all the Democrats and it's like, you know, hey, I'm, I'm the big guy at Andrew. And they're like, oh, I'm talking to the CEO, that's great. And then for the Republicans, I'm talking to the founder.

Palmer trusts Brian, and Brian trusts Palmer to be on TV and do all the stuff he does well and be the expert on the hardware. But Palmer trusts Brian to run the company and be the CEO. That's not an easy thing if you're the founder.

The sensor tower project was a good stepping stone for them, but it wasn't really the big leagues yet. Remember that Anduril was started with the idea of preparing the USA for major geopolitical conflict. And the sentry tower alone wasn't going to change the landscape of that. So they needed to go a lot bigger. Selling to the government is extremely difficult. Budgets are often parceled out for political reasons, and contracts take years to iron out. The Anduril founding team knew that there had to be a better way. They wanted to flip this model on its head. But there's a problem in defense tech. There's something called the Valley of death. And a lot of defense tech companies get stuck in this valley of death. Megan Milam is Anduril's senior vice president of government relations. And she explains it like this valley of death.

It's like the period of time from after you get a prototype or a demonstration, before you get production. And you know, it's called the Valley of death because that's sort of that window where most companies die. It's that two to three year spot where the department is kind of chipping through their internal government processes. You know, companies need to continue to show revenue and growth. And so if you do a prototype or you do a demonstration and it works really well, the sort of bureaucratic process is great. We'll get back to you in two, three, four years. When we've done all of these next steps, they'll be ready to Pick back up the conversation. And most companies can't afford to kind of chip through that valley of death.

So when you kind of look at it from end to end, from requirements to programming to budgeting, authorizing the money, appropriating the money, running an acquisition competition, fighting through protests, picking the winner, you know, in many cases this process has become elongated from one end of the other to about 10 years, if not more. So if you imagine sort of people right now sitting in the Pentagon trying to define the specific requirements for technology that they believe they're going to need in 2033, that doesn't always work out that well.

The end goal is to win what's called a program of record. This is when the government has allocated ongoing funding across many years to really put a new piece of technology into use.

If you're not winning these multi billion dollar programs of record, you're just another company that's kind of building, you know, a cog in the machine. Gizmos and gadgets that get a little bit of the government's small business money. If you can't win a major program of record, it shows you haven't changed the way DoD thinks, you haven't changed the way the procurement works. If all the programs of record are held by the legacy primes, nothing will ever change.

But winning a big contract with the Department of Defense wouldn't be easy. Anduril also brought on Chris Brose as chief strategy officer to help sell to the government. He was an expert in the national defense sector and, and had worked with Senator John McCain for years.

Most of defense is very input focused, very process oriented. We don't start with the question of how do I generate air dominance, for example. We tend to start with the question of how do I build a new generation of the same fighter aircraft that I had before. When I think of disruption, it's really focused on what outcome are you trying to accomplish. So, you know, a commercial analogy would be I want to be able to move around town, I want rides. I don't necessarily need a better version of a taxicab. I need an ability to get a ride quickly, cheaply, safely, when I need it, where I need it. The way in which that capability is delivered kind of doesn't matter to me.

So the team honed in on a general product strategy that holds to this day. Anduril's CEO explained it to me like this.

The formula for building the right things is normally pretty straightforward one. We have to know there is an urgent problem, right? So like there has to be a sufficient level of urgency around solving the problem. Two, we have to believe there is a technology edge we have. We have to have some insight into the problem of why we think we can do this better over the long run. And it's something that has to be solvable in a relatively quick timeframe. This can't be 10 year research projects that are only going to pay out in 2030 or something like that. This has to be things that we think this is solvable today and we could bring a solution to field very, very quickly.

It's a risky gambit because if the government winds up not buying what they've built, Anduril basically has to shelve the project like what happened with the firefighting tank. But if it works, they will be the only company with a truly effective product at the exact right moment.

We're going to ship us fast as possible. It's not going to be done, it's not going to be perfect, it's not going to be pretty. But we're going to get out there and we're going to learn from the real people who use this what needs to change. Because they're the ones who actually understand, not the bureaucrats.

We're not saying, hey, give us a million this year, a million the next year, a million the next year. In five years we'll have something we can test. We're saying, you know what, we're just going to spend $10 million of our own money over the next six months. We're going to build it ourselves and then we're going to prove to you that this can be done in six months, not six years.

And this is basically the secret sauce that makes Anduril work. Even though they are an independent company, they are able to identify the needs of the military and go and actually build complete systems before they are needed.

The challenge of that is Department of Defense is not actually structured or equipped to buy capability in that way. It's just not how they do it. And so there's a lot of work that has to be done still to actually convince DoD that this is a business model that they can wrap their heads around.

So for us, success very much was we need to go toe to toe with the primes. We're going to be the next major defense prime and we are going to win major programs of record. To be clear, we thought that was going to take five years minimum, maybe seven years. We ended up doing it in less than three.

By mid 2018, the team had grown to 30 people and the Defense Department was starting to take notice. Things had been going well with the sensor towers, but Anduril wasn't really fulfilling their original mission. For that, Anduril would need to build entirely new systems and essentially level up every aspect of the business.

You can't just have one product and one really big program office that you're being responsive to. We have like multiple shots on goal that each have these huge multi billion dollar programs associated with them.

Anduril built a helicopter drone named Ghost. They also built a counter drone system called Anvil that could knock enemy drones out of the sky automatically.

You can kind of think about it as multi service like air force, Navy, Marine Corps, army, as well as multi domain. So things that fly, things that drive on the ground, things on the surface of the ocean, things under the surface of the ocean and space.

And they were still adding features to their lattice system to tie everything together. Information from the sensor towers, drones and other assets could now all be synced together to create a clear picture for the soldier on the front lines. The team had been working since day one to get people to wake up to the idea that the military was going to go through a major shift. And it was finally working. This small tech startup building camera towers for border patrol was about to get a lot more important and not a moment too soon. In early 2022, Anduril landed a $1 billion contract with Special Operations command to deliver counter drone systems. It was a big deal. It proved that the model worked. And then the unthinkable happened.

Russia's full scale invasion of Ukraine.

As troops move in right now, there are reports of explosions in several cities.

Mr. Putin urged Ukrainian troops to lay.

Down their arms and go home.

Ukrainian troops are watching and waiting, saying they are preparing for a fight.

President Putin is warning any foreign attempt to interfere with Russian action would lead to, quote, consequences they have never seen. US President Joe Biden has announced a new package of military aid for Ukraine.

Putin chose this war and now he and his country will bear the consequences. The war marked a resurgence of great power competition. Russia was waging a land war in Europe, an unthinkable prospect in the years following the end of the Cold War. The conflict was a testament to the transformative power of modern technology on the battlefield.

Ukraine has been a great example of.

How the ubiquity and proliferation of civilization sensors has allowed them to more effectively close kill chains.

It's actually a real problem.

How do you set up a sensor.

System for air defenses that is identifying not every bird as an incoming drone? Zelensky actually reached out to me back shortly after he was elected, years before this, because he read a Wired magazine article about the work we were doing with U.S. border Patrol, and he said, hey, I've got a border security problem. It's called Russia now.

Remember, Anduril was built with the goal of avoiding these kinds of conflicts, so they were in a good position to help out.

We've actually been involved in the Ukraine war since the second week of the conflict. And I was actually there to deliver some more hardware and also train a bunch of Ukrainian army operators on how to, how to best use it to go after the Russians.

But there were still many challenges ahead.

Terror in the skies above Ukraine's cities swarmed. Hannah Carti Drones unleashed by people. Ukraine says it's ramping up the homegrown production of drones as it struggles to cope with the demand for the technology on the front line.

Both sides have been deploying drones in significant numbers.

And on Monday, Ukraine was attacked. Now Russia has been targeted military and even commercial drones for surveillance and reconnaissance missions. We are seeing a transformation of war.

As we've known it.

And the future of war is one where drones play a key role in this. We've seen a real evolution in terms of how drones have been used over the course of this conflict. This may be the moment where war really does become something else.

We were starting to get signal from customers that this was an area that they had concerns and they had needs.

This is where they really expand their strategy. So instead of just building everything internally like most companies would do and like they were doing in the early days, they start acquiring companies. They bought a company that makes a drone called the Altius, which is a longer range drone that could actually act as a loitering munition. It can be launched from a helicopter or submarine or the back of a truck. And it's really versatile.

The main use case folks want to use it for is anti tank, anti armor warfare. Our goal is to precisely disable tanks that are, you know, an invading force is coming at you with.

This is Mike Mattis, the Senior Director of UN USN's Strategy at Anduril. And this is what he had to say.

I look at the Ukraine, I think, honestly, I'm looking at prehistoric drone warfare.

The rise of cheap swarming drones has created a big problem for the world's biggest militaries.

You've got adversary countries who can build drones really, really quickly. You know, they don't have 100 years of defense procurement slowing them down, right? They're just Their military is moving as fast as they can. And that was part of the reason we decided to go after it, because we said this is a unique situation where the traditional purchasing model, where you're going to purchase two years in advance or five years before it has to be deployed, will never work.

It turns out that having air dominance is super important not only for the delivery of lethal payloads, but also for spotting or intelligence, surveillance and reconnaissance. And the United States over the last 50 years has gotten to used used to this world in which we have assumed complete air dominance. And so we haven't historically had to worry about like, well, you know, if we send this plane up, is it going to come home?

Drones will need to evolve to become even more versatile, stealthy and capable of operating in contested environments. So what role will Anduril play going forward? Anduril's founders understand something very important. Software is eating the battlefield.

What you're seeing in Ukraine is every unit has multiple, very small drones that could be used for surveillance and reconnaissance and targeting. That's then guiding all of these legacy systems that were never designed with that type of operation in mind. But it's nonetheless extremely effective.

And so in order to be a successful defense company in the 21st century, you also need to be a successful software company.

They're all going to be networked. They're all going to have the ability to collaborate to find targets and engage targets. They're all going to have the ability to send them in when I kind of know what's going on and be able to decide at the last minute what I want to do. That is how weapons will work in the future.

You want the commander in the field to just pull out the phone or the tablet and then be like, draw a circle here and be like, patrol, Put drone asset on patrol here. You know, alert me when you find my target vehicle. Send, put the phone away, go back to like. Like, that does not exist.

Lattice is really built to enable that kind of future fight where a commander has understanding, information advantage. They're able to make a decision to marshal and sequence the forces to gain force overmatch. And that is, in essence, enabled them decision advantage.

That's how do I take advantage of, of modern machine learning techniques, modern software networking, to be able to make these things wildly more effective than they were historically.

From a software perspective, what we're doing is automating a problem that desperately requires automation, putting a human being on the loop, rather than putting so many human beings in the loop that they can never make decisions in A time intensive way and fundamentally sort of means that they're operating at greater risk.

It harkens to a future where a software first orientation is necessary for a future fight. And so Lattice is really designed to be a battle management aid that allows operators to remove themselves from being in the middle of all these things. And now they're on the loop.

There's this worry, I think, in popular culture that AI is going to spawn the ass Terminators.

And while I think there is reason.

To be cautious, I do think it's.

Important we don't engage in hyperbole. We're not making Skynet here and we're not making the Terminator here. The idea is that the authorities still reside with somebody who has the permission to do those things. But the speed of the fight is such that I can't allow the fog and friction of all of this information creating cognitive overload on an operator or a bunch of operators.

Hardware is going to change, the sensors are going to change, the platforms are going to evolve. But it's the software at the base level of doing all of that autonomy to orchestrate all of the sensors, the platforms, the different weapon systems that we're bringing together.

We're not trying to make like the world's most exquisite radar. We're trying to make a cheap, super effective, software defined system, fundamentally with the ability to make all these autonomous systems more powerful.

Xi Jinping has been stockpiling military equipment since he took power in 2012, and the Taiwan invasion is far from unthinkable.

Now, if you look at the last few decades, we went from being a bipolar world during the Cold War, revisit two superpowers, to a unipolar world. It's the United States and our, you know, our partners and friends all around the world. Technology has allowed a handful of players to start making this a multipolar world again. Unipolarity of the world is being challenged by the rise of China, the US And a lot of other countries, I think, making bad foreign policy decisions that allowed them to achieve unprecedented economic power, particularly in the area of technology. They've allowed us to make us very dependent on them for technology. And they've enabled themselves to become very powerful using technology.

Xi Jinping also wants to fly China's military muscles as well.

This is a rival that is building capability with purpose. You kind of look a bit more closely, you see them actually talking about wanting to use these types of capabilities to fight differently.

Xi Jinping's relentless pursuit of nationalistic goals has ignited a powder keg of tension in the Taiwan Strait. Now everyone is worried that this new era of great power competition could lead to a catastrophic clash between China and Taiwan.

China has really always seen itself as, as the preeminent organization in the world. That's why they consider themselves the Middle Kingdom. You have heaven, you have Earth, and you have China as the Middle Kingdom. And they see themselves having been supplanted in the last 150 years, really by the West.

The United States Indo Pacific Command, or Indo Pacom as it's known, is vastly different from the border between Russia and Ukraine. It stretches from the west coast of the United States all the way to the western border of India. It's essentially one massive ocean that includes some of the world's most vital shipping lanes, economic powerhouses and potential hotspots for conflict like the Taiwan Strait. The vast distances and the importance of naval and air power change the dynamic entirely. Today, China is one of a few countries that have achieved the nuclear triad. They have the ability to launch nuclear missiles from land, air and sea.

When you're really kind of looking closely at the types of technologies, the types of capabilities that the Chinese government in particular have been fielding, just a massive complex of ballistic missiles, cruise missiles, all focused on going after specific US Platforms and capabilities.

China's missile capabilities pose huge threats to the US Navy in the Pacific and US Allies in the Asia Pacific region. And so does its navy.

I think it's important to understand, let's talk shipbuilding capacity today. We simply don't have enough ship building capacity to recover from likely losses in a fight. If China was to lose half of their navy today, it would take them two to three years to rebuild their surface navy. If we were to lose half of our surface navy, it would take us probably 20 years to rebuild our surface Navy.

We're never going to have enough ships to actually get where we need to go if we end up in a real conflict with China.

Conflict has seemed inevitable, if you've been paying attention. But it's only recently that this has turned into front page news. So now the American military is starting to think that if these great power conflicts are going to happen, we need the best technology possible. The only problem is that the big defense primes haven't really been building the technology that we need.

We always were generating military technology that was superior to our closest competitor. That whole world is gone. We are now in a peer competition with China that has military parity, technological parity, in many cases with the United States. The consequences of going slowly are now very acute.

When people get out of line, we've been able to corral that, redirect that through a combination of military force, economic sanctions and diplomatic. It's always going to be those three things. The US Falling behind on military, the US having an equal on this will change the game substantially.

We're moving towards a world where it's becoming easier and easier for people to become a power that threatens the United States for the first time. It's not clear that the US and our friends have the ability to stop these actors from doing what they want.

The Anduril team was well aware of this, though. They were completely tapped into what was happening geopolitically. And so the mission of the company was to fix the American military and fix the defense technology industry before something bad happened.

At Anduril, we're trying to build products that are relevant to the Indopacom AOR in the Pacific, the ranges are significantly longer than, for example, the war that's going on in Ukraine right now with Russia. And so when we do wargaming, thinking about what products Anduril needs to develop in support of an Indo paycom fight.

The F35 is, I think, in the realm of something that an Anduril could do, especially once it's not a human piloted system, because it becomes much easier to manufacture. You don't need such high redundancy, you don't need life support systems. If you make your aircraft 10 times cheaper by accepting a 1% failure rate in your initial few flights, that's actually totally fine.

Could you have a drone swarm big enough, smart enough, effective enough, lethal enough to defend Taiwan, for example, from an amphibious invasion from China? Something that Xi Jinping has said that he intends to be able to do to seize Taiwan.

There's a kind of a slate of modern technology that needs to be incorporated in our defense industrial base that emphasizes mass over exquisite systems, that emphasizes autonomy. Those capability sets are also the same capabilities sets we've developed for these smaller scale systems, but deployed on different systems in different ways.

In the future fight, what is going to be our advantage? Look, China's catching up to us on hardware. It's getting commodified. We have the F35, they have the J20. What's going to win? It's the ability of this, to talk to each other and do unexpected things. And I think about this as decision advantage. How do we give decision advantage? That's how we're going to win.

The United States has been strengthening its alliances and partnerships in the Indo Pacific for years now. A Prime example of this strategy is the partnership between America and Australia.

The Australians have over the last few years announced a huge ramp up in their spending and in their kind of changing of their strategy.

The defence force, we're told, is quote, not fit for purpose. If we were to be in a conflict with the Chinese, for example, you've got serious weaknesses in our ability to prevent Chinese aggression in the Pacific.

Australia is now preparing for war in order to avoid it.

Our military isn't able to operate independently.

Without a whole lot of stuff from.

The Americans, even in our near region.

Based upon today's talks, we will increase.

Rotational presence of US forces in Australia. US engagement in the Indo Pacific makes an indispensable contribution.

The two nations have worked together to bolster their military capabilities, conduct joint exercises and share intelligence. Recently, the United States, Australia and the United Kingdom announced a new defense partnership called Aukus which focuses on sharing advanced technology, including nuclear power submarines to counter potential threats in the Indo Pacific.

Under this deal, Australia will be buying five nuclear powered submarines from the U.S.

Aukus has one overriding objective to enhance the stability of Indo Pacific amid rapidly shifting global dynamics.

The Aukus agreement we confirm here in.

San Diego represents the biggest single investment in Australia's defence capability in all of our history.

We are witnessing the biggest conventional military.

Build up that we have seen since.

The end of the Second World War.

This is a reaction to what the Chinese have been building, what they've been modernizing and then how they've been using it over the past two decades. Beijing said today that the United States.

The United Kingdom and Australia had embarked.

On a quote, dangerous path.

Aukus will transfer large amounts of weapons grade highly enriched uranium from nuclear states.

To a non nuclear state.

It risks nuclear proliferation and violates the.

Aims of the Non Proliferation Treaty.

The Anglo Saxon world, with the creation of structures like Aukus and with the advancement of NATO military infrastructure into Asia is making a serious bet on many years of confrontation.

The submarine is the ultimate apex predator.

Today submarines are important and challenging. The importance of the underwater domain is one. It's one of the few domains you can still operate undetected, which makes autonomy important, by the way. You don't want to come up to the surface. You can't communicate with submarines very well. They have to be smart enough to change and alter and perform their mission without continuous human guidance. And it's one of the few ways where we can go to places we're not supposed to be. We can listen to people, we can follow people, we can interact with their infrastructure. We can make sure that they're not interacting with our infrastructure. The underwater domain is actually where some of the most interesting stuff is happening. Everyone talks about dogfights in the sky. The actually more interesting stuff is, you know, hunt for Red October submarine warfare.

But nuclear powered submarines are just one piece of the puzzle. These are incredibly expensive assets with upwards of 100 people on board. They're extremely important, but we can't use them for everything. That's where Anduril's dive program comes in.

We acquired a company called Dive Technologies a little over a year ago. Dive, when we acquired them, was making the dive ld. The vision was always to build an extra large version of that sup. After acquiring them, we successfully sold the Australian Navy this joint development program based on kind of this core IP we had with dive already taking that and then supersizing it.

To be clear, we're going to have manned submarines for the foreseeable future. There's a lot of things we're only going to do with them. Like, I don't think we're going to have autonomous nuclear submarines driving around that have to make a determination as to when they should be destroying another country. That's one of the very few niches where I think people are very much going to be the dominant system.

The result will be an entirely new kind of submarine that can be used in completely different ways from a nuclear sub.

Dive at scale is a very interesting problem for the adversary. Number one, you can definitely find yourself a metallic object in shallow water. And with dive, it's just gonna be much more difficult. Right? It's largely not a metallic object. It's essentially 3D printed plastic, if you will, with some, you know, batteries and other things in there. But ultimately it's gonna be have a much lower signature electromagnetically. Additionally, it's gonna be autonomous, which means I don't need to have a manned submarine or a manned surface ship nearby, steering it at risk. And so from a deterrent standpoint, an incredibly capable platform.

As Anduril shifted from a tiny startup building sensor towers to a serious defense contractor with more than 1,000 employees, they've been confronted with some hard questions. At the end of the day, these are weapons of war we're talking about. It's serious business and shouldn't be taken lightly. Is it ethically responsible to build weapons of war? That's the key question.

I think there's sort of the debate of whether you will or will not work on weapons is probably the wrong debate. I think the question is you can make A decision of whether you want to participate in the US's ability and the allies ability to defend themselves and, you know, kind of use military force or the threat of military force to accomplish political ends. Right. Like, that's fundamentally what the military does.

I get into debates with people all the time. They say, oh, well, you know, Ukraine has really changed my mind, and now I want to work in, you know, in defense. And I say, well, look, that's great. I'm glad you've changed your mind. Like, good for you, you know, you know, pat on the back. But it's way too late. It's way too late for you to change your mind on this, because at the end of the day, you need to get these people the weapons and the tactics before the invasion happens.

Humans have been debating this for literally thousands of years. And one of the most robust frameworks on the topic is called just war theory. It was pioneered by a 5th century theologian named St. Augustine. His goal was to ensure that if we must fight, we would only do so for morally justifiable reasons and with a sense of humanity. He broke his thinking into two key areas. The first is the justification for going to war, and the second dealt with proper conduct during war. Even though just war theory is 100 years years old, it's still used today. It's the backbone of many international laws, such as the Geneva Conventions. So that's why Anduril is so focused on building defense technology that can prevent wars. By focusing on systems that keep troops safe and increase battlefield awareness, they can hopefully deter conflict before it starts.

We're not trying to build the tools that go into wars that have already started. We need to prevent these things from happening. And we can only do it if we build product that are so overwhelmingly good that people feel like they couldn't possibly win against them.

Anduril has been continually evolving as a company since its start back in 2017, and they've hit some incredible milestones in that time. But the story is far from over, though. They've built some great technology, but they are still a small company and still have a lot of work to do. Geopolitical tensions are still on the rise. The China Taiwan situation is very serious, and the Russia Ukraine situation is just getting crazier by the day. Anduril needs to continue to innovate and continue to deliver technology that can keep the world safe. It's really important that we don't end up in a hot war, because it would have a huge toll on the world.

Anduril is still not a sure thing. We've had like three coin flips that were critical to our company. When I say a coin flip, I mean it was. It was a bet that we made or a contract we needed where it was 50, 50 or worse odds for us. It truly could have gone heads or tails, who knows? The good news is now I think we're growing to the point where we have like a dozen coin flips every year and it's hard to flip tails 12 times in a row. Companies fail through no fault of their own. Sometimes. There's been three coin flips that went our way and I think back on the company's history, I say, wow, if those contracts wouldn't have gone through, our company would look very different.

I get told this all the time, like, you guys are not just coming to us asking us to buy your particular widget as if we're government corporate welfare. You are actually coming to us with thoughtful, creative and innovative ideas that will make our national security stronger.

I learned a ton from talking to the Anduril team and I hope you enjoyed learning about it too. It's a really fascinating company and I'm genuinely excited about what they do. I hope you enjoyed this video and subscribe for the next one. Thanks a lot.