Palmer Luckey (54:37)
So they've definitely kind of won by any rational definition. And so we're probably not going to approach Chinese cost. Luckily the US has more money and we make more money per person. And so we can probably afford a little bit of inefficiency on the Ukraine side. Side. That one's really interesting because we've had hardware and people in Ukraine since the second week of the war. I've been to Ukraine during the war myself and we've been a part of US aid packages, European aid packages. We've even sold some things directly to Ukraine. But to your point, mostly higher end stuff. Long range loitering munitions that can get through jamming bubbles. And what they really need is large amounts of industrial levels of firepower. I mean, they need a lot of really small, cheap drones. They also just need a bunch of artillery shells. They need a bunch of mortar shells. The biggest problem for a company like Anduril, and it's a fair criticism that people have made. The thing is, I can't compete with, for example, Eastern European manufactured artillery or mortar rounds. I just can't do that in the U.S. no matter how smart I think about it. I make solid rocket motors. I've wanted to make energetics get into the artillery shell business. The problem is I just cannot compete with what is a quantity, quite powerful arms industry that exists in a lot of the Baltics and Eastern European countries that are supporting Ukraine. The problem is that you to automate everything, you have to get to a sufficient scale. And so one thing I've done is I've approached multiple administrations, said, hey, we need to commit to, for example, supplying 155 artillery shells to not just Ukraine, but all of these allies. We need to build the, you know, the alien dreadnought where the metal goes in and the shells come out. So are you familiar with how artillery shell manufacturing happens in the United States States? Here's the actual problem. The facilities are literally owned by the government and then they actually lease them out to operators who then use them to develop stuff. And so if you try to compete with them, the government explicitly says, but this will, it'll be like, it's a waste of investment because we've already made our investment in these facilities. So like, I want to solve these problems, but in general, Anduril's looked at these things kind of quasi realistically. I'm waging this war of hearts and minds to explain why that is the dumbest thing ever. They need to open it up for competition. I think what, what they should do is say, we're not going to give you welfare to make your artillery line. We're going to say that the first company to build something using private capital and get to sufficient scale, we're going to award them a contract for this much and they have to hit a certain price point and a certain scale and only then are we committed to buying. And they just don't want to do that because they have their own centrally planned scheme. There's a lot of secret communism going on in the United States, a lot of secret Soviet thinking that that is just hidden behind a veneer of the flag. So that's kind of like the artillery issue. When you get to the small drones, it actually gets to. I'm competing like my biggest competitor for building small drones. To be clear, I want to build small attack drones for Ukraine and I want to be cost competitive there. But I'm competing with Ukraine using largely Chinese components, right? Most of these internally assembled drones, they're built using Chinese flight controllers, Chinese sensors, Chinese, Chinese stuff. I'm prohibited from using those. So Anduril is sanctioned by China. Our entire C suite is sanctioned by China. The government in the US prohibits us from making weapons using these Chinese components. And so I can come in and say, hey, I have this thing that is cheap, but instead of it being a $900 drone, it is a $2,000 drone. And people in Ukraine say, well that's fucking expensive and how am I ever gonna do that? And I say, you're right, if you're willing to use Chinese stuff, I literally can't compete. And this has been a smart move by China. While, by the way, this is why China keeps, they do this because it actually cripples my ability to compete. There's other stuff that I do that's just too expensive for Ukraine and I'm trying to make it cheaper. I want our learning munitions to be less expensive. But for example, I'm required to use a certain navigation system that the government has approved for munitions of this category. And they also require us to use it because they want us to sell anti tamper stuff using approved parts where Ukraine can't go in and say, ah, this was able to go, you know, 400 kilometers, but if I just strap on a bigger battery and I can tweak it, I'm going to go to Moscow. Another example of this, like I wanted, I actually wanted to sell surveillance towers to Ukraine before this war even started. And that wasn't something that I came up with. It was something Zelensky came up with it. He read a Wired article about Anduril, talking about how we were securing the US Southern border. And when he was in the US for his first UN meeting after winning his election, he wanted to meet with Anduril to talk about what it would look like to have our towers on his border so they could know how Russia was building things up, how they would cross. And then we ran into this problem where the U.S. state Department basically put the kibosh on the whole thing. They said, no, Russia's not going to invade Ukraine. Zelenskyy's basically just angling for welfare. He's trying to be a saber rattler. And so like the people who made those decisions, they're still in the State Department. They're still making these things. So I think to a certain degree, I've got my hands tied behind my back. I'll say I want to make a $2,000 attack drone. And they say, well, you have to use this approved thing. You can only use this approved warhead. You have to make it anti tamper so the Ukrainians can't make it do things that we don't want them to do. And the net of that is what you're talking about. People in Ukraine saying, anduril stuff is expensive and it's locked down and it doesn't and you can't modify it. And I say, yeah, that sucks. Look, I've been to Kyiv, I've been to Lviv, and I've trained people on how to use our systems. And I've heard that this feedback face to face. And it's really hard to tell a guy who's telling you that people are dying because of it, like, oh, well, sorry, I wish I could do better, but that's the strain of it. One more thing, you're right that we have a lot of these different things, and that is good for figuring out what works, not necessarily for scale. Some of those things are getting to scale. Our towers are very much at scale. We're on 35 bases around the world. We're covering about 30% of the US southern border now, a bunch of the northern border is as well. It's like our towers have scaled really well. Same thing with our counter drone systems. We're the program of record for all of SOCOM's drone defense. We're the program record for all of the Marine Corps drone defense. So some of these things are scaling it's these newer things. I guess if I have a critic who says Palmer, but you have all these things that haven't scaled, I'd say, well, guess what? Every single anduril product that is more than five years old has scaled. It takes time to get the government to scale these things, but we don't have any examples of a product that we did did that didn't scale once. It had enough time. Every product in our We've been around for almost nine years. Every product that was started more than five years ago is in major scaling mode. It's just we have a lot of other things that are newer and they're. There's. I'm sure there'll be some failures, but you know, flipping coins, you don't need to get a heads every time to to beat the house.
