Anduril CEO Talks Ohio Plant, an IPO, Working With Trump

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You must get to defense tech startup Anderill being selected and having selected Ohio as the location of a new manufacturing facility that will produce tens of thousands of autonomous systems and weapons annually. All this part of a plan to become a key provider of drones and other technology for the US military. Let's bringing our own ed Ludlow, who's in rather cold Ohio right now, ed.

Thank you Caroline. At full capacity. Arsenal one will be five million square feet, it will create four thousand jobs over ten years, and Andreil's putting a billion dollars of its own cash into the project. Who better to discuss that with than with one of the co founders of Anderil, Palmer Lucky, also chief technology officer.

Thank you so much for having me.

It's incredibly aggressive. The timeline to manufacture the first phase of this site and then start production mid twenty twenty six. How big a fact is that timeline in the highest selection Partmer.

It has to be this fast because we don't have time for business as usual. The types of threats threats of the United States is facing that our allies around the world are facing the fact that we are predicted to run out of munitions within the first eight days of a potential conflict with China mean that we need to hyper scale our manufacturing of these.

So was this the only state that could guarantee that timeline?

I think that they were the state that gave us the best shot of hitting that timeline.

Look, we've really engaged well with.

Jobs Ohio with a lot of the politicians here, not just at the state level, with the local level. You know, like you said, we're hiring four thousand people here in direct jobs, a lot more jobs than that in a direct or sorry, an indirect capacity. It's the largest single job creation event in Ohio history.

It was a state that told us we have the workforce.

We have a million people who are capable of working in the facility within a forty five minute drive. We're willing to work with you on higher education to help train.

People so that they can come in and they can work with you.

Our customer in the form of the United air The United States Air Force obviously is a huge presence here in the form of Right Patterson Air Force Base.

So really all the scars.

Aligned to make Ohio a great place for us to do it and to do it fast, and speaking candidly as someone who is from California, there's some states that are really good at pushing you out and slowing you down, and there's others that are great at pulling you in and speeding you up.

And that's what Ohio was.

Let's go there was California at any point a likely candidate, and if not, why.

There was a zero percent chance at any point of Arsenal one being located in California.

There's a lot of reasons for that, but I mean, you can go through them.

It's the high cost of living, It's the very high energy cost, It's in some cases, the unreliability of the energy systems.

It's the unreliability of the.

State politics and the worry on the regulatory side, and just you know, the reality is California has enough money and enough really successful companies that they don't really have to worry about a company like Mind, a company like Androl. The jobs that we are bringing here to Ohio, they are material and they are something that the state really

What you did say as a company is that it had nothing to do with Vice President elect JD Vans. No, that was not a fact.

This decision has been going on a lot longer than that. We're finally able to talk about it today. But I mean, you saw the renders, you saw the site, the site plans, things like that take a long time to put together. We raised our one point five billion dollar round of financing last year specifically to build this facility.

One of the questions from our audience on social media was about the jobs. Yep, four thousand over ten years. There must be a mix of those originating from Ohio, but you must also be trying to attract talent out of state to move here. And I know you'll be spending a lot of time here as well.

Well. I'm definitely going to be buying the house out here.

I'm blessed with financial success from my first company, Oculus VR that allows me to get a place so I don't have to get a hotel room when I'm spending time out here. The thing about you, like, Yes, we're gonna hire a lot of nato oh islands. I think we're also going to have a lot of people who are imports, who are coming in and adding to the economy here. You look at our headquarters in California, we're about eighty percent imports. About eighty percent of our employees

The supply chain you hire is actually very interesting. So you will have use of two runways where we are now Rickonbucket Airport.

That's right.

But my understanding is that take, for example, Fury behind us. In some cases you'll be able literally to take off from the runway which is just a few feet from where we're sitting, and deliver that technology direct to customer, explain.

Direct to customer, or directly to the action.

I mean, so this is Fury, this is our CCA collaborative combat aircraft. It's basically an autonomous loyal wingman fighter jet that can fight alongside F thirty and other fighters of the United States and.

Our allies use.

But you're right, the goal here is that we can manufacture these aircraft at scale, thousands of these spider jets here, and then we can either fly them directly to the customer or in some cases directly to the theater.

Of course, probably with refueling stops along the way.

But that's that's what we did during World War Two, and that's what we plan on doing it again.

Ohio is quite busy. Intel has a fab going up that's right quite nearby. Do you see that as a sort of competition for talent or do you see it as value add to being here.

It's both.

There's value added, and of course I'm probably going to hire some of their people and they're going to hire some of our people.

That's just the way that these things always go.

What you want to try to do is create make the area more attractive in general, right right, Like if andro was here and we were the only company that was in the area, it'd be harder to get really really world class people to want to stay in the area or move to the area because we're the only game in town. When they know that it's a healthy ecosystem of career choices, it's a lot easier to get people to come even if you if you do, manage.

To keep them around Palmer. When I spoke to Ohio Governor Mike Dewayan earlier, I asked him what was the sort of single biggest factor that gave him conviction about you meeting your timelines, not just for manufacturing, but your commitments to this state. In my career, with respect, every sort of industrial technology company I've covered, no matter how many billions of dollars they've raised from private sources, venture

I think that, like I said earlier, we don't have time for business as usual right now. People are predicting that there is going to be a window of opportunity for g in China that opens in twenty twenty seven. That means that you necessarily need to be ready for a potential great power conflict with China in twenty twenty seven and for at least a few years after that. So we have to write there's there's no other option.

Because we have to believe in it. It is it is critical that we hit it, and I think we will.

Are you guessing some financial incentives from the States.

Of the High Absolutely they were.

They gave us a great incentive package, and that was definitely that was definitely.

Part of our decision was the value and what does it look like? What is its composition?

I am going to let somebody else tackle it, because I'm actual, I can tell you it's in the hundreds of millions versus the billions that we're going to be putting.

Out two point one billion.

Yeah, I think they did a better job negotiating than than me. Maybe I don't know, but I'm really glad that Intel is here. They're really they're a really great partner. Obviously, they're they're they're making they're making a lot of US conductors that are competitive with competitive with the things that are being done in other countries, and it's critical for our products that we have advance and be conductors that are made in the United States.

So I'm really glad that they're down the road from US.

Palmer, it's important to have some extended time with you to talk about Arsenal one. I think one of the most common questions I get from the audience, even if they're familiar with ANDERIL, is what does ANDERIL actually do. They might know you as a weapons manufacturer or if they are a bit more research at autonomous defense systems, but could we just simply talk about what Arsenal one is going to manufacture and where that technology will be sold and deployed.

The way we look at ourselves is as a defense product company, not a contractor, but a product company, meaning we take a product company approach. We decide what to build it, how to build it, when it's done, and we invest our own money into making that happen. Then we sell products to the customer. Now we work hand in hand with customers through that process. It's not like I can go off and build a batmobile and try to sell it to them because I think it's cool, but I think that I'm sorry.

What was the second part of the question I heard question?

Is what specifically, what's the similarity buildings?

So the things that we're building, they're driven by what our customers need, but we are adussing a lot of our own money in them. So obviously we're building Fury, you know, our autonomous spider jets.

Behind you, you.

See all three of the different Barracuda cruise missile family, so the Varracuda one hundred Baracoud to two fifty Baracoud of five hundred autonomous swarming cruise missiles. We're also going to be building a lot of our is R drones. We're going to be building a lot of our mobile command and control systems here, and we're going to be building some combat heads up displays here.

I think you're going to be hearing some news about that soon.

There is a timeline. It doesn't sort of all happen at once. So initially, the first phase of the facility I think is about five acres, that's right, it goes up to five hundred acres. What does that process look like? Building out what you call hyper scale defense or weapons manufacturing.

The process is building this place up in a way that only a madman would are Our COO, Matt Grimm, has been kind of the hero of the day and figuring out how we're going to go from you know, a very very minimal footprint today to ninety five a ball fields in a very short period of time.

And it wouldn't be possible if we did never.

Really close cooperation with the local authorities on the permitting side, on the power and utility side, on the one on the logistics for example, rail logistics, air logistics, road logistics, be able to move things in and out of the facility very very quickly. If everybody wasn't on board and moving lockstep together, this timeline would be absolutely unreasonable.

And you keep hitting it.

But I will note we have competitors who are telling us that we are not going to hit these timelines and that we are madmen, and so look, you know, anyone could be wrong. But I would love to do a follow up piece in maybe twenty four months and see if we're bad men or not, or if we pull those past.

Four months from now, you and I will sit down again, but in an operational facility, is what we were saying.

We'll sit down an arsenal one and we'll have fighter just coming off the line, as my prediction.

The other big question I get for you direct from the audience is how they, as retail investors, can participate in this well.

As you know, the United States government has taken in a very un American position in saying that you need to be generally an accredited investor to invest in companies like ANDREL.

I think that's totally bogus and it's anti American, especially.

Because the only thing that being an accredited investor means is you have money already.

I know a lot of people who have money who you.

Would never say they're accredited to do anything, and vice versa. That said, we are on a path to being a publicly traded company. I think that's an important thing. I want us to be accessible to the American public. I think that it's good for people to be able to invest in American defense companies, not for them to just remain in private forever. I'll take an ideological stand there. I think that that is a good thing for the country.

Doing really well.

We hate We're winning a lot of contracts, We're making quite a bit of money.

We don't doubled last year to about a billion.

That's the rumor. That's the rumor.

Things are doing really, really well, So we don't have to IPO to raise money to keep the company going. I want to do it at a time when the markets are favorable, when people understand what we're doing, and I also want to prove out some of these big bets.

I don't really.

Want IPO when people are saying that we're mad men and trying to do the impossible. I want to do the impossible and then say, look, we did it. All you have to do is bet we can.

Do it again.

You will be doing business with somebody new in the Department of Defense. President elect Trump's pick is mister Henk. Say that's right, you know he was not one of the names that you had in your head when we last spoke a few months. That's right.

You'd asked me about it, and I said that I knew the names.

I heard a lot of the names coming around, and I was a big fan of all of them. You're right, he wasn't one of the names that I had heard rattling around.

May I just make a point that, you know, look at his CV. He doesn't have experience running an organization of that size. You want change and improvement in how America does business with the private sector in defense. So what we were approach with potentially mister HEGSETHB And what do you make of him?

I think that there's a lot of credentialism that is being levied against him that is totally unfair, and I personally empathize with him a lot.

I started Oculus.

VR when I was nineteen years old, living in a camper trailer and putting myself through school. And I didn't have the experience to be running that company. And I grew to thousands of people and the international business shipping millions of virtual reality headsets all over the world. And I didn't have the experience to be running arol either. I'd absolutely no business running this company. People could have made the exact same criticism. What ells Palmer know about

Yeah, his heart's in the right place, but he's just not qualified. The leap from.

Where the people say his credentials are and what he needs to do is a much smaller leap than the best leaps that I've seen people make in my career. So I'm never going to be the guy to say, oh, I don't think he's qualified. No, He's way more qualified than I've ever been to do any job that I've ever done, and I'm doing a pretty good job of it. So I mean, God bless him. I think that he's

I think he's going to kick ass Palmer. Let's end on President Electrum. But in the context of Arsenal one, you still believe change is needed in that military industrial complex procurement process. Absolutely, what specifically needs to change under the next over the next four years to allow for Arsenal to be one to be a success?

I think that we well, I think Arsenal one is going to be a success. The amount of change we've already had in the system I think will allow that. I don't think that we actually need radical changes in the system for Androl to do very well, but for our country to do well, for us to build a national security apperas we need to move quickly.

We need to take targeted risks.

We need to get more companies into defense manufacturing. That includes companies that are not currently defense companies, getting big tech in, getting little tech in, getting a lot of our industrial providers in. That is how we won World War two, is leveraging the whole of the nation. I think that that's the only way that we are going to win in the future as well, and I think that people who are being brought in are have exactly

Palmer Lucky Andrew co founder Always a Pleasure Technology Officer. Here Columbus, Ohio area the site the future site of Arsenal one