Pod Insights a16z Podcast How AI Is Changing Warfare, with Anduril CEO Brian Schimpf About this episode Anduril reimagined how startups can build software and hardware for the defense sector. Now, they're using AI to reimagine modern warfare.
Speaking with a16z Growth General Partner David George, Anduril cofounder and CEO Brian Schimpf discusses how AI helps humans make better strategic decisions by sorting through the enormous amount of data collected from modern battlefields. Brian also discusses navigating the US government’s complex procurement processes, using commercial technologies to kickstart their own product development, and the growing opportunities for startups in defense. Throughout, Brian offers a deep dive into the intersection of technology, geopolitics, and the future of defense.
Read more, including a full transcript, here: https://a16z.com/how-ai-is-changing-warfare-anduril-ceo-brian-schimpf/
In our conversation series AI Revolution, we ask industry leaders how they’re harnessing the power of generative AI and steering their companies through the next platform shift. Find more content from our AI Revolution series on www.a16z.com/AIRevolution.
Please note that the content here is for informational purposes only; should NOT be taken as legal, business, tax, or investment advice or be used to evaluate any investment or security; and is not directed at any investors or potential investors in any a16z fund. a16z and its affiliates may maintain investments in the companies discussed. For more details please see a16z.com/disclosures.
Transcript Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.
0:00 Steph Smith? The American defense industry is the largest in the world at nearly $1 trillion, accounting for about 40% of military spending around the world, and also arguably impacting every person on Earth. Now, this sector has also face-shifted throughout the decades, including the consolidation of primes, shrinking from over 50 to less than 10 large primes receiving a majority of defense dollars. Those are companies like Lockheed, Raytheon, or Boeing. But there are some new companies in town, trying to disrupt how defense is done through new hardware and software. One of those is Anduril, a company that just announced Arsenal One, a billion-dollar factory in Columbus, Ohio,
0:45 Steph Smith? expected to create 4,000 jobs in the region. Now, in today's episode, Anduril co-founder and CEO Brian Schimpf sits down with A16Z Growth general partner David George. Together, they discuss how Anduril got its first product off the ground, competing with some of the largest companies in the world in navigating the US government's complex procurement processes. They also discuss how AI changes the modern battlefield.
1:12 Brian Schimpf? Being able to pull out that signal from this overwhelming amount of information that exists.
1:17 Steph Smith? Plus, what most people get wrong about these technologies.
1:20 Brian Schimpf? It is unethical to not apply these technologies to these problems.
1:25 Steph Smith? And how we shape up to the competition.
1:27 Brian Schimpf? They are running hundreds of tests a year of hypersonic weapons. Right. The US is running like four.
1:33 Steph Smith? Now, if you do like this episode, it comes straight from our AI Revolution series. So if you missed previous episodes of that series with guests like AMD CEO Lisa Su, Anthropic co-founder Dario Amade, or the founders of companies like Databricks, Waymo, Figma, and more, head on over to a16z.com/Airevolution. All right, let's get started.
1:58 Steph Smith? As a reminder, the content here is for informational purposes only, should not be taken as legal, business, tax, or investment advice, or be used to evaluate any investment or security, and is not directed at any investors or potential investors in any A16Z fund. Please note that A16Z and its affiliates may also maintain investments in the companies discussed in this podcast. For more details, including a link to our investments, please see a16z.com/disclosures.
2:36 David George? Let's jump right in. What is Androl? Tell us what you do.
2:39 Brian Schimpf? All right. So we were founded 2017. We're about seven years in. Basic idea was we thought there was a better way to make defense technology. So number one, the tech for the next 20 or 30 years was going to be primarily, how do you just have more cheap autonomous systems on the battlefield? Just more sensors, just more information flowing in. That seemed like it had to be true. So we invested in the core software platform we call Lattice that enables us to make sense of all these things. We have built a variety of autonomous products that we fielded over the last seven years. Just an outrageous pace and we're really working on all aspects of national security and defense.
3:16 David George? And how did you guys get on to National Defense as the place to go spend your time? Obviously, I know your background, but maybe you can share that.
3:22 Brian Schimpf? Yeah. So I was at Palantir for about 10 years. I'd been working on a variety of government programs and then several of the co-founders. So Trey Stevens was also at Palantir, Matt Grimm, our COO was at Palantir. We're all really good friends and we've been talking about doing this idea of there needs to be a next generation defense company. And then Trey and Palmer met through VC world and Palmer was just getting out of Oculus. And he was like, the same thing I want to do. And so we decided to kick this off together. But for me, working in defense, it was just obvious the degree to which there was a problem. You work in this space, the tech is old, it is not moving fast, it is very lethargic. There are relatively few competitors at this point. It just felt very right to do something different. And it's the sort of thing that, once you get into it,
4:06 Brian Schimpf? the people who are actually serving just have this patriotic motivation to solve the problem. It's just very, very motivating problem to work on.
4:14 David George? How did you land on the first product?
4:16 Brian Schimpf? So first product we worked on was what we call Sentry. It's for border security and this was a Palmer idea. He believed that tech could actually solve this. So we have these automated cameras with radars. We can monitor the border for miles away from these cameras. And he was like, this is something we could solve super fast with technology. And it really kind of hit what has ended up being a very good pattern for us is find an urgent problem that actually has a real tech solution that we can apply the cutting edge technologies to. So early on, it was 2017, computer vision was just starting to work. It wasn't even really embedded GPUs yet. We were literally taking desktop GPUs and liquid cooling them to get these things to work in a hot desert, under solar power.
5:01 Brian Schimpf? But we were able to go and get a prototype up in about three months and then move into like a pilot in about six months and then a full scale in about two and a half years. So really, really quick timeline. But I kind of fit this problem set of, we had a technical insight of how you could do this better. And there was urgency to solve the problem. They actually wanted to make a dent in this.
5:20 David George? All right, I'm going to ask you a lot more about that stuff. But one of the things that people say to me all the time, and you hear it in speeches and all this stuff, like AI is going to change the nature of warfare.
5:28 Brian Schimpf? Yeah.
5:29 David George? On the one hand, the major breakthrough that we just had, the way everyone interacts with it is like a chatbot and an LLM.
5:35 Brian Schimpf? It's pretty cool.
5:36 David George? It's amazing.
5:37 Brian Schimpf? Yeah.
5:37 David George? Awesome. I use it for everything. But what are the implications of this new wave of AI, generative AI on modern warfare? Physical sense.
5:47 Brian Schimpf? Yeah.
5:47 David George? You know, the software side, just talk about that.
5:49 Brian Schimpf? So when I think about where AI is going to drive the most value for warfare, it is dealing with the scale problem, which is really the amount of information that is, the number of sensors, the sheer volume of systems that are going to be fielded and it's going to go through the roof.
6:03 David George? So this is like lattice. Maybe start even there. Everything has a sensor.
6:08 Brian Schimpf? That's right. So like what do people do in the DOD? There's a lot of things they do, but what's the primary warfighting function? They are trying to find where the adversaries are.
6:18 David George? Yes.
6:18 Brian Schimpf? They need to then deploy effects against them. That can be a strike, that can be deterring them by a show of force. That can be jamming and non kinetic things. And they've got to then assess, did that actually work, right? Find them, you got to engage and you got to assess, right? It's like pretty straightforward. That is the primary thing that the military does. And so, okay, what do you need to do that? You need a ton of sensors. You need a ton of information on what is going on with an adversary who's constantly trying to hide from you and deceive you.
6:47 David George? Yeah.
6:47 Brian Schimpf? So just huge amounts of information to make that problem as intractable as possible for them to be able to hide. Or when they are deceiving, you can figure it out.
6:54 David George? Yeah, yeah, yeah.
6:55 Brian Schimpf? It's hard to deceive in every single phenomenology of sensing.
6:58 David George? This technology exists, right?
7:00 Brian Schimpf? The sensors exist.
7:01 David George? The sensors all exist.
7:02 Brian Schimpf? The sensors exist.
7:02 David George? Deployed, right?
7:03 Brian Schimpf? They're going to get better and you're going to be cheaper and you're going to be able to do more of them. But a lot of the limit of why can't we do more is what the hell are you going to do with the data?
7:10 David George? Processing capabilities?
7:11 Brian Schimpf? Yeah, like processing, but also just operationally. So, okay, now I say I had a perfect AI system that could tell me where every ship, aircraft and soldier was in the world. What are you going to do with that? Now I know everything. That is overwhelming, right? And so then being able to sift through that information to, well, okay, they're maneuvering here. What does that imply? Is this an aggressive action? Is it outside their norms? Is this different than we've seen in the past? Being able to pull out that signal from just this overwhelming amount of information that exists. And then on the other side, you got to act, right? So now I've got to actually be able to carry out these missions.
7:46 David George? Yeah.
7:47 Brian Schimpf? So this is where on the autonomy side, it really comes in, which is, okay, I want to send fighter pilots out. So the way they do like a predator drone today is like a guy with a joystick.
7:54 David George? Yeah. No, we've all seen the, you know, Ukraine, Russia.
7:56 Brian Schimpf? Yep, exactly. It's all like manually piloted. But that doesn't really scale and there presents a lot of limitations on communications jamming, all these things. So I want to be able to task a team of drones to go out and say, hey, go in this area and find any ships and tell me where they are. I just want it to be that simple. And they just need to figure out their own route. And if I lose some of them, they rebalance. They just go out and handle it. They're running target recognition, they can pop back whatever's relevant. That is where I think the autonomy side really comes in, which is I can just drive scale into the number of systems I can operate in the environment. The promise of AI in a lot of ways in the long run with this is just the ability to scale the types of operations I'm doing, the amount of information I have. And if done very well, it will put humans into a place of sort of better decision making, right?
8:40 Brian Schimpf? Instead of being like inundated by a volume of data and then all of our capacity goes to these mechanical tasks. We can have humans with much better context, much better understanding, historical understanding of what this means, what the implications of different choices are.
8:53 David George? Yeah.
8:54 Brian Schimpf? Those are all things that AI can enable over time.
8:56 David George? Ideally, better decision making.
8:58 Brian Schimpf? I think you get wildly better decision making.
9:00 David George? We're working with both limited information.
9:03 Brian Schimpf? And imperfect judgment.
9:04 David George? That's right, I guess, right?
9:05 Brian Schimpf? Yeah, and so the more you can have AI augmentation for these things and synthesis and like clarity, that is where the promise of this is. And so the US posture on this is very much, we want to have humans accountable for what happens in war.
9:19 David George? Yes.
9:19 Brian Schimpf? That is how it should be.
9:21 David George? Yeah.
9:21 Brian Schimpf? The military commander that employs a weapon is accountable for the impact of those weapons.
9:25 David George? Yeah.
9:25 Brian Schimpf? That is correct. I think that is the system we should have. And so then, nobody is talking about having full-blown AI is gonna decide who lives and dies. That is a crazy version that nobody wants to have.
9:38 David George? Well, I think it's also far-fetched in the sense that it presumes some sort of objective function that isn't driven by us.
9:45 Brian Schimpf? Exactly.
9:45 David George? This is my conversation with everybody when they're kind of like, oh my god, what about when the AI goes Terminator on us? I'm like, it's a tool for humans. It doesn't have an objective function. That's a leap that is not on the scientific roadmap today.
9:55 Brian Schimpf? That's right.
9:56 David George? So, like, why would that be the case in warfare?
9:58 Brian Schimpf? That's right. And so I think the reality for these things, it's going to be human augmentation. It is going to be enabling human software in a much larger scale with much higher precision on these things. And that is the opportunity with it.
10:09 David George? Yeah.
10:09 Brian Schimpf? And so, to me, it is unethical to not apply these technologies to these problems. And I think our view has always been, if we're the best technologists on these problems, or we can get the best technologists to it, giving the best tools on these absolutely critical decisions that are extremely material, that seems like probably a good thing. And engaging in the question of how can you use this technology responsibly and ethically is incredibly important.
10:33 David George? Yeah. Is it more humane to have a fighter pilot in the way of danger or having an autonomous system?
10:39 Brian Schimpf? That's right.
10:40 David George? Piloting in a conflict?
10:41 Brian Schimpf? That's right.
10:42 David George? And by the way, I have friends who are fighter pilots. I love fighter pilots.
10:44 Brian Schimpf? Yeah.
10:44 David George? But, you know, the technology has advanced significantly and you can make the argument that it is more humane not to put them in the line of fire.
10:51 Brian Schimpf? That's right.
10:51 David George? In the way of danger, right?
10:52 Brian Schimpf? Yeah. We're not gonna wanna put US troops at risk.
10:54 David George? Yes.
10:55 Brian Schimpf? And I think though, so the deterrent factor of the US saying, I have this capability and I've reduced my political cost of engaging on these things. It's actually a pretty good deterrent as well.
11:06 David George? Yeah.
11:07 Brian Schimpf? I'm not putting US troops or I can give this to allies.
11:09 David George? Yes.
11:10 Brian Schimpf? And they can defend themselves.
11:11 David George? Yep.
11:11 Brian Schimpf? And so I.
11:12 David George? Keep us out of the fight. Yeah.
11:13 Brian Schimpf? Exactly.
11:13 David George? Keep our troops out of the fight.
11:14 Brian Schimpf? Keep the troops out of the fight and it changes the calculus quite a bit. And so I think that actually in a lot of ways, if done well, has a significant kind of stabilizing impact and deterrent impact. It's just as harder to use force to get your political ends.
11:29 David George? Yes, exactly.
11:29 Brian Schimpf? And I think that can be a very positive thing.
11:31 David George? Yeah, exactly. Yeah, I keep coming back to deterrence and we need to find a way to create a sense of urgency for the sake of deterrence.
11:39 Brian Schimpf? Yeah.
11:39 David George? Not for the sake of going to war.
11:40 Brian Schimpf? That's right.
11:41 David George? And so it feels like that's universally like a people we talk to, I feel like that's universally known and hopefully we can make some progress.
11:48 Brian Schimpf? Yeah, I think people largely agree. Well, Vladimir Putin was very convincing on this. Like it turns out invading Ukraine was probably the single biggest shift I've seen in terms of people recognizing that, look, there are still bad actors in the world. They will use force to get to their political will if they think it will work.
12:03 David George? Yeah.
12:04 Brian Schimpf? If the cost is worth it, they're going to do it. And I don't think there's any reason to believe that's going to stop. It's been true for tens of thousands of years.
12:11 David George? Do you think the future of warfare, you said AI is an augmentation?
12:15 Brian Schimpf? Hmm.
12:15 David George? For humans?
12:16 Brian Schimpf? Yep.
12:17 David George? How fully automated do you think a conflict can become, say in the next 10 years?
12:21 Brian Schimpf? Look, I think the mechanics of, okay, there's this airfield and you want to go surveil it and take it. You can do some strike, you can do some surveillance, you can do all these things. There will be a large degree of automation in that, right? Like I could just say, hey, send this team of drones out in these waves to go conduct this operation, find things that pop up that are a threat. Tell me if you pop up to the human to say engage or not, it goes.
12:48 David George? Yeah.
12:49 Brian Schimpf? Right? Like it can move at a much faster pace. I think a lot of the things that were starting to happen in Ukraine, a lot of the great work Palter did was on things like this where it was like the targeting process of going from satellite imagery through to, hey, this looks like a tank through to an approval of is this a legitimate military target or not? That was streamlined and compressed.
13:06 David George? Much faster warfare.
13:07 Brian Schimpf? Much, much faster. So I think those things will happen very, very quickly, like very, very quickly. Then, okay, now it turns into a matter of policy and degree and scope. That is a thing that I think we're just gonna have to figure out as we work through it with the military. So then what we think about from the technology side is, okay, I don't want to design anything that precludes more advanced forms of this over time. Architect it correctly, but the crawl phase is just get a lot of the basics, just automate it, very mechanical things. Yeah. Make it very predictable, don't have any surprises. And then you can add more sophistication as you build trust, the AI advances, these things get more sophisticated over time. And one of the best examples is on the defensive side where it's right for AIs. We do a lot of work on counter drone systems.
13:50 Brian Schimpf? This is one of the areas we're partnering with OpenAI on, and it's looking at this question of if you have multiple drones flying at you and you have minutes to respond before the strike happens on you. How do you make an optimal decision? How do you make an optimal decision? When you are panicked, you are nervous and your life is at risk. It's very hard. Is that like a person manually sitting there making those decisions today? Yeah. No, it's often three because they have a separate radar from a camera or separate from the guy pulling the trigger on the weapon systems. Oh, man. And so then this, the coordination cost can be significant. So you can automate a lot of this. And then the other problem with this is then, as we've seen in Ukraine, every single unit, every single soldier is now at risk of drones. Yes.
14:31 Brian Schimpf? So this has to proliferate out from making a specialty that you do in an operation center now to every vehicle. In the field. In the field, everyone has to have this capability. You need the ability to have these systems just process all that sensor data automatically, fuse it together, tell you viable options for countering this and tell you what's a threat and what's not a threat. Like, these are the types of things you need to be able to do, respond with intelligent suggestions, and then have the system just automatically carry it out from there. Yeah. These are the types of problems we're working on. And the defensive side is just. You need it, right? There's no choice because the timelines are too short and the urgency is too high.
15:09 David George? Yeah.
15:09 Brian Schimpf? And it's a very straightforward area to understand where technology can really improve the problem.
15:17 David George? Yeah, it's like the highest stakes version of decisioning that autonomous driving cars are doing today, but with way more sensor information.
15:25 Brian Schimpf? Yeah.
15:26 David George? It's not a road.
15:27 Brian Schimpf? Yes. Yes, with an adversary who's constantly trying to fool you, deceive you. And yes, it's very, very hard.
15:33 David George? So that's one of the big parts of the partnership with OpenAI.
15:36 Brian Schimpf? Yeah, yeah, so they've been great. And I think Sam especially has been very clear that he supports our warfighters and he cares about having the best minds in AI working on national security. And who better exists to work through these hard problems?
15:51 David George? Yeah.
15:52 Brian Schimpf? And so I was just incredibly proud of them for coming out in favor of this and saying they're going to work on this. They're going to do it responsibly. They're going to do it ethically. But this is an important problem that the best people should be working on.
16:02 David George? The defense industry is notoriously difficult for startups to navigate. So how did you guys actually get traction in the first place? And do you think that's going to change in the future? Do you think it will continue to be hard? Do you think the primes will continue to have a stranglehold? I'd love your take on that.
16:21 Brian Schimpf? It is very hard and I think we built a lot of the right technology. I think we have the right business model of investing in things that we believe need to exist. I think we're picking a lot of the right problems to go after. But probably more than anything, I think we understood the nature of what it took to sell, right? And the congressional relationships, the Pentagon relationships, the military relationships, like all of this that you need to be able to say, hey, we have the right tech. You can trust us. We can scale. We can actually solve these problems for you, proving that it works. And then like catalyzing all of these really complex processes around it. I think the other part that we've done quite well is we're just finding ways to find those early adopters. And we understand those playbooks, who's going to move quick.
17:05 Brian Schimpf? How do you just build that momentum and advocacy in the government to make this go? Look, it's like more bureaucratic in certain ways. Is it much worse than selling to a bank or an oil and gas company? It's, I don't know, maybe 30% worse, but like probably not 5X worse.
17:17 David George? Yeah.
17:17 Brian Schimpf? And I think the reality is it's like enterprise sales are actually very hard.
17:22 David George? Yeah, yeah, yeah. Especially the ones with long sales cycles and massive commitments.
17:25 Brian Schimpf? That's right. These are the large capital investments customers making. That is a slow sales cycle. That is how it works.
17:30 David George? Yeah.
17:31 Brian Schimpf? And so I think there's like a lot of complaining and frustration. It's okay, well, also being bad at business means you're bad at business. If you don't understand your customer, you're going to lose.
17:40 David George? Yeah.
17:40 Brian Schimpf? That's how it works.
17:41 David George? Yeah, yeah, yeah.
17:42 Brian Schimpf? So do I think the government needs to be a better buyer of these things? Do I think they need to like take better strategies that'll get them more what they want? Absolutely. They're taking observably bad strategies to get to the outcome they actually want. Do I think it's necessary to change for us to be successful? Not really. We're just going to play the game that they present.
18:00 David George? Okay, I want to talk about the observably bad strategies.
18:04 Brian Schimpf? Yeah.
18:04 David George? What are the observably bad strategies?
18:05 Brian Schimpf? Right.
18:06 David George? And then what are the good ones? And maybe also wrap it into this idea that how do you actually convince the government that your ideas are the right ideas? So take, should you go spend money building a whole new generation of F-35s with manned pilots or a whole new generation of aircraft carriers? Or should you do something different? And how do you actually get your points across to them?
18:29 Brian Schimpf? Okay, so they're sort of like, how do they contract and buy? And what's been going wrong there? And then it's what's the right composition of, even if you could buy perfectly well, what should you be buying?
18:38 David George? What should you buy? Yeah, two different questions.
18:40 Brian Schimpf? Yeah, and so how are they buying poorly? So the typical government contracts are done in what's called cost plus fixed fee. And this actually came out of World War II when we were retooling industry to work on national security problems, where it's like, we're going to cover all your costs and we'll give you a fixed profit percentage on top. And so the incentives here are sort of obvious. If it's more expensive, you get more profit. If it is less reliable, you get more profit, right?
19:02 David George? The longer it takes, yeah.
19:03 Brian Schimpf? The longer it takes, the less reliable it is, the more complicated it is. There's no point of incentive in there to actually drive down costs. And you see this play out, right? It's like the companies have gotten so used to this where you look at even something like Starliner, where, you know, SpaceX had a third the amount of money that Boeing was given to make Starliner work. And SpaceX did it on time, probably faster than they even predicted, did it probably incredibly profitably and it worked. And so I think these incentives that don't hold you accountable are actually bad for your company. It just makes you a worse company. But do people in the government realize that it's bad for the country? I think they are frustrated. I think they understand that this is not really working. So you look at like F-35 as an example of one of these programs.
19:47 Brian Schimpf? It took 25 years to get it from initial concept to fielding. There's this awesome chart, which is like, shows how long it takes to get commercial aircraft or autos from kickoff to fielding. And it's been like flat to slightly better for all of those things, like on the order of two to three years. The military aircraft side just went literally straight up. Like, these things are taking longer and longer and longer. And there's an amazing quote that if you extrapolate this out, so in the 90s, this guy made this quote. If you extrapolate this out, by like 2046, the US government will be able to afford one airplane that the Air Force and Navy share. And the Marine Corps, every other day of the week gets a day. That better be a good airplane. Yeah, these things are just crazy. And so I think they recognize that this is not working, right? This is broken.
20:32 Brian Schimpf? Now, the other part of this, they haven't had a lot of alternatives. So you have a relatively small cartel of these companies who sort of all say, we won't do fixed price programs anymore. They won't do things on a fixed cost basis. So, okay, if you're the government and you're a buyer, what are you gonna do? Yeah, of course. You don't have a lot of choice here. And there's been a lot of problems with trying to get this model right. Now, turn some things that can work a lot better. I think SpaceX really proved this where they literally built a reusable rocket that you catch with chopsticks commercially. Like, that is, I think we can solve these things, guys. What thing can't we build? I think we can build an airplane. I think we can build it.
21:11 Brian Schimpf? So there's not really a question that this is the only part of some magical thing that can only, like, is the only people that can do it anymore. And you guys with autonomous, what are dead? Exactly. Yeah, like, it's proven now. The future is here. Yeah, exactly. And so I think the alternatives are there now. And then models that can work a lot better. It's like, one of my crazier ideas is new missile takes about 12 years to go from concept through to fielding. Like, 12 years. That's insane. It's insane. And so, okay, if you're in that world. But how fast is the technology evolving? Oh, like. This is the, like, 12 years from now, like.
21:43 David George? What will be able to do?
21:44 Brian Schimpf? Right.
21:44 David George? Technologically, and then we'll still be on the previous system.
21:46 Brian Schimpf? No, there's even crazier examples, like the Columbia class nuclear submarine is going into service in 2035, and its expected lifetime is through 2085. So how good were we in 1960, I guess, compared to where we were today? It's like, it's unclear, it's unclear.
21:58 David George? Yeah, we had technology to go to the moon.
22:00 Brian Schimpf? Yeah, exactly.
22:01 David George? It was pretty good. It was like the quality of the phone, it was like the computing power of the phone.
22:05 Brian Schimpf? Yeah, and so these timelines just get longer and longer, and it's just this death spiral, all these things.
22:10 David George? Contrast that cycle of development with China. Do they take 12 years? How does their tech stack up to ours?
22:17 Brian Schimpf? The single best stat for this is they're running hundreds of tests a year of hypersonic weapons.
22:22 David George? Right.
22:23 Brian Schimpf? The US is running like four.
22:24 David George? Right.
22:25 Brian Schimpf? Anyone who's worked in technology understands the compounding value of iterating on these things, and it is just so undervalued.
22:32 David George? Why is that the case?
22:33 Brian Schimpf? Look, the US, all these tests are very expensive, very complicated. There's so much buildup because every test has to go well, because we do relatively few tests. So then it increases the risk and the duration that you prep for these tests and increase the cost.
22:46 David George? The cycle times are long, yeah.
22:47 Brian Schimpf? Yeah, you're just in this vicious negative cycle. Like, anyone who's worked in like software understands this, like the old school way of releasing software. If you did a yearly release, you try to shove everything you can into that.
22:56 David George? Yeah.
22:56 Brian Schimpf? The risk goes through the roof, quality is a disaster. Going fast has an insane quality of its own and just how quickly you can learn and how much you can actually reduce costs on these things. And so they're just much more willing to like test and iterate in a way that the US is not right now. And so I think that is like, long-term, the biggest thing I worry about for the US, just pace. The pace of innovation, pace of iteration on these things. It probably is the single biggest determining factor of how successful you're going to be over a 20 to 30-year period.
23:29 David George? How do we create a sense of urgency?
23:30 Brian Schimpf? Yeah, like you look at that retooling, we had a two-year period of lend lease, and the amount of GDP that was spent on lend lease, the time was through the roof. And we weren't at war then, right? We were supplying other people. So we had a two-year head start to recondition US industry around this before we even entered into a conflict. And that's about how long it took. Empirically, Russia, about same duration, about two years to retool their industry against defense production. They are now outproducing all of NATO on munitions.
23:58 David George? Russia.
23:58 Brian Schimpf? Russia.
23:59 David George? Yeah.
23:59 Brian Schimpf? Russia.
23:59 David George? Oh, I believe it.
24:00 Brian Schimpf? And we've sanctioned them to hell, and they still are doing it, right?
24:04 David George? They still have gas.
24:05 Brian Schimpf? They still have plenty of gas. And so it's quite tricky to think you're going to reconstitute this in a single day. I think the department has a lot of urgency on it. One of the areas where we see it is showing up with weapons. So when you look at these war gaming sort of scenarios and all these war games are sort of questionable in their own ways. But pretty consistently, the stockpile of key US munitions is exhausted in about eight days. It's hugely problematic. Yeah. And like, that is because we have gone down this path of thinking that we'll be able to have this Gulf War strategy of concluding a conflict in two or three days. And that's how we're going to fight our wars. And it's just not true, right? It's like, any of these high intensity conflicts. Well, for any adversary that matters. That's right. It's not even close.
24:48 Brian Schimpf? We've got to be prepared to sustain these protracted conflicts. And that in and of itself is probably one of the best deterrent factors we can have. Exactly. It's like, we will not stop. We will not back down. We will have the capacity to withstand anything, right? That is a message we need to send to our adversaries worldwide. We have critical gaps on a lot of the kind of constituent parts of supply chain. This is a national security issue. So I think there is a feeling that this is a problem. I don't think anyone thinks everything's going great. Now, the question is, what are the strategies to get a way out, right? I don't think there's any debate that we're on our back foot in terms of the capacity we need, the mass we need, and the type of systems we need. Now, like, how do you get out of it? That's a much harder question and do it in a way that is going to work with Congress, is affordable, is actually something we can sustain.
25:32 Brian Schimpf? The path we're on is probably more incremental than revolutionary, I would say, with like US government where companies like us are going to come in and win incremental new programs and show the different. Yes, we'll be more innovative. We'll be more innovative. I think that flywheel is really starting to go. We still have a volume issue. But it is a major volume issue. And I think on the weapons production side, look, the only solve out of this is to actually tap into the commercial and industrial supply chains that exist. We're pretty good at building cars. We're pretty good at building electronics. Certainly the components that go into. The components, for sure. Building a lot of components. Like, we can do this stuff. Yeah. And you could design your systems in a way that take advantage of those commercial supply chains. Like, one example we have is maybe like a low-cost cruise missile. Yeah. It's very cool, several hundred mile range. And we made the exterior fuselage in this process that's used for making acrylic bathtubs. It's this hot press process.
26:18 Brian Schimpf? So like, we're making the gas tank. This is a mad scientist thing. It's incredible. And it's like, the fuel tank is maybe the same thing as the rotor molding. You use it for like, making plastic toys. And it works great. Yeah. There's a huge supply base that's available to do these things. And in contrast, it with most of these traditional weapons where it's like. Overly bespoke components. We gotta get the dude that knows how to solder this one thing out of retirement. True. And the supply chains are super deep, like four-year lead times on these weapons. Like, it's really, really bad once you get into it. Like, I saw this thing, the defense primes were like, "We need to change the federal acquisition rules so that we can stockpile four-year lead time parts." You're like, "A four-year lead time part? What are we doing? What are we doing? The world has changed in four years. Yeah, like, what is happening? And so, I think there's a problem.
27:03 Brian Schimpf? But then the government doesn't help, or they don't allow them to change the components. There's no incentive to change the components. Well, so this is the problem, there's no urge. It goes back to there's no urge. Exactly. And so, look, I think a lot of the traditional players are like patriots and they really care, but it's like, they're in a system that doesn't encourage them, support them, or even... I kind of boil it down to like, two key things. One is meaningful redirection of resources. So like, right now, the amount of money that's actually spent on capabilities like the types of things we're working on is somewhere between 0.1 and 0.2% of the defense budget. That seems pretty low. Even we got to 2%, 2%. We are like, in a wildly different world in terms of what you can do with that type of money. You're making like, a VC-sounding pitch? Yeah. If I could even get... The TAM is this. If I could just get to 2%.
27:48 Brian Schimpf? Just get 1%. But that's actually very awful context, all kidding aside. This is a crazy, small number. It's a crazy, small number, and even the small numbers are pretty big, but you really need to up this. So like, number one is, make the hard choices to drive redirection of resources and the technologies that are actually going to be what you need, right? Where they're so stuck with these legacy costs. Number two is, every company in the world gets this, which is, you need to empower good people to run hard at a problem and put all the things that they need to do it, and all the approvals, and all of that, under their command to just get to yes. Yes, yes. It's very simple, right? That's how every company operates, and that is how you are successful. Just empower good leaders to get results. Yeah. And hold them accountable.
28:32 Brian Schimpf? It is the opposite of how it works in the Pentagon, where every time something has gone wrong, a new process and a new office has been added to check the homework and say no, and they stall progress out. And so I think there's relatively simple things that can be done with some combination of congressional action and executive action to flip that on its head, say, nope, these program offices are fully empowered to field their capabilities. They're just accountable to senior leaders on the risk of trade offs.
29:00 David George? Yeah.
29:00 Brian Schimpf? And that's it.
29:00 David George? And you give them a budget.
29:01 Brian Schimpf? Give them a budget, give them a target, and they have to understand the risk, they have to do all this, but they're going to make informed choices on risk and cost and schedule and performance trade offs.
29:11 David George? Yeah.
29:12 Brian Schimpf? Like, that's their job. That's what we're hiring them to do. And if we create really empowered people to actually field stuff, you will get amazing results, because there are really good people in the government. It's just there are 10 times as many people who say no as there are to people who are accountable for.
29:24 David George? Oh, that's fascinating. 10 times more people who hang around, say no than say yes.
29:28 Brian Schimpf? That's right.
29:29 David George? Could you do just like a project warp speed for defense? Like, I know that's like, that implies something short term, like, it's like a one-time catch-up or something. But like, it probably, probably needs to be just like a permanent shift.
29:40 Brian Schimpf? I think you have to do both, right? So you've got to say, look, yeah, we need a warp speed for autonomous systems or weapons. We need that, right? That's a no-brainer that we need to have. And in doing that, you can tease out what are those things that you cut, and everything worked out fine, and you just didn't need to do it again. And then in parallel, you do the painful and slow process of just schwacking back all these like bureaucratic things that exist. I think you got to do something right and use that as a template. And so these sort of like things that prove you can be successful, do more of them, go at bigger scale, while also cutting back all the nonsense on things that just don't need to exist anymore. They made sense at the time, now let's revert, walk back, and reset where we actually need to be for where we are.
30:23 Brian Schimpf? Like, tech has changed, the pace has changed, reflect that in your process.
30:26 David George? It seems, even before the stuff we were just talking about in 2019, when you guys started the company in 2017, starting a company in defense
30:34 Brian Schimpf? Yeah.
30:35 David George? was extremely unpopular. And when you talk about what do you need to succeed as a startup, there's so many things, but capital, talent, relationships with customers, like, all of those things are way, way harder, or were way, way harder in defense.
30:48 Brian Schimpf? Yeah.
30:48 David George? In 2017, and in fact, like radioactive for some in 2017. You know, a lot of the engineers and things, there's like a
30:55 Brian Schimpf? Yeah.
30:55 David George? religiously opposed. Now it seems that there's this whole new burgeoning interest in defense startups. And we have an American Dynamism Fund and lots of people are interested. How did that happen? Because it seemed to happen a little bit before Ukraine too.
31:10 Brian Schimpf? Started to shift just before Ukraine.
31:12 David George? Yeah, what was the cause of that?
31:14 Brian Schimpf? So yeah, when we started, I mean, the number of VCs who gave us like ethics interviews or just said no. Or look, like my crass take is that Silicon Valley is like quite memetic, the VC world as well. And once the mainline funds like you guys, Founders Fund, General Catalyst, all came out and said, we're doing this. And like our valuation was high enough, then everyone was like.
31:41 David George? Then they got it.
31:41 Brian Schimpf? Chase, chase.
31:42 David George? Yeah.
31:42 Brian Schimpf? I think that was like step one was it was sort of normalized.
31:46 David George? Yeah.
31:47 Brian Schimpf? Like the mainstream VC funds were saying, no, we're doing this. This is important. I know Mark put out posts on it at the time. And so I think that was like the snowball then of, okay, this is succeeding. It's actually okay. Everyone's been told it's okay. And then there was this catalyzing event around Ukraine. And then I think on the why so many defense tech startups, it's like, look, this stuff is, I think it's very important work. It's also as an engineer, just some of the hardest and most interesting problems you're going to work on.
32:15 David George? Yeah, yeah.
32:15 Brian Schimpf? So I think a lot of engineers grew up looking at Skunk Works and seeing the SR71 Blackbird. All these wild things that the US was able to pull off. That was your inspiration growing up as an engineer.
32:28 David George? Yeah.
32:28 Brian Schimpf? Like this stuff is iconic. People want to work on these things. And so I think it just really mobilized people who really cared about this. And then you have a ton of vets who are leaving the military and just want to solve problems that they encountered.
32:41 David George? Yeah.
32:41 Brian Schimpf? And so you just have all these kind of a ton of interest in working on it. Now a ton of capital because they've seen our success. They know it can be done. And then just the social normalization of the whole thing.
32:50 David George? Yeah.
32:51 Brian Schimpf? Really flipped the narrative.
32:52 David George? Yeah. And I would say the evolution of the sort of primitives for technology has actually advanced the opportunity big time. Right? So like a lot of the dollars that would go to something like an aircraft carrier, which is untouchable for a startup.
33:06 Brian Schimpf? Yes, yes.
33:07 David George? Should go to smaller form factor, a tritable, fully autonomous.
33:11 Brian Schimpf? Yeah.
33:11 David George? Equipment.
33:12 Brian Schimpf? You're a hundred percent right. And this has been a big part of our strategy and this has been like. We are leaning into everywhere where there's commercial investment and so many of the things that historically have been like defense exclusive are no longer the case.
33:24 David George? Totally.
33:25 Brian Schimpf? One of the examples of this is we built this electronic warfare system. It's really cool. It's a jammer, senses, jams, radio signals. If we did that five years ago, 10 years ago, you would have had custom tape out chips. It's hundreds of millions in.
33:37 David George? Yeah, of course.
33:37 Brian Schimpf? It's a huge thing. So only government funded things did it. It was on a really slow cycle. Well, now with all the 5G tech, this is like the performance of these things is through the roof.
33:47 David George? Yeah, exactly.
33:48 Brian Schimpf? You can just take commercial parts.
33:49 David George? Yeah.
33:49 Brian Schimpf? And then just being the fastest to integrate and understand how to utilize these technologies becomes the advantage. Same with AI. It was like, we don't do AI model research.
33:57 David George? Yep.
33:58 Brian Schimpf? We don't need to.
33:58 David George? Yeah.
33:59 Brian Schimpf? We just take the best things that are there.
34:00 David George? The best models. Yeah, exactly.
34:01 Brian Schimpf? Riding these tech waves has been a huge part of it. And that is the macro shift that occurred where the department hasn't reconciled yet, which is like the innovation is much more coming from the commercial world. So it becomes being the best adopter. It is no longer these 10 year tech roadmaps the department controls.
34:18 David George? Yes, exactly.
34:19 Brian Schimpf? It is a totally different world we're living in. And so I think, yeah, the macro piece of like why a company like us can see major technology shifts like around where the innovation is coming from, huge geopolitical shifts.
34:30 David George? Yes.
34:30 Brian Schimpf? And then the consolidation of the existing industrial base with the bad incentives has led to an erosion of capacity. And so you combine all these things together and you're like, the conditions were sort of set for like us to be successful on this.
34:43 David George? Yes, yeah.
34:44 Brian Schimpf? They don't think we could have done it five years or later. It would be too late. Five years earlier, probably would have been too early.
34:49 David George? It wouldn't have worked, yeah.
34:50 Brian Schimpf? I think we were in this like two to three year window where we could ride all those waves correctly.
34:54 David George? Yeah. Brian, it's so fun to be with you. Thanks a ton for spending the time.
34:57 Brian Schimpf? Yeah, thank you.
34:57 David George? Thank you for what you're building as your investor, but more importantly, for all of America.
35:02 Brian Schimpf? Thank you.
Previous RIP to RPA: How AI Makes Operations Work Next Ben Horowitz in Conversation w/ Dr. Clarence B. Jones, MLK's Advisor and Speechwriter Page updated October 26, 2026 · transcript and summary are machine-generated
