How The Rarest Company On Earth Raised $75M

Vulcan Elements CEO John Maslin https://www.linkedin.com/in/johnmaslin/%E2%81%A0 joins Sourcery to announce their $65M Series A led by Altimeter (Brad Gerstner, Erik Kriessmann) with participation from One Investment Management (Rajeev Misra) to build the most advanced rare earth magnet factory in America—fully decoupled from China. Bringing their total funding to $75M. We cover why rare earth magnets are the “essential invisible building blocks of the economy,” powering everything from everyday consumer electronics, AI data centers, EVs, and robotics to satellites, drones, and every major U. S. defense platform. Maslin explains why China’s 90%+ dominance in magnet manufacturing is a national security risk, how Vulcan has decoupled from Chinese supply chains, and the company’s plans to scale from hundreds to thousands of tonnes of production this decade. From building a factory from scratch in North Carolina to deploying AI inside the magnet-making process, this is a behind-the-scenes look at the startup quietly powering the future of U. S. national security and AI. Highlights ​ $65M Series A led by Altimeter, bringing total funding to $75M.​ China makes 94% of magnets; the U. S. makes less than 1%.​ Magnets power everything: phones, drones, data centers, robotics, EVs – demand could 10x from robotics alone.​ Reindustrializing America: North Carolina “Research Triangle” facility with U. S.-made equipment, local talent, SpaceX alums, and PhDs.​ Next-gen factory: AI-driven production using Vulcan’s own sensor and material data for a “2025-era” industry 4.0 plant. Connect with us: ​ John Maslin: https://www.linkedin.com/in/johnmaslin/​ Molly O’Shea: https://x.com/MollySOShea​ Sourcery: https://x.com/sourceryvc Brought to you by: ​ Brex https://brex.com/sourcery—The modern finance platform, combining the world’s smartest corporate card with integrated expense management, banking, bill pay, and travel. As a Sourcery Listener you get: 75,000 points after spending $3,000 on Brex card(s), white-glove onboarding, $5,000 in AWS credits, $2,500 in OpenAI credits, & access to $180k+ in SaaS discounts. On top of $500 toward Brex travel, $300 in cashback, plus exclusive perks (like billboards..) visit → https://brex.com/sourcery ​ Turing—Turing delivers top-tier talent, data, and tools to help AI labs improve model performance—and enables enterprises to turn those models into powerful, production-ready systems. Visit: turing.com/sourcery ​Kalshi https://kalshi.com/sourcery—The largest prediction market and the only legal platform in the US where people can trade directly on the outcomes of future events: https://kalshi.com/sourcery ​Fourthwall https://fourthwall.com/—The #1 way to sell merch online — Fourthwall is the easiest way to launch a fully branded merch store—used by big brands like MKBHD, Acquired, & even the Smithsonian. 100+ products. No upfront cost. Visit Fourthwall to start today: https://fourthwall.com/ Follow Sourcery for the latest updates! https://www.sourcery.vc/ Chapters: (00:00) Introduction to Domestic Production and Resilient Supply Chains (01:59) $65M Series A Led by Altimeter (04:01) Vulcan Elements (05:27) Why Rare Earth Magnets Are Critical (08:58) Decoupling from China: Challenges & Strategies (12:24) American Talent & Reindustrialization (14:23) Assembling a SpaceX-Level Team in the Research Triangle (17:58) Scaling Up: New Facilities and Hiring Plans (19:14) The Manufacturing Process of Rare Earth Magnets (29:25) Challenges and Innovations in Manufacturing (32:02) The Role of AI and Advanced Technologies (36:18) Future Milestones and Policy Impacts

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Speaker 00

  A key reason for doing this was to support the domestic production of critical national industries and to make our supply chains more resilient. Chips, data centers, energy production. At Altimeter, we just led the Series A in a company, I don't even know if we've announced it, but I'll announce it here, which is an all-American producer of rare earth magnets. Right? So these are now viable investments.

• 0:26Speaker 01

  Doesn't matter if we're a hundred million dollar company or a trillion dollar company. Every dollar matters. Putting product in customer hand is the mission. If you're just copying and pasting China and trying to build a manufacturing business around that, you are doomed. Today, China mines 55 to 60% of the rare earths. They manufacture 90 to 94% of the magnets. They're actually importing the difference. So this is less of a raw material availability problem as it is a refining and manufacturing problem. Vulcan Elements is a manufacturer of rare earth magnets. Every piece of hardware, if it's moving and it needs high performance, you're going to need a rare earth magnet. And when you think about the next generation technologies that will define the 21st century, all of that has to have a rare earth magnet.

• 1:06Molly O'Shea?

  Well, we have big news today. You just had a recent announcement. Could you share more about this?

• 1:11Speaker 01

  Yeah, so we're excited to announce that we have raised a $65 million Series A, bringing us up to a total investment to date of $75 million.

• 1:19Molly O'Shea?

  One of the critical parts about Vulcan is that you're decoupled. So can you explain how this works and what does this mean?

• 1:25Speaker 01

  Yeah, so when we initially started this company, one thing that we realized is

• 1:59Molly O'Shea?

  John Maslin, CEO of Vulcan Elements. Welcome to Sorcery.

• 2:03Speaker 01

  Yeah, thanks for having me.

• 2:04Molly O'Shea?

  Well, we have big news today. You just had a recent announcement. Could you share more about this?

• 2:11Speaker 01

  Yeah, so we're excited to announce that we have raised a $65 million Series A, bringing us up to a total investment to date of $75 million. This round is led by Altimeter, so Brad Gerstner and Eric Kreisman, major participation from Rajiv Mishra's One Investment Management. And we're really excited about the syndicate that we have, and these are the right investors and the right cap stack that's going to allow us to go and solve a real problem for the US right now.

• 2:40Molly O'Shea?

  Let's break this down. So like, what was the process like and why are these the perfect investors for it?

• 2:45Speaker 01

  So the process went faster than we were expecting. When you have a track record of being able to execute and use words like on time, on budget, building for America, and here's the proof. We were able to go from initial conversations to signed term sheets in about four weeks. Actually, maybe a funny story. I just had my first kid about a month ago. I signed the term sheet and my wife went into labor four hours later. So the timing was phenomenal. We got really fortunate on that. And the reason why these are the right investors, when you think about Eric and Brad at Altimeter,

• 3:26Speaker 01

  they understand hardware. They understand how to scale businesses outside of pure SaaS. When you look at their portfolios, when you look at their personal experiences, they understand what it takes in terms of workforce development, thinking about who are the right customers to have? How do we go and build this into a generational business? And when you think about funds like One Investment Management, they do infrastructure, they do mining, they understand project finance and all of the different pieces that we'll need later stage as we go into hyperscale.

• 4:01Molly O'Shea?

  So we need to get into Vulcan. What is Vulcan? How did this begin?

• 4:05Speaker 01

  Yeah, so Vulcan Elements is a manufacturer of rare earth magnets, which has been in the news a lot lately. This company started about two and a half years ago. I had just gotten out of the Navy and was at Harvard Business School, completing my MBA. Was looking at really the three critical components that will define the 21st century. Semiconductors, batteries, and rare earth magnets. And the way that we generally like to describe it here is if you think about your own body, a semiconductor is like your brain, a battery is like your heart, and a rare earth magnet is like your spine. And everyone was focused on semiconductors and batteries. Frankly, those are critically important and they should be worried about that, but we weren't thinking as a country about the third leg of that stool.

• 4:48Speaker 01

  The rare earth magnet, which converts electricity into motion. And we saw that China was producing over 90, up to 94% of the global supply, and the US was producing less than 1%. And when you think about the next generation technologies that will define the 21st century, whether that's autonomous vehicles, or robotics, or the data centers that enable AI, drone technology, all of that has to have a rare earth magnet, turning that motor, sensor, actuator, generator into motion, so that we win the national security and the economic fight that we're going to be in for the next 25 years.

• 5:27Molly O'Shea?

  Why is this so critical for the economy and for national resiliency?

• 5:31Speaker 01

  So let's talk about what does a rare earth magnet go into? When you think about national security, every satellite, every drone, every missile, every tank, every ship, every submarine, every piece of hardware that moves, that the Defense Department uses, needs a rare earth magnet. When we think about the broader economy, everything from MRI machines to hybrid and electric motors, your cellphone, consumer electronics, robotics, again, every piece of hardware, if it's moving and it needs high performance, you need torque in that motor, you need some type of heat tolerance, you're going to need a rare earth magnet.

• 6:15Speaker 01

  These are ubiquitous fundamental building blocks to our economy, and they're getting more and more important.

• 6:20Molly O'Shea?

  We just came off of reindustrialize. I missed you there. I know you just had a newborn baby, so you get an excuse. But reindustrialization is the heart of the conversation right now and America's manufacturing efforts. So I want to know from your perspective, why is Vulcan? What is Vulcan's role in reindustrialization?

• 6:43Speaker 01

  So when you take a step back and you think about the broader impacts of geopolitics or economic statecraft, one of the leading indicators of a country's military and economic might is its manufacturing capability. And you can look at multiple sources. You can look at The Rise and Fall of Great Powers by Paul Kennedy. You can look at Freedom's Forge by Arthur Herman. You can look at Ray Dalio's The Changing World Order. Every single one of those books has a very common thread. And as we think about reindustrialization, whether it's around drone technology or shipbuilding, the picks and shovels, the chips, the rare earth magnets, the batteries, if we forget

• 7:26Speaker 01

  about those, we lose because we can't actually go and build those grand pieces of equipment that we're relying on as a country. I think Marco Rubio said it really well during his confirmation hearing. If America does not start manufacturing things, we're going to have to ask China what we're allowed to build and buy in five years. And that is down to a critical component level. And that's why Vulcan Elements is so important, is we are going and filling that critical gap right now so that across the economy, across national security, we can go and deliver those amazing technologies that our grandkids are going to rely on.

• 8:07Molly O'Shea?

  Manufacturing in America right now is laggard. It's been stagnant for a while. There's a Calci market on this. There's 22% odds that Trump will bring back manufacturing during his term. That equates to around like 13.1% of GDP. Right now, I think we're at like 9%, but there's 22% odds that that will happen. What do you think about this?

• 8:30Speaker 01

  I'm bullish. I think he's already doing it. I can think of a couple of projects, you know, personally in the rare earth space where we can really put our thumb on the scale and make that happen. I think it's going to take an entire government and industry coalition to get this done, but I think we have the momentum and I think that we have the brain power and the tailwinds to go and make it happen. So I'm very bullish on that and we need it.

• 8:57Molly O'Shea?

  We do need it. One of the, one of the critical parts about Vulcan is that you're decoupled. So can you explain how this works and what does this mean?

• 9:06Speaker 01

  Yeah. So when we initially started this company, one thing that we realized is it was phenomenally challenging to fully decouple from China outside of ownerships or any type of financial mechanism that ties you, JVs, partnership subsidiaries. It was really around the material, the equipment and the software. So I think taking equipment and then talking or material and then talking about equipment and software. Today, China mines 55 to 60% of the rare earths. They manufacture 90 to 94% of the magnets. They're actually importing the difference. So this is less of a raw material availability problem as it is a refining and manufacturing problem. So being able to go and find that material,

• 9:49Speaker 01

  that is completely doable. We've already done that. It's readily available. There are additional mines in the United States and in allied countries that are coming online rapidly. So really where the problem that we had to go and fix was, was on the equipment side. If China, if China manufactures 94% of the global supply of these magnets, where do you think all of the equipment to make those magnets comes from? It's virtually 100%. So what we had to do is we had to actually co-develop some of the first pieces of magnet making equipment in the United States in the 21st century. It took a lot of engineering hours. It took a really phenomenally intellectually technical team on our side with candidly great manufacturing equipment producers who were here in the United States who just hadn't

• 10:33Speaker 01

  made that piece of equipment before. They were making complementary and orthogonal pieces of equipment. They just hadn't done it for the rare earth magnetics industry. And so what's nice about our small scale commercial facility that we're sitting in is it's a blueprint. For our commercial scale. Every piece of equipment is not laboratory. It is small scale industrial. And we're looking at partnering with the same suppliers and scaling that up so that we can not just do this here in the United States, but more importantly, we can actually create an entire ecosystem where you're thinking about indirect jobs, you're thinking about being able to maintain your parts and candidly making sure that you don't just need an MBA from Harvard or a PhD to get a good paying job in this country.

• 11:17Speaker 01

  We can do all of those things if we go and kick down really hard engineering problems.

• 11:22Molly O'Shea?

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• 12:07Molly O'Shea?

  Companies like Scale AI, DoorDash, ServiceTitan, Hims, Anthropic, Flexport, Robinhood, and Plaid trust and use Brex. Start today at brex.com/sorcery. That's B-R-E-X.com/sorcery. Can you share more about America's current industrial beast? Because at Reindustrialized, there were some SMBs there. There were some like mom and pop shop manufacturers. But working through this and getting your own hardware and all of that, like what kind of talent do we have on American soil?

• 12:44Speaker 01

  I think people underestimate the talent that we have.

• 12:49Speaker 01

  When you look at the SMBs, those mom and pop shops that have been doing CNC machining or welding, or any other type of metalwork for the last 25 years, we have incredibly sophisticated technicians in this country. We have second, third, fourth generation welders and people who've worked on furnaces. And we have really dense pockets in our country. When you think about states like North Carolina, or Oklahoma, Indiana, Pennsylvania. And so I think what we're seeing is now you have Silicon Valley thinking about it, you have DC thinking about it, you have more capital flowing to these areas. And what's important is people in

• 13:30Speaker 01

  high school, or people in college, or in their early twenties, they're saying, I can go and build. I can go and use my hands again. Can we go back to 1950? No, we have to be able to understand automation and how AI is going to actually influence next generation factories. But I think that through things like reindustrialization, that conference, and just all of the signaling that DC cares about this, that Silicon Valley cares about this, we're making it sexy again to some 14-year-old, some 18-year-old who says, I want to go and build and serve this country with my hands. And the other thing that I would say is never underestimate America's

• 14:15Speaker 01

  ability to go and train talent. That is something over and over and over again throughout our entire history that we have been phenomenally good at.

• 14:23Molly O'Shea?

  Let's talk about your team. So how did you assemble the talent for your team? We're in your facility right now in North Carolina. What kind of local talent did you pull, or talent from outside state lines? Tell us about it.

• 14:35Speaker 01

  Asking who's on our team is my favorite question. That's the best question that you could ever ask me. So my co-founder, he's a PhD in electrical engineering with a focus on magnetics. He opened one of the first magnetic labs in the United States in two decades, down at the University of Central Florida. Our COO, his name is Jake Bowles. He was a boots-on-the-ground SpaceX engineer for several years, and then was a senior manufacturing engineer at Ursa Major. Our chief of staff, Jonah, he has deep defense background, working at the Pentagon, thinking about academic research around.

• 15:15Speaker 01

  Military readiness, ensuring that America continues to be the America that we've had for the last 75 years. And when you think about the technical team that we have, one of the reasons why we're in the research triangle is we did an analysis of the top 50 cities in the country, and we really looked at four parameters. The last two are the most important. The first was proximity to customers. Second was proximity to suppliers. But then the last two were states that are open for business that want advanced manufacturing in their state. But the fourth, most importantly, is where can we find pockets of the US where you can find incredibly talented PhDs, engineers, and technicians, all within a 45-minute radius?

• 15:58Speaker 01

  So you can't build this in the middle of nowhere. You also can't build this in Manhattan. And the research triangle is one of the top four. So we've been able to find powder metal experts. We've been able to find PhDs who are one of three or four in the country with their backgrounds. And I've said this before, and I will say this a thousand more times, the technicians that we've been able to bring into this company, they are the smartest people at this company. You don't need to go to MIT or Harvard to make a difference. You just need to be intellectually curious, and you need to be willing to get your hands dirty and turn a wrench.

• 16:39Molly O'Shea?

  Where are they coming from? Like, what other companies or universities?

• 16:44Speaker 01

  Yeah, so we've recruited talent from North Carolina State University, from UNC Chapel Hill, from several of the community colleges. There's a lot of powder metal in this part of the country. There's a lot of aerospace, and there's a lot of biomanufacturing. So this is one of those untapped markets that, and other companies come here, but maybe don't come here yet, because we want all of that talent. When you think about untapped areas of the country that have just incredibly dense manufacturing talent and technical talent.

• 17:20Speaker 01

  This is an outlier.

• 17:22Molly O'Shea?

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• 18:07Molly O'Shea?

  Who on the team are you looking to bring on?

• 18:09Speaker 01

  Yeah, so one thing that we're doing with this fresh set of capital is we're moving to commercial scale. We're completing a multi-state site search right now. We're going to be making that determination here over the next couple of months. And then what we're going to be doing is scaling the team. So it's going to be a lot of technicians. It's going to be mechanical engineers, electrical engineers, chemical engineers, people who understand microstructure and metallography, who are not afraid of turning a wrench. There are no desk engineers at this company. And as we look at who we're trying to bring on board, it's scale-up engineers. This is very sophisticated, advanced manufacturing. People tend to think this is buy a piece of equipment, press a button, make a magnet.

• 18:55Speaker 01

  That is not the case. You need to understand how every step is coupled to the next, and you need to make sure that your rate of learning is incredibly fast using 2025 tools. So we're going to be really indexing on those scale-up engineers who understand how you take something from small-scale commercial to hyperscale.

• 19:14Molly O'Shea?

  Since we are in the facility, could you give a high level on how it's built out and the different systems you have to go through for the process of creating a rare

• 19:22Speaker 01

  Earth magnet. Yeah, so right now what we do is we buy a rare earth metal that has either been mined or recycled from an end of life magnet, think an off spec motor, a hard disk drive, a power tool, a wind turbine. We take that rare earth metal, we melt it down with iron and boron, and we turn it into a metal alloy. It's called strip casted flake, actually. It's right here. And what you can see, if you look, is you can see the shiny pieces, those are the rare earths that are perfectly blended and uniform into that material that we're making every day. What we then do is we throw it through, it's called hydrogen decrepitation. We're pumping the alloy with hydrogen to break it up into a coarse powder, a couple

• 20:07Speaker 01

  strands of your hair thick, without hurting the structural integrity of that metal. That's that decrepitated powder right there. We then throw that through a high powered jet mill, so it's an ultrafine powder. We put that powder into a magnetic press, where we're pressing that powder into a block with into solenoid electromagnets, so a magnetic field that aligns all of those particles, think north, south pole, like a magnet. And then what we do is we throw it through a centering furnace, where we're effectively baking the magnets, so all of those properties lock in. After that, we grind it down, we shape it, we coat it, and then we make a magnet, like this. We made this in this facility, and that

• 20:46Speaker 01

  can go into a drone motor, a hard disk drive, a consumer electronic, a missile, a ship.

• 20:55Molly O'Shea?

  I want to break down the use cases like much more because I don't know if many people understand that magnets are in literally everything from like what you put on your fridge to missiles. So like, could you, could you go into more depth on the use cases for magnets and why it's so important that America has a geopolitical advantage here?

• 21:13Speaker 01

  Yes, and I think you, you just highlighted something important. When people think it's a branding problem, when people think about a magnet, they think about a refrigerator. So there are two things that happen when you put a rare earth element into a magnet. The first is the flux density or the strength of that magnet significantly increases. So, and I can show you, actually really quickly, these are my paper clips, here's my example. These magnets can hold up to 150 times their weight. So that's what happens when you put a rare earth element in. The second thing that happens is the heat tolerance significantly increases. We're dealing with extremely high temperatures and operating pressures when you put this into a car or a defense application.

• 21:56Speaker 01

  And so that's why a rare earth magnet is needed for industry and defense. But when we think about use cases, again, these are ubiquitous. So what you see on the table right here, these are drone motors. And actually, if you if you pick that up, this one right here.

• 22:15Speaker 01

  And you look inside, those are all of the magnets that are creating the motion in that motor.

• 22:21Speaker 01

  So that's what this magnet, for example, that we made here with US material, with US allied equipment is going to go into. Because every motor, the sensors that we use for navigation, the actuators that we're using for robotics, the generators that we're using for power systems, they all use rare earth magnets. And that's why we need to get magnets, batteries, and chips into the lexicon when we're thinking about the critical components that America needs to onshore at scale right now.

• 22:53Molly O'Shea?

  What is the new admin doing to help strengthen America's position in this? I know there was a recent deal for the Pentagon and MP Materials. If you can go into that as much as possible.

• 23:05Speaker 01

  So I think what the US government was doing is they were doing exactly kind of what I was just saying we need to do. They were making sure that rare earth magnets are in the lexicon, similar to batteries and semiconductors. And so frankly, when we think about companies like MP Materials, we need multiple companies to succeed. And MP Materials, they operate the only scaled rare earth mine in North America right now. We want them to go and succeed and execute and scale. That said, we need several 10,000-ton facilities. We need several companies going and creating competition and innovating and doing this better and faster and cheaper. And so I think that the United States government has made the initial first moves.

• 23:49Speaker 01

  In a way that we haven't seen in a long time, using authorities that we haven't used in decades to actually go and make this happen. And I'm excited to see what they do over the next year.

• 23:58Molly O'Shea?

  So let's talk about your current production. Where does that stand?

• 24:01Speaker 01

  Yeah, so we opened our doors to this facility on March 31st. And actually, the Chinese export ban on rare is happened five days later, the same week on April 4th. And in four months, we are already producing magnets. We are making magnets and shipping them to customers, qualifying them with customers across hard disk drives for data centers that enable AI, automotive applications, drones, robotics, several different defense applications. One thing that we're really proud of here is we've won several DOD contracts over the line, over the last nine months with every branch of the military, top priority

• 24:40Speaker 01

  programs, making sure that the defense industrial base has the material that it needs to go and scale up.

• 24:48Molly O'Shea?

  How are you able to do that? You're such a young company.

• 24:51Speaker 01

  So I think it's two things. One, it's the amount of pre-work that we did getting this facility ready, making sure that all of the wraparound utilities and electrical and heat exchangers and water chillers were ready to go, that they were at spec. I think that that's something when we talk about reindustrialization and building new manufacturing companies, it's not sexy, but if you miss it, you're delayed six months. Or you get your equipment and you need to completely redo all of the piping or all of the welding, which that burns money, that burns time, that burns trust. We nailed that in this facility. And then the second thing, and it's why we nailed that in this facility is our

• 25:30Speaker 01

  team. One thing that we have done is the rate of learning here is exceptionally fast. So our COO, his challenge

• 25:41Speaker 01

  Was when he started the company, I told him, go and build a team like you would have seen at SpaceX or at Ursa Major, where you were moving, you were executing, you were kicking down hard engineering problems every day. We're not admiring problems, we're fixing problems. And that's what we've done. I mean, we're very fortunate in that, you know, the last five positions that we filled, we had over 500 applications and that's with zero marketing. That's with a very low media presence. People hear about the mission and they want to come and work here because they know that this is important to the country. So team is everything.

• 26:18Molly O'Shea?

  How has this resulted in customers?

• 26:20Speaker 01

  When you think about the execution, plus what's happened with the geopolitical, you know, trade war, where rare earths and rare earth magnets become kind of the centerpiece between the US and China, the demand has been completely overwhelming. We could have sold this pilot facility out 15 times. We actually sold it out over 12 months ago, over 95% capacity, leaving a little bit for, you know, samples for customers that we really want to go and work with. And so what it's done is it's driven a lot of demand. It's a good and it's a bad thing. It's good because we know we have product market fit. We know that there are people who want to buy our magnets. It's a bad thing because we want to deliver product to customers. We want to go and fix this problem as quickly as

• 27:05Speaker 01

  we can. And that's why we just raised this fresh round of capital so that we can go and start doing that.

• 27:11Molly O'Shea?

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• 27:57Molly O'Shea?

  I would assume this is fairly CapEx-heavy, getting this off the ground. One of our partners is Brex and they're all about spending smarter, moving faster. But how do you think about performance as a company and scaling this up when you have so much demand, you have a lot to invest in, and you have to manage all of the systems?

• 28:15Speaker 01

  Yeah, so I think the first thing is, as we scale, we have to stay hyper-scrapy. And what I mean by that is, we need to find ways to reduce costs in every single part of the business. So, for example, this facility was nothing like it looks now nine months ago. We personally went and painted the walls, we redid the carpet, we put in new tiles, we spackled some of the walls. We saved several hundred thousand dollars. Some of the pieces of equipment, one of the main pieces of equipment, we were actually able to get at auction at 20 cents on the dollar, and then we refurbished it. It works perfectly.

• 28:59Speaker 01

  We use it every single day. Are we going to be able to do that as we go into hyperscale? Probably not. But I think having this ethos of, it doesn't matter if we're a hundred-million-dollar company or a trillion-dollar company, every dollar matters. Putting product in customer hand is the mission, and we are scrappy and we're going to find, we're going to figure it out. I think that's how you actually go and make something that is successful.

• 29:25Molly O'Shea?

  Have you had challenges with that and having to fully decouple from China, especially with machinery? I can imagine that gets expensive.

• 29:33Speaker 01

  Yeah, the equipment was hard to get. We were able to negotiate good deals, and that's because American companies, they want this to happen, right? It's good for them because they get to scale, but this also comes down to their patriotism, their belief in America being the economic and military powerhouse of the world. And I think the other piece here is, we still have a lot of work to do. So, we're making magnets, we're validating them with customers, we're starting to ship them, but we have additional grades that we need to go and achieve over the next couple of months. This is not, again, press a button, make a magnet. And the amount of work that we have to do is phenomenal. And that's where, I'm going to say it again, team is everything.

• 30:18Speaker 01

  And we're trying to just find the smartest, hardest working, intellectually curious people that we can find, because if that's what you're looking for, you are not going to find a bigger, more satisfying challenge than Vulcan Elements.

• 30:30Molly O'Shea?

  Eric is definitely your investor, because that sounds like something he would say. And I think he said multiple times on our podcast.

• 30:36Speaker 01

  But that's why, that's why we get along so well.

• 30:38Molly O'Shea?

  So what is it like working with him? Like, what does your current advisement team look like and mentors?

• 30:46Speaker 01

  Yeah, so he's been phenomenal. He gets it. A lot of investors are kind of doing some hardware tourism. I would say he's not one of them. He understands what it takes to put steel on the ground, to get product into customer hands. He has a great network. He has seen this happen with other portfolio companies at Altimeter, who are multi-billion dollar companies. He's seen where it's gone well, where it's gone poorly, and helping us kind of avoid some of those issues a year before they happen. In terms of who are some of our other advisors, Chris Miller, the author of Chip Wars, he's been a phenomenal advisor for a year. It's a great book.

• 31:28Speaker 01

  And, you know, he was one of the first people to realize, hey, this isn't just about semiconductors. We need to think about rare earth magnets, too. Because if we don't have both, we still haven't fixed the problem. Another phenomenal advisor we have is Nadia Shadlau. She's a senior fellow at the Hudson Institute. She was the Deputy National Security Advisor for Strategy under the first Trump administration. She understands how to navigate the Defense Department, talking to the government, making sure that we're meeting them where they're at.

• 32:01Molly O'Shea?

  So Vulcan has a next-gen approach. Could, could we go into this deeper? Like, what are you doing differently?

• 32:07Speaker 01

  Yeah, so there's, there's a lot of IP under the hood that we're not disclosing quite yet, that'll be coming out over, over the next, call it, you know, one to two years. But from

• 32:18Speaker 01

  The first day, we said, if you're just copying and pasting China into the United States and trying to build a manufacturing business around that, you are doomed. You will absolutely fail. Because when you think about the unit economics, labor costs, environmental regulations, permits, you're not going to be able to just copy and paste. And so what we've been able to do is we're using 2025 tools. Something that our grandparents wouldn't have seen. When we think about how do we build in AI agents into our manufacturing process? How do we think about building in large language models?

• 32:58Speaker 01

  So we have a full analytics and characterization lab where within an hour of every step of the process, we're feeding that data into our own models and then training them to tell us, hey, maybe run that piece of equipment for 10 more minutes or at 10 degrees hotter. And what it's doing is it's cataloging all the different grades of magnets that we make. And it's also showing us how we can optimize our own recipes. And so what we're doing with this raise is we have computational statisticians at this company. We're going to be building out our software team. Because in order for the US to compete and build those industry 4.0 type factories, which is a buzzword, but we have to actually think about how to do it. We have to go and build those models and those data lakes.

• 33:43Speaker 01

  Because if you don't have good inputs, you're going to have terrible outputs. And only once you have those good models, can you start thinking about how to automate correctly.

• 33:51Molly O'Shea?

  A company I recently came across is Turing and they help build and deploy AGI systems across various real world industries. I'm curious, as you think about this and as we approach the super intelligence world of things, how important and how critical not only do these systems, these AI systems and AI agents fit into place of building a next gen company, but also like, how much is that going to affect your output, right? Because that touches upon a lot of magnets.

• 34:22Speaker 01

  Yeah, I think that, well, maybe let's start there, right? When we think about physical AI or robotics, if we hit the volumes that companies like Optimus or Figure AI are discussing, that could 10x the global demand for rare earth magnets by themselves, not even touching on the other industries that are going exponential, like drones or cars.

• 34:46Speaker 01

  So that's going to change everything when we think about our own output. When we think about what we're actually producing, what we need to make sure is that we're actually doing the hard work of collecting the inputs. So I'm not an AI expert. I will never claim to be. But one thing that I do know is if you just throw into some random AI, how do I make a better magnet? How do I make a different chemistry of magnet? You're going to get some insane output. If you don't have that data lake and you don't understand every single variable and how every single piece affects itself or each other, using the word maybe first principles,

• 35:28Speaker 01

  which let's not even say that, but just each variable, you're not going to be able to go and build those industry 4.0 factories. So that is why this facility actually exists is because we're collecting all of that data. We're building out our software team and we're thinking about how we actually implement that into our facilities so that we can 5, 10, 20x our output with the same type of machinery in a couple of years.

• 35:52Molly O'Shea?

  Do you imagine Optimus in here?

• 35:54Speaker 01

  Maybe one day. They should ship me one and we'll put it to work.

• 35:58Molly O'Shea?

  You should start playing with that. Have you seen the Tesla diner? I'm going off script, but it just came out. It's crazy. You just like you go in, you charge and then like an Optimus feeds you food. Okay. So as we think about the next 12 months, right now, what's the month? I think it's July, July 2025. What's, what are your next milestones for this next year? You have an absurd amount of demand. You've got a team to build. You have new facilities to build out. What are your milestones?

• 36:27Speaker 01

  Yeah. So the big milestones that we'll be announcing over the next 12 years is where that commercial facility is going to be. We'll be announcing some very large partnerships with off takers. We'll be building out our team aggressively, two, three, four, axing our team at least.

• 36:47Speaker 01

  So there's, there's a lot that you're going to see over the next 12 months. But maybe even more importantly than that, what we're going to be doing is in this facility, shipping magnets and putting them into customer hands. Yeah, so hopefully it's multiple deals to go and scale this rapidly across several companies, you know, creating the capacity that we need, creating the innovation. The other things that they're doing on the policy side, which kudos to them. I think it's necessary and needed is in the National Defense Authorization Act, what they've done is if you look at section 844 of the fiscal year 21 NDAA, they actually ban the use of Chinese magnets. And there have been follow-on addendums that say by January 1st of 2027,

• 37:32Speaker 01

  you need any company that sells to the DOD. If there's a magnet, which if it's a piece of hardware, that's virtually everyone, you need to have country of origin or provenance. So that means from mine to separation to metal to alloy to finished magnet, you need to tell us exactly where that came from. It can't come from any foreign entity of concern. And you need to go ahead and validate that. You need to have, if you haven't done that, you're likely going to need a Department of Defense SEC DEF level waiver. And so what we're seeing is a lot of companies who sell directly to the Defense Department saying, hey, Vulcan, we need a magnet, we need a magnet right now.

• 38:13Molly O'Shea?

  Wow, that's super intense. All right, well, John, thank you so much. This was amazing. Hey, it's Molly. If you enjoy our interviews, check out our newsletter, sorcery.vc, where we deliver a once a week top deals and tech headlines email and also go deeper on our podcast interviews. Subscribe to Sorcery today. And don't forget to subscribe to the podcast on YouTube, Spotify, Apple, or wherever you listen. Link in description to sign up.