Torsten Reil
speaker
213 appearances
1 recordings
1 series
first heard Dec 2024
last heard Dec 2024
Torsten Reil’s voice in public audio — every appearance, attributed to the second.
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So software and software contracts work in defense, even though some people say it is impossible, it clearly is possible. However, there are some areas where software needs to have a hardware carrier. With a Eurofighter, we have a combat aircraft as a carrier, and that's great, and we're not building a Eurofighter.
But with drones, you need to think about drones differently in order for them to have the effect that you want them to have, which is basically precise mass. So you want to be able to have a large number of drones, extremely precise, to provide a deterrent that doesn't exist at the moment. And so for that, you need to have large numbers of drones.
You need to have the ability to manufacture those drones in a way that isn't the case right now. Most drone companies right now build small numbers of quite exquisite drones. They're quite expensive, sometimes a bit of a boutique business where people really care about the hardware and the carbon and everything else. But that's not what we need. What we need is really scaled up production.
And so when we looked at what's required in terms of capability, we couldn't, certainly on the Western market, we couldn't find anyone who was able to produce these large numbers. And so that's when we started to look at, can we build these kinds of drones ourselves? And can we think about it differently from a software first point of view?
meaning that we can shift a lot of the complexity from hardware into software. We can simplify the hardware, and we can manufacture it in much larger numbers at lower prices. And that's what we did with the HX2, which we just announced a couple of days ago.
It is and it isn't. So it is in that there are many areas where you need to have hardware experts. And we've built an amazing team that obviously deals with things like the design, the components, but also the supply chain. And that's different from software. But you can think about hardware as software as well. You can optimize a lot of parts of hardware by shifting complexity into software.
And you can also test hardware in software. And so we spend a lot of time building infrastructure for the entire company around simulation platforms, for example, AI infrastructure platforms, et cetera. And some of that technology is also applicable to hardware. So we've developed our drones extremely fast and we've tested them extremely fast.
And the reason we're getting to that kind of iteration speed, and it is all about iteration, just iterate, iterate, iterate, is because we can move a lot of the testing into software. And only when we get to a certain point, we move it into hardware, we test it in hardware, and then we go back into software again.
So these two things, if you do it well, which we're trying to do, are extremely interlinked. And the best hardware companies, I think, are software companies and vice versa.
Software can, with the right simulation environment, go really far. But there will be some things that maybe you didn't expect that aren't covered in your simulation. That happens in particular when you're deployed. As our drones are in Ukraine, then the realities of conflict will throw things at you that you just didn't anticipate. And so that's something that you have to test.
It is an inhibitor, like many other things as well. But for the complaints that we have about procurement and everything else, a lot of these rules are also there for a reason. Are they always applied in the right way and in as timely a way as ideally would be possible? Probably not. But the rules quite often make sense. What's the craziest rule?
I think there are lots of rules and it's frustrating. But if you enter defense as a company, that is what you've signed up for. And so you'll rarely hear us complain about how slow procurement is, etc. Because people want to do the right thing. The procurement officials also want to do the right thing. And by the way, I think politicians do too.
It's just that eventually you end up with a system that's grown over a long time where the incentives aren't quite aligned with the realities of society. Well, this is my point.
I think the system probably incentivizes the latter, but that doesn't mean that there aren't individuals actually across different forces in procurement agencies, but also in politics who really want to innovate. It does exist.
So there are all kinds of, I think, little things that you could do. But what we are suggesting is that you introduce a mandatory 20% on new defence companies for defence equipment. That is the easiest way of doing it.
So if you reserve of your defence equipment spend, so not the stuff on maintenance and everything else, but actually defence equipment, if you reserve 20% of that to new defence companies, which you can define, that is a shortcut to actually realigning incentives. What is the current spending on new defence companies?
There are many. The first thing is that you also have to have relationships with governments, with the right decision makers. You have to have a government relations team that deals with all of that. And in Helsing's case, it's not just one country, it's several. And so we're active in the UK, in France and in Germany, just recently opened an office in Estonia, and there'll be more over time.
So we have to have those relationships with various governments. You have to then think about how do you deal with lobbying from industry? So not every prime in the defence industry is yet our friend. I think we want to reach out to all of them, but not everyone sees us as friends yet. Who's your friend and who's not your friend? Well, probably Saab is a friend, for example.
We work very closely with them. They're shareholders in Helsing as well, really close friends. Others, I think it can fluctuate. I don't mean this in jest. I think we all genuinely need to work together. I think we all have bigger fish to fry. And defense primes will always have a role. We don't think that they will disappear. In fact, actually, I think they will grow if we do things right.
The thing that we have to avoid is the Tesla moment for the defense sector. If there is a big wave coming of new technology, and it's all around autonomy, software, and AI, essentially, again, precise mass. If we collectively, including the primes, don't understand that and don't adapt, the same thing is going to happen to defense as happened to the car industry.
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