Chapter 1: What is the main topic discussed in this episode?
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Bloomberg Audio Studios. Podcasts. Radio. News. Well, CES Day 2 is well underway, and with that in mind, let's go to Bloomberg Tech co-hosts Caroline Hyde and Ed Ludlow, who are on the ground in Las Vegas with Paul Berlucki. He is the founder of Anduril. Over to you guys.
Katie, thank you very much indeed. And we are on the floor of CES, but we've got some serious conversations to have, not just about retro technology that is being brought back by Parmalaki and one of his startups, but we also want to talk about Anduril because very much defense tech is in the eye of the storm right now.
We have two Truth Social posts coming out from the president talking about the publicly traded defense companies. shouldn't be doing stock buybacks, shouldn't be paying dividends and need to focus on investing in America. Where do you think that is being pointed at and why do you think it's being announced now?
Well, you can probably guess where I fall on this issue. President Trump is saying that he wants to see defense companies building new plants, building new factories, delivering on time, and then maintaining systems cost effectively. And that's, I mean, trying to do more.
That is why I started Andro eight years ago, because I looked at the United States defense industrial base and realized we weren't moving fast enough. We weren't building new plants. We weren't building the new technologies that we needed. And so I'd say I'm broadly aligned. Personally speaking, I think dividends and buybacks are actually very, very different in their tenor.
And I think probably I'm much more on the sides of not allowing these companies to do dividends, certainly not when they're years behind on critical programs where they are failing to invest in new things. Stock buybacks are a little different because you're investing in yourself. You're basically saying, I believe that my future is better than my past.
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Chapter 2: How does Palmer Luckey view the defense industry and Trump's salary cap proposal?
I now cannot do stock buybacks if I'm not investing in new plants, if I'm not doing these two things. The other thing is, it's always tricky when you want to... You know, I'm in defense because I wanted to help solve these problems, right? It's actually the same thing with, like, Mod Retro in the gaming space. Like, oh, of course Palmer would criticize these other game companies.
After all, he's in the gaming space. It's like, yeah, but I'm in the gaming space because I want to solve these problems. It's kind of this, like, catch-22. Like, if you're outside of it, they'll say, well, why don't you do something about it then? And you do something, like, who cares what you're doing? You're just part of the problem. It's always been emotionally difficult for me.
We also have posts that President Trump is thinking more than a trillion should be invested in the area of defense.
The budget should grow. He's not anti-defense or anti-defense company. That's not for sure. That's for sure.
What's interesting is your company is, dare I say it, considering going public.
Yes.
Would your CEO, do you think the CEO that leads the business when it's gone public should be under these sorts of restrictions from an executive order? Do you think that's going to be an issue?
I think that when you are on the dole and when you're effectively run on the public's wallet, the public should be able to impose whatever restrictions they want on you. And you're not asking whether it should be, you know, like, you know.
If I am getting paid by taxpayers, they should have the ability to elect people, elect representatives, elect who will then nominate people who can hold me to account in any way they wish. If they want to say that I only pay myself $5 million until I'm caught up with my schedules, they should be allowed to do that.
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Chapter 3: What challenges does Anduril face in the defense technology market?
You remember being a teenager and your parents say, you're grounded until X, Y, and Z. Bring up your grades, solve your problems, and then we will talk about altering the deal. You say, but this deal has so many problems. If it's like this my whole life, if I'm grounded for the rest of my life, that means I'll have no social life.
And your parents are not necessarily looking to ground you for life. They're saying, right now, you're grounded. And I think that that's what you're seeing right now. It's not necessarily a lifetime commitment.
Let me jump in here. I want to bring the Bloomberg television audience the reporting, because these are two true social posts by the president. That's right. They're proposals. But what Bloomberg's reporting in the last hour is that he is considering an EO, according to sources, to make this happen. Answer this.
Is Anduril on track with the pledges and commitments it's made in Ohio, the projects that it is contractually obliged the military on, not just in this country, but around the world?
There are a handful of things where we are not, but in most cases we are. So like you brought up Ohio, we're building this huge plant, Arsenal One in Columbus, Ohio, where we're building autonomous fighter jets and a bunch of other things, building about six million square feet there. We're actually ahead of schedule on that.
We had a bunch of people from Ohio that we hired, the first round of factory workers. We brought them out to California on our dime, so we're housing them, we're paying them, and we brought them so that we could put them into our existing factory, teach them how Andrel works,
We indoctrinate them into our way of manufacturing, our way of thinking, and we've actually already finished that training process, and we've already sent them back to Ohio where they're helping stand up the factory. We're going into production this summer, and we have a new batch of people that have already been sent back. So on Arsenal One, we are ahead of schedule.
We are hitting our commitments. I think we're building a new plant to build new things, and we're doing it on our own dime. We're spending $900 million of our own money to build this plant.
Where aren't you? You were very transparent. Some places you're not. Are the weapons working as you want them to? Are they performing in the field?
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