# Anduril Founder Palmer Luckey talks production speed and momentum in the defense tech space *CNBC Television* · https://www.youtube.com/watch?v=s38Gf98CXjw ## Summary Anduril founder Palmer Luckey discusses the maiden flight of the YFQ-44A autonomous fighter, which flew 556 days after contract selection, and the rapid production of Ghost Shark robotic submarines in Australia. He defends Anduril's cash burn as spending on factories the U.S. needs for national security, enabled by using its own money rather than relying on government funding. He distinguishes Anduril from AI hype by arguing AI powers its products rather than being the product. He also briefly confirms a side project to build a bank for defense and technology startups, which has received preliminary conditional approval. ## Key points - The YFQ-44A collaborative combat aircraft made its first flight on Halloween, flying autonomously without remote control. - Anduril went from selection to first flight on the FQ-44 program in 556 days, the fastest a fighter program has moved in decades. - The Ghost Shark robotic submarine went from initial contract to real production in Sydney, Australia in less than 3 years. - Luckey says Anduril's cash burn funds factories, not perks, and self-funding lets programs continue through the government shutdown. - The FQ-44 factory was built before Anduril won the contract, and will start producing production aircraft next year. - Luckey argues Anduril differs from other AI companies because AI (Lattice) powers its products rather than being the product itself. - Luckey confirms a side project bank for defense and tech startups has received a preliminary conditional approval from the OCC. - He says the bank is needed because Silicon Valley Bank's collapse nearly took down many companies and existing banks have forgotten their job. ## Notes ### YFQ-44A First Flight - The YFQ-44A, Anduril's collaborative combat aircraft for the Air Force, made its maiden flight on Halloween. - It is an autonomous fighter: you push a button to tell it to take off and it performs the rest of the mission without a remote pilot or person directing it. - Name breakdown: Y is a production representative prototype, F is fighter, Q is unmanned, 44 is the designation, A is alpha; in full production it will be the FQ-44. ### Production Speed and Factories - The FQ-44 and Ghost Shark share factories built for very large scale using largely autonomous manufacturing processes. - FQ-44 went from selection to first flight in 556 days — the fastest a fighter program has moved in decades. - Ghost Shark went from initial contract to real production robotic submarines coming off the line in Sydney in less than 3 years. - Luckey hopes the rest of the industry takes notes and works in a similar way. ### Cash Burn and Self-Funding - Anduril spends its own money to move faster than relying on government funding. - During the government shutdown, all Anduril test sites, programs, and products are still moving at full throttle. - The FQ-44 factory was built before the contract was won; it will start turning out production Furries next year. - Luckey says money is not being burned on nap pods or parties but on factories the United States desperately needs for national security. ### AI Bubble Debate - Anduril preempted AI hype; the name Anduril Industries is an acronym for AI, which 8 years ago was seen as technology that would never work. - All systems run on Lattice AI brains, including the FQ-44 and Ghost Shark. - Luckey distinguishes Anduril from other AI companies: AI is not the product, it makes the product work — he sells fighter jets, submarines, missiles, heads-up displays, rifles, and force fields powered by AI. - He defers on whether AI is a bubble, saying he is a techno head, not a finance person. ### Bank Side Project - Luckey confirms a side project to build an extremely reliable bank for defense and technology startups, with a preliminary conditional approval from the Office of the Comptroller of the Currency. - He is funding all operations himself and says it is too early to say more. - He argues the US needs banks that hold money and help companies succeed, noting Silicon Valley Bank's collapse almost took many companies down. ## Transcript [00:00] Joining us now in an exclusive interview is Palmer Lucky, Anduril founder. Palmer, it's great to have you back on. It's Peter glad to be back on. So, I want to start right there with these milestones and specifically, we got to work on this name. YF-Q-44A, which is your collaborative combat aircraft for the Air Force, just had a maiden flight on Halloween. How significant is this milestone and perhaps even more importantly, what does this mean in terms of production now? Well, it's a huge milestone for us because this is, you know, an autonomous fighter. You push a button to tell it to take off and it goes off and it performs the rest of the mission. And that's exactly what we just demonstrated at the [00:35] first flight. You don't have someone who's flying this thing from a remote control. You don't have a person telling you what to do. It It does what you told it to do ahead of time and it just goes down and executes on that mission. In terms of the name, you know, the so Y is a designation for a production representative prototype. F is for fighter. Q is for unmanned. 44 is a designation and A is for alpha. So, the actual name of the aircraft when it's in full production is going to just be the F-Q-44. But for this initial demonstrator, you're right, it's the YF-Q-44A. Yeah. And you're also expanding internationally. You just opened this factory in Australia. We're seeing defense spending grow not just here [01:12] stateside, but globally as well. How does this position you? Well, the thing that the the YF-Q-44A and the Ghost Shark have in common is that we've built these factories that are able to manufacture both of them at very large scale using largely autonomous manufacturing processes. They're very simple to set up. We're designing products that can be made at scale at a price that is much cheaper than a lot of these legacy programs. And in both cases, we've gone from initial concept to production in extremely very very short period of time. Like the the F-Q-44, we went from selection to first flight in 556 days. That's the fastest a fighter program has moved in decades. With the Ghost Shark in Australia, we've [01:57] in less than 3 years gone from the initial contract to real production robotic submarines coming off of our line in Sydney. That is extraordinarily fast and I hope that the rest of the industry can try to take notes from us and do things in a similar way. So, along those lines, and I say this knowing there's an information article just a couple weeks ago about the cash burn at Anduril. As you do stand up all of these factories and you do scale all of this production, can you build and deliver to the military what it needs when it needs it? Absolutely. And one of the reasons we want to spend our own money is because it allows us to move so much faster than relying on the government to pay for everything. I mean, one good example of [02:35] that is the government shutdown right now. I'm sure they're going to work it out in the long run, but right now, Anduril is still moving through full throttle. All our test sites are operational. All of our programs are running. All of our products are still moving forward. And it's the same thing with our factories. I mean, the F-Q-44 factory, which is going to start turning out Furries next year, production Furries. We We started building that before we even won the contract because we were so confident that if we won the contract, we were desperately going to need it. And if we didn't win it, we'd be able to use it for making our other products. And so, look, we're we're burning a lot of money, but it is being put to very [03:10] very efficient use. We're not burning money on nap pods. We're not burning money on on you know, having parties. We're burning money building factories that the United States desperately needs for its national security. All right. So, if we're So, if we're talking about spending though, we had Palantir down today despite another really strong quarter. There's concerns. There's debate at least among investors that an a bubble is potentially inflating across this AI ecosystem with all the money that is being spent. How do you see it? Well, Anduril is interesting because we're the AI company that kind of preempted a lot of this AI hype. The The name Anduril Industries, the acronym acronym is AI. And 8 years ago, we [03:48] couldn't even talk about that because AI was seen as this technology of the future, never something that was actually going to work. Now, AI is the hottest thing ever. Look, AI powers all of our systems. The F-Q-44 has a Lattice brain. The Ghost Shark has a Lattice brain. All of our systems are running on our Lattice AI brains that powers all of our stuff. But I think that we're very different from a lot of these other AI companies in that AI is not the product. It's just the thing that makes the product work. I'm not selling AI software. I'm not selling an AI brain. I'm selling fighter jets. I'm selling submarines. I'm selling missiles. I'm selling heads-up displays. I'm selling rifles. I'm selling force fields that [04:26] happen to be powered by AI. So, I think it's just it's a very very different category than a lot of these other AI companies. And there's a world where where where this is a bubble. There's a world where it's not. I got to admit, I'm not really a finance person. I'm a techno head. I type on the computer really really well. It's your job to tell us if it's a bubble or not. Okay. So, let's shift gears here a little bit because just a couple weeks ago, conditional approval from the Office of the Comptroller of the Currency for another startup. So, So, media reports tell me Aerobor. Tell me about it. I think it's a little too early to talk much about it, but as you know, I've been working on a side project to build [05:02] a bank that is extremely reliable, not really to build a bank that startups like to build a to build a bank that is the type of bank that defense startups need, that technology startups need. A lot of the people You know, when when when Silicon Valley Bank collapsed, it almost took a lot of companies with them. The existing market is not really doing what needs to be done. And it's a little too early for me to be out there shilling. We have a We have a preliminary conditional approval. So, I I think right now, I'm funding all of the operations myself. I think at some point in the future, there'll be there'll be more to say. But the bottom line is, the US used to have banks that were in the business of holding your [05:42] money and helping companies succeed. And too many of them have forgotten that their job is not to be cute and financialize everything to the nth degree even at the expense of their customers.