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Palmer Luckey on Hardware, Building, and the Next Frontiers of Innovation

The a16z Show

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  • Early Bets That Shaped Tech Paths
    • Palmer Luckey recounts selling Oculus to Facebook and nearly taking NVIDIA, showing early industry bets shaped later outcomes.
    • He also tells the Bitcoin story of buying a phone for 8,000 BTC and almost being Coinbase’s first merchant customer. Transcript: Speaker 3 Most people believed we were living at the end of history. Great power conflict was over. The United Nations could write strongly-worded letters, and that would be enough. Then Russia invaded Ukraine. Palmer lucky saw it coming. Before the invasion, he tried to sell Andruil’s surveillance towers to Zelensky, who had read about them in Wired and wanted them on Ukraine’s border. The State Department killed the deal. They said Russia wasn’t going to invade. Palmer started Andruil 2017 with 25 people. Bloomberg called it the most controversial company in tech. Wired named him the worst person in Silicon Valley. Today, the company has over 7,000 employees and 25 products. They’re the program of record for drone defense across SOCOM and the Marine Corps. Before Andrill, Palmer founded Oculus as a teenager, sold it to Facebook for $3 billion, and watched Meta pour $60 billion into the vision he started. He was also an early Bitcoin holder. He bought a Samsung phone for 8,000 Bitcoin and almost became Coinbase’s first merchant customer. This conversation was recorded live at A16Z’s Founder Summit. It covers what it takes to build hardware at scale, why the U.S. Is spending too much and getting too little on defense, and why Palmer is still optimistic about the next 30 years. (Time 0:00:40)
  • Edge Cases Make Hardware Hard
    • Hardware fails because edge cases in real environments multiply problems engineers solve in the lab.
    • Inside-out VR tracking took years to be robust against reflections, fans, and moving scene elements. Transcript: Palmer Luckey You had tracking, but you had to have the boxes outside. Well, what it was is the first development kit didn’t have any spatial tracking. You couldn’t track movement through space. It was just where you were looking. So it was three degrees, three off or whatever. Exactly. And so then we were developing a six-toff system. That was what became the Oculus Rift DK2. That’s right. Like that was the real first modern. That was the outside tracking. Chris Dixon Is that right? Palmer Luckey So we were experimenting with different systems. Actually, I mean, that was an inside-out system that you’re referring to. We ended up still using an outside-in system for the DK2. And then even for the CV1, it took us years to get inside-out tracking robust enough that we could take it out of a room that we would show investors and actually get into people’s living Rooms. Because we were talking a little bit about this earlier, but the edge cases are what kills you. It’s easy to make it work in a lab. Very, very, very easy. Maybe not really easy, but it’s relatively easy. What’s hard is when you put into a real room, real rooms have glass in them. They have reflections in them. They have other people walk through. Now a large chunk of your scene is moving. You have to reject that. And that sounds easy for the bulk of it. But what about the things on the fringes? What about things like curtains that move a little bit? Or like you scan your scene and then you come back and next time it’s moved just a little bit. Also fans, ceiling fans, the death of inside out tracking. It’s just rejecting all of those things becomes a Herculean challenge. And we eventually got it working. (Time 0:03:40)
  • Prioritize Quality Over Lowest Price
    • Do not prioritize cheap unit price over core usability; make products high-quality enough that people keep using them.
    • Palmer argues ‘free isn’t cheap enough’ — better, higher-end devices convert mainstream users more effectively. Transcript: Palmer Luckey It’s the number one Palmer Lucky blog on the internet. Free Isn’t Cheap Enough? It’s written by me. But it’s this great piece where I laid out this hypothesis years ago called free isn’t cheap enough. And I argue that the thing holding VR back is not the price per unit. Like it’s not the fact that it’s $300 versus $200. It’s what you’re talking about. It’s too heavy. It’s too sweaty. The quality and content pipeline is just not there to make an average person, not a gamer, not an early adopter, like your mom, to use it. And so when people say, I’m not interested in VR, you can give them an easy hypothetical. Okay, well, wait, what if it was a pair of sunglasses and it was as good as the Matrix and it were $99? Would you use it? And even unimaginative people are like, yeah, if I could do literally anything that I could imagine in a pair of glasses, of course I would do it, but that’s not what VR is. And I say, well, then we’re just arguing about when VR is going to take off. It’s not if it will. We know the physics allows us to get to something like what I’ve described. And so I argued that this relentless push on making it cheaper and cheaper is pointless because even if it was free, it wouldn’t be good enough for people to keep using. I would posit you could give a VR headset as they exist today to every person in America and upwards of 90% of them would stop using them within a month because it’s just the quality is not Quite there yet. In other words, free isn’t cheap enough to make VR succeed. Yeah, maybe even a higher price better one would be even more successful. That was my argument. Unfortunately, people didn’t listen to me and they kept going and they launched the Oculus Go at $99, which went back to being threed off. And that was a whole misadventure. (Time 0:17:01)
  • Use Controversy As A Recruiting Filter
    • Early controversy filters for mission-aligned hires; being polarizing helps attract true believers.
    • Palmer used ‘Don’t Work At Anduril’ to repel wrong fits and attract committed applicants. Transcript: Chris Dixon But also, like, you started off, you know, negative press, like this kind of sense, you know. Palmer Luckey We won the Wired Magazine Worst Person in Silicon Valley Award. Bloomberg called us the most controversial company in tech. So this was back when Andrel was 25 people building drone defense systems. And by the way, this was the same year that WeWork had been indicted by the feds. Uber had just ousted all of its senior leadership. And you beat them. No, yeah, the most controversial tech company was Homer Lucky and his 24 drone people. Chris Dixon Yeah, it was incredible. So you went from that to now 7,000 people, employees. Palmer Luckey Depends on how you count it, but if you include contractors, yeah. Chris Dixon And sort of, I think, an iconic company that is, I assume, has gone from maybe having trouble recruiting. You tell me, trouble recruiting in the beginning to now being a talent magnet. Palmer Luckey Oh, the opposite. Did you see our latest recruiting campaign? It was called Don’t Work at Anderle. Chris Dixon Oh, Don’t Work at Anderle. Because you don’t want the wrong people. Palmer Luckey It has become, so when you’re doing something early and it’s really crazy and it’s new, this is true with Oculus too, you only get the true believers, the who are there because they want To, and they believe in what you’re doing and they could be making more money elsewhere. As long as they feel like what they’re doing is like, why would you go work at this startup that everyone’s laughing about and thinks is a joke like Oculus was early on to a lot of people In tech? Why would you go there if it’s not even going to pay you well? And the answer is because you really believe in what they’re doing. And that’s a natural filter for the lily pad jumpers, the think fluencers. You know the people I’m talking about. You see them on the LinkedIn. These are the people who, they’re AI experts right now. They were AR experts a year ago. They were VR experts a year before that. I guess, yeah, they were like, you know, the social, local, mobile experts before that. Web 2.0, yeah, guarantee, they all were Web 2.0 people as well. And Web 3.0, don’t forget Web 3.0, 5G. Yep. People who have been to enough of tech conferences know exactly what I’m talking about. That’s hilarious. And so the problem is Andrel has now gotten to the point where there’s no filter. We are now cool enough to get those people. You’re too cool now. And so it’s important to get the right people. (Time 0:19:17)
  • Run Small, Autonomous Product Teams
    • Keep business units small and mission-focused to preserve trust and speed decision-making.
    • Launch many lean product teams rather than one massive, slow-to-change product group. Transcript: Palmer Luckey Of stuff. It’s kind of incredible. We’ve got about 25 products. The interesting thing about Anderil is what we’re doing where we’re launching many, many, many products and where we are having individual product teams on each of those that are relatively Lean is actually easier for me to run as a company than the companies that have to invest in one or two products and grow them to serve everybody. Like the ultimate example of this is these large enterprise software companies where you have thousands of people working on one thing and it has to serve everyone in commercial and Consumers and enterprise and government. And like that is a very hard problem to build a product with thousands of cooks in the kitchen. All I have to do is keep making new products. And then I keep a small number of cooks in each kitchen. And that ends up being a pretty self-regulating strategy. People are tribal. People work well with a certain number of people. Like there’s only so many people you can have very high trust in, where you trust they’re truly doing things for the right reason, where you understand what everyone is doing around You. It’s not that much bigger than the size of a home construction crew or a small game development team. You kind of see these natural themes emerge over and over again across societies and across history, where it’s these groups of a certain size. I mean, the founding fathers. Chris Dixon And I’m trying to keep every business unit as close to that size as I can. And they’re all sort of engineers and product people, not like, I assume you try to eliminate middle management and layers. Palmer Luckey There was a very brief period, very early in Andrews history, where we had more lawyers and lobbyists than engineers. It was very, very brief. But we had to overinvest in that when you’re starting a company in such a compliance-heavy, regulatory-heavy, government-interface side. We have never, ever had that problem since. I’d say we’re about 85% engineering. So yeah, we have quite little overhead. We don’t have a ton of middle management. We basically have project and team leads that are typically engineers who came up out of other programs. One of our program leads is a guy, we call him the King Intern, because he was Anderil’s first intern. So he started when he was 19 years old at Anderil. We were his summer internship. And then he quit school, came to Anderil, and within 12 months was leading a product. And now he’s leading an entire business division. And like, we’ve done a pretty good job of making a meritocracy where people see the people in leadership roles are themselves engineers who have cut their teeth and proven themselves Inside of Anderil. Yeah. And when you’re growing quickly, it’s a lot easier. Like, this is a harder strategy for a stable company, and I can’t recommend it. But when you’re introducing products at a sufficiently high rate, there’s always a place for you to take these people, to pluck them out and say, you’re going to be in charge of this new Product and you’re going to make it work using your experience of how to work inside of our organization and the fact that people know you and trust you. (Time 0:24:10)
  • Follow Academic Research Proactively
    • Read academic literature to track true state-of-the-art rather than rely on press releases.
    • Use academics as an outsourced research team to spot real technical advances early. Transcript: Palmer Luckey How do I keep up with the weird stuff? I would never admit so in public, but I do actually keep up with the academic literature. I’m not… Which, like, of the computer science? In any space that I’m interested in. So, like, I am reading all the journals that mention synthetic long-chain hydrocarbons. I’m a huge believer in that. It’s going to change everything, and it’s going to make this whole battery electric nonsense look like the multi-trillion dollar farce that it is, especially in aviation. This is a long topic, but I’m not saying, by the way, the best performers in that area are not necessarily academic, but by staying on top of the academic side, you’ll never be too far behind. People in academia don’t have to create or produce or sell necessarily. Their job is just to be on the front lines of what’s new. And so they’ll never be too far behind that most of the time. Same thing with VR, same thing with optics, same thing. There’s like good academic stuff in VR on some of these areas? No, no, there’s nothing good, but they talk about everything. Okay. Chris Dixon It’s what, it’s what. I think of, yeah, I just don’t think of it. Palmer Luckey Think of it this way. Like suppose that you are going to try to, like you want to keep up to date with new curved polarizer materials that are used for making pancaked optics, where you’re folding optical Paths on top of themselves. You’re like, I want to stay on top of this. Well, what are you going to do? Are you going to read press releases that of all the companies that are, you know, touting this stuff? The company, the manufacturers don’t tout this stuff. Like, how are you going to stay on top of the fact that there even are new advancements? And it turns out a pretty good way is to just follow the academic literature where you have people that are doing research on these things. And then they’ll, like, their job is to say, you know, oh, and, you know, such and such group in China is doing this. And there’s other company that has this approach. What we propose is a novel approach to X, Y, and Z. Now, they probably can’t actually do it, and they’re never going to pull off anything of interest, but they’ve still done like the other work. I am basically using them as my outsource research team on anything. Like if I need to find out what the state of the art on something is, I can trust the academics somewhat more than the press. (Time 0:28:00)
  • Warfare Now Favors Mass Production
    • Modern warfare shifted from exquisite, slow systems to mass-producible, lower-end systems that matter in conflicts.
    • Starting to build deterrent systems after hostilities begin is too late to influence outcomes. Transcript: Palmer Luckey Much. We’re getting way too little. And we’re not progressing at the rate that our geopolitical adversaries are. And if it were a perfect, if it were peacetime and there was no inkling of conflict for us or our allies, that maybe wouldn’t be a problem. But that’s not the world that we live in. And so the rivalry with China is a big one. It was a little broader than that. I mean, when we started Anderle, if you look back at the first pitch deck, you remember there’s this page with a bear and a page with a dragon. And we lay out what the Chinese roadmap looks like. And we laid out what the Russian roadmap looked like. And we literally lay out that Russia is going to invade Ukraine. They intend to take it by force. There’s a great quote by Putin where he says, the country that wins in the sphere of AI will become the ruler of the entire world. I have a huge amount of respect for that quote. First of all, like what an incredible amount of style there. I’m not saying that I like Putin. I super don’t. I arguably started a company to fight Putin. I’m personally sanctioned in Russia and Belarus. I literally cannot go there without being arrested by Russian security forces. So don’t take this in like the, I’m in a nail palm or the wall. He said something good about Putin. But let’s be honest. That’s some really good like Bond villain level. Yes, they’ll become the ruler of the entire world. Chris Dixon You got to respect that. Palmer Luckey And he said that along, like you said, he said that speaking to a bunch of technical students at a technical high school. But a long time ago, you’re saying. Yeah, back in 2007. Seven? Okay. This guy was, like Putin must read a lot of science fiction. Yeah, yeah. He was, That’s really early. I mean. Well, remember, we were quoting it in an Andrew Pitch Deck in early 2017, before AI was cool at all. So, like, man, I would kill for a U.S. Leader to be that far ahead. Could you imagine if you had somebody come out? I won’t even name who, but if you had somebody come out in the White House and says, We have to hold the Lagrange points. Someone has to have the high ground in orbit. The cislunar insertion and transfer pads must be protected if we’re going to extract resources from the belt, asteroids, so you know what I’m talking about. And imagine if that was also, could you imagine if that was like from his own mind and not something that somebody wrote? That is Putin. He’s a competent adversary in these ways. And so, yeah, that was very much part of the rivalry. The problem is, of course, that now that rivalry has kind of reached its terminal stage, right? He’s made his move on Ukraine. Everyone’s seen that it’s happening. And so the remaining one that we can influence is China. And you called out all the drone stuff. I mean, you knew that was all going to happen, all the stuff like the Ukraine drone. We were talking about literally, I mean, our deck laid out exactly what was going to happen. And it said that warfare is going to be about a lot of these proliferated systems. A lot, like it’s going to move away from exquisite things that you build up capacity over decades to instead lower end systems that you can actually manufacture at a rate that is relevant To an ongoing conflict. And of course, that’s exactly what’s what’s what’s what’s exactly what’s happened in Russia. But the very big picture here is we were living in a world in 2017, where a lot of people believed we lived at the end of history, that there was no more geopolitical movement of significance To happen, and that United Nations could write mean letters to dissuade people from expansionist actions. And that what we’re seeing playing out is kind of the more cynical version of, we’re seeing the cynics, the cynics were right. The cynics who said, no, war is still a thing of the present, hopefully not the future. And it’s a good thing that companies like Anderil, I think, were getting started early on this. Because imagine if Anderil was started right as conflict kicked off in Europe, or worse, being started right as conflict kicks off over Taiwan with China. It’s too late. You can’t start working on bombs after the war has started and expect to have any deterrent impact. (Time 0:33:30)
  • Exploit U.S. Comparative Advantages
    • Lean into U.S. strengths: financial capital, hyperscalers, and global partners rather than trying to out-compete China’s manufacturing head-on.
    • Use economic and cultural advantages to create asymmetric edges in the tech race. Transcript: Chris Dixon Complaining about in the press right now, which is we just, like, the hyperscalers just invested a trillion dollars and, like, and is it a bubble? Maybe, who knows, but it’s a good thing. Because this is what we do. This is what we’re good at. Palmer Luckey It’s an advantage we have. It’s the capitalist animal spirits, right? Chris Dixon Like, it’s like the, you know, it’s like the internet. It’s like building out the fiber. Like, you need this excitement and capitalism. We need to choose advantages that United States has. Palmer Luckey Like this, this is the one issue with the one issue with re-industrialization is that China has already done a really good job there. I’m not saying we shouldn’t, we should, but we need advantages that take advantage of our better financial apparatus, arguably to take better advantage of our cultural apparatus, Certainly they take advantage of a unique fact, which is the U.S. Has friends, or at least partners, all over the world. China doesn’t have that. China has not convinced the world to host the Chinese military, to host Chinese culture. The United States needs to lean into the remaining advantages we do have. We should re-industrialize. (Time 0:38:48)
  • Building A Narrow Bank For Stablecoins
    • Palmer describes founding a bank to support stablecoin deposits and 24/7 settlement for modern needs.
    • He frames it as ‘boring’ narrow banking focused on deposit safety and predictable liquidity. Transcript: Chris Dixon Everyone’s calling it Palmer Luckey’s Crypto Bank. Palmer Luckey It’s not so much a crypto bank as a bank that does support stablecoin deposits and transfers because, of course, any bank is going to need to support these things. If you want 24-7 liquidity and you want 24-7 settlement and you want it every day of the year with every country around the world, you’re going to have to do it via stablecoins. It’s just obvious how that’s going to happen. So everyone’s seized on Palmer Luckey is doing all this crypto stuff. It’s actually way more boring. It’s a bank that’s a modern bank in a way. In many ways, it’s the most boring bank there could be. We originally were thinking of calling it the real bank, but it turns out that the slogan, I think, of Citibank is the real something bank. I can’t remember what it was. It’s not a good slogan. Anyway, we’re going to call it the real bank, but it was a very simple thought. Okay, SVB is collapsing. Yeah. Turns out that there’s more risk in the system than people thought. It’s potentially more widespread. And like, yes, SVB did some things that someone could avoid, but there’s a lot of things that are inherent to the way that current banking is done. So, our idea was, what would a bank look like if its job was to serve companies who more than every half percent of interest on their deposits actually just really needs their money to Be there and not disappear? Chris Dixon So, it’s narrow banking, not fractional reserve? Palmer Luckey So, I think that there needs to be one-to banking in the United States. Not all banking. I’m not saying every bank should be like this. But the product should be available. I started going around talking to banks. I said, all right, I’ve got this thing. I want you to take my money and then you have it when I come to get it. It’s the only thing you’re going to do. Chris Dixon By the way, it’s called narrow banking. And like there was actually a company that tried to do it recently and under the Biden administration and they got shot down. Palmer Luckey And the government doesn’t want anyone to do this as part of the crazy scheme. I know, I know. There’s a reason the banks aren’t doing this. And it’s not just that nobody’s smart. It’s that the government doesn’t really want it to happen. Chris Dixon Well, yeah, they claim it’s because then you would hurt the credit system and all those other things. But to your point, I think, shouldn’t you be able to have at least some people opt out and actually have a bank that has your money there? Well, and by the way, you can do it if you have a T-bill, for example, then you have a Q-sip, or they’re a custodial, it’s bankruptcy remote. And so it’s effectively available to wealthier people, but not to the retail. Palmer Luckey And not available to people or a lot of these tech companies, including smaller tech companies. So that was the question. How do we make a bank that would give people the things they need from a bank without the parts that are going to destroy their entire business? I mean, let’s be real. If the federal government would not have bailed out SVB customers far beyond what the law required, and if the Biden administration would not have more or less spuriously declared That the signature bank deal was actually signs of systemic collapse, which is nonsense, like if they wouldn’t have done that, it would have wiped out a lot of tech companies. And so what we’re trying to do with Erebor is actually a lot more boring than many people think, but there is a market (Time 0:39:58)
  • Progress Is Often Psychological, Not Just Technical
    • Many breakthroughs today are social, regulatory, or willingness-to-act rather than pure science.
    • Cheap housing and manufacturing gains often fail due to policy and regulation, not lacking technology. Transcript: Palmer Luckey And there’s a lot of things that don’t require even technological breakthroughs. Like the most exciting thing about what’s going on right now, in my opinion, is that it’s mostly not actually technological progress. It’s psychological, or you could even call it quasi-religious progress, catching up with the science that was figured out decades ago. That’s this whole nuclear thing. I have all this nuclear energy stuff. It is just everyone’s willingness to do nuclear catching up with the technology. Chris Dixon Political, cultural will. Palmer Luckey A lot of this bioscience. There’s a lot of things that have been proposed for decades that are only just now actually being tested. I mean, here’s another example. We’ve understood oxytocin, which is one of the primary mammalian pair bonding chemicals. We’ve understood how it works for decades. We’ve been like actively using it to help like postpartum depressed mothers bond with their kids. Like, oh, you hate your baby? Look at your baby and we’re going to give you this shot. Well, the fuck you love your baby now. It’s incredible. And there’s people who are talking about using it in totally novel ways. For example, doing divorce counseling. And we’ve understood the mechanism of it for 50 years now. And it’s literally just a willingness to just do things. And so I’m excited about the new science. I’m excited about new fusion. There’s a lot of just do things that’s going on right now. Chris Dixon And some of it’s infrastructure, like AI is really about GPUs, right? Palmer Luckey Like a lot of it’s engineering. It’s just like, isn’t it too? Like just the timing of like all the stuff came into place. You got so lucky. What a crazy coincidence. You basically had all these GPUs for gaming. By the way, Oculus, when we were acquired by Facebook, almost bought NVIDIA back when they were worth about $7 billion. And we were looking at doing a 51% takeover. No, but here’s the, and people say, oh man, imagine if we would have gone through with that project. But they never would have done what they did, right? It was gaming. And then the gaming stuff happened to be useful for all the proof of work and staking stuff in crypto. And then that ended up also being very similar to what we needed for AI. Like, man, what an incredible coincidence we live in that world. There’s an interesting argument where Oculus would have gone and got NVIDIA and AMD and centralized them and then only focused on gaming, and then we wouldn’t have any of this stuff. Wouldn’t have AI. Chris Dixon It’s a crazy world. And do you think we’re entering into this sort of, like, maybe unprecedented 20, 30-year period of exploration? Absolutely. Palmer Luckey Look, I’ll give you my thesis for optimism. People know that I’m a pretty happy guy. It seems like I’m having a good time. It’s because I remind myself that oats are like a dollar for some large number of pounds of oats. You can work for one hour of minimum wage at a federal level and earn enough calories to survive an entire week. It’s the best it’s ever been. Nobody’s been able to do that. And it’s not just oats. It’s agriculture in general, modern pesticides, controls, roundup, machinery. We’ve figured out how to make food really, really well. We throw away most of it. That’s how good we are at making it. And the same has been true, I think, for clothing. How many outfits do you own? Chris Dixon 20 or something, I don’t know. Palmer Luckey And how many would have you have owned as a rich guy even, you know, even 50 years ago? How about 100 years ago? How about 200 years ago? We’ve just made clothes so cheap. People buy clothes and they throw them away after wearing them one time. And you don’t even have to be rich to do that. Like there are people who are in college working part-time who do this. And I think that what you’re going to see is that same level of automation that has dominated textiles and agriculture start to apply to everything. I think AI is going to make it easier for the resource extraction, processing, and manufacturing to, like, I really do believe that in our lifetimes, you’ll be able to go buy something That’s like a Ford F-150 for $1,000 or the equivalent of $1,000. Chris Dixon The cost of the raw minerals. Palmer Luckey The cost of extracting and transforming it will go to near zero, and we’re going to compete the margins way down. It’s just not that crazy. And so if you can, and I bet you’ll be able to recycle it with 90% efficiency at the end of the season. You’ll say, what’s my summer car going to be? Let’s go down to the mall and buy one, and we’ll try it out. Same thing, I think, for housing. Housing is going to come extremely cheap. The components are not expensive. It’s the transformation and the regulation that have made it really hard. Chris Dixon The policy is a bottleneck. Palmer Luckey Correct. And so I think that this is what I mean when I say we don’t need technological breakthrough so much. We just do things. And like the tech to do this is going to catch up. (Time 0:48:20)
  • Why Anduril Can Be Too Costly For Ukraine
    • Palmer shares feedback from Ukraine: Anduril’s systems can be more expensive and constrained by US-approved components.
    • He explains scale, export restrictions, and procurement rules make matching cheap Chinese-made hardware difficult. Transcript: Speaker 3 You were speaking about how you have a lot of small teams. And this feels like it’s optimizing for the number of products you can iterate on and figure out what works, not for manufacturing very efficiently and making the cost of unit as low As possible. And I’m coming from Ukraine. I have spoken to some people in the defense industry there, and their criticism for Unreal was exactly this, that your products are very expensive, and what they need right now on the Front line is like something very, very cheap, just like we had it in the Second World War where like German engineering was way superior to the Soviet one, but the Soviets just had massive Quantities of the tanks which were stupid, lame, easy to destroy, but the sheer quantities eventually won. How are you thinking about this? Are we in a situation where China has already won the race on cheap manufacturing? General, what are your thoughts on this? I’m very curious. So they’ve definitely kind of won by any rational definition. Palmer Luckey And so we’re probably not going to approach Chinese cost. Luckily, the U.S. Has more money and we’re more, you know, we make more money per person. And so we can probably afford a little bit of inefficiency. On the Ukraine side, that one’s really interesting because we’ve had hardware and people in Ukraine since the second week of the war. I’ve been to Ukraine during the war myself, and we’ve been a part of U.S. Aid packages, European aid packages. We even sold some things directly to Ukraine. But to your point, mostly higher end stuff, long range loitering munitions that can get through jamming bubbles. And what they really need is large amounts of industrial levels of firepower. I mean, they need a lot of really small, cheap drones. They also just need a bunch of artillery shells. They need a bunch of mortar shells. The biggest problem for a company like Anderil, and it’s a fair criticism that people have made. The thing is I can’t compete with, for example, Eastern European manufactured artillery or mortar rounds. I just can’t do that in the U.S. No matter how smart I think about it. I make solid rocket motors. I’ve wanted to make energetics, get into the artillery shell business. The problem is I just cannot compete with what is a quite powerful arms industry that exists in a lot of the Baltics and Eastern European countries that are supporting Ukraine. The problem is that to automate everything, you have to get to a sufficient scale. And so one thing I’ve done is I’ve approached multiple administrations and said, hey, we need to commit to, for example, supplying 155 artillery shells to not just Ukraine, but all Of these allies. We need to build the, you know, the alien dreadnought where the metal goes in and the shells come out. So are you, are you familiar with how artillery shell manufacturing happens in the United States? Here’s the actual problem. The facilities are literally owned by the government and then they actually lease them out to operators who then use them to develop stuff. And so if you try to compete with them, the government explicitly says, but this will, it’ll be like, it’s a waste of investment because we’ve already made our investment in these facilities. So like, I want to solve these problems, but in general, Anderl’s looked at these things kind of quasi-realistically. I’m waging this war of hearts and minds to explain why that is the dumbest thing ever. They need to open it up for competition. I think what they should do is say, we’re not to give you welfare to make your artillery line. We’re going to say that the first company to build something using private capital and get to sufficient scale, we’re going to award them a contract for this much. And they have to get a certain price point and a certain scale. And only then are we committed to buying. And they just don’t want to do that because they have their own centrally planned scheme. There’s a lot of secret communism going on in the United States, a lot of secret Soviet thinking that is just hidden behind a veneer of the flag. The other, so that’s kind of like the artillery issue. When you get to the small drones, it actually gets to, I’m competing, like my biggest competitor for building small drones, like I, to be clear, I want to build small attack drones for Ukraine and I want to be cost competitive there. But I’m competing with Ukraine using largely Chinese components, right? Most of these internally assembled drones, they’re built using Chinese flight controllers, Chinese sensors, Chinese stuff. I’m prohibited from using those. So Andrel is sanctioned by China. Our entire C-suite is sanctioned by China. The government in the US prohibits us from making weapons using these Chinese components. And so I can come in and say, hey, I have this thing that is cheap, but instead of it being a $900 drone, it is a $2,000 drone. And people in Ukraine say, well, that’s fucking expensive and how am I ever going to do that? And I say, you’re right. If you’re willing to use Chinese stuff, I literally can’t compete. And this has been a smart move by China, by the way. This is why China keeps, you know, they do this because it actually cripples my ability to compete. There’s other stuff that I do that’s just too expensive for Ukraine. And I’m trying to make it, I’m trying to make it cheaper. I want our loading munitions to be more or less expensive. But for example, I’m required to use a certain navigation system that the government has approved for munitions of this category. And they also require us to use it because they want us to sell anti-tamper stuff using approved parts where Ukraine can’t go in and say, ah, this was able to go, you know, 400 kilometers. But if I just strap on a bigger battery and I can tweak it, I’m going to go to Moscow. Another example of this, like I wanted, I actually wanted to sell surveillance towers to Ukraine before this war even started. And that wasn’t something that I came up with. It was something Zelensky came up with. He read a Wired article about Anderil talking about how we were securing the U.S. Southern border. And when he was in the U.S. For his first U.N. Meeting after winning his election, he wanted to meet with Anderil to talk about what it would look like to have our towers on his border so they could know how Russia was building things Up, how they would cross. And then we ran into this problem where the U.S. State Department basically put the kibosh in the whole thing. They said, no, Russia’s not going to invade Ukraine. Zelensky’s basically just angling for welfare. He’s trying to be a saber rattler. And so like the people who made those decisions, they’re still in the State Department. They’re still making these things. So I’ve, to a certain degree, I’ve got my hands tied behind my back. I’ll say, I want to make a $2,000 attack drone. And they say, well, you have to use this approved thing. You can only use this approved warhead. You have to make it anti-tamper so the Ukrainians can’t make it do things that we don’t want them to do. And the net of that is what you’re talking about. People in Ukraine saying Andrel’s stuff is expensive and it’s locked down and it doesn’t, and you can’t modify it. And I say, yeah, that sucks. Look, I like, I’ve been to Kiev, I’ve been to Lviv and I’ve, I’ve trained people on how to use our systems. And I’ve heard this feedback face to face. And it’s really hard to tell a guy who’s telling you that people are dying because of it. Like, oh, well, sorry. I’m, I, you know, I wish I could do better, but that’s the, that’s the show. One more thing. You’re right that we have a lot of these different things and that is good for figuring out what works, not necessarily for scale. Some of those things are getting to scale. Like our towers are very much at scale. We’re on 35 bases arou… (Time 0:53:40)