00:00There has been a lot of hype around the company, a deep focus on what it is doing, how it is growing.
00:07And so as a place to start, would you just bring us up to speed on where Anderil is today,
00:12operationally, revenue, the business it is doing with the U.S. government and Western allies?
00:17Absolutely. Well, thank you for having me on. Really excited to have you here.
00:21Anderil has been around about eight years, but we've grown incredibly in that time.
00:25I think this year we're going to be over 6,500 employees. We've got something like about half of them here in Costa Mesa.
00:33We're looking to basically double revenue this year. So we're about a billion last year. We'll go over two billion this year.
00:38And we're ramping production about 400 percent.
00:41So a lot of the mix is switching from a lot of the earlier stage things we were doing, which were kind of experimental,
00:47really learning what the technology could do, how to integrate it with warfighters.
00:51This year, we're really moving into this mode of really producing.
00:55Brian, forgive me. We've actually got some breaking news that's just crossed the Bloomberg Terminal.
00:59President Trump is saying that he was due to meet China's President Xi in two weeks' time.
01:04He's saying now that he sees no reason to do so.
01:08The team are going to put some of the headlines up on the screen.
01:11But, Caro, a significant piece of news, because part of what we wanted to discuss today was China.
01:18The president is saying that he's calculating increased tariffs on Chinese products.
01:24This is a dialling up of geopolitical tensions.
01:26Brian, bear with us. We are now seeing this quite sharp market reaction.
01:30Clearly, the S&P 500 has changed direction here because, well, you know, jump in, Caro, I think part of the point is that we were headed in a different direction.
01:40And this brings so many questions around what the TikTok relationship had been, and much of that had been sort of almost this linchpin in relationships between President Xi and, indeed, President Trump.
01:49But then there's been this ongoing narrative about how we could rectify and rehabilitate the relationship.
01:54There have been calls from China perhaps wanting yet further relief from some of the higher tariffs that they've been seeing.
02:00Sorry, I've just pulled up the true social posts, and that's where the president's communicated, and he's basically saying that China is becoming very hostile.
02:08Let's get back to the conversation, Caro.
02:10Well, your take, Brian, because in many ways, Andril and defense tech as a whole is about the story of national security.
02:17And it is about U.S. versus China. Is that where you see the key risks?
02:20That is one of the key conflicts. But if you look worldwide, I mean, you've got land wars in Europe.
02:26You've got, you know, the Red Sea still basically denied. Iran doesn't look like it's going to slow down anytime soon.
02:32China, beyond just the tensions with the U.S., has been constantly aggravating with the Philippines, you know, constantly fighting over different islands and things like that.
02:41So you're in this period of just massive geopolitical instability, and China is obviously the focus.
02:47But, I mean, they've had a very strategic view to this, right?
02:49Like, they've blocked, they've probably put significant export controls on magnets for high-end semiconductors.
02:55How hard is that? Rare earths, for example. We understand the breaking news of today as well, as China's making it harder and harder for rare earths to be exported, not just to the U.S., but to Europe.
03:03Yeah, and I think this is part of a long-term strategic plan they have had, right?
03:07They have used industrial policy beyond just military power to construct a world where they have a lot of leverage over the U.S. and their allies.
03:16They drive dependence on these things. And it's a very sophisticated strategy that they're playing.
03:21Yes.
03:22I think this is something that Trump recognizes. I think he is a very good negotiator.
03:27If he's saying these things, he understands what that means and how he is using that to position for maximum advantage.
03:33And so I think it's going to be a long-run conflict with China, and that's something we've just got to be prepared for.
03:38Brian, thank you for rolling with this. The news is breaking as we go to air. The market's reacting.
03:43One of the things that we've just shown on the screen is the semiconductor index.
03:47Yeah.
03:47One reason why it's critically important to talk to you, Anduril, is your efforts to re-onshore the manufacturing base in this country, in Ohio.
03:58But in research for being here today, Caroline and I looked a lot at the supply chain for your industry.
04:04Everything from wire harness through to GPUs that go on board a lot of the weapons behind us.
04:12Could you just expand on that a little bit, you know, why Arsenal 1 is so critical in that sense, in that context?
04:19Absolutely. So, you know, when you look at defense as one of those areas where national security is paramount,
04:25pulling these technologies onto U.S. and ally manufacturing is absolutely key.
04:29And the strategy we've taken with this is there is a lot of industrial capacity in the U.S.
04:33There is the ability to take advantage of largely commercial industry that can manufacture these things.
04:39But when you start stepping back, there's things that defense alone can't solve, right?
04:42These are things like, you know, the rare earth magnets, germanium supply.
04:47These are things that China has strategically tried to stranglehold.
04:51And this will require beyond just stating as a policy that you have to source it for America.
04:56The sources are very, very limited.
04:57This is areas where I've been really encouraged by what the Trump administration has done around trying to reignite this idea of how do you do smart industrial policy?
05:05What is it going to look like in the U.S.?
05:07It's going to look different.
05:08It's going to be a combination of tariffs.
05:10It's going to be a combination of things they did with like MP materials, guaranteed offtake.
05:13There's just this very different strategy that needs to be taken to really solve this on a country level scale.
05:18And for us, we can be early adopters, right?
05:21Like we can take advantage of all those things.
05:23And we're building out a massive manufacturing complex in Ohio to be able to take advantage of all of those suppliers in the U.S.
05:29and build a lot of things here onshore.
05:31Okay, so the breaking news is that the president has taken to Truth Social and he is saying that it looks like he now won't meet with China's Xi and things are changing.
05:39We will discuss that for the next hour.
05:41While we have you, Anderil has been in the headlines partly because of the insatiable appetite of all kinds of investors to be involved.
05:50You did a secondary or a tender for your employees.
05:53Would you talk about the focus you have right now on talent and that mechanism to keep people, basically?
05:59No, absolutely.
06:00So the defense world has shifted a lot, right?
06:04Like a lot of the people in traditional defense industry are amazing at things like aircraft design and hypersonics and things along those lines.
06:11But the next generation of this really looks different.
06:14It really looks about software.
06:16It looks how you adopt commercial manufacturing approaches.
06:18It's how you mass manufacture these capabilities.
06:21It's a very different focus.
06:22We're moving out of an era where we need to make relatively few of very, very expensive high-end things.
06:27We're moving into an era where it's much more about how do we have things at scale that are smarter, that are more autonomous.
06:34And so this ability to attract the best talent into this really is coming from tech companies.
06:38It's coming from universities.
06:39It's people who otherwise would have jobs at, you know, kind of all the tech company brand names you would know.
06:44Part of that is compensation and liquidity and all the startup economics.
06:48But honestly, a lot more of it is just do they get to work on exciting problems with people they like on things that really matter, right?
06:55And I think we present this opportunity to be very clear in our purpose and our mission, something that's going to be impactful.
07:00And they get to work on just amazing cutting-edge things, right?
07:05Like making autonomous fighter jets and, you know, these reusable missiles.
07:08It's just an absolutely crazy thing to work on if you're a young engineer.
07:12And that's what we've really found is the formula to get the best and brightest here.
07:15It's an exciting opportunity to actually contribute, give back, and build something incredible.
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