00:00Merlin is hitting Wall Street the company building the operating system for autonomous flight aiming to enable fully self-flying
00:07aircraft across military and civilian use.
00:10Joining us now is Matt George co-founder and CEO of Merlin Labs. He rang the bell this morning at
00:15Nasdaq Market Site with your three-year-old son which is yes like bucket list.
00:19So fun. I don't already checked that off. All right. Talk to us about first off what the products that
00:26you guys engineer and and and put it put it
00:29out there because I was joking about the airplane movie you know blow up doll with Danny this. I don't
00:35think she's seen airplane. But this is much more sophisticated than autopilot on like a 747.
00:41We're bringing AI and combining with traditional avionic systems to enable aircraft to fly themselves. So either with reduced crew
00:47or totally on their own.
00:49We're taking that next step up from traditional autopilot to fully autonomous aircraft and from takeoff to landing and it
00:55can make decisions in the air. Correct. Takeoff to landing.
00:57We fly it all the time out of our facility in Quonset, Rhode Island. Talks air traffic control. Does a
01:01bunch of other cool stuff both for civil and most importantly right now defense use cases.
01:05How big of a step up is that from the technology that currently exists? Because it's my understanding that flights
01:11as they stand are mostly being operated by the technology inside of the plane and pilots themselves don't do as
01:17much as they historically do.
01:18That's a great that's a great question. We we joke that we're kind of born on third base versus some
01:22of the autonomous car companies because we have 60 years of history of how autopilots work.
01:26So we're just taking that next step and applying some AI to actually go from where autopilots are today and
01:31where they've been honestly for 60 years and bring them to the next step for our civil and military customers.
01:36And it's all the more important right now or at least the importance is highlighted by the war in Iran.
01:40Yeah, we've already seen a few planes shot down. Fortunately, I think those pilots were able to bail safely.
01:46But I guess the hope is that we'll be able to do this kind of operation in the future when
01:53it's necessary without endangering the lives of our soldiers.
01:57One of the things we're most proud of at Merlin is building that autonomous platform of record for whatever the
02:02future of American air power looks like. As we've seen in Iran over the past couple of weeks, it's really
02:08dangerous.
02:08And we did lose a tanker crew. We had six crew members who were lost in a KC-135 tanker
02:13in an air to air collision. So anything that we can do to bring autonomy to make those service members
02:18safer and more effective is really at the core of what we're doing and why we went public today to
02:23rally some more resources to get those things in the hands of those people.
02:27By the way, what about for commercial aviation? Because we've had some crashes over the past few years that we
02:32think may have been intentional, you know, on the part of the pilot. That could be avoided with your systems.
02:38Most airplane accidents come down to human air. I'm a pilot. The closest times I've come to doing something really
02:45dangerous in an airplane is not because the airplane broke or not because of some external factor. It's because of
02:49a mistake that I made. And I think every pilot will tell you a story like that.
02:53So if we can bring autonomy to those aircraft, we could reduce those aircraft accidents and make aviation much safer,
02:58but also much more accessible for folks around the world.
03:01Do you think I mean, that's a clear and very strong message, I think, for a populist that is constantly
03:05worried about headlines of aircraft accidents.
03:08Do you think, though, that the appetite and the comfort level is there to have a fully autonomous flight for
03:14civilian use?
03:15It's got to be a staged approach, and that's why we're really proud of the fact that we're not going
03:18right to sort of that Jetson's end state.
03:21We're taking the autonomy, putting it in large aircraft to assist humans. And then gradually that autonomy gets more and
03:27more capable to make aviation safer.
03:28But it's a stepwise approach to get there. So you rang the bell this morning. You're coming to Wall Street,
03:35I guess, to risk back. How will you what kind of capital are you getting and how will you deploy
03:39that capital?
03:39Yeah. So we made the decision to go public, to go rally hundreds of millions of dollars behind this problem,
03:44particularly at this moment in time, particularly for some of our defense customers.
03:48As you've seen in the news, American air power is changing and we need to go keep up with the
03:53rest of the world.
03:53So we're going public today in order to go rally hundreds of millions and eventually millions of dollars behind that
03:58problem and then also do things like M&A to make sure that we're bringing people into a big tent
04:03and making sure that we're making autonomous autonomous aircraft for a really important American mission.
04:08What's the moat you have with the technology itself? What's to stop one of the big airlines themselves from trying
04:15to develop their own in-house AI systems?
04:17Yeah. So we compete with some of the biggest aerospace companies in the world, like Lockheed Martin and a few
04:21others.
04:22We have one mission in life, which is to make safe and very, very effective autonomy versus some of the
04:26other big defense primes who are doing everything.
04:29So we're spending hundreds of millions of dollars on the problem. We are far out in front of those others
04:34who are working on the problem.
04:36And we're building a deep moat built around certification, but most importantly built around actually getting in the hands of
04:41users and getting that experience, which is something that's very difficult to catch up with.
04:45You know, it seems it seems trivial right now. But the last time I spoke with you, we were in
04:50the middle of the longest government shutdown in the history of the U.S.
04:53And I recall defense contractors having issues with that, getting paid, right? How do you deal with a government shutdown?
04:59How do you deal with that kind of volatility?
05:01Ultimately, our mission is to make sure that the service members who are on the other side of the government
05:06get what they need.
05:07So throughout those shutdowns, we've deployed our own private capital to make sure that we weren't missing any of those
05:11milestones.
05:12We didn't miss any of those milestones and we kept going on our own dime to make sure that we
05:16get those warfighters what they needed out in the field.
05:18How are you viewing just the relationship with the government right now?
05:22A very different AI company, but an AI company nonetheless, Anthropic, had a skirmish with the Department of Defense because
05:28they didn't agree with how they wanted to use their technology.
05:31How do you approach these matters when there are issues of privacy and data use, especially when it comes to
05:36AI systems in the hands of the government?
05:38It's got to be a close collaboration with the Department of War and private industry.
05:41But ultimately, at the end of the day, our mission, regardless of who's in an administration, is to provide those
05:46tools to the service members who need them the most.
05:48We're really proud of the fact that we're doing that.
05:51But we do have to have that conversation with the Department of War and make sure that it's a two
05:54-way conversation.
05:55But ultimately, we're following the democratically elected government and we're entrusting the tools that we're building into their hands to
06:03go serve the folks that need it the most.
