Epirus & Galvanick CEOs on the Future of Defense & Cyberattacks

0:00The other thing that America does really, really well is we are underdog comeback kings, you know? I see us catching up, but we can't just play the Me Too game. Like Andrew's very Me Too to China, they said we're going to go toe-to-toe, manufacturing in volume, build computers, build drones. We're going to build everything that China does really, really well. The easiest way to defeat a weapon system is on the factory floor. CrowdStrike's a$100 billion company to secure IT systems. In operational technology, it's almost zero. Qualcomm, Intel, NVIDIA, all of those chips come preloaded with all the software and the control circuits you need.

0:35Build a drone or build a robot or build an augmented reality headset. And a lot of times the chip manufacturers even give you reference designs or plans to say, well, if you don't know how to build your own drone, here's how to do it. It isn't how many we have today, it's how many can you build in a year. Mike Flynn called me up and said, hey, come to the White House. And then spent four years and owned all cyber, telecom, supply chain, and crypto policy at the White House on the National Security Council. I think President Trump is probably the best boss I've ever had. He's like two increments smarter than most other people, like very smart people.

1:05Things would happen. And I'd ask myself, like, why did he do that? Joshua Steinman, Andy Lowery. Welcome to Sorcery.

1:25Andy Lowery, welcome to Sorcery. Thank you. So you're CEO of Epirus. Correct. Could you give some background on EPRES? Yeah, sure. EPRES was founded in 2018 by a team that I led back at Raytheon, where we worked on a really kind of incredible project called Next Generation Jammer, which was a long-range standoff electronic attack system. That system kind of clued in a bunch of the engineers that founded the company into the direction of saying, you know, what could we use other gallium nitride phased arrays, which is sort of the essence or the key feature that the next generation jammer came with.

2:07They looked at that and they looked at fields like directed energy and protecting and sort of using electronic warfare to protect things like bases or ships or aircraft or even vehicles. And when they looked at that, they said, this is a great idea. I mean, it's a really great idea to put the same sort of technology that we did in standoff electronic attack for this other mission of basically weaponizing electromagnetic interference in order to get consumer electronics not to function. So we said, all right, let's try it. But for the longest time at Raytheon, the Air Force and the military, the customer didn't really see the viability of that approach.

2:48They didn't think it would work. In other words, not invented here. We're not quite sure this is going to work. We're not putting any money at it. And because traditional primes are so coupled with the interests and the directionality that the customer wants to take them in, they don't really have a lot of independent thinking, right, where they say, well, we're going to put$200 million to work, build a big machine, prove you guys wrong, and then sell a whole bunch of them to protect our warfighter. But that's what neoprimes or these new class of primes, like Andrel, like even Palantir was the grandfather of us all, so to speak.

3:24But the new primes, S.H.I.E.L.D., Saronic, others like me, Epirus, we kind of do do that. That is the motion that we do. We're like a product company where we're looking at the capability gaps more than the requirements. And what's the capabilities you're trying to solve for? Like, what are you trying to fix as a warfighter, taking the approach as like a product thinker? Like, hmm, what's the human factors types of issues? What are the different issues and what could we bring technologically that would go up against this particular type of threat? And when you look at traditional threats, okay, I still would say there was some benefit in being able to basically use a product motion, use a competitive motion to kind of analyze what kind of even sophisticated, exquisite systems that we would need to fight sort of the old war.

4:19But when we're talking about the sixth domain of warfare, which is this fifth domain of warfare for your listeners is cyber. So it built up. It was like land, sea, air, space, and then came cyber. Well, now what's happened, we see within this what I'll call sixth domain is the cyber systems have become physical. So cyber has typically been only software attacking networks, attacking sorts of systems with software types of attacks. And we've learned to defend against cyber with what? One to many type of defenses like cyber protection, you know, antivirus, those types of things that can take many, many, many, many, many simultaneous threats all coming at the same time and repel them all equally.

5:10Like imagine a virus software that only could take one software at a time. It would just let anything in the back door. The same is true with the physical cyber is what I'm going to call. Six-domain type stuff where you have computers that are flying or computers that are in boats or computers that are in robot men that are starting to walk the fields robotically that China's begun to build. All of those things are cyber types of attacks that are just now in the physical realm or the physical domain. and there's an element, one, of folks doing Me Too, like Andrew's very Me Too to China. They said, we're going to go toe-to-toe.

5:49We're going to manufacturing in volume. We're going to build computers. We're going to build drones. We're going to build everything that China does really, really well. They've got a long way to go. I mean, China's building, I've heard, 60 million drones per year. It's not outside of the question of China being able to do, but in the U.S., maybe 50 ,000 drones in a year, So there's a huge disparity there. So they're making a lot of good ground. But the other thing that America does really, really well, and it's branded into our culture, really, is we are underdog comeback kings. You know, we from our even reception as the Revolutionary War, we were underdogs that somehow got past the English and struck our independence.

6:33And we're an underdog again. I see us catching up, but we can't just play the Me Too game. This isn't going to be a war just mass versus mass, and whoever has the more massive type of arsenal wins. We have to be clever. We have to outthink the enemy as well and leverage what we're really, really good at. And part of what we're really, really good at is radars, is phased arrays, is gallium nitride, and that comes from our military-industrial complex like Raytheon and everything else. So take the knowledge, but now apply it to cots, very simple systems that are easy to build, easy to field, and turn that into more of a Silicon Valley kind of design motion.

7:14And that's what we've done at EPRES. So we, unlike Andrel, have more of our roots back into traditional defense. But like Andrel, we also have our roots heavily cemented with a whole bunch of different folks from like Rivian, Waymo, and other Silicon Valley companies. So we've blended those two worlds, and we think to deliver the types of systems, like the force field generator that Epris generates, I think to deliver those type of systems, we're the type of company, we're the right blend, we're the right mix, and so far the customer has thought the same. sorcery is brought to you by brex the financial stack trusted by more than 30 000 companies including one in three venture-backed startups in the u.s nearly 40 percent of startups bail because they run out of cash brex is literally built to help founders avoid that unlike traditional banks that let your money sit idle shipping away at it with fees brex is designed to help you spend smarter and move faster their all-in-one solution combines checking treasury and fdic protection into one powerful account.

8:20You can send and receive money globally at lightning speeds, get 20 times the standard FDIC coverage through their partner banks, and even high yield from day one. But same day and even same hour liquidity. Access your funds anytime. Companies like Scale AI, DoorDash, Service Titan, HIMS, Anthropic, Flexport, Robinhood, and Plaid trust and use Brex. Start today at brex.com slash sorcery. That's B-R-E-X dot com slash sorcery. Drones seem to be at the forefront of the sixth domain of warfare. Could you explain a little bit further your one-to-many approach to this? Sure. So when you look at drones, they have the advantage of coming out of what we'll call consumer electronics.

9:08And consumer electronics for years have been building around common system on a chip cores. So Qualcomm, Intel, other companies build NVIDIA, build the Jetson system. All of those chips come preloaded with all the software and the control circuits you need to build a drone or build a robot or build an augmented reality headset. And a lot of times the chip manufacturers even give you reference designs or plans to say, well, if you don't know how to build your own drone, here's how to do it. And so that feeds basically a very simple tinker toy way of building drones or fielding and building drones.

9:48And so we see lots of different folks that are becoming to the business. You see folks from China, you see folks from Iran, but you see folks like the Houthis who don't even have their own country, but they're able to participate in this kind of warfare due to the ease of design and engineering. And then when you're talking about additive manufacturing, 3D printing, and these types of things, then that makes the physical container for those chips easy to build as well and easy to scale as well. So we have a problem with manufacturing speed and capacity more than like arsenal depth or how many missiles we have.

10:25It isn't how many we have today, it's how many can you build in a year. And that becomes sort of similar in why we call this physical cyber at EPRES. it becomes similar to thinking about it from the aspect of a cyber attack, where you might have many, many small little software packages all coming and descending upon some sort of vulnerability and some sort of a network. Well, this is just like that. You might have 1 ,000, 2 ,000, 10 ,000, 100 ,000, and it'll just keep going up until they overwhelm your defenses, overwhelm your ability to protect. and the traditional way of protecting one effector, one threat, OODA loop, that isn't going to work.

11:08It does not scale with this sort of six domain threat. We need to do something different. And that's what we're here to kind of solve at EPRES. You talk a lot about being a product company. And now you're on the second generation. Could you explain how you've built this out and what the second generation brings you? Sure thing. Yeah, we just very exciting times. We're announcing officially we're nearly done with our first four systems that we're building in the second generation technology. We've built into that. That second generation technology has lots of benefits and a lot of features that the previous version didn't.

11:48So our generation one. And again, think of it for the viewers that are familiar with engineering that are out there in Silicon Valley, you typically use a heavy sort of leveraged prototype development system. They call it EVT, DVT, PVT. They stand for engineering verification test article development. I'm sorry, design verification test article and then production. So you're building basically prototypes at each stage. Now, this is in contrast to when I was an engineer at Raytheon, and we would build things through what you call a waterfall method, which has a lot of policy and procedures and checklists and things like that.

12:27And you're slowly building one system to kind of the end game to a set of requirements. You're not iterating with prototypes and iterating with generations. That feels like a product company. And so Generation 2 is our next generation where we've taken in from two deployments now, two deployments overseas and four systems, we've taken in all of that data, all of that feedback, and we've rolled it in to the Generation 2 system. The number one thing that they've asked us for is more range. You know, they want to see a half a mile or even further if we can make it further. And that's for two reasons.

13:05One reason is to push out the actual protection arc. But the other reason is, and people don't think about this, is a lot of these aircraft will continue even after we disrupt them in the force field. They continue to have some sort of forward motion. So you need to be able to contend with the tumbling, and we still want that sort of final detonation to be outside a fence line or outside wherever we're trying to protect. So Generation 2 does that. It has about two and a half times the range of the Generation 1 system in the same size box, exact same size of kind of a 10-foot by 10-foot box. It has two and a half times the range of the previous generation.

13:45And what I would consider it to be is a fully mission-capable prototype, ready for action, ready for scale, ready for production, ready for overseas deployment, ready for integration into a variety of different C2 command and control systems, ranging from Andrell's Lattice to FADC2 that the Army uses. In today's high-speed business world, staying ahead means using the smartest tools possible, including the powerful capabilities of artificial intelligence. Meet Turing Intelligence. Turing builds customizable AI systems designed to solve your mission-critical challenges, no matter your industry.

14:20From expert guidance to tailored projects, Turing helps top companies realize AI that's more capable, more adaptable, and more effective. With Turing, discover how AI can accelerate your business growth. To learn more, visit Turing.com slash sorcery. Spelt S-O-U-R-C-E-R-Y. That's Turing.com slash sorcery. Wow, that's a huge achievement. Yeah, it's great. We're real excited at Everest right now. It feels like our child has grown up and gone to college, and now he's well ready for the world and ready to get out there. And Generation 2 will be that bird that finally flies from the nest and I think starts distributing these protective systems all over the world.

15:04So we're at Reindustrialize. The heart of this summit and conference is reindustrializing in America. What is Everest's role in reindustrialization? Well, that's a great question. And it's a very interesting topic that I don't even know was fully explored. Like, there's a lot of defense companies here. And the question's why. Well, you know, I think Palmer Luckey said it in Laksberg. The robot. The robot. Palmer bot, I guess. It's going to go with murder bot. You know, that's now we got Palmer bot out there with his, what do you call it, bullet or whatever haircut that they had on that robot earlier.

15:42Well, as he was saying, though, there are regulations that require people to manufacture in America. So when we're talking about more and more volume defense systems at mass, when we're talking about millions of drones needing to be built for military purposes, not for just, you know, toys and things, we're talking about that being done in the United States. So that is a real need. The six domain drives a real need for us to build back into America. But here's what's going on as we're doing that. We're realizing that lots of the stuff that go inside at two or three levels down, these systems are also coming in without any manufacturing sources in America.

16:27So you the microprocessors, the computers, you cannot buy an American made computer. You have to go overseas. You have to go to China. And military doesn't want to buy a foreign-made computer, but there isn't any option. So they have to do by exception and so on and so on. And each of these drones are just little computers inside of flying gizmos. That's exactly what we're talking about. Those computers there are not sourced by the United States. So this is pulling, this kind of sixth domain is pulling a lot of that more consumer electronics manufacturing back to the U.S. because now it's becoming militarized.

17:04So we see that in our system. Now, the other thing it does, though, is it accentuates enormous gaps in very simple pieces of equipment like rocket motors for the drones. And Palmer detected that he wasn't going to be able to source that many rocket motors in the entire United States, and he went and opened a factory in Ohio. And so what did we do? Something very similar. We have this big phased array system that requires hundreds and hundreds of high-powered microwave amplifiers, every single system. So if we get an order for a hundred systems, we're talking tens of thousands of high-powered microwave amplifiers.

17:43We haven't built that kind of volume of amplifiers in the United States anyways since the early 2000s when we were doing the base stations and all of the towers were going up for our cell phones everywhere and you had Nortel networks and all of that. That was really the last time we've built this kind of volume of high-powered amplifiers in the United States. So since then, what has happened, we've moved those overseas, the high-volume lines, we've lost the capacity, we've lost the formula, we lost the quality. And so our rocket motor is really high-powered amplifiers. And that's what we're looking at very seriously because we really seriously think in the next year, maybe two years, we're going to get an order for at least dozens, if not hundreds, of our systems, which will drive this kind of weakness in our current sort of manufacturing capability in the U.S.

18:34So, but we're ahead of it, and we're working here, and we're here. This is why we're here. We're working with partners. We're working with partners like General Dynamics. We're working with lower kind of supply chain partners that we have as well, and we're looking at options and how we can expand capability, capacity, quality of all of those partners right now. One of the externalities of having this stagnation in production and manufacturing in the U.S. is loss of talent or no talent. So how are you going about the talent issue? Well, the experience we draw from is from Raytheon. And Raytheon, you know, being an aerospace and defense contractor does do a lot of assembly.

19:18does do a lot of work and how we design the systems even lend themselves to the type of the workforce that still exists that are able to do things like torque things together and assemble things physically and all of that. What we're really talking about a lot of times in at least our systems is sort of lower down in the food chain, sort of when you're putting boards through solder reflow or you're pick and placing components on top of those boards. And then you're tuning those boards by sort of a hand process where you're basically very carefully putting in capacitors or you're very carefully putting in wires in order to do some tuning for the systems.

19:55All of that is like tried and true aerospace manufacturing that I've managed many, many factories to do that. The problem with those factories is they're generally low volume, high mix. And we need that same quality, but now at high, high volume. And so that's what's missing. It's that ability to go high volume and push that button when we need it. We don't have that in the United States in electronics very much anymore. It's pretty much been shipped overseas. How do we solve this? I think just one step at a time and one company at a time and one project at a time. Our project is driving a huge demand for it.

20:33So it'll be sort of a name maker when it comes to bringing back high-powered amplifier design and manufacturing back to the U.S. I think EPRS alone will drive a lot of that one particular class of product. But then when you look at all the other classes of products that we're missing in America and missing being able to manufacture, we need companies to basically take the mantle and drive that change. I mean, Andrel talked about if someone doesn't build a U.S.-made computer, they're liable to do it. an andrel. Okay, that's the type of sort of gung-ho, hey, all on board, all on deck. We need to kind of collaborate.

21:09We need to kind of get some spirit, United States spirit here, and we need to really, really reinvigorate the whole Made in America concept and not just on the surface. A lot of the Made in America stuff has just been, oh yeah, we put a little paint on it at the very last step. We need to really look at the entirety of the supply chain and begin slowly but surely bringing that capability capacity back into the United States. And I will say that this administration is making it easy, much easier than other administrations. And they are willing to take risk. They are willing to lean forward. And we've been a beneficiary or it's been benefiting Empress very much since the new administration has taken over and have been pushing for this type of delivery, these types of systems.

21:54So as we wrap up, what are you most looking forward to in the next year? Well, I can't, I mean, generation two leaving the nest. I mean, I cannot wait and see in January, maybe February, we'll be testing these systems officially for SCORE and the Army. If these systems go forward, if these systems work as well as I think they're going to do, it will be a damn breaking moment for us and customers internationally, customers in Department of Homeland Security, and then of course, all of our services, Navy, Air Force, and Army, will all be sort of given permission, if you will, to go forth and order as much as they want.

22:32So I'm pretty excited about that. I'm pretty excited about where the direction of a lot of this whole neoprime and six-domain-type warfare is going, and I'm really grateful to be in the center of it all. I feel like the luckiest kid in the world to be kind of a part of this really important stage of our country's sort of future. Andy, it was a pleasure to have you on Sorcery. Thank you so much for the time. Thank you very much for having me. I really appreciated it. Thanks.

23:21Carta's fund administration platform supports over 9 ,000 funds and SPVs, representing nearly$185 billion in assets under management, with tools designed to enhance the strategic impact of fund CFOs. For more information, visit carta.com slash sorcery. That's C-A-R-T-A dot com slash S-O-U-R-C-E-R-Y. Joshua Steinman. Molly O'Shea. Welcome to Sorcery. Great to be here. We need to start off with your background. You have one of the most intense backgrounds I've come across. Can you just break this all down? Don't leave anything behind. Yeah.

24:04I spent a summer in high school studying Al-Qaeda and writing pretty extensively on it. And it just so happened that summer was the summer before 9-11. So like literally on 9-11, I was like, oh, there's an Al-Qaeda attack. I had this huge paper that had been written critiquing U.S. foreign policy with Al-Qaeda up until that date, saying it wasn't going to work. And that sort of kicked off this crazy sequence of events that, you know, led me to get recruited into like a strange section of the Navy out of college. two tours in Iraq doing fun stuff there and then working at the intersection of emerging technology and defense both in uniform and then out left active duty went to the private sector joined a startup and then yeah had an old boss Mike Flynn call me up and say hey come to the White House and then spent four years and owned all cyber telecom supply chain and crypto policy at the White House on the National Security Council for four years and then started Galvanic.

25:12It's been a ride so far. Quite the highlight reel. Yeah, it's been fun, you know. So have you been focused on cyber the whole time? Yes and no. I think the interesting thing is that if you, at a philosophical level, I like this mental model of thinking about layers of reality. So like the spoken word is a layer of reality, like we're communicating using that layer. I could communicate through the written layer of reality by writing things. Money is another layer of reality. And then raw digital information is like sort of the most pressing layer of reality that exists right now that I think is changing the way in which things happen.

26:02And so I think a lot of my work over the past 15 years has been trying to find where we can use those layers of reality to positively affect America's national security. So forward in Iraq, that had to do with running operations to find out critical information that we needed to know to find people that we wanted, stop things from happening, that we didn't want to happen, et cetera, and you can use the various layers of reality to do that. And then, you know, at the White House, you know, crypto is like one version of that layer of reality. Cyber, obviously, is a huge part of that layer of reality.

26:45We've basically connected everything in the world to the internet, and we're just now seeing what that actually means for security, prosperity, all those things. So you spent the first term for President Trump in the White House. You worked with him. What was that like during the first term? It was great. So I loved it. Playing at that level is, you know, that's the human chess match. That's like the great game. you're playing against adversaries with live rounds and I you know both in terms of you know from the military side but you'll go visit a foreign leader on behalf of the president and you'll literally come to an agreement and it's like you're there on behalf of the president United States on behalf of the country and like this is the offer let's go do this and they're like okay great let's do that and it takes just an incredible amount of patience and aggression intelligence that is both sort of you have to be able to understand or think about and try and understand like what do people want from me what do people want from us what do they want from the country um and yeah i found it incredibly enjoyable i think president trump is probably the best boss i've ever had he and every day was just another realization of this it's probably hard for him, I think.

28:11I think he's like an increment smarter, two increments smarter than most other people, smart people, like very smart people. Things would happen. And I'd ask myself, like, why did he do that? You know, you don't say anything, right? He's the president. It's his show. But, you know, he would do something. I'd be like, why did he do that? And then like two weeks later, you see like, oh my God, what a chess move. And so after like, Like after a certain period of time, it just became very easy to just like hit the I believe button, go be a good staffer, give him the good options that he needs, give him leverage, give him opportunities, and then just sort of like let the master work.