Full Interview: Anduril CEO Brian Schimpf on $1B+ Revenue & Still Doubling

0:00What is the growth of Andrel? Recent funding valuing the company at more than$30 billion. Andrel is helping to build the military of the future. We're eight years-ish in. We're at about 7 ,000 employees. We have consistently doubled revenue like every year. Over a billion, we're still doubling revenue. Nearly everything we're doing is around this future of a more disconnected, more autonomous battlefield. That's like a core part of the thesis we have. We've been able to build up a software platform, all the components you would need from sensors, from compute, From networking systems, like communications, all this stuff, enables us to go really fast.

0:36Worldwide, we're in a period where things are just geopolitically more unstable. People like to talk about this, that we're in this time of peace, but it doesn't seem all that peaceful to me. We set up this company to have an impact on the world, to change deterrence, to change the trajectory of where defense was going. Feels like it is really happening now. Like it feels like we're at the scale and size that this is really moving the needle. And you're creating a lot of financial momentum around it too with rumors of IPOs and fake SPVs. Yeah, the fake SPVs are great. Everyone is slinging andurl stock that they don't have.

1:08There are just a handful of these growth stage companies that are doing very well in an outrageously large market with incredible momentum and track record of success. We are one of those few companies. If the world is going to need more of what we're doing, we are undervalued.

1:32Brian, welcome to Sorcery. Thank you. Thanks for having me. Thanks for having me at Anderil. Yeah, it's a pretty cool campus. It's like tons of energy, old LA Times printing press. It's a very awesome space. I've had so much fun interviewing each of the founders today. And I've asked, I think most of them, if not all of them, what their favorite product is. So let's start with that. What's your favorite product? Right now I am probably most excited about the autonomous fighter jet because it is pretty wild, pretty first of its class, and it's just like a big plane. Like airplanes are cool. But my opinion will probably change in about like four weeks because we got a lot of really cool stuff going on.

2:10And so I want to talk about the current state of Anduril's business. You've scaled a lot, so can we put some numbers behind that? What is the growth of Anduril? Yeah, so we're eight years-ish in. We're at about 7 ,000 employees. We have consistently doubled revenue every year, right? So even over a billion, we're still doubling revenue. And so we have just massively ramped on the top line, number of employees, and then the number of products we've been able to field is just pretty unsurpassed. I mean, I think we're in just dozens of different fielded products, depending on how you count it, configurations, whatever else.

2:48But we've just been able to show the ability to rapidly get new capability out to the field quickly and that there's demand for it. We can make it go quick. And so it's just really grown a lot faster than I anticipated. I thought we'd be five, six years from now at this point. but just the pace that the customers have been excited about what we're doing, the uptake, all of that has gone a lot faster than I would have thought. I think there's macro reasons for that. There's execution reasons is a huge part of it. I think we've built the right things at the right time. But just that somehow it continues to accelerate even beyond where we're at today.

3:30How has the product line expanded and how does that get shaped? What is the form there? Because you have land, air, space, Arsenal 1. Yeah. Sea. We have electronic warfare. So all the jamming, all of those pieces. We're thinking about cyber things. It's all sorts of crazy stuff. The way we think about it is a couple of different things. So one, just natural progression of the company. We're going to move up in the complexity and scale of what we can work on. So if early on we were working on smaller drones, it made sense for where we're at. You know, the capital to actually get there, the expertise you need to have.

4:07It's a solvable problem quite quickly. We've moved up into just much more sophisticated capabilities. We're making low-cost cruise missiles that fly hundreds of miles. We're making autonomous fighter jets. You know, like three years ago we weren't believable to make autonomous fighter jets. Now we're doing it. And we're going to have them be produced in a production facility in, like, months from now. So just the physical scale, the complexity, everything we're doing, we're able to mount harder and harder things. It reminds me of the Tesla progression through a hand-built Roadster that was limited edition through to increasing sophistication on production, design, all these pieces.

4:43So you kind of have that angle. Then the other piece of this is what is believably going to be a good, big enough business to justify us being into. That bar has raised over time, like the scale of the business we need to go after has gone up. But the parts that have held true are, we've got to be able to see real adoption within like three to five years, right? We're not working on things that are 10 years out. It's just not where we're at. We've got to see the ability to get real traction in the next few years. We've got to have like a technical edge of like, why would we be able to do this better on production, on software, on hardware?

5:21What is the insight we have? And the government's got to want to buy it, right? At the end of the day, we don't have that many customers, and they've got to be at a point in their life cycle where they're investing in this type of capability now. So you could have made small drones 10 years ago and tried to sell them to the government. A lot of people did. Not that many of those businesses are around anymore because the government was not ready to move out at any meaningful scale at that time. And so really getting that market timing right is probably the most important part for us, where we have conviction this can actually go because we've got the business intuition, the technology, the customer's ready, that this is gonna pay out in like next three to five years.

5:59So that's kind of how we always assess it. The other through line with this is we're not gonna work on stuff that we don't believe is relevant for the future of where the military's going. You can chase kind of nonsensical products that don't have longevity to it, that aren't actually fit for purpose. Maybe you can make some money off of it for like a few years. But if you're not actually aligned to where the government's going to be, where the military's going to be 10 years from now, it's not going to work out. So everything we're doing, we are constantly validating this is something that would actually be dominant in the long term.

6:35This actually makes sense to integrate into the military. And if you're right on that, it tends to work out in the long run, right? It may not work out immediately, but over the long run, you will be successful. And you're also doing it with very competitive efficiencies against competitors and primes. Yeah. I mean, I often think we're, you know, it's like, are we as good as we would like to be in terms of like beating the best commercial companies and getting things out to market? Not always, but you know what? Defense is a very unique world where you're going to build a lot of different products at relatively low volumes.

7:13Like that's actually a very strange world to live in. Compare it with like, you know, a Tesla or an Apple where they're going to build an outrageously high rate of these products. And like saving two seconds off your production time can mean significant amounts of savings or, you know, you can get out much more of the system. We're in a very different world. And we've thought about manufacturing with production, with all these things. This idea of how do we have, you know, the ability to sustain very high mix of products, relatively low rate and be extremely flexible. that cross cuts everything we're thinking about.

7:44And then the other side of this is, we've had this through line of nearly everything we're doing is around this future of a more disconnected, more autonomous battlefield, right? That's like a core part of the thesis we have. So we've been able to build up a software platform, all the components you would need from sensors, from compute, from networking systems, like communications, all this stuff that is, enables us to go really fast when we get onto a new capability. So we're not inventing all the software from scratch, not inventing all the hardware from scratch. We've got this toolkit and baseline that we refine and build on over time.

8:20So this enables us, again, if you live in this world where you're going to have a lot of products and you're going to have to field them fast and you're going to have to mature them fast. It's the only strategy that's going to work. You've got to keep this sort of recipe, this toolkit of components that you can bring to bear very, very fast. And then you need the software to tie them all together. And that's Lattice for us, that core software that makes everything smart and work together. So we've taken a strategy that's quite different than what a lot of the traditional players have done, right?

8:44That's expensive. That's hard. It takes a lot of conviction that you're building the right things. You got to get it right. There's no like short term feedback on it. You just got to have belief of where this is going to go and invest in it. How do you price the products? Yeah. So highest level, our view should be these should be cheaper, right? Like if we're working on something, we should be coming in at a fraction of the cost of the alternative approaches. We can get there through, you know, the fact that we're using commercial off-the-shelf components or things we've invested in, cheaper production processes, and really just design it with cost in mind.

9:17So that's kind of a baseline we start with. But yeah, pricing with the government is a mess. Like, it's incredibly complicated. There's a huge art to it. Sometimes they want to see your cost and your price reasonable. Sometimes they'll just use other price justification. It really is all over the place how you actually sort of allowed to price these things intelligently. But our view of this is it should get to a rational place that every other industry has gotten to, which is we would prefer to work on things where we charge a fixed price and there's a, you know, kind of a sustaining fee to this, right?

9:52Like I'm paying year over year for upgrades and everything else. And that's how the software gets better. It's how your systems get better. It's a very rational win-win outcome. And we also like models where if it doesn't work, we don't get paid. It's a controversial position in the government. But we really prefer models that hold us accountable to delivery. It just makes us a better company and the government gets a better outcome. So we always try to find these ways to take more of the risk, to be more accountable. That works really well for us. And I think it's a win-win scenario versus the traditional approach where it's like the government took all the risk and you get a fixed profit fee.

10:26That's a disaster. Like everything just gets more complex and more expensive. It doesn't work out. Secretary Hegseth was just here, had a big visit. Yeah. And he was also just at the Reagan National Defense Forum. I'm curious, from the visit and then also his remarks at the forum, how do you now view this kind of like new world of war? And do you think it's being embraced in a way that it wasn't before? The main change he's driving at is when you look at the industrial base, the ability to produce and the ability to get new capabilities out quickly is one of the most determinative aspects you can have as a defense department, right?

11:07It's a war department. And that's not where we're at, right? We've had a strategy for generations, which has been the decades-long technological edge is how we win, right? And the U.S. invested more, had better engineers, and capitalized it more efficiently to get to that massive technological edge. And there is still a dimension of that for sure. But increasingly, the ability to produce at scale in a way you can afford, the ability to innovate fast on the software to rapidly adapt these capabilities, that's going to be the determinative characteristic. We see this in Ukraine, we see this across the board.

11:49So everything he's trying to align around is this idea of how do we get capabilities out faster to the force in a way that is affordable and effective, right? And companies that can work in that world, great. Companies that can't, you're going to die. And I think that's a healthy view. What he's not saying, and I think because the reality is, is there is a mix, is some of the stuff is going to look like autonomous systems, but it's not all going to be, right? There's still going to be a place for, you know, aircraft carriers and all these things, but the balance is going to shift. And there's these new class of capabilities that are really relevant, that can be more cost effective, that you can produce at scale.

12:27And that's going to be a key aspect of what we do in the future. And so the focus is really on industry that can perform, setting up incentives for performance and setting up the whole acquisition system around speed, where prior it was entirely set up around, we just need the most expensive capabilities at any time at any cost. And that's not the world we're in anymore. Do you think the nearly trillion dollar budget is reasonable or unreasonable given the amount of efficiencies and technological advancements that we have? And maybe for people that don't understand how it's being allocated, could you also share that?

13:04Yeah. So there's borderline trillion dollar defense budget and everyone thinks it's like we're buying a billion dollars of kit every year. Well, that's not true, right? I forget the actual percentages, but it's more than half goes to personnel costs, to facilities, to military construction. So you just have an outrageous percentage going to these kind of fixed costs that you have that are not next generation technology. And then there's an outrageous cost as well then to sustaining the legacy technologies you have bought. So maintaining aircraft, maintaining ships. These are huge bills, right?

13:44That is significantly higher than the amount that's spent on procurement. And when you look at this in terms of historic terms, the procurement budget as a percentage of GDP, for example, is I think the lowest it's ever been. And so we're not spending money on the new technology. We're spending money on sustaining the old technology. We're spending money on all the infrastructure that we have to have a global military. And that is very expensive. So now you're really talking about how do I get efficiency out of, you know, call it the 30 % of the budget that you're actually maneuvering around. And in that world, you know, there's a good argument, which is we could be spending that money a lot more efficiently.

14:28I think that is true. It's hard to argue we couldn't. How much more efficiently? I don't know. But I tend to think we can get a lot more bang for our buck on weapons, on aircraft, probably 2x from where we are, by just looking at a different mix of these things. But the hard part is we've got to transition to that world. So we can't just jump to that and say, all of a sudden we're going to abandon all of our manned surface combatants and move to this autonomous future or something like that. That's just not believable. So we're going to have to go through this transition, which is sort of always true of how do we responsibly cycle out the old, think about what's still fit for purpose or not, and then get the new systems in place.

15:12That will cost more for a period of time. And that is a hard world to live in. And so I don't see a world where the defense budgets could magically shrink and we still have the military that we need to have. But I do think these things can be done wildly more efficiently than they ever have in the past. 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 % of startups fail 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.

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16:40Meet Turing Intelligence. Turing builds customizable AI systems designed to solve your mission-critical challenges, no matter your industry. From 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. I want to talk about Anduril's expansion. You have a global expansion, whether it's the facility in Australia or the new deal with Edge and the UAE. Yeah.

17:19Let's maybe start with Australia and building out Ghost Shark there. Yeah. What was that process like? Australia is a great example. So setting the context maybe a little broadly, worldwide, we're in a period where things are just geopolitically more unstable. People like to talk about this, that we're in this time of peace, but it doesn't seem all that peaceful to me. We've got a land war in Europe. The Red Sea is still intermittently shut down. Israel and Iran going at it. You've got China doing constant aggression on the Philippines and the South China Sea. Cambodia and Thailand are sparring all the time right now India Pakistan doing air wars and doing you know it's like air combat I'm probably forgetting several of these going on right now and so we're not in a time of peace right like this is not a stable time and so something has changed right like there's a sense that a lot of historic grievances the political opportunism to use violence to get to your ends that has changed and every nation's reflecting it where they're increasing defense spending they're ramping up their own defense and i think the view of what the u.s is going to do or not do on everyone's behalf has shifted i think the u.s reasonably is saying we're not going to go fight everyone else's wars we're going to expect every nation to provide for their own defense but that also does not imply the u.s is backing away as the sort of security guarantor for the world right like we still have the only blue water navy in at scale that is able to project force anywhere and sort of multiple parts of the globe all the time can guarantee international shipping and stability of the seas there's all these things we're still going to do as america that are very aligned to our interests and aligned to the the system that we have so that's the whole backdrop that's going on there's a whole lot of other pieces to this nations are increasing their budgets the security situation is deteriorating and the US's role is shifting in a lot of this.

19:20And on top of it, the backlogs on like, you wanna order Patriot missiles. I'm hearing right now, the latest number, someone told me over the weekend was 15 years to get a new Patriot system. Like, what does that even mean? Like, I have no idea what that means, right? But it's like, call it even five to seven for a backlog. You're like, this is crazy. So the US isn't even a dependable producer anymore. Can't get the weapons in time. this has resulted in basically every country looking a little bit differently in how they're going to think about when they are ramping spending, what does that mean, and what do they want to be true.

19:57They're all going to look at a question of, if we're going to spend a lot of money, we should get some economic benefit. But probably more importantly, we need to have assured supply. We need to know that if we order this, this shows up, and that we want to shape our military for what we need it to be for our regional challenges. Australia is a great example of this. They shut down their French submarine program. They're going all in on the U.S. nuclear submarine programs. That's not going to show up until 2035. So this major gap of about a decade where their old technology was phasing out and they were waiting on this next generation capability to come in.

20:36We went and pitched them on this idea of you could build these extra large autonomous underwater vehicles. You can build them fast. And we did this model of splitting the development 50-50. They had skin in the game. We did two. And we ended up executing that program incredibly quickly. And to their credit, they saw the opportunity and said yes basically immediately. They said yes in just a couple of months, and we were signed and under contract. And we were able to deliver at pace. We built out an Australian engineering team. We built out an Australian production facility. We have our first production GoShark already came off the production line then I think 30 days of signing the production contract.

21:14So just an incredibly fast pace that shows what you can actually do if you just hit go on this. And we want to replicate that model in a number of other countries. It's not going to look all the same, right? There's not that many places that will do, you know, fully ground up capabilities. But this idea of integrating into their military, helping them think about ways they can use technology to modernize, do warfare differently, and understanding a more nuanced approach to how they're going to get local engineering and local production that fits while still being aligned with the U.S., which is still, again, the backstop of world security.

21:52Everyone needs that U.S. alliance. And so this is just a very nuanced, complicated thing to actually solve for. But the numbers are pretty clear. Europe is going to spend something like four times the amount of procurement that the U.S. is over the next five years. Like it's a massive buildup. Japan's going to substantially increase their budget. Taiwan's increasing their budget. Australia, like everyone is ramping. So that problem I talked about with the U.S. having so much in sustainment and keeping the legacy going. So the countries won't have that problem as much. They have an opportunity to build new and build efficiently and something we very much want to help them with.

22:30How do we increase manufacturing capacity? Inside the U.S.? Yeah. Manufacturing capacity in the U.S. is, I think, actually quite solvable. So there's things that we have a lot of capacity, right? Like there's a lot of automotive production. There is a lot of industrial production. What I think has gone wrong on defense production is we viewed it as this Galapagos Island of industry where we said, cutting you off from everything else, all the learnings in the commercial world, and you're going to evolve on your own. and that was a disaster right it was its own requirements its own industrial base it's quite separate but that was didn't have to be true right in world war ii we didn't design airplanes we wish could be produced we designed airplanes that could be produced we designed jeeps and tanks that could be produced in the processes in the industrial capacity that we had and designing with that in mind when you know from the beginning you're going to have to design this for rate you're going to have to design this to scale.

23:28Well, you start with the question of how would I manufacture it? That is a lens you take. What we asked industry to do for nearly the last 40 years was how could you design the most high-end Swiss watch of a weapon or an airplane? We just had capability at any price. And we're shocked to find out that you can't mass produce Swiss watches. It's like crazy. It's just not how this works, right? Like you have to tie it to the scaled industrial capacity that exists. It's always going to be defense exotic stuff. Like there isn't a lot of commercial market for solid rocket motors and explosive warheads.

24:00But those are then, now you're down to a solvable set of problems. So we've really looked at this question of how do you design this first and foremost to tap into scale? Once you're there, then, okay, is there enough composites capacity or printed circuit board capacity in the US or CNC shops? The answer is absolutely yes. There is definitely enough capacity. But then you get to the problems that defense can't solve. And this is the rare earth, the germaniums, the, you know, the high, you know, the magnets. all these different issues, and then you get to semiconductors. These are national policy issues.

24:31You have to solve this at a commercially viable level, not at a defense-specific level. It will always then be too expensive and unproducible if you just have a defense exquisite magnet factory. Like, that doesn't work. You need a commercially viable magnet factory that defense uses, that is in U.S. or allied territory that you have faith in. These are industrial policy things that now, for the first time in decades, we've taken honestly the fact that China wasn't playing the free trade game that we were playing, that they were using their state power to create dependence on their supply chains, and that this is a problem, that we do not have the resilience we actually need for defense, but even just trade negotiations.

25:14We saw how it played out. Now, imagine we wanted to put economic sanctions on them if they were doing something nefarious. No one would get iPhones. No one would get cars. Like, it completely hamstrings our ability to act independently as a nation to just basically penalize bad behavior. We just lose all that leverage. So this has to be a lens that as a country we take and as a different world, it will make people uncomfortable, it will take time to figure out how to do it. But that is a critical national policy issue that has to be addressed. So you started off as an engineer at Palantir, and now you're the CEO of Anderle.

25:47what is the biggest lesson that you learned and how has that shaped your leadership? The biggest lesson from Palantir was really this focus on talent, which often can be, everyone says it, in practice it's a lot more annoying than you would think. And because often the talented people are super opinionated, they're kind of aggressive, they tell you you're dumb, like it doesn't always feel good and it just feels a little chaotic and high entropy but this was like the beauty that i think carp really recognized and drove at palantir which was this notion of let's just have really brilliant people that are highly empowered to own problems it's probably the number one lesson in like how we run things here or you know what i've seen really work is often middle management and like these companies that scale they get so locked into the system and stability that they think they're getting talent, but they're not getting creative talent.