Silicon Valley Takes On the Pentagon’s Explosives Shortage

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0:17Heather Somerville: Welcome to Tech News Briefing. It's Thursday, October 29th. I'm Danny Lewis for The Wall Street Journal. The U.S. military is planning to buy millions of drones in the coming years. But can it adapt to modern warfare without the bombs those drones are supposed to carry? America is facing a chronic explosive shortage that threatens to get in the way of the Pentagon's efforts to replenish its weapons stockpiles and arm troops with top-of-the-line drones. And a big part of the problem is that the U.S. doesn't have enough of the materials and chemicals needed to build explosive weaponry. But now, new tech startups are stepping in to fill the gap.

0:50Heather Somerville: Heather Somerville covers technology and national security for The Wall Street Journal. She joins us now. Heather, what are the materials we're talking about here?

0:58Danny Lewis: There's a category of materials called energetics, and this includes propellants and incendiaries of all sorts, as well as explosives. And when we talk about unmanned systems, drones, what we're really talking about is sort of these higher end of high impact explosives that we don't have a lot of sources for domestically and have become increasingly hard to get from other countries because of wars going on and tariffs and geopolitical issues globally.

1:27Heather Somerville: Why is the U.S. military struggling so much to get what it needs to make these weapons right now?

1:31Danny Lewis: This is a problem that's really decades in the making. So the U.S. rapidly built up a supply of these explosives during World War II. We put up many of these plants around the United States and they supplied the U.S. military. And then after that, there's a number of things that happened that really created a dismal supply base domestically. The first thing is the military has used for a long time these really big weapons systems that it doesn't really like to fire very much because it's super expensive. Soldiers aren't widely trained on them. So there just wasn't much demand for these materials.

2:09Danny Lewis: We also increasingly relied on other countries to ship them to us. I mean, these plants historically have been pretty dangerous, dirty, not things that anybody wants in their neighborhood. And it was really hard to keep them running. Then, you know, the Ukraine war started and a big source of one of these explosives that came from Poland was rerouted to Ukraine. Other European suppliers are more concerned about keeping this material for themselves or supplying Ukraine than the United States. We used to get some of the precursor materials for these explosives from China and Russia. and we haven't been able to get them from there for some time as well.

2:47Danny Lewis: So meanwhile, there's basically one plant that we have in the United States called Holston Army Ammunition Plant in Tennessee that supplies some of these high-end explosives. And it was really left to fall into disarray. They're working on repairing it with a billion-dollar modernization effort. But right now, there are slim pickings for these sorts of explosives.

3:10Heather Somerville: Okay, so you talked to a startup called Odin Energetics. that's trying to solve this problem in a very tech industry way. Who's behind it and what's the company's plan to disrupt the weapons manufacturing industry?

3:21Danny Lewis: It's an interesting joint venture between these two companies that people probably haven't heard of, but that are pretty interesting. One is called Sologen. That is a Peter Thiel-backed chemicals company that's taking a new approach to building chemical plants. And then this other little company called Kraken Kinetics. And this company is making the payloads. This is all the parts that attach a bomb, a warhead to a drone. And so they're like, well, if we just get together, can we figure out this middle part, building the explosives materials so that these drones have something to carry? So that's what they did.

3:57Danny Lewis: And their approach is to build these small factories that they can then deploy really any place that they're needed. Could be right next to a battlefield, for instance. For now, they're trying to put them on some decommissioned military bases, and they can put them together in six months and they can start producing right away. And they have some new technology they're bringing to it that they say makes their explosives 30 percent more powerful than what's being used right now on drones. And they have some additional approaches to manufacturing that they say makes this much safer than the factories that we had prior where there were lots of safety issues.

4:36How so?

4:37Danny Lewis: Well, there's a number of things. One example is that they're not storing huge amounts of highly flammable chemicals. They're creating these chemical precursors and they are in a state where before they're manufactured to become a bomb, they're only as flammable as sugar. It's not very dangerous. That's one improvement. You don't have some big pile of highly explosive material sitting around in a factory somewhere that could cause a massive disaster. Second thing that they're doing is they're not developing these explosives in massive quantity all at once. So it's not a sitting target, for instance, for an enemy drone to strike.

5:18Danny Lewis: What they're doing is it's kind of on-demand explosives is a way to think about it. Like the military wants something, they spin it up and they can do it so quickly that they don't have to keep this stuff sitting around where it can cause some sort of massive inferno, which is really one of the big safety concerns with the Energetics plants of the decades prior.

5:39Heather Somerville: Coming up, what does this foray into explosives manufacturing say about Silicon Valley's growing relationship with the military and broader defense industry? That's after the break.

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6:32Heather Somerville: Welcome back. We've been talking about a startup, Odin Energetics, making inroads into the U.S. military's efforts to rebuild its explosive supply. Heather, you've been reporting a lot on Silicon Valley's foray into the defense industry, but making explosives feels like kind of a different skill set for a lot of these folks, you know, compared to, say, having tech industry engineers and software developers build military drones. How much outside of the usual Silicon Valley wheelhouse is this?

6:59Danny Lewis: It's pretty far outside the wheelhouse. And that's one of the reasons it was quite interesting to me to learn more about. To the extent that we have seen Silicon Valley lean into military tech, It's often with the things that are, for lack of a better word, sexy, like the autonomous fighter jet or the unmanned sea vessel that can crash into something. And this is an extension of the very expensive systems from older defense contractors that always got lots of money, always got lots of attention, always had lots of lobbying power and had allies on Capitol Hill. This was always like the cool stuff.

7:40Danny Lewis: This energetic stuff is like nerdy chemistry stuff. It never had the political backing and the headlines. And it hasn't been a place where Silicon Valley has gone. Also, historically, the investors who back the venture capital firms that invest in startups have long been wary of doing any sort of military investments. That started to change and loosen up as venture capital firms put more money into software that could be used in war and some of this drone technology. But now increasingly there is venture capital interest in putting money to work in the materials for bombs. I mean, this is another level of Silicon Valley funding war.

8:27Heather Somerville: Yeah. Are there other startups that are starting to look into getting into this sector?

8:30Danny Lewis: Yeah, there's a few out there and there's a couple others that are older and have private equity backing. But I think what Odin Energetics is going for here is they think they can do this work really quickly. And they also think that they have the capacity to make the explosives much more powerful than anybody else can. They have to prove that still. But that's their pitch. And the reason that that is important is if we are moving towards a military where every soldier has a drone in their rucksack, where we are fighting foremost with mass quantities of smaller unmanned systems, you have to pack those drones with a more powerful explosive to get your best bang for the buck, if you will.

9:17Danny Lewis: These drones can't carry a lot of weight, or if they do, it degrades their performance. So if you keep the warheads with these explosives nice and light, but still make them super powerful, then you can start to have some effect. And what others have pointed out to me is the U.S. is still really far behind other countries in terms of drone production. I mean, we have Ukraine and Russia and China building several millions of drones a year. The U.S. is straining to get to tens of thousands a year at best right now. And so if you don't have as many drones as the other guy, you better make sure that those drones work really well when they hit something.

10:00Danny Lewis: And that's one way that both the industry and the military is thinking about this problem as they're trying to rebuild this energetic supply chain. If you had more platforms, you need more explosives.

10:13Heather Somerville: That was WSJ technology and national security reporter Heather Somerville. And that's it for Tech News Briefing. If you're a listener on Spotify, be sure to leave us a comment. Today's show is produced by me, with supervising producer Katie Ferguson. I'm Danny Lewis for The Wall Street Journal. We'll be back tomorrow with a new episode. Thanks for listening.

10:56Danny Lewis: at claude.ai slash wsj.