Anduril Founder Palmer Luckey Talks Partnership With Qualcomm

Palmer Luckey · Anduril Industries

US should rebuild end-to-end computer manufacturing; dependence on China is unacceptable and the cost objections are overstated.

Luckey argues America invented the computer industry, shipped it overseas, and now critical sectors (military, medical, hospitals, power plants) run on Chinese-made computers, which he calls crazy given China is the largest strategic adversary. He says Anduril has tried to get others to invest in domestic computer production and failed, so it is doing it itself, aiming for a computer made in the US from chips to glass, metals, batteries and plastics. He dismisses analyst estimates that an American iPhone would cost $37,000 or an American computer $100,000 as efforts to prop up a status quo that mega-corporations want to keep, since they prefer outsourcing to cheaper non-American labour. His evidence is that Anduril already builds drones that are essentially computers (memory, GPU, CPU, sensors, batteries, rugged integration), so the only difference from a laptop is a keyboard and screen. He says Anduril's own display glass is American, most assembly is in the US, and the panel is made abroad for now, putting the product at about 90% US and allies with a technical road map to 100%. He also says Anduril is sanctioned by China, which forced it to build a supply chain independent of China.

“I think it's crazy to have an entire country depend entirely on its largest strategic adversary for its most critical economic powerhouses.”at 2:50

Palmer Luckey · Anduril Industries

US chip subsidies mostly fund chip production while packaging and assembly stay in China, so they have little effect.

Luckey acknowledges Qualcomm's plan to make chips in Arizona but argues chips alone are not enough. His point is that US semiconductor subsidies and investment have no capacity to package the chips and turn them into finished products, and that packaging and assembly happen overseas, mainly in China, where the chips go to become laptops. In his view, American semiconductor subsidies have therefore been little more than a subsidy for Chinese-made computers. He argues the goal is to capture the entire value chain in the US, which is hard because suppliers have either never been in the computer industry or have been away from it for about twenty years since the last US plant closed.

“One of the problems with The US subsidies and investments in semiconductors is that at the end of the day, we don't have any ability to package them and then turn them, transform them into useful products. So from a certain point of view, American semiconductor subsidies have really just been a subsidy”at 5:31

Palmer Luckey · Anduril Industries

The Pentagon's biggest gains lie in faster procurement and leaner development, with Ukraine showing the value of quickly dropping failing weapons.

Luckey says the Pentagon can change faster procurement and leaner development cycles, and that Ukraine has shown the value of rapidly buying what works and then stopping purchases of things that stop working. He calls giving units the decision to buy or stop buying the most important lesson from Ukraine. He frames the Pentagon's problem as one of execution rather than knowledge: the department knows what it needs to fix but finds the change painful, like dieting, so progress is slow.

“The things the Pentagon can change in terms of faster procurement, in terms of more lean development cycles or things that I think everyone's learning from Ukraine, like the ability to very rapidly procure the things that work and then critically stop buying things”at 13:37

Palmer Luckey · Anduril Industries

Even with a Democratic sweep, US defense spending probably won't change much; Democrats recognize the need for investment.

Asked whether a Democratic wave in the midterms would materially cut defense spending, Luckey says even with a blue wave the US is not necessarily going to see a huge change. He hedges that he is an engineer, not a politician, and could be wrong. His reasoning is that he talks to Republicans and Democrats, and the Democrats who control the defense budget understand that the world needs investment to replace legacy systems and that the threat is near term. He adds that allies such as Japan are openly discussing constitutional changes to host nuclear weapons, so 'everything is on the table' and most people across parties agree America must invest in new technology. He concludes the defense budget will go up and down, but he expects to be fine.

“I think that even with a blue wave, you're not necessarily going to see a huge change in defense spending. Look, I could be wrong.”at 15:02

Palmer Luckey · Anduril Industries

Computer chip pricing and delivery timelines are unusually hard to forecast because of the AI boom.

Luckey explains why he cannot give exact pricing or delivery dates for the Blue Chip laptop. He argues it may be the hardest time in history to predict computer chip prices and delivery timelines because of the AI boom. He says he cannot confidently commit to a date or price he would be able to hit when delivering. Blue Chip is expected to enter production next year, with prototype production already underway at Arsenal 1 and with about two dozen other American companies.

“you'll know this is maybe the hardest time in history to predict the pricing and delivery timelines of computer chips because of this AI boom.”at 16:24