Bloomberg Technology Special Live From Rocket Lab (Correct)
ANNOUNCER: THIS IS BLOOMBERG TECHNOLOGY WITH CAROLINE HYDE AND ED LUDLOW. CAROLINE: WELCOME TO A SPECIAL EDITION OF BLOOMBERG TECHNOLOGY, LIVE FROM ROCKET LAB IN LONG BEACH. CONVERSATIONS WITH THE BIGGEST NAMES IN THE SPACE AND DEFENSE INDUSTRIES. ED: WE HAVE BEEN ON THE ROAD IN
SOCAL. WHAT STARTED WITH A SINGLE NAME HAS BOOMED INTO THOUSANDS OF STARTUPS, MANY IN SOUTHERN CALIFORNIA AND IN COMMERCIAL SPACE, THIS IS HOW IT STARTED. SPACEX HAS BECOME SYNONYMOUS WITH COMMERCIAL SPACE. IT'S A PROLIFIC LAUNCH PROVIDER WITH 380 LAUNCHES OF THE FALCON 9 FAMILY OF REUSABLE ROCKETS TO DATE. COMPETITION IS CATCHING UP
ABROAD AND AT HOME. >> WHEN YOU LOOK AT THE COMPANIES, A LOT OF THEM HAVE BEEN TRAINED AT SPACEX. THEY ARE BUILDING NEW STARTUPS AND DECIDING TO BUILD WHERE THERE IS A CONCENTRATION OF TALENT, WHICH IS SOUTHERN CALIFORNIA. >> WE BROUGHT ROCKET TECHNOLOGY TO ELON MUSK. HE LIKES TO SAY YOU CANNOT THROW A ROCK WITHOUT HITTING A SPACEX ALUM WORKING AT ANOTHER COMPANY. ED: SMALL AND MEDIUM CLASS ROCKETS, 11 LAUNCH MISSIONS THIS YEAR. ANOTHER COMPETITOR IS ULOA,
TRANSITIONING FROM PREVIOUS ROCKETS TO THE NEXT GENERATION VULCAN FAMILY. THE PENTAGON HAS BOUGHT SEVERAL LAUNCHES BEFORE THE END OF THE YEAR BUT DELAYS HAVE PUT PRESSURE ON THE COMPANY. IT HAS LAUNCHED TWO ROCKETS SO FAR. NEITHER HAS CRACKED REUSABILITY. IN EUROPE, DELAYS AND MALFUNCTIONS LEFT THE CONTINENT UNABLE TO GET TO ORBIT WITH ITS OWN ROCKETS FOR QUITE SOME TIME.
THE CONSORTIUM LAUNCHED THE FINAL MISSION OF ITS VEGA ROCKET ON SEPTEMBER 4. SPACEX IS STILL THE MOST RELIABLE WAY TO HITCH A RIDE TO EARTH ORBIT. CAROLINE: A CALIFORNIA STATE COMMISSION VOTED AGAINST A REQUEST BY THE U.S. MILITARY TO APPROVE MORE SPACEX LAUNCHES, EXPRESSING CONCERN ABOUT WHY THEY WERE NOT APPLYING FOR A PERMIT THEMSELVES. SUMMER VOICING CONCERNS OVER WORKING CONDITIONS AT SPACEX, ELON MUSK'S INCREASING ROLE IN U.S. POLITICS AS WELL. ED: WE WILL DIG DEEP INTO SPACEX.
RIGHT NOW, ROCKET LAB, THEY COMPETITOR, A ROCKET COMPANY, LAUNCH PROVIDER, WE ARE IN THE LONG BEACH HEADQUARTERS. ALSO A FOCUS ON A COMPANY THAT HAS A HOME IN SOUTHERN CALIFORNIA AND NEW ZEALAND. THE CFO IS WITH US. THANK YOU FOR HOSTING US. LET'S START WITH THE BASICS. ROCKET LAB IS AN END TO END SPACE PROVIDER.
BRING US UP TO SPEED. >> THE SPACE COMPANIES OF THE FUTURE ARE NOT JUST LAUNCH COMPANIES. IT'S ABOUT PROVIDING THAT SERVICE. THIS IS OUR HEADQUARTERS. WE MAKE A LOT OF ROCKET COMPONENTS AND AVIONICS HERE. WE HAVE EXPANDED THE FOOTPRINT. WE STARTED IN NEW ZEALAND AND
EXPANDED TO THE U.S. AND FURTHER TO DENVER AND ALBUQUERQUE AND MISSISSIPPI AND SILVER SPRINGS AND A LAUNCH SITE IN VIRGINIA AND A FACILITY IN TORONTO. WE ARE DOING MORE THAN LAUNCH. ED: TWO LAUNCH SYSTEMS. WHAT ARE THEY? ADAM:
THE VEHICLE BEHIND YOU IS ELECTRON, THE SECOND-MOST FREQUENTLY LAUNCHED VEHICLE IN THE U.S. IT HAS LAUNCHED 53 TIMES. WE HAVE A DEDICATED MARKET. WE ARE DEVELOPING NEUTRON, WHICH WILL ADDRESS THE LARGER MEDIUM CLASS MARKET. CAROLINE: CAN WE TALK ABOUT HOW DIFFICULT SPACE ENGINEERING IS? WHERE ARE WE WITH NEUTRON? WHAT ARE THE ISSUES? ADAM: WE ARE QUITE A WAYS ALONG.
WE HAVE BEEN AT IT THREE YEARS. WE ANNOUNCED IT IN AUGUST, '21. AMAZING TO SEE A ROCKET COME TOGETHER. I DID NOT COME FROM A SPACE BACKGROUND 6.5 YEARS AGO.
TO SEE WHAT IT TAKES TO PULL IT OFF THESE STAGGERING. ED: IT IS LITERALLY ROCKET SCIENCE. YOU CAN SAY IT. ADAM: I AM GRATEFUL EVERY DAY THERE ARE PEOPLE WHO DEDICATE THEIR LIVES TO DEVELOPING THESE SYSTEMS. IT IS AN ARDUOUS TASK TO GET THERE. IF YOU CAN DO IT, YOU ARE ONE OF THE FEW WHO HAVE PULLED IT OFF. IT CREATES A DEFENSIBLE POSITION. SPACE IS HARD.
THE CHALLENGE OF WAKING UP EVERY MORNING AND DOING BATTLE WITH PHYSICS AND THE FIERCEST COMPETITORS ON THE PLANET INCLUDING SPACEX -- AROUND THE INDUSTRY, WE SEE BODIES EVERYWHERE WE HAVE TO STEP OVER. IT MAKES YOU WAKE UP EVERY MORNING, THIS IS A SERIOUS BUSINESS. WE HAVE TO MAKE THE RIGHT DECISIONS AND BE VERY FOCUSED. CAROLINE: YOU ARE THE NUMBERS GUY. CAPITAL EFFICIENCY. YOU HAVE TO SPEND EXTRAORDINARY
MONEY. YOU TOOK THE COMPANY PUBLIC. YOU HAVE TO ANSWER TO RETAIL INVESTORS AND INSTITUTIONAL INVESTORS. WHAT'S THE REVENUE RUN RATE AND WHERE DOES THE MONEY COME FROM? ADAM: WE HAVE BEEN ABLE TO GET TO SCALE. Q2, $100 MILLION IN REVENUE. WE'VE CROSSED THAT REVENUE.
IT'S IMPORTANT, LAUNCH REPRESENTS 30% OF REVENUES. SPACE SYSTEMS REPRESENT 70%. ED: ON THAT, IN LAYMAN'S TERMS? ADAM: WE SELL SOLUTIONS. SUBSYSTEMS FOR THE MERCHANT MARKET. SOLAR SOLUTIONS FOR SPACECRAFT. RADIOS, BATTERIES, COMPOSITES. WE ARE SERIOUS AND MATERIALS.
WE BUILD FULL SPACECRAFT SOLUTIONS. WE BUILT SPACECRAFT FOR NASA. WE BUILT A COUPLE THAT WILL BE ORBITING MARS. ED: THIS IS BIG NEWS. ORIGINALLY YOU WERE NOT ON THAT LIST. ADAM:
THAT WAS FOR THE SIMPLE RETURN. WE WERE NOT INCLUDED IN THE FIRST BUT WE WERE ADDED TO THE PROGRAM. WHEN YOU LOOK AT THE DIFFERENT PROGRAMS, NOT JUST SUBSYSTEMS, BUT WE ARE MAKING FULL SATELLITES FOR THE DOD AND THE SPACE DEVELOPMENT AGENCY. WE WANT TO BE THE PRIME
CONTRACTOR. MOST EXCITING FOR ME IS HOW QUICKLY WE HAVE COME FROM AN ORGANIC BASE TO SIGNIFICANT REVENUE AND GETTING PAST THAT REVENUE THRESHOLD. CAROLINE: 53 LAUNCHES ALREADY. HOW MANY LAUNCHES ARE WE
LOOKING AT IN TERMS OF NEXT YEAR? ADAM: WE'VE INDICATED 15 TO 18 THIS YEAR. WE LAUNCHED 11 SO FAR. BIG Q4 COMING UP. THE RATE NEXT YEAR, WE SEE GROWTH. IT WILL DEPEND ON HOW MANY
ROCKETS. WE CAN BUILD A LOT. CAROLINE: 3D PRINTING. ADAM: A LOT OF STUFF. ED: THE MISSING FACTOR? ADAM: THE MARKET. WE CAN BUILD AS MANY ROCKETS AS
THE MARKET DEMANDS. IT IS A NASCENT MARKET. ED: IF I WANT TO GET INTO THIS, THE BUSINESS OF SPACE -- CAROLINE: I BEAR WITH YOU A LOT. ED: ELON MUSK HAS A BIG LEAD WITH SPACEX. THE BUSINESS OF SENDING PAYLOAD
TO ORBIT TOPS OUT AT $3 MILLION FOR THEM. THAT'S A SCALE YOU ARE NOT NEAR YET. IT MAKES IT SEEM LIKE THERE IS A CEILING ON HOW MUCH MONEY YOU CAN MAKE IN THIS BUSINESS. WHAT DO YOU MAKE OF THAT? ADAM: DEPENDS ON HOW YOU DEFINE THE BUSINESS. SPACEX LAUNCHES. THAT'S A CRITICAL PART OF THE
ECOSYSTEM. IT'S NOT THE BIGGEST PIECE. THE APPLICATIONS AND ONGOING REVENUE STREAM IS REALLY WHAT PEOPLE ARE SHOOTING FOR. THAT'S WHAT WE ARE ORIENTED AROUND. WE ARE ALL ABOUT DESIGNING SPACECRAFT, BUILD IT, VERTICALLY INTEGRATED, LAUNCH THEM ON ROCKETS AND OPERATE ORBITS. IT'S AN IMPORTANT THING TO THINK ABOUT YOURSELF AS AN END-TO-END PLAYER. IF YOU ARE A ONE SOLUTION PROVIDER, IT'S PROBABLY NOT THE PATH. CAROLINE:
FOR INVESTORS, TELL US HOW THE MARKET SCALES UP? WHAT IS NEEDED? YOU SAY YOU CAN BUILD THESE. WHAT GETS THE MARKET TO THE NEXT ITERATION? ADAM: THE MOST EXCITING NOW IS YOU THINK ABOUT WHAT TYPICALLY DRIVES THE HOCKEY STICK GROWTH IS USUALLY COMMERCIAL. WE ARE SEEING THE HOCKEY STICK BEING DERIVED FROM COMMERCIAL OPPORTUNITIES. STARLINK IS OLD NEWS. AMAZON KUIPER, TELE-SATELLITE, YOU ARE SEEING A COMBO OF GOVERNMENT AND COMMERCIAL PRESENTING HOCKEY STICK OPPORTUNITIES. IT IS NOT A ONE BET SITUATION.
ED: THERE IS SO MUCH MORE TO COME. BEFORE WE LET YOU GO, THEY WORD FOR SPACEX. WHAT THEY ENABLED YOUR COMPANY TO DO IN CALIFORNIA? ADAM: YOU HAVE TO GIVE THEM CREDIT. THEY ARE AN INSPIRATION. ASPIRATIONAL TARGET. WE SEE WHAT CAN BE DONE.
WE WAKE UP EVERY MORNING UNDERSTANDING THE CHALLENGE FACING US. WE ARE NOT INTIMIDATED. THIS COMPANY DOESN'T GET INTIMIDATED BY COMPETITION. WE ARE UP FOR THE CHALLENGE. THERE'S A TREMENDOUS AMOUNT OF
OPPORTUNITY. CAROLINE: YOU WERE UP EARLY FOR US. GREAT THANKS. WONDERFUL TO HAVE US HERE AND YOU HERE WITH US. COMING UP, SO MUCH MORE, WE WILL DIG INTO WHAT ELON MUSK HAS BEEN UP TO. THE ROBOTAXI REVEALED. THE COMPANY DEBUTS BUT SHARES ARE LOWER BECAUSE OF SKEPTICISM. >> WE EXPECT TO BE IN PRODUCTION WITH THE CYBER CAB, WHICH IS HIGHLY OPTIMIZED FOR AUTONOMOUS TRANSPORT IN PROBABLY, I TEND TO BE OPTIMISTIC WITH TIME FRAMES BUT IN 2026. CAROLINE:
A LITTLE OPTIMISTIC WITH TIME FRAMES, AS EVER, ELON MUSK UNVEILING ROUGH PRODUCTION TIMELINES. SHARES OF TESLA LOWER THIS MORNING. ED: SIGNIFICANTLY. CAROLINE: BECAUSE OF CYNICISM AND SKEPTICISM. A LACK OF DETAIL. DOWN 9% THE LAST TWO DAYS. NANCY WAS THERE AT THE EVENT, IS A HOLDER OF THIS STOCK. ED: IT'S BASED ON EXPERIENCE. NANCY: IT'S AWESOME.
ELON SAID THE FUTURE SHOULD LOOK LIKE THE FUTURE AND IT DOES BUT WE DON'T KNOW WHEN IT IS. THERE WERE NO DETAILS EXCEPT IT WILL COST LESS THAN 30 GRAND. IT WILL COST $.20 PER MILE, BUT IF YOU ADD IN REGULATION, IT WILL BE $.40. . THERE WAS NO SUBSTANTIVE BACKUP. IF YOU ARE THERE TO BE WOWED, IT WAS FILLED WITH WOW.
OPTIMISTS STOLE THE SHOW. THE ROBO VAN IS INTERESTING. WE HEARD NOTHING ABOUT THE RIDESHARING APP. ED: WE'VE DONE REPORTING ON THIS BUSINESS MODEL. THE PIECE OF NEWS THAT JUMPS OUT IS CYBER CAB WILL BE AVAILABLE TO BUY. THAT ADDS ANOTHER FACET OR DIMENSION TO THE MASTER PLAN.
DO YOU UNDERSTAND THE PROPRIETY RIDE-HAILING APP TESLA WILL ONE DAY OFFER? NANCY: NO. HE SAID A LOT OF THINGS. THERE WAS A COMMENT ABOUT UBER DRIVERS WILL BE THE SHEPHERDS OF THE FLOCK. WHAT DOES THAT MEAN? WE WILL DO AWAY WITH PARKING LOTS? IT SOUNDS LIKE HE WAS RUNNING FOR OFFICE. CAROLINE: WHICH MIGHT BE A CRITICISM OF WHAT'S BEEN HAPPENING. YOU ARE AN INVESTOR. WE'VE SEEN THE POP IN THE SHARES OF UBER AND LYFT TODAY. ED: LET'S SHOW THAT. NANCY:
DEPENDS ON WHEN YOU GOT IN. WE ADDED UBER TO OUR 12 BEST IDEAS PORTFOLIO 10 MONTHS AGO, WHICH WAS LUCKY TIMING. THAT WAS THE WINNER LAST NIGHT. UBER. THEY ENJOYED IT VERY MUCH. ED: IN THE NEAR TERM? NANCY: THEY WERE WORRIED AT THE IPO TESLA WOULD REPLACE THEM. THIS IS PROOF POSITIVE THAT IT'S NOT. MAYBE A DECADE. A LOT CAN HAPPEN BETWEEN NOW AND THEN. THAT WAS THE DISAPPOINTMENT,
THAT WE DIDN'T HEAR ANYTHING ABOUT THE MODEL II. NO SPECIFICITY ON THINGS INVESTORS CARE ABOUT. RETAIL CROWD WAS SHOUTING WE LOVE YOU ELON! IT FELT LIKE A PARTY. CAROLINE: WHAT WAS IT LIKE BEING THERE? NANCY: PRETTY COOL. THAT WAS THE MOST FUN FOR ME, TALKING TO INVESTORS. WHY THEY OWN THE STOCK? WHY THEY OWN THE CARS? THESE WERE DEVOTEES.
IT FELT LIKE A MOCK PIT OF GROUPIES. ED: MARGUERITE, BRING UP SOME VIDEO OF THE CYBER CAB. IF YOU ARE GOING TO DO THAT AND OFFER TO SELL IT FOR 30,000 U.S. DOLLARS, WHY NOT STICK A STEERING WHEEL ON IT AND SOME PETALS AND SELL IT FOR $25,000 LIKE A NORMAL CAR? NANCY: HE EVEN SAID, WE HOPE IT GOES WELL. [LAUGHTER] CAROLINE:
FINGERS CROSSED. ED: THIS IS THE ROBO VAN. ONE OF HIS SKILLS IS KEEPING INVESTORS LOOKING TO THE HORIZON. DO YOU REDO YOUR WHOLE TESLA MODEL? NANCY: WHEN? WE HAVEN'T SEEN THE MODEL II. WE WERE SUPPOSED TO SEE IT NEXT YEAR.
THIS WOULD BE A GOOD TIME TO GIVE INVESTORS THE SENSE OF WHAT IS GOING ON. ACROSS-THE-BOARD, INSTITUTIONAL INVESTORS WERE DISAPPOINTED. EVEN IN THE REPORTING AFTERWARDS. I EXPECT THE STOCK TO TRADE
DOWN. OPTIMISTS IS COOL. CAROLINE: DO YOU STAY IN? NANCY: YES. WE GOT IN AT $100 WHEN HE WAS SELLING OFF IN JANUARY '23. WE SOLD BACK SOME AS IT ROSE.
YOU WANT TO OWN IT FOR THE NEXT 3-5 YEARS. YOU MAY NOT WANT IT FOR THE NEXT 1-2. ED: ELON MUSK IS ALWAYS LATE BUT HE OFTEN GETS THERE IN THE END. THANK YOU NANCY. AMD SAW ITS BIGGEST DECLINE IN
MORE THAN A MONTH AFTER THE COMPANY UNVEILED NEW CHIPS BUT DID NOT PROVIDE INFO ON NEW CUSTOMERS OR FINANCIAL PERFORMANCE NEAR-TERM. I SPOKE WITH THE CEO AND HERE'S WHAT YOU SAID ABOUT THE LATEST ACCELERATORS. >> INCREDIBLY FAST GROWING MARKET. IF YOU THINK ABOUT WHAT WE'VE DONE OVER THE LAST 12 MONTHS, WE'VE SEEN MI 300 DEMAND FROM WHEN WE STARTED THE YEAR TO OUR MOST RECENT EARNINGS, OVER $4.5 BILLION IN THIS IMPORTANT AI
ACCELERATOR MARKET. CAROLINE: COMING UP, WHAT'S IT LIKE WORKING WITH SPACEX? OUR CONVERSATION WITH THE MISSION COMMANDER OF POLAR US DON -- PUOLARIS DAWN. ED: JARED ISAACMAN, MISSION CONTROL FOR PALRIS DAWN.
>> I LEAVE THAT TO THE EXPERTS AT SPACEX AND E LINE TO DETERMINE THE TIMELINE. WE WILL FLY IT AS SOON AS IT'S READY. THERE'S A LOT WE CAN DO WITH DRAGON. THAT'S WHY THE FIRST TWO MISSIONS WERE DESIGNED FOR DRAGON. ED: WE WANT TO HELP OUR AUDIENCE AROUND THE WORLD UNDERSTAND WHAT'S REALLY HAPPENING INSIDE SPACEX. EXPLAIN WHAT IT'S LIKE WORKING WITH THE ENGINEERS AND HOW IMPORTANT YOU FEEL THIS IS NOT JUST TO AN INDUSTRY BUT AS YOU PUT IT, HUMANKIND'S FUTURE OUTSIDE EARTH ATMOSPHERE.
>> AWESOME QUESTION. SPACEX IS EXTRAORDINARY. SINCE I WAS 16, I HAVE BEEN IN THE BUSINESS AND HAVE WORKED WITH THOUSANDS OF COMPANIES ACROSS VERTICALS INCLUDING DEFENSE AEROSPACE. I WAS CEO OF A DEFENSE AEROSPACE COMPANY FOR 12 YEARS. I HAVE NEVER SEEN AN ORGANIZATION LIKE SPACEX. A LOT OF COMPANIES HAVE A
VISION STATEMENT THAT NO ONE CARES ABOUT. 14,000 PEOPLE WHO SHOW UP FOR EVERY DAY WORK AT SPACEX BELIEVE THERE IS NO GREATER IMPACT THEY CAN MAKE IN THE WORLD AND TRYING TO MAKE LIFE MULTI-PLANETARY BECAUSE THE WORLD IS MORE INTERESTING WHEN YOU CAN JOURNEY BEYOND THE STARS. SPACEX IS NOT SOLVING ALL THE WORLDS PROBLEMS. EVEN GOING TO MARS. THEY MAY DEVELOP THE OPTIMAL VEHICLE TO TAKE US THERE AND BACK BUT WHO KNOWS HOW MANY POTENTIAL CHALLENGES WILL EXIST ON THAT JOURNEY MAKING, A SELF-SUSTAINING CITY AND COMING BACK? SPACEX INSPIRES SO MANY OTHER RESEARCHERS WHO START DIFFERENT COMPANIES THAT FOLLOW SPACEX PHILOSOPHIES. IT WILL TAKE SO MANY SPACEX LIKE COMPANIES TO MAKE THE WORLD A BETTER PLACE. THEY ARE A GREAT BEACON THAT IS
INSPIRING MANY OTHERS TO DO THE SAME. CAROLINE: JARED ISAACMAN, MISSION COMMANDER, TALKING ABOUT THE ECOSYSTEM WITH WHICH SPACEX GOES ON. A GREAT EXAMPLE IS A NEW VC FIRM STARTED BY FORMER SPACEX LEADERS, RAISING $550 MILLION FOR ITS FIRST VENTURE FUND.
THAT'S A LOT OF MONEY. IT'S A MASSIVE TARGET, 32 COMPANIES, REAL CAPITAL NEEDED FOR THESE STARTUPS. ED: FUNNY TIMING ON A BIG PIECE OF NEWS. THAT'S WHY WE ARE HERE IN SOUTHERN CALIFORNIA. THE IRONY IS WITH EVERYONE GIVING KUDOS TO SPACEX, YOU CAUGHT UP WITH THE EL SEGUNDO MAYOR. SPACEX HAS MIXED FEELINGS ABOUT THIS PART OF THE WORLD. CAROLINE: MIGHT BE MOVING. HE'S CONCERNED ABOUT THAT.
LET'S GET HIS TAKE. >> WE ARE WORKING ON INCENTIVES TO KEEP PEOPLE HERE. SPACEX HAS SO MUCH CAPITAL INVESTED, STARTED IN EL SEGUNDO.
MOVED ON TO HAWTHORNE. WE WILL DO EVERYTHING WE CAN TO KEEP THE INDUSTRY HERE. WE'RE WORKING WITH GOVERNMENT OFFICIALS AND DOD. CAROLINE: $550 MILLION VC FUND, THAT WILL KEEP TALENT WANTING TO COME TO THIS PART OF THE WORLD.
COMING UP, A NEW KEY PARTNERSHIP TO HELP GROW THE BOOMING SPACE BUSINESS. ♪ CAROLINE: WELCOME BACK TO A SPECIAL EDITION OF BLOOMBERG TECHNOLOGY. WE ARE AT ROCKET LAB IN LONG BEACH. ED:
ANDURIL IS ONE OF THE MOST PROMINENT DEFENSE COMPANIES IN THE U.S. IT HAS MANAGED TO WIN CONTRACTS WITH THE U.S. GOVERNMENT. >> IT'S A PERFECT EXAMPLE. THEY POINT TO HOW LONG IT TOOK SPACEX AND PALANTIR TO GET FIRST CONTRACT FROM THE U.S. GOVERNMENT. AND DURIL WAS FOUNDED IN 2017 AND BY 2020 HAD THEIR FIRST PROGRAM OF RECORD. BUT GOVERNMENT HAS WOKEN UP TO
THE NEED OF WORKING WITH STARTUPS. THAT WAS NOT THE CASE IN 2010 OR THE DEFENSE 1.0 GENERATION. ANDURIL HAVE SHOWN YOU CAN MOVE FASTER. FOR STARTUPS FOUNDED IN THE PAST FEW YEARS, THE PROGRAM WE LOVE TO POINT TO IS REPLICATOR, A PROGRAM FOCUSED ON WORKING WITH STARTUPS AND FOCUSING ON PRODUCTION. IT'S BECOME A CORE INITIATIVE OUT OF THE DOD UNDER THIS ADMINISTRATION. PREVIOUS ADMINISTRATIONS
FOCUSED ON THE DEFENSE INNOVATION UNIT. IT WAS BUILDING TIES TO SILICON VALLEY, UNDERSTANDING THE BEST ENGINEERS IN THE WORLD ARE IN SILICON VALLEY AND THE DOD HAS TO WORK WITH THEM. WE LOOK AT THE PRIVATE INDUSTRY SIDE. THERE'S NOW A TALENT DENSITY.
THERE'S MOMENTUM, CAPITAL. THAT WOULD MEAN NOTHING IF THERE WASN'T AN EAGER BUYER. THE DOD HAS BECOME AN EXTRAORDINARILY EAGER BUYER, SUPPORTABLE WORKING WITH STARTUPS, UNDERSTANDING THEY NEED TO BE MORE THOUGHTFUL ABOUT PROCUREMENT AND MAKE IT POSSIBLE FOR EARLIER STAGE COMPANIES TO SELL INTO THE DEPARTMENT OF DEFENSE AND ALSO THESE LARGE LEGACY PRIMES, WHO HAVE HAD NO COMPETITION FOR 100 YEARS, NOW HAVE TO WORK WITH STARTUPS. THEY HAVE TO INTEGRATE TECH THESE STARTUPS BUILD IF THEY WANT TO BE THE CHOSEN SUPPLIER TO THE DOD. WE'VE SEEN THIS CHANGE IN HOW THE DOD VIEWS STARTUPS AS A POSSIBLE SUPPLIER FOR THE REQUIREMENTS THEY HAVE.
CAROLINE: PRAY CONVERSATION WITH CATHERINE BOYLE. ANDURIL'S WORK IS NOT JUST ON EARTH. THE SENIOR VICE PRESIDENT IS WITH US. YOU ARE IN CHARGE OF THE SPACE AND SOFTWARE SIDE.
YOUR FOCUS IS BROAD. WHAT IMPACT DO YOU WANT TO MAKE IN SPACE? GOKUL: THANK YOU FOR HAVING ME. EXCITING TO BE HERE.
YOU CAN FEEL THE ENERGY IN THE ECOSYSTEM. OUR FOCUS IN SPACE IS AROUND SPACE DOMAIN AWARENESS AND ENSURING AS SPACE GETS MORE CONGESTED AND CONTESTED THAT WE CAN DEFEND AND PROTECT U.S. ASSETS. THE SPACE DOMAIN IS CRITICAL TO WHAT THE U.S. GOVERNMENT DOES.
GPS POSITIONING, HOW SOLDIERS KNOW WHERE THEY ARE, COMMUNICATIONS, IT'S NEVER BEEN MORE IMPORTANT THAN TO PROTECT SPACE DOMAIN, IN ORDER FOR US TO DO WHAT WE NEED TO DO ON THE GROUND. ED: CASE STUDY THROUGH THE NEWS OUT IS A DEAL WITH IMPULSE. SPECIFICS? BASED ON WHAT YOU'VE EXPLAINED, WHAT DOES THAT ALLOW YOU TO DO? GOKUL: WE ARE THRILLED TO WORK WITH IMPULSE, TOM MUELLER AND HIS TEAM, THE INNOVATIONS THEY BRING. THEIR PROPULSION TECH. THE ABILITY TO ACCESS HIGHER ORBIT. ED: THE BASICS, SMALL SATS, THEY CAN MOVE THEM AT DIFFERENT ORBITS. GOKUL: FOR LONGER DURATIONS.
THEY ARE BUILDING AN ORBIT TRANSFER VEHICLE, SO THEY CAN MOVE FROM ONE ORBIT TO ANOTHER AT A PRICE POINT THAT WAS NOT AVAILABLE BEFORE. THE U.S. MOST CRITICAL SYSTEMS ARE LOCATED IN HIGHER ORBIT WHICH ARE EXPENSIVE TO REACH. WE WILL BE ABLE TO PUT ASSETS IN THOSE ORBITS TO DO THE MISSIONS WE HAVE BEEN TALKING ABOUT. WE ARE A MISSION SYSTEMS PROVIDER. WE PROVIDE END-TO-END SYSTEMS
THAT ANSWER DOD MISSION, WHETHER OBSERVING THINGS IN SPACE OR DOING OTHER THINGS. WE'RE ARE EXCITED TO WORK WITH PARTNERS LIKE IMPULSE TO BRING TOGETHER THEIR SYSTEMS AND ULTIMATELY MISSIONIZE THEM FOR A DOD USE CASE. CAROLINE: YOU ARTICULATED A THREAT. ASSETS NEED
PROTECTING/OVERSEEING. HOW QUICKLY ARE WE SEEING OTHER COMPANIES, COUNTRIES DOING WHAT YOU ARE DOING? OR THAT THEY WILL BE ABLE TO TARGET US? GOKUL: WE'VE HEARD THE U.S. GOVERNMENT SAY OPENLY SPACE IS BECOMING A WAR FIGHTING DOMAIN. PROTECTING SPACE IS CRITICAL.
OVER THE NEXT 10 YEARS, OUR ADVERSARIES WILL LAUNCH MORE SYSTEMS INTO SPACE THAN THE LAST 70 YEARS COMBINED. WHETHER THAT IS MALICIOUS OR NOT, THERE IS SO MUCH GOING ON UP THERE THAT WE NEED TO HAVE EYES AND EARS ON EVERYTHING, ENSURING ARC ABILITY TO CONDUCT OPERATIONS REMAINS UNDETERRED. CAROLINE: WHAT HAS THAT MEANT FOR YOU? MORE TALENT? INVESTMENT? SIZE AND SCALE? GOKUL: IN EVERY DOMAIN, AIR DOMAIN, CCA AIRCRAFT, LOYAL WINGMEN, THE UNDERWATER DOMAIN, THE SUBMARINE THE SIZE OF A SCHOOL BUS, ONE THROUGH LINE CAN EXIT. FUNDAMENTALLY WHAT WE DO, WE GO FROM TRADITIONAL SYSTEMS, WHICH ARE HIGH COST, LOW VOLUME AND WE INVERT THAT. THE WAY TO DO THAT IS A FOCUS ON SOFTWARE AND AUTONOMY. IF YOU WANT HIGH-VOLUME, YOU HAVE TO GET AWAY FROM ONE OPERATOR COMMANDING ONE SYSTEM TO ONE OPERATOR CONTROLLING MANY SYSTEMS. TWO IS THE ABILITY TO MANUFACTURE AT SCALE.
WE SEE THE SAME NEED IN SPACE. WE NEED TO MOVE TO MORE AUTONOMOUS SYSTEMS, MORE VOLUME SYSTEMS THAT ARE ABLE TO DO THESE MISSIONS. ED: WE'VE COVERED YOU THROUGHOUT THE YEAR. TREY STEVENS HAS COME ON THE SHOW. THAT PORTFOLIO OF PRODUCTS BUT ALSO I WANT TO COME BACK TO SPACE. IT'S A NEWER AREA OF THE BUSINESS? GOKUL: THAT IS FAIR.
ED: HOW ARE YOU GROWING IT? CAROLINE TALKED ABOUT TALENT. FROM A PRODUCT PERSPECTIVE, WILL YOU OFFER MANY THINGS? IS IT AN AREA OF GROWTH? GOKUL: TREMENDOUS GROWTH. IT'S A DEMAND SIGNAL WE ARE SEEING FROM CUSTOMERS. A BIG PART OF THAT IS PARTNERSHIPS. WE WANT TO BRING A TEAM OF SUPER FRIENDS TO THIS MARKET.
ALL THESE STARTUPS YOU WILL TALK TO TODAY, WHERE WE ARE SPECIAL IS OUR ABILITY TO UNDERSTAND GOVERNMENT MISSION AND PUT TOGETHER A SOLUTION. THE DEMAND SIGNAL LOUD AND CLEAR IS WANTING TO WORK WITH MANY STARTUPS, EACH OF WHICH PROVIDE UNIQUE CAPABILITY BUT THEY NEED TO BE PUT TOGETHER TO SOLVE PROBLEMS. EVERY SUPER FRIEND DOES A UNIQUE THING. YOU PUT THEM TOGETHER AND THEY ARE UNSTOPPABLE.
THAT IS WHAT WE WANT TO DO. WE WANT TO BRING TOGETHER A TEAM OF COMPANIES TO PROVIDE OPTIONALITY TO THE GOVERNMENT TO SAY YOU DON'T JUST HAVE TO ANSWER THESE MISSIONS IN THE TRADITIONAL WAY. WE CAN BRING A NONTRADITIONAL TEAM AT A LOWER. PRICE POINT ANDHIGHER QUALITY . ED: WHAT IS IT ABOUT SOUTHERN CALIFORNIA AND THE SPACE INDUSTRY? GOKUL: IT'S CRAZY. THE TALENT DENSITY.
IT'S AMAZING. WE ARE PARTNERS. WHEN IT COMES TO DEFENSE, IT'S TEAM AMERICA. THIS EXCITING TO WORK WITH THESE COMPANIES HERE. YOU CAN RUN INTO THE SAME FOLKS OVER AND OVER.
WE ARE THRILLED ABOUT THAT. ED: THE SENIOR VICE PRESIDENT, THANK YOU VERY MUCH. SO MUCH MORE TO COME. ONE COMPANIES HOPE TO REVOLUTIONIZE OTHER KEY SPACE ARCHITECTURE, WHICH HONESTLY HASN'T BEEN TOUCHED SINCE THE 1960'S. WE WILL SPEAK WITH THE NORTHWOOD CEO, COMING UP NEXT. ♪ CHECK OUT THE BLOOMBERG TECHNOLOGY PODCAST. THIS IS BLOOMBERG. CAROLINE: NORTHWOOD IS A SPACE START UP THAT WANTS TO BUILD GROUND STATIONS THAT TALK TO SATELLITES. YOU KNOW THE BIG CIRCULAR DISH.
BUT ONES THAT CAN BE SCALED AND BUILT IN A COUPLE DAYS. YOU MIGHT RECOGNIZE HER FROM HER ACTING ROLE, WELCOME TO BLOOMBERG TECHNOLOGY BRIDGET. TELL US ABOUT THE SHEER INFRASTRUCTURE AND TECH.
BRIDGIT: THANK YOU FOR HAVING ME. EXCITED TO BE HERE. FOR SPACE COMPANIES, YOU ARE RELIANT ON CONNECTIVITY. CONTACT WITH SPACE IS STUCK IN A DIFFERENT ERA WHERE YOU FIND CUMBERSOME SOLUTIONS FOR OUTAGES IN A WAY THAT WOULD BE UNACCEPTABLE IN OTHER INDUSTRIALIZED SECTORS. WE WERE TALKING TO A COMPANY YESTERDAY THAT HAD THEIR CONTACT TIME SLIPPED OUT FROM UNDER THEM AT THE LAST MINUTE. IT'S DIFFICULT TO DELIVER FOR CUSTOMERS UNDER THOSE CONDITIONS. WE ARE EXCITED TO CHANGE THE
EXPECTATIONS FOR SPACE COMPANIES, WHERE YOU HAVE A DYNAMIC SATELLITE CONNECTIVITY THAT YOU WOULD EXPECT OF YOUR POWER GRID OR CELL PHONES. WE THINK THIS IS A HUGE OPPORTUNITY SPACE. OUR FIRST CONTRIBUTION IS THROUGH SHARED DISTRIBUTION THROUGH PHASED ANTENNAS WHICH OFFER 10X AVAILABILITY. ED:
ANTENNA ARRAYS HAVE NOT BEEN TOUCHED SINCE THE 1960'S BUT YOU KNOW WHAT THEY ARE. IF YOU'RE EVER LUCKY ENOUGH TO DRIVE PAST ONE, YOU MARVEL AT THE ROMANCE OF SPACE INFRASTRUCTURE STILL. FOR ALL THE EXPANSION OF CONSTELLATION HAPPENING ABOVE OUR HEADS, YOU HAVE TO HAVE IT. WHAT'S DIFFERENT ABOUT YOUR
ANTENNA? WHAT'S DIFFERENT ABOUT WHAT YOU ARE OFFERING? BRIDGIT: THE MODEL WE ARE AIMING FOR IS SOMETHING SCALABLE, THAT CAN BE DEPLOYED SWIFTLY, RESPONSIVE TO CHANGING NEEDS, THAT CAN BE PLACED IN MORE DYNAMIC LOCATIONS. WE ARE ENVISIONING A SYSTEM THAT COULD BE ON A ROOFTOP OR IN A PARKING LOT OR IN SOME AUSTERE LOCATION. THE FIRST DEMO WE DID, DEPLOYED IN SIX HOURS, THAT WAS OUR FIRST TIME BRINGING IT IN THE FIELD. WE ARE EXCITED TO BRING THE TIME DOWN FURTHER.
WE BUILT OUR FIRST SYSTEM IN FOUR MONTHS. WE ARE BRINGING THE TIMEFRAME DOWN FURTHER. WHEN YOU THINK ABOUT CELL TOWER INFRASTRUCTURE AND THAT EXPANSION GLOBALLY OF INFRASTRUCTURE THEN ENABLES THE INDUSTRY, THAT'S THE KIND OF SCALE WE NEED FOR SPACE TO ACCOMPLISH THESE MISSIONS THAT WE ARE SEEING POP-UP. CAROLINE: HOW LONG DID IT TAKE FROM STANDING START TO DEMO AND HOW QUICK THEY FROM DEMO TO THE WORLD? BRIDGIT: WE PRIORITIZE BRINGING ON THE RIGHT PEOPLE, THE RIGHT PARTS AND PROCESSES. WE HAVE FOCUSED ON BUILDING A TEAM OF PEOPLE THAT ARE EXCEPTIONALLY EXPERIENCED.
WE HAVE SOURCED PARTS FROM DIFFERENT CORNERS OF INDUSTRIES THAT ARE TRADITIONALLY USED. WE HAVE THOSE TIMELINE AND COST ADVANTAGES. PROCESSES, WE ARE FOCUSING ON A DESIGN FOR MANUFACTURE METHODOLOGY SO WE CAN BUILD SWIFTLY AND HAVE THINGS CONSOLIDATED INTO MODULAR UNITS AND APPROACH THAT DIFFERENT. IN OUR FIRST ITERATION, THIS WAS FROM THE BEGINNINGS OF THE DESIGN PHASE THROUGH SOURCING PARTS, ASSEMBLING PARTS, TESTING AND DEPLOYING. THAT WAS THE FOUR MONTH TIMEFRAME.
IF THERE WERE NOT SOME PERSNICKETY BOARD MEMBERS, WE COULD HAVE BEEN FASTER. CAROLINE: YOU HAVE EXPERIENCED THE GOVERNMENT SIDE. WHAT ARE THE BUGBEARS IN THE PRIVATE SIDE? BRIDGIT: THE STUFF WE ARE TRYING TO SYSTEMATICALLY EMBED, THE METHOD OF ENGINEERING, OF BEING DESIGNED FOR MANUFACTURE, WE ALREADY HAD 10 IMPROVEMENT ON ASSEMBLY TIMES BASED ON THE FIRST ITERATION, 10X, AND THE PARTS WE ARE SOURCING FROM. OUR SUPPLY CHAIN FULLY U.S. TO DATE, IT'S ABLE TO BE FLEXIBLE. ED: YOUR CUSTOMERS WILL BE SPACEX
AND AMAZON OR DEFENSE? BRIDGIT: THE COOL THING ABOUT THE GROUND SEGMENT, IT'S LIKE THE S&P OF THE SPACE INDUSTRY. IF THE MARKET IS GOING UP, GROUND IS GOING UP. EVERY SATELLITE, MISSION REQUIRES GROUND CONNECTIVITY.
WHETHER IT IS A LAUNCH OPERATOR NEEDING MORE FLEXIBLE AND RESPONSIVE TIMES OR A DIFFERENT PAD LOCATION OR A SATELLITE OPERATOR ON BOARD WANTING TO MAKE SURE IF THERE IS A SCHEDULE SLIP DURING LAUNCH THEY CAN STILL MAKE THEIR CONTACTS WITH THIS SATELLITE THEY HAVE INVESTED A LOT OF MONEY FOR A LOT OF YEARS TO GET UP THERE BUT I THINK THE RESPONSE OF DYNAMIC SPACE MISSIONS LIKE GOKUL WAS SPEAKING ABOUT IN TERMS OF GOING TO DIFFERENT ORBITS, THAT'S EXCITING. COMMS USE CASES ARE EXCITING. APPLICATIONS. ESPECIALLY WHEN YOU WANT LOWER LATENCY, GREATER RESILIENCY. THAT'S KIND OF ABORTING THE ANSWER BUT IT IS ACROSS THE BOARD. ED: YOU CAN COME BACK WHEN YOU ARE READY WITH A BIG NAME CUSTOMER. THANK YOU VERY MUCH. COMING UP, THERE'S EVEN MORE ON
THIS SPECIAL PROGRAM. NEW LIFE-SAVING DRUGS, MORE POWERFUL FIBER-OPTIC CABLES. A LOT OF PRODUCTS ON EARTH TODAY CAN ONLY BE MANUFACTURED IN SPACE. WE WILL TALK ABOUT WHY. THAT'S NEXT. ♪ ED: HOW DO I SAY THIS? VARDA BUILDS LITTLE SPACECRAFTS THAT PROCESS PHARMACEUTICALS IN ORBIT AND BRING THEM BACK TO EARTH BUT IT NEEDS ROCKETS TO GET THEM THERE AND THEN GET THEM BACK.
LET'S TRY AND WORK OUT HOW IT WORKS WITH THE CEO. THAT'S A PRETTY GOOD SUMMARY. WILL: ALMOST AS GOOD AS I WOULD HAVE SAID. ED:
YOU ARE A CUSTOMER OF ROCKET LAB, WHERE WE ARE. THEY ARE NOT YOUR LAUNCH PROVIDER? WILL: CORRECT. ED: EXPLAIN WHAT YOU DO. WILL: WE MAY PHARMACEUTICALS IN ORBIT, BECAUSE THE LACK OF GRAVITY ALLOWS YOU TO MAKE NEW DRUG FORMULATIONS THAT WOULD NOT BE POSSIBLE WITH EARTH GRAVITY. WE BUILD MANUFACTURING SYSTEMS
TO MAKE THOSE AND THE REENTRY VEHICLES. ED: I FAILED CHEMISTRY IN HIGH SCHOOL AND CAROLINE DID VERY WELL. IT WON'T BE STABLE ON EARTH, THAT WILL BE STABLE IN MICROGRAVITY? WILL: EXACTLY. TEMPERATURE IS PART OF THE PROCESS. YOU CHANGE THE TEMPERATURE, THE PRODUCT REMAINS THE SAME. WE USE GRAVITY FOR THE MANUFACTURING PROCESS. CAROLINE: SO MANY QUESTIONS.
HOW DO YOU GET THEM BACK? WILL: WE BUILD REENTRY VEHICLES. WE ARE THE THIRD COMPANY EVER TO BUILD ONE. SPACEX, BOEING AND LITTLE OLD VARDA, 103 PEOPLE. MACH 25. CAROLINE: WHEN WE WATCH THE REENTRY OF SPACEX, THEY LAND IN A SPECIFIC PLACE. IF YOU NEED A BROAD LANDMASS? WILL: EXACTLY. NEAR TERM WE HAVE AN UNGUARDED VEHICLE, WHICH MEANS THE AREA WE NEED IS LARGER. WE WANT TO BRING THOSE
DISPERSION AREAS CLOSER, TO EVENTUALLY GET TO A FOOTBALL FIELD SIZE. ED: VERY EXCITING AND NICE. CAROLINE: [LAUGHTER] ED: IT'S PROBABLY DIFFICULT WHAT YOU'RE TRYING TO DO. EXPLAIN THE COMPLEXITY. THE REENTRY VEHICLE, GETTING IT INTO THIS AREA, I THINK YOU ARE TRYING TO LAND IN AN AREA THE SIZE OF MARYLAND? WILL: A LITTLE SMALLER. IT'S RELATIVELY SIMPLE. IT'S NOT TRIVIAL. REENTERING EARTH ATMOSPHERE HAS BEEN DONE BEFORE. WE ARE DOING IT IN A NEW WAY
FOR THIS SPECIFIC USE CASE. IT'S TECH WE'VE DEVELOPED OVER THE LAST FEW YEARS. CAROLINE: WHERE ARE YOU MANAGING TO LAND? AMERICA? THE SIZE THAT YOU NEED TO PUT THE REENTRY? A BROAD? WILL: OUR FIRST ONE EARLIER THIS YEAR OCCURRED IN UTAH. THE NEXT ONE IS OCCURRING IN AUSTRALIA. WE ARE LOOKING AT NEW MEXICO. REENTRY WILL BECOME AS COMMON AS LAUNCH. WE ARE LAYING THE INFRASTRUCTURE AND BUILDING SYSTEMS FOR THAT. ED:
THE CAPSULE IS OVER MY RIGHT SHOULDER. THE RELATIONSHIP WITH ROCKET LAB. LAUNCH PROVIDER. THE MAJORITY OF REVENUE COMES FROM OTHER SERVICES.
CAN YOU EXPLAIN THE WORK YOU DO WITH THEM? WILL: THERE ARE APPLICATIONS. ONCE YOU GET TO SPACE. THAT'S OPENING THE ICEBERG OF WHAT YOU CAN DO. YOU CAN SEE THIS ECOSYSTEM DEVELOPING. YOU GET EXPONENTIAL GROWTH RIGHT NOW. EASIER ACCESS TO SPACE MEANS MORE DEMAND FOR SPACE.
THAT'S THE B, VARDA IS ONLY POSSIBLE NOW BECAUSE ACCESS TO SPACE IS ONLY CHEAPER AND EASIER. WE ARE DEMANDING MORE ACCESS. YOU CAN SEE THE ECOSYSTEM COME TOGETHER TO MAKE THESE PHARMACEUTICALS IN ORBIT.
SPACEX IS OUR LAUNCH PROVIDER, ROCKET LAB ALLOWS US TO DO COMMS. VARDA IS THE REENTRY VEHICLE THAT HAS THE MANUFACTURING EQUIPMENT INSIDE AND THEN WE DO THE REENTRY OF THE VEHICLE. IT IS A TEAM SPORT. CAROLINE: THAT DEPENDS ON REGULATION APPROVAL FOR COMPANIES LIKE SPACEX. IS THAT AN ISSUE? WILL: ANY TIME YOU ARE DOING SOMETHING THAT HAS NEVER BEEN DONE BEFORE, OF COURSE WE NEED TO PUSH REGULATIONS ALONG THE WAY. REGULATORS ARE NOT THE TIP OF THE ICEBERG FROM A TECH PERSPECTIVE.
AS THE INDUSTRY MATURES, SO WILL REGULATION. I WROTE AN OP-ED LAST WEEK ABOUT SPECIFIC STANDARDS WE COULD PUT IN THE FAA REVIEW PROCESS TO MAKE IT EASIER, WITHOUT REDUCING SAFETY, FOR ANALYSTS TO CHECK WORK. CAROLINE: GREAT TO HAVE TIME WITH YOU. CAN'T BELIEVE IT. THAT DOES IT. ED: IT FLEW BY. CAROLINE: WHAT NUMB A SHOW -- WHAT AN AMAZING SHOW TO BE HERE AT ROCKET LAB. ED: FIND THE PODCAST, PRIMED FOR
LIFT OFF. CAROLINE: WITH ALL THE PUNS. ED: A SPECIAL EDITION IN SPACE AND DEFENSE OF BLOOMBERG TECHNOLOGY.
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