6 ms·

It's hilarious that Anduril is proposing "more affordable" defense gear. They are a prime wrapped in VC funding, and like most defense contractors, they are eg

It's hilarious that Anduril is proposing "more affordable" defense gear. They are a prime wrapped in VC funding, and like most defense contractors, they are egregiously overpriced compared to the cost of materials. I can see them capturing US DOD budgets, but predict that much more cost effective competitors emerge internationally.

inamberclad 3y ago
The DoD will never go overseas for their most important equipment, that's what these primes are based on.
- bluGill 3y ago
  The DoD often goes overseas. Most navy ships are built in Italy (the big ones are built in the US, but most are smaller). Even when things are built internally, the DoD often looks to various allies for critical parts.
  - mlindner 3y ago
    The US DoD is not buying any naval ships from Italy. In fact I'm not aware of a single ship in the US Navy that was built outside of the United States.
    - defrost 3y ago
      Splitting the difference to reach the true situation: * The US Navy contracts for shipbuilding outside of the USofA, and * The foreign company builds for the US Navy take place at shipyards within the USofA. eg: “Austal’s Alabama-based shipyard is currently contracted on 11 different vessel programs for the US Navy and Coast Guard, and it is a source of pride seeing this vessel visiting our home. Plus, its Australian and historical heritage makes it all the more special.” * https://www.austal.com/news/arrival-austal-built-us-naval-vessel-uss-canberra-sydney-harbour https://www.austal.com/news/arrival-austal-built-us-naval-ve... The U.S. Navy said on Thursday it awarded a contract worth more than $5.5 billion to Italy's Fincantieri to build its newest class of warships, known as frigates. The contract is for detailed design and construction of the lead ship, with an option to buy nine more. If the navy exercised all options on the contract, delivery of the 10th ship would occur in the mid-2030s. The ship will be built at Fincantieri's Marinette Marine shipyard in Marinette, Wisconsin. * https://www.reuters.com/article/us-usa-navy-frigate-idINKBN22C3UB https://www.reuters.com/article/us-usa-navy-frigate-idINKBN2...
      - mlindner 3y ago
        Yep exactly. The companies building the ships are often US companies that were bought and then build the ships in the US.
        defrost 3y ago
        ?? The two examples given are an Italian company and an Australian company that are operating from US shipyards while remaining non US owned companies. They do operate via US registered wholly owned subsidiaries which is a matter of bookkeeping. In both instances the US Navy has sourced knowledge and skills from non US companies and paid them to provide service via shipyards on US soil .. with oversight from existing established home soil operations eg: Austral Marine Division in Australia.
        mlindner 3y ago
        The "Italian" company is a former American company that was bought up by the Italian company, the same is true of the "Australian" company.
    - jstarfish 3y ago
      Heh...I know of one particular drydock that was built in China.
GoRudy 3y ago
If they don't use cost plus pricing it would probably be a win compared to the entrenched defense contractors who are using cost plus pricing.
alsodumb 3y ago
I mean it's not like it's saas where you can expect cheaper alternatives to emerge from anywhere in the world to capture the market. Building tech for DoD takes a lot of things (i) access to ITAR restricted tech, (ii) access to capital, (iii) and DoD actually willing to work with you, where being a domestic player helps. There is nothing hilarious about Anduril claiming to be more affordable gear when it's actually much cheaper than the current players that supply DoD.
brookst 3y ago
“Cost of materials” is a terrible basis for pricing and for evaluating value. The ultimate gaming PC has maybe $20 worth of sand, plastic, and metal. I’m not defending defense spending or contractors, just saying that a criticism of their pricing should be based on value received, not materials.
beambot 3y ago
"Cost of materials" is small relative to the R&D costs of cutting-edge solutions with military-grade operating parameters...
- Arrath 3y ago
  And then requisite QC processes during serial manufacturing to ensure that the system will stand up to storage in some bunker for decades before being shipped across the world, abused by late teenaged soldiers as they hump it around some forlorn battlefield and, finally, maybe, used in anger.
vt85 3y ago
[dead]
indymike 3y ago
I'm not sure this is "more affordable" in total, it's just more affordable per projectile. It's a lot like a 5" gun on a destroyer. If you ignore the cost of the ship, it's about $1,200 per shot. A bargain compared to a Tomahawk or SM3.
baybal2 3y ago
[dead]
nostrademons 3y ago
The issue with all peacetime weapon systems is that they necessarily have to work within the peacetime procurement system. They become optimized for capturing contracts, not capturing battlefields. Anything that's actually optimized for capturing the battlefield, in the absence of a real battlefield to capture, fails to win the contract and languishes in some bankrupt startup. Usually the way wars go is that the first 2 years are spent in utter chaos as the belligerents realize that all their plans don't survive contact with the enemy, and then you get rapid technological development, usually from outside firms that were initially part of non-defense industries, once the belligerents actually get serious about winning the war.
- bluGill 3y ago
  The US has been at war for a long time though. Iraq, Afghanistan, Somali pirates... Ukraine and Israel are some of the proxy wars we have a hand in (how much is up for debate). While what you say is true, weapons do get tested in the field and that wins.
  - nostrademons 3y ago
    Against adversaries whose industrial base and social structures are 200 years behind us. That gives us weapon systems that are adapted to fighting adversaries whose industrial base and social structures are 200 years behind us. We've been very lucky (in a sense) that ambitious leaders who actually can get technologically-savvy workers to follow them generally prefer to work within the American system and fight over ad clicks, purchases, and management fees rather than physically making war. I'm not all that confident that the U.S. military would win vs. say SpaceX, Amazon, or Google. Moot point as long as it's more profitable to sell things than take things, but we would be very screwed if we fought an adversary with peer-level technology, population, and manufacturing base.
    - baybal2 3y ago
      [dead]
  - 3y ago
mlindner 3y ago
> I can see them capturing US DOD budgets, but predict that much more cost effective competitors emerge internationally. The selling point of Anduril according to one of its founders has always been "Make billions of dollars while saving the US government tens of billions of dollars." I don't think people really understand how much money is thrown around willy-nilly within the Department of Defense. Anduril's offering to sell drones here with individual purchase prices in the $100k-$500k range here. Compared to the alternatives used for this role it's 1-2 orders of magnitude cheaper.
- notyofriend 3y ago
  Are we really going to be 500k drones to shoot down 10k ones. Seems wasteful
  - mlindner 3y ago
    They're not $500k. And currently it's $4M missiles shooting down $10k ones, and you need to often shoot several of them to ensure that you down the target.
    - notyofriend 3y ago
      I guess it’s ok if the gdp difference between the 2 warring countries is at least at the same order of magnitude. Actually dollar numbers probably don’t matter as much as dollar/unit gdp
brindlejim 3y ago
To the folks who want to cut Anduril slack, let me just say that these cost 5-6x a Shahed. In war, like in chess, if you manage to trade crappy little pieces for rare big pieces, you win. And if you decide that your strategy is to trade expensive big pieces for crappy little ones, you usually lose. The US has avoided losing by fighting small countries against which it has an overwhelming advantage, which keeps its hot wars short. If it were to fight a long hot war against a near peer (hello, Taiwan Straits), its dumb decisions about bloatware would quickly catch up to it. Setting aside the budgetary considerations, quality is its own quality, as Stalin never really said. That is, if you can manufacture tens of thousands of payload-bearing model airplanes for less than the price of a Tesla, then you can DDOS any air defense system in the world. Its million-dollar missiles will soon be exhausted, and your radio-controlled offensive will have won.

inamberclad 3y ago

The DoD will never go overseas for their most important equipment, that's what these primes are based on.

bluGill 3y ago
The DoD often goes overseas. Most navy ships are built in Italy (the big ones are built in the US, but most are smaller). Even when things are built internally, the DoD often looks to various allies for critical parts.
- mlindner 3y ago
  The US DoD is not buying any naval ships from Italy. In fact I'm not aware of a single ship in the US Navy that was built outside of the United States.
  - defrost 3y ago
    Splitting the difference to reach the true situation: * The US Navy contracts for shipbuilding outside of the USofA, and * The foreign company builds for the US Navy take place at shipyards within the USofA. eg: “Austal’s Alabama-based shipyard is currently contracted on 11 different vessel programs for the US Navy and Coast Guard, and it is a source of pride seeing this vessel visiting our home. Plus, its Australian and historical heritage makes it all the more special.” * https://www.austal.com/news/arrival-austal-built-us-naval-vessel-uss-canberra-sydney-harbour https://www.austal.com/news/arrival-austal-built-us-naval-ve... The U.S. Navy said on Thursday it awarded a contract worth more than $5.5 billion to Italy's Fincantieri to build its newest class of warships, known as frigates. The contract is for detailed design and construction of the lead ship, with an option to buy nine more. If the navy exercised all options on the contract, delivery of the 10th ship would occur in the mid-2030s. The ship will be built at Fincantieri's Marinette Marine shipyard in Marinette, Wisconsin. * https://www.reuters.com/article/us-usa-navy-frigate-idINKBN22C3UB https://www.reuters.com/article/us-usa-navy-frigate-idINKBN2...
    - mlindner 3y ago
      Yep exactly. The companies building the ships are often US companies that were bought and then build the ships in the US.
      - defrost 3y ago
        ?? The two examples given are an Italian company and an Australian company that are operating from US shipyards while remaining non US owned companies. They do operate via US registered wholly owned subsidiaries which is a matter of bookkeeping. In both instances the US Navy has sourced knowledge and skills from non US companies and paid them to provide service via shipyards on US soil .. with oversight from existing established home soil operations eg: Austral Marine Division in Australia.
        mlindner 3y ago
        The "Italian" company is a former American company that was bought up by the Italian company, the same is true of the "Australian" company.
  - jstarfish 3y ago
    Heh...I know of one particular drydock that was built in China.

GoRudy 3y ago

If they don't use cost plus pricing it would probably be a win compared to the entrenched defense contractors who are using cost plus pricing.

alsodumb 3y ago

I mean it's not like it's saas where you can expect cheaper alternatives to emerge from anywhere in the world to capture the market. Building tech for DoD takes a lot of things (i) access to ITAR restricted tech, (ii) access to capital, (iii) and DoD actually willing to work with you, where being a domestic player helps. There is nothing hilarious about Anduril claiming to be more affordable gear when it's actually much cheaper than the current players that supply DoD.

brookst 3y ago

“Cost of materials” is a terrible basis for pricing and for evaluating value. The ultimate gaming PC has maybe $20 worth of sand, plastic, and metal. I’m not defending defense spending or contractors, just saying that a criticism of their pricing should be based on value received, not materials.

beambot 3y ago

"Cost of materials" is small relative to the R&D costs of cutting-edge solutions with military-grade operating parameters...

Arrath 3y ago
And then requisite QC processes during serial manufacturing to ensure that the system will stand up to storage in some bunker for decades before being shipped across the world, abused by late teenaged soldiers as they hump it around some forlorn battlefield and, finally, maybe, used in anger.

vt85 3y ago

[dead]

indymike 3y ago

I'm not sure this is "more affordable" in total, it's just more affordable per projectile. It's a lot like a 5" gun on a destroyer. If you ignore the cost of the ship, it's about $1,200 per shot. A bargain compared to a Tomahawk or SM3.

baybal2 3y ago

[dead]

nostrademons 3y ago

The issue with all peacetime weapon systems is that they necessarily have to work within the peacetime procurement system. They become optimized for capturing contracts, not capturing battlefields. Anything that's actually optimized for capturing the battlefield, in the absence of a real battlefield to capture, fails to win the contract and languishes in some bankrupt startup. Usually the way wars go is that the first 2 years are spent in utter chaos as the belligerents realize that all their plans don't survive contact with the enemy, and then you get rapid technological development, usually from outside firms that were initially part of non-defense industries, once the belligerents actually get serious about winning the war.

bluGill 3y ago
The US has been at war for a long time though. Iraq, Afghanistan, Somali pirates... Ukraine and Israel are some of the proxy wars we have a hand in (how much is up for debate). While what you say is true, weapons do get tested in the field and that wins.
- nostrademons 3y ago
  Against adversaries whose industrial base and social structures are 200 years behind us. That gives us weapon systems that are adapted to fighting adversaries whose industrial base and social structures are 200 years behind us. We've been very lucky (in a sense) that ambitious leaders who actually can get technologically-savvy workers to follow them generally prefer to work within the American system and fight over ad clicks, purchases, and management fees rather than physically making war. I'm not all that confident that the U.S. military would win vs. say SpaceX, Amazon, or Google. Moot point as long as it's more profitable to sell things than take things, but we would be very screwed if we fought an adversary with peer-level technology, population, and manufacturing base.
  - baybal2 3y ago
    [dead]
- 3y ago

mlindner 3y ago

> I can see them capturing US DOD budgets, but predict that much more cost effective competitors emerge internationally. The selling point of Anduril according to one of its founders has always been "Make billions of dollars while saving the US government tens of billions of dollars." I don't think people really understand how much money is thrown around willy-nilly within the Department of Defense. Anduril's offering to sell drones here with individual purchase prices in the $100k-$500k range here. Compared to the alternatives used for this role it's 1-2 orders of magnitude cheaper.

notyofriend 3y ago
Are we really going to be 500k drones to shoot down 10k ones. Seems wasteful
- mlindner 3y ago
  They're not $500k. And currently it's $4M missiles shooting down $10k ones, and you need to often shoot several of them to ensure that you down the target.
  - notyofriend 3y ago
    I guess it’s ok if the gdp difference between the 2 warring countries is at least at the same order of magnitude. Actually dollar numbers probably don’t matter as much as dollar/unit gdp

brindlejim 3y ago

To the folks who want to cut Anduril slack, let me just say that these cost 5-6x a Shahed. In war, like in chess, if you manage to trade crappy little pieces for rare big pieces, you win. And if you decide that your strategy is to trade expensive big pieces for crappy little ones, you usually lose. The US has avoided losing by fighting small countries against which it has an overwhelming advantage, which keeps its hot wars short. If it were to fight a long hot war against a near peer (hello, Taiwan Straits), its dumb decisions about bloatware would quickly catch up to it. Setting aside the budgetary considerations, quality is its own quality, as Stalin never really said. That is, if you can manufacture tens of thousands of payload-bearing model airplanes for less than the price of a Tesla, then you can DDOS any air defense system in the world. Its million-dollar missiles will soon be exhausted, and your radio-controlled offensive will have won.