The Startup Industrial Base: Building for the Next 250 — Washington, D.C.

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Good morning, everyone. Thanks for being here. My name is Garry Tan. I'm president and CEO of Y Combinator. It's great to have founders, government, industry all in one room. This morning when I went through YC as a founder in 2008, I was building a blogging company. Software was the frontier, and the big challenge was getting it into as many people's hands as possible. In the 18 years since, software has left the screen. It can see, it can navigate, it can fly, it can run entire factories. We've got computer vision, autonomy, batteries, chips, advanced manufacturing, and most importantly, the engineers who know how to make it all work.

Most of it was built for commercial reasons, but all of it can be pointed at defense. YC funds startups at the very beginning, often when it's just a couple of founders and an idea. We've backed more than 5,000 companies since the beginning, including Airbnb, Stripe, DoorDash, OpenAI, and Coinbase. So, if you're wondering why I'm in Washington talking about interceptors and munitions, the honest answer is we followed the founders and what they want to build. Over the last few years, more and more engineers have come to us convinced that keeping America safe is a problem worth spending their lives on. And we agree. They want to build hardware, and they want to build it here in America. They want to get it into the hands of people who need it. I want to be specific about who those people are. Right now, there are Americans deployed on ships, on bases, at the edge of a jammed network, and they're all depending on whatever equipment they were handed. They deserve the best this country can build, not just whatever happened to be on contract.

Some of the founders building that next generation of equipment are here with us today. They're working on hard problems that give the US a real strategic advantage with systems that don't cost a fortune per shot, per mission, or per unit. One team is building navigation systems that let drones operate when GPS gets jammed. Another is building interceptors that can take down cheap drones without costing more than the drone. Others are using rockets to deliver cargo to contested areas or building aircraft that fly in the stratosphere and stay up there for weeks. Then there's the supply chain. You can't have an independent defense industrial base if you rely on your adversary for critical parts. Which is why one company here is making high-performance magnets in America. Another is securing the firmware inside the vehicles and aircraft we operate. To the founders, you're asking people to rely on your work in situations where failure can cost lives. Reliability, security, manufacturing, support — all of it matters, and it matters deeply. A great demo isn't the finish line. It's the beginning of the obligation.

Institutions have an obligation to keep the bar high, but to make it possible to clear, so that when someone builds a product that works, there's a path to actually getting it used. That's why we're all here. And it's what we mean by the startup industrial base. America should be able to draw on its entire capacity to invent and build. The industrial base should be open to a team of 20 people with a better answer. Small teams have a particular advantage. They can learn something on Monday and change what they're building on Tuesday. The person who heard the customer's problem can walk across the room to the person who can fix it. That matters when the threat keeps changing. Drones get jammed. Comms go down. Adversaries adapt. The people using our technology need to adapt too. So here's the question I want us to work on today: What would it take for a 20-person company to become a dependable supplier to the American military? The big defense companies play an essential role. So do the manufacturers, suppliers, and workers who've spent decades learning how to build things people trust with their lives. What we need is more ways for new companies to join them — more competition, more suppliers, more manufacturing capacity, more opportunities for a good product to earn a real customer. So let's talk about faster rewards, clearer requirements, and fixed-price contracts where they make sense. Let's give founders a way to prove their technology under tough conditions and a credible path to orders when they do. My ask today is practical. If you're a founder, tell the people in this room exactly what's in your way and be specific. What test do you need? What kind of feedback from customers? What contract? What would let you deliver? If you're in government or you're a buyer, bring a real problem. Tell these founders what success looks like and what it would take for you to feel confident enough to buy. And if you're at an established defense company, take a look around. A team you meet today could end up as a supplier or a partner who helps you solve a problem you've been stuck on for years. We have people here who are willing to devote their lives to building for this country. Let's give them a fair chance to deliver. Thank you all for being here. Let's get to work.

Hello. Good to see everyone today. My name is Gaurav. I'm the co-founder of a company called Solugen. We're a Winter 2017 YC batch, and we were a strange fit. We're this chemical company. We figured out this new technology to miniaturize chemical plants. And we went through YC, which was effectively a software incubator at the time. But what we realized was the same exact principles that you could apply in software could be applied to the chemicals industry, and you could move faster than anyone's been able to do it. So today I'm going to tell you about a little work that we've been doing on the munition supply chain with our chemistry and what we have to offer. If you guys want to start the video.

So in 2026, every missile, every munition, every platform is dependent on one plant in Tennessee called Holston. It broke ground in 1942. The RDX pilot plant went up in 13 days, which is insane. Composition B from phone call to first shipment in three months. And in 1945, we had 1.5 million pounds per day. In 2020, 9 million pounds. So what we made in a year, we now take too long to make. So if you look at 1942, our munitions capacity was 300 million pounds for obvious reasons. 1976, 2016, everything kind of went sideways. We had to put in $1.8 billion to Tennessee. But even after that, the maximum volume that we got out of it was 30 million. Now if you compare that to where China and Russia are, we're probably two orders of magnitude off, which is a problem. Even with all the announced expansions, everything like that, how do we do this safer? How do we do this faster? And how do we do this better? That's really the fundamental question we had. And we discovered four problems in the supply chain. One, we talked about there's just not enough munitions. Two is these unmanned platforms are getting smaller, so you need higher energy density energetics. Stockpiles are — sorry, this is going too fast, but that's okay — the stockpiles are visible from space. So we solved all four. This is all to say that we solved this problem. We've put in $100 million of private capital to solve this problem, and the way we did it was by studying how it works today. Right now, a chemical plant is a regulatory nightmare, an energetics plant is a regulatory nightmare. Put those two together, and you've got the worst combination possible. So what we ended up doing was disaggregating the two. We took the chemical plant, put it centrally, and we created distributed production units for payloads. So that way you're not taking the risk of an energetics plant and a chemical plant at the same time, and it allows you to build much faster. We got permitted in three months because of this technology. Yes, thank you. So we've actually executed on this across the United States. Our home base is in Houston, Texas. But we've got two units in Houston and one unit we're building in Louisiana. In the future we plan on having multiple sites, but right now this is the footprint that we've got. So the precursor is called Terraforge. It's the energetics precursor at scale. This is the plant that we've built. It does roughly 240,000 drones' worth of precursor explosive. And then the Nitroforge is the distributed payload production part of it, and that is roughly 48,000 drones per unit. So one Terraforge feeds five Nitroforges fundamentally. And we actually built a Nitroforge technology in six months. So on top of that, how do we make a better energetic? So Comp B is what our grandparents used to use. We need to make something much better. And what we did was we actually designed these plants to produce higher-density energetics that allow your blast radius to increase.

So, this isn't theory. We've actually done this. We partnered up with the premier warhead designer, Kraken Kinetics. And we actually built a fully CONUS advanced energetics supply chain in 247 days for $100 million. And so, this is the actual buildout that we did to give you some context. This would take a traditional chemical company five years to build up. And so, we were able to do it much, much faster because of the way we operate.

This is the Nitroforge unit that's actually getting shipped to our arena testing site. So here the Nitroforge actually makes the payload that gets incorporated into the drone. So with Kraken Kinetics, we actually said, 'Hey, these drones, they're getting smaller, and you need really more advanced energetics to keep up with that type of warfare.' And so fundamentally we're going to need dozens of Terraforges and probably 100 to 150 Nitroforges. So the criticality is we can't do this by ourselves. So we actually launched a company with Kraken Kinetics called Odin Energetics. Odin Energetics is focused solely on creating payloads that we can scale across multiple drones. So if you look, this is basically where the Nitroforge technology is born out of.

Everything's made in Houston. We deploy it with international partners everywhere in the world. We do believe that with the advanced energetic, you actually get a better kill per cost per kill. Fundamentally, what we need to succeed is — Emil, if you're listening, I just need someone, one lead on the R&D side, just one lead that can help us over the next 30 days to do a sprint. We're going to show you guys that we've solved this problem, and now we need to scale it, and I can't do that by myself. So thank you.

Good morning. I'm Luther Lowe, the head of public policy for Y Combinator. So excited to see everybody here this morning. I'm going to be your part-time MC, and I'm so excited to welcome to the stage Emil Michael and Jason Miller. Emil Michael is the Under Secretary of War for Research and Engineering at the department and the department's chief technology officer, leading its research, development, and prototyping efforts. Before returning to government, he served as Uber's chief business officer and held leadership roles at Tellme Networks and D-Wave. He previously served as a White House fellow and special assistant to the Secretary of Defense. Jason Miller is a longtime senior adviser to President Donald Trump and a veteran political strategist and communications adviser. He's held senior roles across President Trump's presidential campaigns and transition efforts, helping shape political strategy and public messaging. Please welcome Under Secretary Emil Michael in conversation with Jason Miller.

So, it's great to be here this morning with one of the rising stars in the President Trump's administration, Emil Michael, Under Secretary for Research and Engineering. So, I want to dive right into it. Yesterday we were all watching on TV, whether it be Fox or CNBC, with all of the tech leaders and the president. The president made it very clear where he is on superintelligence with data centers. How does something like yesterday then immediately impact what you're doing at the Department of War starting today?

And so, if you're communicating with the founders that are here today, how will what happened yesterday then impact them as they're in these early stages of their company's lifespan?

So, a moment ago you talked about needing to win. Of course, when we talk about needing to win, we're talking about beating China in the SI race. Make sure it's not — I said SI, so don't get me in trouble here. But we have to go and win this. And so much of what's critical for the companies that are here today is how do we go and win in their respective fields, whatever companies they're doing. You're one of the few people that I know who've actually gone into China and won. As the chief business officer for Uber, went in there with approximately, I believe, was it roughly a $2 billion investment. Received a lot of criticism, and I believe you guys exited with a $7 billion valuation roughly. Okay, I might be rounding right about there. What was it that you learned going in there that now applies directly to what you're doing at the Department of War about going head-to-head and competing with the Chinese?

So I want to stay on that point for a moment. As you look out here at all these young faces and people are starting these companies, what is it that the founders in this room can do that their contemporaries in China cannot right now?

So I want to stay on that with regard to efficiency, because one of your reputations is someone as a chief business officer at Uber and a lot of time in startup-type companies is efficiency. Now that you're inside the building at the Department of War, inside the Pentagon, what is that gap between what the Pentagon and the supply chain before you came in was producing versus what we actually needed?

So I want to stay on that point with regard to efficiency, because you made it very clear that we have to be efficient. We have to get the cost down. When you look at something such as the cost per kill, when you talk about shooting down a rocket that's coming from Iran, how much of that dollars and cents versus the sheer scale debate comes up as you're trying to do both at the same time?

And so if you're one of these founders and you have a startup, what types of things should the founders be saying no to as they're looking through the life cycle of the business and where they're growing to? Where do you look and say here are obvious inefficiencies or things that people need to be — and again, look, it could be founders, it could be the primes who come in — where do you look and say this is wasteful. This is not going to work for the long haul.

So on that point, we have Drone Dominance, a number of the other programs you've helped to launch. Some of the folks who are in this room though won't naturally fit into a certain category. So what was your advice then to these founders as they're trying to decide: am I trying to solve a current need, or is this a great idea that I think will go and transform things? Where's that balance?

So you talk about lobbyists, for example, in DC. We have some smart people in this room, people can figure out how to, you know, in their spare time figure out how to get you to Mars and back in the same afternoon. Just geniuses. But then I get the question all the time: but I don't understand this budget cycle and dealing with — you have the Pentagon and then you have the OMB and then you have Capitol Hill and you have these influencers and you have the media and all these things going on. And you have a lot of young companies who are saying, 'Do I need to hire somebody? Do I need to — if we're so thin on dollars, we're trying to scale and innovate at the same time.' At what point does a company look and say they probably should hire someone in DC to help them?

So one of the things that you said when you came in is that you want to have a series of fast yeses and fast nos. So tell the folks here — don't have to necessarily name companies — but what types of things have been presented to you where this has been, whether it be a demonstration, whether it be a pitch, this was a fast yes? And then what types of things have been put in front of you where you're just like, this is a fast no, Trevor, how did this person even get in front of me? Get him out of here right now.

So on that point, I want to stick with this for a moment because if you're — I'm sure we have a lot of people here who make drones, are involved in the counter-drone space. If somebody's not already in the Drone Dominance program, how do you get in front of that? How do you enter that?

So you posted something on social media this summer. There's a picture on — maybe it's on Instagram — but you were only in America. Of course, you're someone who was born in Egypt, grew up in New Rochelle, someone who went to Harvard, went to Stanford, and just very, very successful. And America is really the only place in the world where you can do this. I was at dinner with a number of the founders on Monday evening and realized that of the — I think I was with four of the founders — that I was the only one who was born in the US. Of course, I haven't founded anything, and it was remarkable that everybody wants to come to the US and wants to do business here and start a company. What are the things that these founders who are not from the US, and again regardless of industry, that they need to be thinking about as they're setting up a company in the US or they're redomiciling to the US, where you've seen folks find pitfalls or other traps, things they need to be looking out for to make sure they can succeed as an American company?

I certainly haven't.

So, one of the things that you said you want to have — before we open up to a couple of questions — you said you want to have five new primes pop up before President Trump's current term is finished up. If you're a founder and you're here today and you're doing something with the Department of War, you want to be doing something with the Department of War, and you want to be that prime. What is it that a founder should take away from here today to go back and tell their team, to tell their investors, say, 'If we want to be the next prime, this is what we have to do'?

You guys heard it here. Space is hot. The secretary likes space. Luther, do you want to open up for a couple of questions?

I think we got time for about two questions. Let's maybe in the back. I'm going to run it back to you.

Hi, I'm Mike Stone from Reuters. Thanks for coming in today. Great meeting yesterday. Question.

Yeah, of course I'm a reporter. Anybody else want to ask a question? I'll do it for you.

It's okay. We're going to do it now. So, sir, we talked about Drone Dominance. All the drone manufacturers that I speak to, they have a problem with brushless motors. The winding machine costs $300,000. In order to get the cost per brushless motor down to whatever China can give us — 50 bucks — they need to do way more volume. Should the United States government get into the brushless motor business? Should you be a merchant supplier?

Luther, one more.

Yes. Under Secretary Michael, Special Adviser Miller, my name is Yuki. I'm a retired Ukrainian diplomat that spent some time in Silicon Valley working with Ukrainian tech, Ukrainian defense companies. So I have some experience there. From that perspective, I would like to ask you: how do Ukrainian companies and the Ukrainian defense ecosystem in general become a part of the startup industrial base in the US? We know about the Drone Dominance program. What else is out there for them? Thank you.

All right. Well, I know we're at our time, so join me in thanking Secretary Michael for coming to work with us here. Thank you.

Okay, good morning. I'm Ivan, CEO of Splash Industries, and at Splash, we develop low-cost USVs for contested logistics and maritime domain awareness purposes. Now, I know what you're probably thinking. There are a thousand other USV companies out there. What separates us from the rest? Ultimately, it comes down to our highly vertically integrated approach. So we develop all of the autonomy stack in-house. That's from the camera systems to the electric actuators to every single circuit board on the boat. And of course, the software, the most important part, that is all developed by us. What does that actually mean in practice? What it means is that we're able to deliver a vessel that is 5 to 10 times cheaper than current similarly capable solutions. Our goal from the very beginning was not to just build another million-dollar boat, but really to build something that can provide affordable mass to the fight. They are a lot faster to build. So it takes one of our technicians 8 hours to build one of our Typhoon USVs, the one shown here. And they are incredibly easy to use. There really is no learning curve to our vessels. We can train people in a matter of hours. Now, I want to be careful and make sure that this does not sound like a sales pitch, because it definitely shouldn't. The Navy, the US Navy, already owns and operates a number of our vessels. The Army recently placed their first orders as well. So instead of just listing stats, what I thought we would do here is that I would go through some of the cool missions that the Navy has gotten us to do over the summer. So we've done probably 12 exercises this year so far, and I've gone through and selected three of the ones that really stood out to me the most. Really, what I want to do here is to show rather than tell. So for the first one, we're going to be hopping over to Hawaii, where we were tasked to deliver cargo to a number of warships off the coast of Honolulu. Now, traditionally, this would be done using helicopters, larger ships, but in any case, it would be manned assets. You would have people on boats or helicopters, of course, very expensive, and in case of conflict, you're actually putting warfighters at risk, which is not great. Our goal here was to demonstrate that we are able to deliver smaller components quickly to these warships. And you've probably seen this video at some point. This is us approaching LHD-2, doing an autonomous beach landing. And it's really important to note that this was not remote controlled. This was all controlled from a different location using autonomy. So no one was holding a remote controller next to it. That's not really the point. That is not scalable. So during this exercise, we proved that it is possible to autonomously resupply a warship. That's the first time that a USV has ever done a fully autonomous resupply of a warship while it was on the move. So it wasn't stationary. They were transiting at around 10 knots. So after we completed that, the Navy said, 'Cool, let's do that, but 20 times further away.' So on the following day at RIMPAC, we went out on a grueling 170-nautical-mile mission to deliver cargo to CVN-71. So that was in Sea State 5, mostly at night. You can imagine that out there in Hawaii, 170 miles out, you don't get many opportunities to take photos. So really, we got some good onboard footage, but that mission once again was a success and really showed the reliability of our vessels. This is what our C2 looks like. Just a quick sneak peek in there. The operator can see all of the vessel stats, the live feeds, and then be able to plot out missions on the map. Now, so it showed just how reliable our vessels are. A lot of our competitors, when they saw that mission brief, they thought we were crazy to even attempt it, because usually USVs a lot of time are used with chase boats. This was without any chase boat. If anything would have failed on our USVs at that time, we would have never seen them again. So for the next one, we'll hop over to Kwajalein, I guess. Quick show of hands. Who's been out to Kwaj?

Okay, we got one. We got one. Oh yeah, Max.

Yeah, so one thing that is important to note about Kwaj is that it is very, very far away. So getting any equipment out there and doing any sort of missions out there is hard, and that is where another important part of our USVs comes in. They are just about small enough for a single person to launch and deploy. And since they are using an internal combustion engine, we can dump that fuel and ship them in commercial aircraft. So quite literally, you can have an unboxing experience for your USVs. They're also lightweight enough to even hook up to a golf cart. We did get into trouble for that at Kwaj. So don't do that if you go to Kwaj with your USVs. But that all goes to show just how easy it is to deploy. You don't need docks, you don't need harbors. All you need is a beach and a dolly to move the vessel around. So what were we actually doing out in Kwaj? First, we were training local participants on using our USVs. These participants here, they have never used any remote control system in their life. So the fact that we were able to get them trained up in a matter of hours to successfully execute medical supply delivery missions, that really speaks volumes about how easy it is to use our USVs. You don't really need a PhD to operate them. So once we got the training out of the way, we embarked on a few other medical supply delivery missions across the atoll. So those were about 150 miles. The weather was varying here. We got some great weather, and you can see just how clear the water is. That's probably 60 feet of water, but you can see straight down to the bottom. And on the way back from — oh, actually, I'll not jump ahead here. That's what a beach landing looks like. So the vessel gets out on shore. An operator on the receiving end is able to unload the cargo, grab whatever medical supplies, cargo you have on there, and push it back in the water. So really, it's quite easy to use. And on the way back from one of those missions, we actually stumbled across a sunken World War II German cruiser that was used for nuclear testing. So that was just a cool thing that I thought I'd include. And those are just the rough mission tracks of what we did on that, both outside and inside of it. So that mission really showed just how easy it is to transport our vessels. Out of the 44 companies competing in this, we were the only USV company to complete all of those missions successfully. And of course, the low cost of the vessels also...

helps as they are going to be getting procured by RMI, ideally Royal Marshall Islands. So a million-dollar boat doesn't really cut it for using them in a medical supplies delivery use case. Now for the final one, I have to be a little bit careful. I have redacted pretty much everything I need to redact there. So this was during a force-on-force, a war game exercise with the Navy. But I have done a very nice graphical recreation here to kind of get across what we were able to do. Yes, my art career is just getting started. So in this mission, we were tasked with surveying and if possible destroying enemy assets at an island, here marked in red. Now there were a number of rivers connecting these assets to the main bay. But the enemy, being a smart enemy, blocked access to that channel. So what we were expected to do is go in the harbor, go in the bay, survey the enemy outpost, and then get out of there. That being said, we did not take no for an answer and tried to get in. So the way they blocked it off was using these thick steel cables, so normal boats aren't able to pass. If you pass with a normal boat over this, you're going to foul your props. But we don't have props. We have a water jet, which allows us to do the beach landings. So what we were able to do is, after a little bit of moving back and forth, get over that and get into that enemy outpost. Once we were in, things got easy. So our precise mission autonomy allows us to navigate at fairly high speeds in decently narrow channels. And when the channels got really narrow, and I mean like 15 ft narrow, I could jump across that and I'm not that athletic. So even when it got as narrow as 15 ft, our vessels were able to navigate in that river setting, which is pretty unique. They've never seen that before and definitely that was not an outcome that was expected from that exercise. Here is just a picture of what that looked like towards the very end. So you can see this part here that was 15 ft wide. Other USVs obviously couldn't get in there. And this was also not remote controlled. So we were sitting 30 m away. No one was remote controlling the boat because that would have been easy. It was all done using our autonomy. So that showed that we have a very unique river capability, an attributable price point, and the lack of exposed props gives you a pretty unique advantage in some of these use cases. Of course, your draft is a lot shallower. You're able to get in places where no one else is able to get in. Here I've only selected three of the cool missions. We've done quite a few. So I would be happy to talk to any of you about more of our exercises, what we've done, including towing a water skier behind our USVs. I think that's the world's first as well. So I'd be happy to talk to you about that. I'll be hanging around today. And if you want to reach out, that's my email as well. So thank you so much.

Hi, good morning. My name is Eric Bradom and I'm from Deep Knight, and it's my pleasure to talk with you this morning. Today I'm going to talk about a problem that we actually solve. Everything these days needs to see in the dark. Drones, unmanned vehicles, dismounted soldiers, not only the soldiers that are fighting, but the soldiers in reserve, the technicians and logistics support chains for them need night vision. Marine vehicles, there's a whole, even man-operated vehicles, everything needs to be able to see in the dark and it needs to be able to do it digitally. So the revolution that I'm going to be talking about today is AI-based night vision that runs on commercial imagers and commercial processors that gives you night vision surpassing the latest analog tubes. But again, it does it digitally at a very low cost. And you don't have to take my word for it either. I'm actually doing demos in a small room over here. So please stop by. So the problem in using CMOS sensors is that a lot of them are blinded by the dark. You know, when it gets dark outside and you want to take a picture, you hold your phone up, you try to take a picture and it says hold still and it counts down 5, 4, 3, 2, 1 and then you look at it and the picture's not even that good. Anyway, what we're talking about is the best level of night vision. 90 frames per second, 120 frames per second, multiple channels on a little tiny embedded processor. And that's the paradigm shift we're talking about today. So if you take a standard off-the-shelf CMOS imager, in most cases, the image on the left is what you're going to see at night. And this particular setting is 1 millilux, which means there's no moon in the sky, only stars, and it's hard to even see your hand in front of your face. There are some specialty CMOS imagers that the Army created with different companies. And if you use one of those, you can get a pretty good view, but still, it's not clean enough to be able to use downstream AI. It's not really clean enough to understand the surroundings, but as soon as you apply Deep Knight to it now, you can see the rocks that you're standing on. You can see the water's edge. You can see across the bay, the beach, the stars, and the sky. Completely different level of performance and context. Our AI is actually recovering true information. There's no hallucination. There's no guessing at what you see. We're basically using the AI to remove the noise that is actually generated by the sensor. So it's revealing the signal that's in the scene. So if you look at the raw output from a Deep Knight camera on the left, and again, this is a high-performance CMOS low-light camera that's available off the shelf. You can kind of see there's a fence in front of you, but you don't know if it's a defense installation or what may be ahead of you. And you can't really tell what you're walking on. But as soon as you flip on the Deep Knight solution, now you can see you're walking on pebbles. There's a sewer grading ahead, some obstacles. The fence is for a tennis court. There's people on the tennis court. And if you want to run downstream AI to do object classification, detection, tracking, you can do that now because the image is full HD and it's so clean. And again, this is no moon in the sky, only stars, and you have a tree canopy. So this is the darkest that it gets.

The Army's actually been testing our technology at Fort Belvoir in C5ISR, the night vision labs, and they maintain demonstrations of our technology if you're ever there and would like to see it. On the left you have a Gen 3 night vision tube. This is only 1,800 FOMO, but we've tested up, the Army has tested us up against the 2,376 FOMO tubes as well. And you can see how that compares to running Deep Knight again on a CMOS imager. So here you can see in full HD. You can actually read what's on the sign. You could do facial recognition if you needed to. And run all kinds of downstream AI. So it's exciting because it's an order of magnitude lower cost, higher resolution, digital, and you can run downstream AI and communicate the signal. It's also more cost effective than thermal. So a lot of drones, for example, will use thermal imagers. They're much lower resolution and much more expensive. So if you look at this is a 640p thermal imager on the left. And again you can see it very well, especially as an indication of where the target is. But when you turn on Deep Knight now, you're getting a full HD image. You can tell that the person is on grass. You can see there's a cat there. You can read what's on the sign because we can see the reflective bands. So again it's a shift in thinking and one of the things we're trying to do is help people understand that instead of using a thermal imager and struggling with the cost and export restrictions, you can use a CMOS imager and run Deep Knight on it. And in fact, we will be in production with the drone company in fourth quarter, this coming quarter, and early testing by one of the military programs shows that by using low light instead of thermal, they gain 20% better navigation and target accuracy while reducing cost. This is another image from a drone. On the left is the raw CMOS imager output and then on the right is what you get with Deep Knight. This is the worst case. This is a 1 millilux environment. And the bright lights on the ground don't wash everything out. They stay in place. And this just shows you what's possible. I'll also mention that the AI takes the movements of the drone and is able to counteract for motion blur. So that's why the image is so crisp. So we are currently pursuing our round B funding. We are working with customers in dismounted soldier applications. We're in the supply chain for multiple SBMC primes. We're doing drones, vehicle vision, counter-UAS, and much more. We have a lot of new features coming too. One of the new ones coming is color night vision. And we think that after people get used to color night vision, they won't want to go back to monochrome. It gives you so much more context of your environment, especially when you're trying to navigate a vehicle. So that's what's coming. We were just awarded an OTAA contract for the Dutch program to apply our processing to thermal cameras. So that's just getting started. And I mentioned that we'll be in production on a drone in fourth quarter. And at the bottom is just some of our customers that we work with. And I guess in terms of what we're looking for from the government, we are funding the development of a low-cost, super high-performance digital binocular that can be upgradable to color. It can be upgradable to add a thermal sensor. It has a long upgrade path, but a very low cost of entry so that night vision can be made available to all of the troops and the supporting troops. We're doing that on our own dime with the investor money and we're looking for potential customers. That'll prototype in the April time frame and then it'll go into testing and hope to find customers shortly thereafter. So with that, I'd like to say thank you and please come find me in the demo room across the hall here. Thank you.

Can my voice of God person encourage people to come out from the reception area for Secretary Duffy? I highly encourage everybody to check out the Deep Knight demo. They've got it set up in a private room over here. Please check it. It's very cool. So it's my pleasure to introduce the conversation between Y Combinator CEO and President Garry Tan and Sean Duffy. Sean Duffy is the 20th United States Secretary of Transportation leading the department responsible for America's aviation, highways, railroads, and other transportation systems. Before joining the administration, he represented Wisconsin's seventh congressional district in the United States House of Representatives and served as an Ashland County District Attorney. Please welcome Secretary Sean Duffy in conversation with Y Combinator President and CEO Garry Tan.

Hey everybody. Vibrant morning. Or not. I don't know. You guys need some coffee? Yeah. Everyone needs a little coffee. Secretary Duffy, thank you so much for joining us. Good to be with you. Let's dive right in. I mean, America's transportation system reflects decisions made really generations ago. If we get this decade right, what should Americans be able to do that they can't do today?

So first, at DOT we have, so I have pipelines, I have ports, I have rail, passenger and freight. I have roads and bridges. I have cars. I have airports, airplanes, airspace, commercial space launch. So NASA is one thing, but whether it's Blue or X or anybody else. So it's a really big department and there's been, I just think, a long time where it is kind of on autopilot and the world has changed a lot over the course of the last 5, 10, 20 years and so not a lot of innovation has been injected. There's a lot of conversation about how we change the way we do things but not a lot of implementation. And so one of the biggest hardest projects that we've undertaken is modernization of the airspace. And what I mean really what we're doing is we're going, we need new radar and there might be new ideas on radar. We were having a conversation, Gary and I were before, of like what does America accept as new technology and what won't they accept? Radar, digital radios. It's like really exciting. Voice switches, a surface awareness system so you can see the airfield from the tower. We have our air traffic controllers will pass an airplane off from one controller to the next by using literally a paper strip with information on the flight. We're going digital. We can actually swipe the information from one controller to the next and the cockpit can see it at the same time. We use like really old copper wires. We are going to go to fiber. It's really exciting fiber. We have an old telecom architecture. We need to build a new architecture. You guys see what happened on the east coast about 10 days ago. Whole east coast shut down. I had one of my lines cut. We have this redundant system that should be redundant but it all has a single point of failure which means it's not redundant and some of the lines don't always work and so one line gets cut, the redundant line doesn't work and so the east coast shuts down and all the while all these foreign leaders are trying to fly in for the UN week and so we are going to, we are fixing all that and I got 12.5 billion dollars from Congress to do this infrastructure build but how we manage the airspace case is, you'd be shocked at what we use. And so we have humans that sit in our command center and they'll have six different screens and they'll have a paper flight chart above them and they try to assess all this data and make decisions on weather and on flight trajectories. And we have really wonderful tools that are actually old tools now, old technology that we could use AI and predictive analytics to determine what weather's going to do. So instead of having a ground stop at an airport for say two and a half hours, it might only have to be 45 minutes, but the ground stop you get today is for, you know, two and a half hours. So if you did anyone fly to DCA here, we'll have, yes. So we'll have, there's one runway, right? We'll have four airplanes get to DCA at the same time, and only one airplane can land at a time on a runway, right? So we would say, well, if we could predict that two hours before they're all going to get there, we could speed up two of the airplanes and we could slow one of them down so all of them get there when the runway is open for them to land. Like, not complicated stuff, but we don't do any of this. So we're trying to, by the way, I'm getting, I got some crap for saying you're turning over air traffic control to AI. I'm like, this was a really bad, like, it's dumb AI, not smart AI. But moving from paper and pencil to something even just digital, just go digital. So the systems are so old, it's really hard to rebuild while you're keeping, airplanes have to fly. The system has to be safe and all the while you're changing spark plugs while your car is running. It's happening and I just, the pitch that I have is, and especially in aviation, I need answers. I need solutions. I need really good partners. Some of my partners, I'm shocked that not all of them, I've got a lot of really great partners but a lot of partners will have contracts with us for years, sometimes decades and they just don't produce. It's a payment that they get that they don't really produce for us. I need companies to be really innovative to think of what we do and think of what solutions they have for us and how we can use the best innovative tools to make our system work better, make it safer, but make it more efficient. I think everyone is sick of the cancellation and the delays. We can do a way better job. And especially when, by the way, you guys all probably know this, we have the busiest airspace in the world, bar none. Like we fly, there's way more commercial, way more general aviation in America compared to anywhere else. And so what the rest of the world does doesn't really work for us. But what we do here actually leads the world. So what the tools that we're going to use is, you know, the rest of the world is going to buy a lot of what we do. We were the first in flight. We led, we ushered in the jet age. We've led aviation and this is one of these critical points. And so we're looking for good solutions and good partners. And but just if anyone wants to come and see me, if someone says, "Hey, I got this tool that's pretty cool. How could you use it?" Like that doesn't, that's like, I'm like, "I can't think for you." It's great if people go, "Hey, I got a tool that could solve this problem for you, right? This is a pro. This is how we could fix this." And so this is, ASI has built this smart tool which by the way, small company that competed with the biggest companies, move fast, really innovative and they got the contract, a big contract with us that again, they're focused on the US but I'm sure they're going to sell that around the world. We don't care about the size, we care about the speed and the innovation that comes from the company. So that's exciting. I think that was the, maybe your question was along this but this is exciting stuff that we're doing that will change the experience I think for the American people. And it's smart companies that help us make that happen.

I mean it sounds like it's a little bit a matter of will. You know, can we, obviously assuming that we can keep everything as safe as it ever was or increase the bar of safety. Do you want your flights to be more efficient? Do you want, you know, people to move from this part of the country to this other part 30% faster, 50% faster just by better coordination? Like these are things that are basically readily available today. And that's what you're trying to... We're not breaking the innovative ceiling here. It's like these are tools that just aren't used, but it's also tools that maybe haven't been used in aviation that you can think through how can we deploy them here. If by the way, when we're more efficient, just think how much jet fuel we save and how much staffing costs we save. It's billions of dollars a year we save in dollars, but the amount in carbon emissions is substantial. So no, it has a real impact. One other thing, and again, I'm not this other, the tool when you fly, love the airlines, they're wonderful, but they'll, Delta sees Delta, United sees United. And what they do is, let's say an airport can handle in a 15-minute time period 15 airplanes. Well, the airlines will schedule 32. Well, if I can only handle 15 in a 15-minute time period, but you schedule 32, you can have delays. You're going to, like, you're all going to be lined up, you know, trying to get to the end of the runway and take off. It's just we're building in delays to the system. We're burning fuel. We're burning time. I'm giving the information to the airlines to go, hey, could you guys do a better job on your scheduling? Could we actually spread this out a little bit? Because you got time before and time after. If you spread it out, we don't have this chaos at airport. So that's not me dictating, but that's me asking and giving information from the tools that we have. Anyway, so aviation has consumed like 80% of my time. Yeah, it sounds like there's already headway being made on, you know, smart or the Modern Skies Act. So smart is this ASI tool we got at the command center at DOT. So we have, you have a tower, you have a TRACON, you have a center. A lot of this infrastructure is very close together and we've divvied up the airspace based on the technology we had in the 50s, 60s. With new technology means you could radically transform how we think of the airspace, but then also how we structure what we're doing on the ground. And so with ASI, we're starting small. We're starting in the DC region just to make sure everyone's getting comfortable and then we can expand it from there. And I think by next summer we'll be driving more efficiency. And so we've asked the Congress for 30 billion more with our Modern Skies coalition, which by the way seems like a lot of money, but if you think about the cost to the economy of the inefficiency that the current system drives, I think it's a great investment. I'm a fiscal conservative and I find myself asking for money all the time. And there's a great return on that investment. But yeah, we'll have more money coming. We want more tools, more software, and we need, I think, better. We can help medium-size airports find more resources to build more. Listen, if you travel the world, beautiful airports around the world, we should have that same kind of beauty and infrastructure in America. I think we deserve that. So we want to help facilitate that. I need private equity to get involved and help. There's bonding authority that can make that happen. Also, a lot of the towers that we use, they were built in the 1960s, 1970s. A lot of you get a leaky roof. You'll have toilets that'll leak down to the break room, you know, down below. But we'll replace every tower in America over the course of the next 300 years on this plan. So yeah, not great. There's also opportunity, and again this is a conversation we have to have internally, but do you need a tower? Are there some places that we should have, you know, infrastructure where we put cameras and sensors and then we can have controllers see that in a, you know, whether it's in the tower or in the TRACON or some other location to control the airfield. Well, you probably get better vision, you get better data, and you probably get some better results. But that's a conversation I have with, you know, air traffic controllers and how we do that. There's a whole bunch of components but the technology is there to make that happen. It's just a matter of is that where we want to go in this country.

Yeah. If you get redundant networks then you know as you modernize the different systems they actually make the system safer and then you don't have to have direct line of sight because you have cameras and backup cameras and you have systems that'll give you awareness of where every plane is on the runway. You know, from ADS-B or other tools that we have in the works. Absolutely. I mean down that road, autonomous aircraft and drones, they're becoming useful in infrastructure, inspecting pipelines, moving cargo, supporting national security. And it sounds like one of the things you guys have been thinking about is how to help ensure safe drone operation beyond that pilot's line of sight as sort of a next frontier of what drones would be capable of doing.

Yes. So we're working on beyond visual line of sight for drones. So I mean like airplanes, drones are similar in the sense that airplanes are used commercially and they're used for war, right? Those two things are how we use airplanes. Drones as we see what's happening in Russia and Ukraine. Drones are weapons of war, but they're also tools of commerce. And again, whether it's pipelines, train tracks, delivering your Uber Eats to your home much more efficiently, taking vehicles off our roads. And so maybe this is an overall philosophy for us. Innovators move fast, government moves slow, and if we don't move at the speed of innovation, and again, we have a bedrock of safety. We have to make sure the systems are safe, but we have to move faster. So innovators, if you're too small and you're trying to innovate in America, you'll go under. Or if you're big enough, you're going to take your business somewhere else and you're going to innovate somewhere else. I want the innovation to happen in America. I want the jobs in America. I want the technology in America. And I want American companies to deploy that around the world. And that means we have to move at a different speed whether it's with drones, but also, and we're, by the way, I think we're behind in drone technology. We're catching up very fast. Working with our national security assets to make sure we're seeing what's commercial and what's not commercial is incredibly important. But you know, eVTOLs as well, these vertical lift, advanced air mobility, Jetson, you guys know what I'm talking about. Joby, Beta, Archer, some of the bigger ones. This is, I mean, I think this is the cool technology that we're trying to advance. And we've got an EIP where we got eight test zones where we're testing allowing these test flights to happen. And then we're getting data off the vehicles that'll help us certify those vehicles. Which is very cool. There we have a pilot in those vehicles. I imagine at one point they completely can be autonomous. The question is, does America want that? Do you want to have vehicles that are autonomous or do you want to keep a pilot in those vehicles? But it's the same thing with autonomous vehicles. We're moving quickly to make sure our autonomous technology can continue to evolve here. Again, if we import someone else's autonomous vehicles, the data that comes off those vehicles is substantial and we send that data in America somewhere else. Probably not great. We'd love that data to be here, which means the innovation has to happen here. The companies have to be from here. And so we've moved, I think, pretty well at the speed of innovation to allow them to continue to grow in this country. So yeah, autonomy is a pretty wild one in that, I don't know if you saw this study around the amount of bodily harm and injury to human beings in the course of being driven around or driving around can be reduced by as much as 90% by things like Waymo or self-driving cars. And when you look at that and you know, autonomy broadly, like this is sort of the promise of this technology. Obviously it's, you know, a long time in the making and you want to do it very safely, but how do you think about that balance? It's like, you know, when is it ready? Certainly like in the next, we're talking about like this generation, like this next 10 years. This is so I would say that it's not a science, right? It's, I kind of call it my Goldilocks philosophy. We can't go too fast where we don't have the safety bedrock because then people get hurt. And then innovation will be shut down by the public and we go too slow and innovation leaves or it dies. So we have to get it just right. And it's a continual analysis of making sure we have systems in place to drive that safety culture, but also we're giving a long runway for those innovators to continue to expand their technology and grow at the same time. Sounds like that's a conversation we're having across all parts of autonomy really in sort of intelligence. Can I say just AI is exciting, right? It's or frightening. I don't know what, wherever you sit is how you think about it, but this room would probably say it's very exciting. Yeah. So probably the most exciting thing that's happening in America right now. So I seed that to you guys. But the next most exciting thing is all happening at DOT. So, and I'm not biased when I say that either. A little bit maybe. But if you think autonomous vehicles, you think of drone technology, you think of eVTOLs, the way people and products move, the way innovation affects your everyday life. No department is going to impact you more than what we're doing at DOT. And that's why it's so important to get it right and to have smart people, smart companies, help us make sure that the government's not the impediment. And I think government so often is the impediment. It's slow and it's not very insightful. And everyone, as safety is our safety is the bedrock is what I talk about. But people can wrap themselves around safety and that can be their excuse for doing nothing. And by doing nothing, it actually becomes far more risky. It's less safe by not advancing the technology. It's not a, it's not an economy. It's both. It's both. It's both. That's right. I mean, NASA is all about safety, but if all they do is safety, you never put people on rockets and launch them into space. Like, it's inherently risky and you have to manage the risk, right? Because we're putting people on rockets, but we want to send people to space and so there is some risk that we have to tolerate. And if there's zero tolerance for risk, I mean, just chain up your airplanes, you know, chain up your innovation, shut it down, and like send it somewhere else, which we don't think is the answer. I want to ask you a little bit about maritime. We saw a splash just now. Ports, shipyards, domestic manufacturing sit at the intersection of both economic strength and national security. How are you working to build a stronger industrial base on the maritime side? So, just, I mean, a couple things. I think that it's a national security issue that America doesn't really build ships anymore, at least in the commercial space. We were the greatest ship builders in the world, bar none, by far, going through World War II. And we kind of gave up. We gave it up. And we look at what's happening in the Middle East right now, and you go, "Well, shipping's pretty important. We don't really think about shipping a whole lot, but it's a really important part of commerce. And as we see, there's a correlation between national security and commercial. And there's dual use. Having a vibrant shipbuilding industry is incredibly important because that feeds into our ability to build military ships as well and vice versa. And basically, I'm a free enterprise guy. The rest of the world has subsidized their shipbuilding and they stole it from us and we gave it up. And so though I believe in free enterprise, if you want to build ships, you can't think that you can play the free enterprise game and beat the guys that are subsidizing shipbuilding. And so we have a really good coalition in government that's trying to think through how we bring shipbuilding back, which by the way maybe doesn't seem like the most innovative space in the world. It's interesting like rocket companies when we talk about shipbuilding, like they get really excited about shipbuilding. There must be some cross-section between rockets and shipbuilding. And I don't know, like that you guys probably get that. I don't really get it. You're smarter than I am. So there's like we have to bring I think shipbuilding back to America. We're deal, we've, we think that and we're in a little bit of a race with China but small modular reactors, we should have nuclear on ships. That is on the commercial side. That's the, we've sent that out to industry. We have three ports that are willing and working with us to accept SMRs. And but I think we have to send the signal that we're open, we're going to work with industry and that is I think on the commercial side the next generation of innovation that can give America a leg up. And again it's not just shipbuilding obviously this is a conversation that's happening in a lot of spaces especially with data centers but we think there's a good correlation between that and shipbuilding obviously we're trying to develop this at NASA and put that on the moon as well as a power source so a lot of multi-use sources for nuclear. Secretary, if it's okay, we wanted to open it up for maybe one or two audience questions. Sure. Anyone? Yes. Only good questions. Only good question. Good questions. At YC, we have a rule. It has to be someone who has a question that helps everyone in the audience. Hi, my name is Kush. I'm in the Garden batch. I'm making unmanned airplanes for inspecting oil and gas pipelines, but eventually I want to get into making large aircraft for moving cargo around. So I was curious to know what's your opinion on how that regulation would open up for large Part 23 aircraft over 10,000 pounds which can actually move around cargo. I'm getting odd feedback. I didn't, I can't, what was the question? Sorry. Can you repeat more slowly? Sorry. Yeah. So I want to build like large cargo aircraft that can move cargo completely autonomously. So over a few thousand pounds maybe. And I was curious to know what's the regulation going to look like. Is this in shipping you're talking about? No, airplanes. Autonomous airplanes. Oh, yeah. Okay. What's my thought on that? Yep. Listen, I think it's, I run into a whole bunch of issues, right? Pilots have issues with autonomy. It's coming, right? And I think as I look at kind of where do we deploy first, flying in Alaska is very dangerous. Alaska doesn't have a great road system, so they fly supplies to a lot of these outpost communities. I think that's the first place we go is using autonomous airplanes to fly in. And again, we have great companies that are working on autonomous aviation. And so listen, we're open and again we drive safety on this front, but there's a lot of work that's being done right now in the space and we'll be good partners when that comes live. There's a different political conversation that has to be had, but in regard to strict technology, drive safety, we're all in. Last question. Dennis Willie with a company called Astroscale and we do in-space logistics. So that's my question. What can we expect from the Department of Transportation's 28 budget with respect to developing and investing in space logistics, not just the launch complex but the ability to do things in space to support the economy there. So we, I mean, so commerce has the in-space, we have earth to space, so the launch licenses. I just, from my view, I think we have to make sure the industry is robust. We need a lot, I think we need to have a lot of companies. SpaceX is unbelievable. They're remarkable. It looks like Blue is after their launchpad issue at the Cape. They're, I think they're by the end of the year, starting next year, they're going to be able to launch again. They've rebuilt their pad remarkably fast. The president signed an executive order telling us to build more launch capacity. So we did an RFI, request for information. Where should we go? And I see us as investing in the infrastructure of this new spaceport. Obviously the companies can, they have to build their own pads and I think there'll be multi-use pads as well. But we need the capacity to make sure that smaller companies have the ability to launch. They don't get pushed out of launches because we don't have the facilities available to them. So, you know, Wallops is getting full. Obviously, the Cape is full. So we have to see over the horizon on what's coming next. And I think we're going to have a lot of companies that want to get in the space. By the way, all you wonderful billionaires or future billionaires, you used to buy horses and blow your money on horses. Now you're all buying rocket companies, which is pretty exciting. And it's a really cool space, but it needs to be more vibrant. We need more competition, more players in the space. And so that's my role. And just so in our commercial space office, it's difficult because a lot of talent can make a lot of money at SpaceX or at Blue or, you know, pick your space company. We're trying to hire another 70 people. If you look at the cadence of launches that's going to happen, not just now but into the future, we got to bring in good people that can help us. One, we need regulatory reform that we have to move much faster. We have to license much faster and it's hard for me to hire the right people because the industry is soaking everybody up. Well, the industry can't be successful unless we're successful in doing our part as well because we're, you know, we're regulators, but we're also partners in making sure that America continues to lead in space. And by the way, this is one where I want to make sure these launches happen in America. I don't want to see them go somewhere else. So that's what we're working through right now. But it's an exciting time in, you know, in commercial space. Do you want, we'll do one more. Did you have a question? Yes. Hi, my name is Theo. I'm actually industries. What you mentioned about airspace tracking with optical redundancy example you're building. So thanks for the pitch. Our question is, I'm sure for a lot of sensing companies, FAA is something we're very, very grateful for keeping American sky safe. But at the same time, risk tolerance might be too high for a lot of companies who are coming in trying to secure more airspace, doing more activities in the sky. What sort of government incentives slash strategic can we work on to improve sort of the openness into working air? That's a great question. So again, it's, we take this on a case-by-case analysis. So again, we have to deal with drones, right? So drones are, you know, 400 feet. How do we manage the growing commercial use of drones in cities? How's that going to be managed not just with one company but when I have four companies that are playing in the same airspace? And then, you know, with then the eVTOLs come into play and they're going to layer right into, you know, the current system that's used, which by the way, if you look at all the growth that's going to happen, again, the most complicated airspace, the busiest airspace that's going to grow, what, you know, two, you know, two and a half times in the next 15 years, especially when you add in new technology, new vehicles, we need the tools in place to effectively manage. We're going to have supersonic flight over land, right? Very cool. And again, that's us being able to move with industry and move more quickly. I guess my, as we wrap up, my pitch is we want the best ideas. I don't know what, I don't know what the next, I think a lot, the next administration, no matter who it is, a lot of the work we've done, they're going to continue with, like, we're doing, we're doing because what we do is for America. Like, this is not, there's nothing partisan in a town that's all partisan all the time. What we do is really nonpartisan. Maybe 5%, 10% you could say feels partisan. But this is American infrastructure. It's American regulation. It's American safety. And so I think what we do is going to live on past, you know, past my tenure. But then thinking through, I got really, I see your problem. I have a solution for you in coming in and talking to us, or I see a problem in the airspace. This is my problem with my vehicle. Can you accommodate us? Can you help us? And so I'm not trying in the air, like airspace usage. I'm not trying to go like, how, like, what's the new technology that's going to come out and how do I have to think? I can, I'm just trying to think through what I'm doing right now. But if you have issues, you should flag them for us. One last thing I'll mention is if we're going to continue in aviation to be the innovative hub in the world, we have to be able to certify airplanes. And if you look at what the eVTOLs are going through, the pain they're going to go through in the certification of their vehicles, it's too laborious. You know, you, it's hard to certify Boeing aircraft. Where's a new innovation in aviation and from the big producers, it doesn't happen because it's so hard to certify. So we need to think through, again, we need to make sure we have safe aviation, but can we move faster? A lot of, I think there's a lot of private capital, a lot of innovation in aviation that's not happening because they'll say we just, we just, it's going to take too long, too much money to get through the FAA and allow this craft to fly. We have to do a better job of that. And the same kind of energy we've put into modernization of the airspace, we now need to put in, we got to have two. We're going to keep the same push there, but also think through how we move through the certification process much faster. And that's going to take us time. Anybody wants to join us at DOT or FAA, we probably don't pay as well. But if you know anybody that wants to partner and come in and serve their country, we are, we're open for business and you can be an SGE or you can be an employee. But we need, and this is what's different in America, people, and I think Elon did this. This is when Elon was willing to come and serve with DOGE, all of a sudden people said, "Well, maybe I would, maybe I'd be willing to give back, too." And we've got good people helping us out, but I need, everyone likes to bash their government. I join in bashing my government and how slow it is and how inefficient it is. But if there's people who say, "Well, I don't want to bash it. I want to fix it. I want to actually help." And you'll be frustrated by it. You'll be, government is frustrating. It's slower than you move. But this is making your government work is making the private sector work as well because there's so much overlap. And so if you guys know anybody that has made a little bit of money and wants to come in or wants good experience, we would, we need the brightest minds helping us out. They might be watching online. We have several thousand people online right now. Reach out. We want great people. And then in the end, it's way better for everybody else. And that's how we change America is by letting our departments move with all of you. And instead of stopping you, let's all move together. But it's good people helping us out making that happen. Secretary Duffy, thank you so much for your leadership. Thank you. I appreciate you.

All right. Is this thing on? Cool. Hopefully you could hear me in the back. My name is Dr. Jason Cornelius, and today I'm talking about making missiles as cheap as bullets. So this is our Mark III interceptor, a two-foot-long rocket meant to shoot down Group 1 and Group 2 UAS. We build these for about $2,500 each. And we just tested it three weeks ago at Yuma Proving Ground with JITA 401, NORTHCOM, and NORAD. So here's a little bit about the company. And we have a booth in the back, so feel free to stop by later and check this out. I'll just set it here for now. We joined YC Summer 25 batch and we did... All right, just to make a note, the timer, they're just adding it now, so all good. We did YC Summer 2025 and then around August, you see the Wall Street Journal article on the left side there. April 2026, we did testing at Fort Hood with First Cav and US Army DEVCOM. That was our Mark 2 interceptor, a three-foot-long, very not maneuverable missile. And we got feedback from the end users, specifically JITA 401, saying, "Hey, can you make this a little bit more compact, a little bit more agile?" Four months later, we did an entirely new clean-sheet design of a missile. In four months' time, and demonstrated it just three weeks ago at Yuma Proving Ground. That's the photo you see on the far right, September, obviously this month. So that missile, very much more maneuverable. You'll see a little bit more about it. So this is the entire team, Perseus Defense. Right now, we have eight full-time folks, and...

This team built a fully active guidance interceptor missile to shoot down drones. So you can see we have all the folks listed on the bottom there. Maybe most important is our chief happiness officer, Ariel. She keeps the guys, you know, in good shape at the office. A lot of background in aerospace and defense. You know, we have a few folks from AeroVironment. Phillips, actually, Nick is somewhere in the back. He could tell you about our flight computer later on. And you know, we have kind of a lot of experience from aerospace and defense. You know, counter UAS, as you guys know, lacks affordability and range. We do have a lot of solutions that are out there. Very exquisite. We're using Coyotes. We're using Patriots. We're using AIM-9Xs to shoot down $3,000 and $4,000 drones. Not great. Everybody knows this. And so what Perseus is working on is dropping that cost curve. So you can see the normal curve if you do a curve fit to all the existing solutions, it's very steep. Our curve fit is about 1/5 the cost per range of those. So you can see on the bottom we have the Mark III on there, the Mark V, which is the new one that we're going to start developing. That's a little bit of a larger missile. Think about like a three-and-a-half-foot missile to shoot down specifically Group 3 UAS. And really the idea here is that we're not only building very low cost, we're doing it very quickly. So four months from new design to when we get it out there on the range. And then also the speed at which we can build them. So scalability, it takes us about a half hour when you have a pile of parts in front of you to a fully assembled missile that's ready to go. So if you have five technicians, a regular 40-hour work week, you can do the math. That's about 1,500 interceptor missiles per month. So that brings us to some of the problems that we're working to solve. Obviously one of them here is cost. You kind of get the idea there. This is the more important one, I would say, though, on the magazine depth. The entire rest of the United States builds about 1,000 interceptor missiles per month. Our near-term goal is to match the rest of the United States. Now, obviously, our missiles are not as exquisite as a Raytheon Coyote or as a Patriot missile, but they're meant to do the role that those missiles are being used for right now, which is to shoot down very low-cost, attritable drones. So we're doing it at a price point that's more reasonable since we're designing it specifically for that mission. And we think we're pretty bullish on being able to do very quickly 1,000 interceptors per month production capacity and longer term getting up to 10,000 interceptors per month. So we are based down in Austin. That's where we have an 18,000-foot manufacturing facility. And I think I kind of mentioned some of the high levels here, but Group 1 and 2 counter UAS is what this missile that's right here is designed for. High-rate production cost. So sales price $5,000 per shot, which is a good order of magnitude cheaper than any other interceptor that's out there right now. And with that, you know, you could see some cool photos here on the slide. So I'll kind of gloss over this, but how we can do this when no one else can, we really started from, okay, how are missiles built today and how could we build them differently and cheaper? And so we threw out a lot of the, you know, aerospace has done to make it like 10 to the ninth redundant so that out of whatever that number of solutions that is or flights that is, you have only one mistake. We took the approach that if we can make it so cheap, like 30 times cheaper than a Coyote, it's okay if we need to shoot two of them to take out the target. And so that means that we use a little bit lower-cost components. We use additive manufacturing, which also enables us to move very quickly. But using some of these newer technologies and leveraging them allows us to build an interceptor missile that flies fully active waypoint guidance for $2,500 per shot. So the left photo there, you could see the parts broken down and then 30 minutes later you have a full missile. We do have our own in-house developed flight computer, which is a pretty cool aspect too. So April 2026, Golden Shield at Fort Hood. That was a really good test event for us. That's the left and middle photos there. Really all the photos on this slide. And then just a couple weeks ago, we were doing some additional testing with JTA 401 with this new interceptor. And then we're currently working through the contracting process right now with the Army Applications Laboratory to do some tech maturation and get this thing from where it is, which is like a TRL 5 system, up to a TRL 6, TRL 7. Modular missile launchers. This is kind of one of the last parts I'll talk about. We do have what you see there is an eight-shot missile launcher. I wasn't able to bring it with us today, but eight of these go inside a Pelican case that's about this tall. Two of us, any two of us, it's really only about 100 pounds, could lift it up and walk with it. So it's very modular. We've had preliminary discussions with a lot of USV providers, UGV providers, even UAV providers to take our system, whether it's this platform that holds eight, a larger platform for maybe say a destroyer, or even individual missiles and mount them under the wings of a UAV. So there's a lot of different options from that side. And then, you know, this is kind of the last slide here. First startup to build an actively guided missile, I think. I don't know if anyone, feel free to correct me on that one, but yeah. So it's working pretty well at this point. We get within 5 meters of the drone. So that's not bad. At several hundred meters range, we can get within about 5 meters miss distance for a $2,500 missile. We need to obviously tighten that a little bit if we're going to put a warhead on it. What we'd really like to do and what we're aiming for is to make this direct hit to kill so that we don't even need a warhead and then we can use it domestically to protect nuclear facilities, airports, the capital, the US-Mexico border and so on. So that's obviously very hard to do. There's really one missile that's endoatmospheric, inside the atmosphere, that does direct hit to kill reliably. It's Patriot. We're going to try to do that for $5,000 a shot. So that's Perseus Defense. We're in the back. Please stop by and check us out. Thank you.

Hi everyone, I'm Dante Vice, co-founder and CEO of Albore Inc. We make drone submarines. So basically we have this way. All right. So Albore makes drone submarines. We started the company in January of 2025, looking at how America was starting to mass-produce unmanned aircraft and unmanned surface vessels at low cost. The challenge with undersea assets has historically been they're extremely expensive and they're used for very brief intelligence-gathering tasks. But given the challenges the US is facing, we need undersea assets that can perform the same types of missions as unmanned aircraft and unmanned surface vessels. That is, you know, these are attritable systems. They can be produced in large quantities and they can perform kinetic missions in order to deliver that same sort of cost-asymmetric threat in the undersea environment. Okay. Not sure what has happened to these slides, but yeah, basically the envisioned CONOPS for these types of underwater vehicles are if you can make vehicles that are low-cost and can travel ocean-wide distances, you're able to do portions of the role that manned submarines in very large, very exquisite underwater vehicles, we're talking about, you know, tens of millions of dollars in vehicles the size of garbage trucks, are currently tasked out with. So that's everything from intelligence gathering to detection of mines, which has been very relevant recently, to survey in commercial applications as well as, you know, long-range precision strikes. >> Sorry. >> Okay. Thank you. >> There should be a picture of a drone submarine here. There is one literally directly outside if you're curious. Okay. Yeah, but basically the challenge right now is underwater vehicles today, they're super limited in terms of their capabilities. You either have these really expensive systems that are really big. We're talking, you know, large percentages of the size of a manned submarine, tens of millions of dollars. And those are the ones that can actually travel entire oceans. Or you have these smaller vehicles that are basically, you know, incremental improvements to torpedoes where they're fire-and-forget and they can maybe, you know, last a day or two in the water. But if you're talking about a real sort of, you know, pure competition, you know, you're going to want vehicles that can stay in the water for, you know, weeks on end and travel across oceans. And so in terms of the sort of like high-low mix that is envisioned, you know, we're trying to provide the, you know, low-cost medium-capability system that can complement really large exquisite assets and actually do meaningful jobs during, you know, pure competition. The way that we're doing that is rather than focusing on battery-powered systems, right, batteries just don't store very much energy fundamentally, and if you're pushing through water, that is a very energy-intensive task. We have basically brought back conventional World War II submarine design in an autonomous form factor where we are able to surface, use onboard fuel and generators to recharge our batteries, and then continue transit underwater. And that enables you to basically 10x the amount of distance that you're traveling while maintaining a really small envelope. I don't know why, but these pictures are really not loading, but this should be a picture of the ocean taken directly from our drone submarines' periscope. But the bluff is that we have deployed these in the ocean many times and demonstrated them to a number of different stakeholders and as of today have contracts in multiple countries and are working with people across three different continents, including, you know, US Navy and, you know, international coast guard and special operations customers. And this is a pressing issue. This image, I'm glad actually loaded. This was us and the president of the United States a couple of months ago at Senator McCormack's defense tech conference. You know, these issues are top of mind for everybody. You know, the president was talking with us about, you know, the Strait of Hormuz, but there's a number of different geographies where these types of systems really matter. And, you know, people are starting to look at how unmanned systems are changing aircraft and, you know, there's a lot of focus, big programs like Drone Dominance, for example, that have been really successful at ramping up US production of unmanned aircraft. And, you know, we anticipate that in the coming years, things that are similar will start to happen in the undersea environment as well. And we think that there's a sort of unique opportunity to actually get ahead of the curve here and start mass-producing these systems ahead of our adversaries to be ahead rather than behind and sort of cement the US's historic undersea advantage. And our goal for the next year is we plan to build 75 drone submarine systems, which would make us one of the probably three largest manufacturers in the world. This year we're on track to build 10 and deliver them to initial customers. Yeah, that's all I have. Thank you.

Hey everyone, I'm Russ from Nine Mothers. We're in the X26 or P26 batch. We do affordable autonomous defense against suicide drones. So Group 1 suicide drones. If you're not familiar with these, these are the ones that are in Ukraine and Russia using against each other repeatedly, but also in other places. We're starting to see them. So they're small quadcopters. You'll see some outside from other people. And yeah, they're super cheap. They're $300, $500 each and up. And they'll kill everything from vehicles to people. They can be entirely RF denied, as in fly with fiber and not be tracked. And then they carry payloads from very small to pretty large. They'll do up to 100 miles an hour, at least in our experience, and some of the newer ones will go a little faster. And the problem we've got is that there's no real cheap defense to this. There's no real good way of stopping them. As you've seen with some of the other companies, there's expensive solutions. And so when we started looking at this problem, we realized that we needed something cost-effective because this was the same kind of problem as IEDs were in Iraq, Afghanistan, right? How do you protect everything? How do you protect all the vehicles? And having a million-dollar system that works is cool. Having something that's low six figures is more viable. And so one of my co-founders is driving a robot that has our system on top of it. So it's basically a 20-inch tall robot that we make for low six figures that can, with a human in the loop, autonomously defeat drones going fast. So publicly we only talk about going about 30 meters a second, and that's what we've consistently been doing for about a year now. We can do faster, but come find me if you want to know more details on that. But yeah, the point of this system is to have something that's highly effective, like high PK. And so this version is a shotgun on a robot. We can track and defeat drones day or night. And we've done different weather conditions as well. And we're pretty early on the move, but we haven't really announced what we're doing on that. We're on a couple of projects. I'll talk about in a sec, but yeah, this whole thing, excluding the robot, like the tracked vehicle, is sub-50. We make a man-portable version of it as well that some people are using. And yeah, it, as I said, low six-figure price, and maybe we'll get it lower than that at some point. Yeah, we're working with a whole bunch of people. Air Force is the newest one. Done a bunch of stuff with DEVCOM, JOC, SOCOM, Marine Corps Warfighting Lab, DIU, and Army Applications Labs as well. So this ranges from creators to actual sales and delivery of things and like R&D efforts too. We don't tend to go into detail, but if you want to ask more questions, let me know. But we are delivering a bunch of units at the moment is the short version. But yeah, one of the things that we do is try and own the entire stack, right? We want to have ownership of everything from the ammunition that we use to the gun that we use to where we source all of our stuff and we write all of the software ourselves. This means that when things inevitably don't go as planned, that we have full control over the outcome and we're the ones fully responsible for it. And so far that's been really good, right? We tend to, as I'm going to say on the next slide, underpromise on what we do and then overdeliver, which has also served us pretty well with the relationships we've built in the DoD. And for us, that means being very confident in what we can do and then extending ourselves to the point of failure, right? As in, we will happily do things that may work and then see what happens and then improve it. But yeah, at the moment this system's capable of shooting down direct attack drones at over 30 meters a second, so 65 miles an hour, and then yeah, in multiple different weather conditions and time of day. And if you want to learn more, come find me afterwards. But yeah, this is just the starting point, by the way. So we have this man-portable version. We have a vehicle-mounted version publicly. Here we're on a project called Sand Hills 2 for 20th Engineering, which is an autonomous breaching project with a company called Forterra. There are some more things coming out, and if you're going to a USA, you will see us at a bunch of things. Come and ask us questions if you want. But yeah, we're working on a couple of other things. So one of the things we're doing is controlling existing weapon systems using this. So our control system and our algorithms can be used to control other things, which is kind of an exciting time. And then yeah, there's also different munitions being added to this for extended range and some different capabilities. But yeah, help from anybody in the audience, like very interested in more DoD contacts. As I said, we're connected to a whole bunch of people, but DoD is very big and very different. So happy to talk to anyone afterwards. We're in the corner. Come and ask us any questions, but we'd love to connect. So thanks.

Hello everyone. My name is Ryan. I'm co-founder and CEO of Metalware, and we're a cybersecurity company based in the Bay Area. This is about defending the embedded stack, our platforms that the Department of War runs, including munitions, UAVs, and more. To start, I want to remind everyone that cyber is the first warfighting domain. When you think about Venezuela and taking out equipment and power grids so our warfighters can go and perform their operations safely. On the contrary, you look at Salt Typhoon and Volt Typhoon and you have adversaries prepositioning in our infrastructure to disrupt our troops from mobilizing ahead of conflict. As you all have seen, AI capabilities in cyber are progressing very quickly. Back in the spring, Anthropic announced Mythos and its capabilities. It obviously found a ton of vulnerabilities in code bases that were very old and affecting systems and devices that run on millions and billions of devices. Even what's changed in the last few weeks that many may not know is that these capabilities are commoditizing. So Anthropic published a report literally yesterday saying that Mythos-level capabilities are now available for download open-source for all of our adversaries to use with similar performance to Mythos, saying that adversaries are only a couple months behind the US capabilities on the frontier. In short, adversaries have frontier-level hacking tools currently within the Department of War across Air Force, Army, and others that we work with. They are lacking the tools. They're using bench rigs and checklists rather than being equipped with the best tools. The type of software that we focus on is firmware and embedded system software. So this runs individual components and sensors and controllers on munitions, on aircraft, on UAVs. There's a number of different reasons why this is a more difficult technical domain from lack of updates, legacy code bases, lack of access, and obviously the dependency on having hardware in the loop. To paint the picture a little bit clearer, when you think of a munition, a drone, an aircraft, you have hundreds of small essentially embedded computers dispersed throughout that are performing mission-critical functions for that system. Today's DOW requirements around cybersecurity, particularly for platform IT embedded systems, are typically RMF and ATO, right? These are standards adapted towards hardware systems, very different in technical domain from enterprise IT systems. So there are no login pages for an aircraft or a munition. A lot of these standards do not apply and are outdated when it comes to actual physical hardware security. Bringing it to Metalware, where did we start? We actually started in the offensive security community, building and developing offensive capabilities for the US intelligence community. This is where we learned the tip of the spear of hacking and access and understanding how to reverse engineer and find vulnerabilities in systems that we build capabilities off of. What we're doing now is taking these tactics, techniques, and procedures, automating that in order to enable scale for our defenders across the armed services to be able to increase cyber resiliency of our own platforms before the adversaries begin attacking our systems. So in short, we've developed a lot of technology and algorithms and research in partnership with a number of institutions, including the Air Force Research Lab, and we are automating this process that is traditionally very lengthy in terms of vulnerability research for these types of hardware platforms. Couple of differentiators since we get asked this a lot. Why not just use these frontier models on our own systems to secure them? Number of different reasons. First and foremost being if adversaries are using these frontier models against our systems, we want to have something better, right? Secondly, the AI models inherently to embedded systems and platforms. They were not trained on this type of code. It's a different technical domain. That's where our expertise differentiates us. A number of other aspects such as when you're testing a weapon system, you're going to be in an air-gapped high-side environment. How do you get access to AI in those environments? That's something we help our customers do. Couple of screenshots of our platform. We don't build physical devices, so it's not as flashy to have a demo up here. But we have an automated platform that's very easy and reduces the labor and expertise required for our end users, which are cyber engineers and developers, to secure and understand their systems. Couple of the product screenshots here. So yeah, in short, we're taking the tip of the spear, techniques and tactics, automating that in order to provide scale across the Department of War, provide our tools to the prime vendors who develop these, to the verification and validation teams within the armed services to be able to verify primes' work and have additional confidence to cyber teams, penetration testing teams, and so on and so forth. Quick summary and background on our company. I mentioned we work with the US intelligence community. We're beginning to work with the Air Force and Air Force Research Lab. We work with defense primes as well as commercial critical infrastructure companies, particularly around developing operational technology and industrial control systems. Bit of our background. We come from the same type of places where we built these systems and broke them. And that comes with our expertise. If this resonates, whether you're a customer or a vendor or OEM, feel free to email me at [email protected]. Thank you.

Testing. Hello, Under Secretary Hurst, thank you so much for joining us today, especially on the last day of the fiscal year. I'm sure it's a super busy time. And so on behalf of all the founders in the room, I'd love to chat with you about what it takes for them to build, deploy, and scale their tech across the department. And so I guess to kick things off from your role in comptroller, what do you think is the single most important thing we can do to get technology into the hands of our warfighters faster?

And I guess to double-click there a little bit, what advice would you have for founders looking at these new funded programs who want to turn those policy demands into actual funded opportunities for their business?

Awesome. And founders, it's quite easy sometimes to find users who love the product you build, but unfortunately a lot of the time they don't always have access to budget or the authority to spend it. And so what advice would you have for founders who have those users and want to align them with a program office or a budget owner to actually get their technology from a demo to a funded capability?

Do you have any examples of simple questions that a founder can maybe ask a PA to figure out the answers to these questions? Because a lot of times this is the founder's first time selling the department and they might not know how it works internally.

Do you have any advice for how to find the right program manager if you don't have someone on the ground on your staff that might already have a relationship with that person?

And I guess to like double-click on this a bit. So if we use an example of let's say we have a drone interceptor startup that has an amazing demo and that customer wants to buy more. What needs to happen on the funding side to take that amazing demo to a production order instead of this endless cyclical loop of demos for that company?

Interesting. On the latter, how early would you say a founder needs to ask their initial government user or government customer to find transition pathways for what they're building?

Yeah. Yeah. I guess for small hardware companies, for example, like back to the interceptor example, right? A lot of times winning a contract and actually getting paid are vastly different things for that archetype of company, especially if they need to hire people or stand up a facility before actually being able to deliver on that contract. And so what ways can the department maybe get flexible on payment structures for these hardware companies on technical milestones or creative ways that don't require them raising outside capital or waiting for investment to start delivering on that contract?

Are there any specific ways that your office can help a company if their technology is ready and maybe it's commercially proven, but the funding pathway for transition might not exist or be active in the government?

And I think all of us in this room want our hardware companies to increase their manufacturing capacity. But I've heard it's been pretty hard for founders to make the decision of opening a production line if they don't know how many units the government might actually buy in a short period of time. And so what can the department maybe do to put out more dependable demand signals for founders to make these decisions prior to actually manufacturing the capabilities?

I guess outside of being dual use, is there any other evidence that may give you confidence that a younger company might be ready for a larger production order?

And for the founders in this room that have technology that works, it's commercially proven, but they might not have any relationships in the Pentagon, what would you recommend to them to become a credible supplier to the department in the next 90 days?

Awesome. You comfortable opening up to the floor for a few questions?

Cool. This is an incredible conversation. So much alpha right here. Raise your hand if you have a question. You're making it run, man.

Hey, thank you. Marcus Weisscover with the Wall Street Journal. Secretary Hurst, what's the status of omnibus reprogramming? Did you guys do one this year? Can you give us a sense of the size and does it being happy physical New Year's Eve? Does it have to be approved by today by Congress or is that able to be approved, you know, down the road at some point?

Yes, ma'am. Jane. Hi, Jane. Great to see you both.

Jane Lee, I'm the chair of the Senate Defense Modernization Caucus Alliance. Question regarding your new task force on waste, fraud, and abuse. I think one element, having been on Senate Appropriations Committee, is building trust with them if you're looking for funding flexibility. It's making sure that the department who hasn't had a clean audit. I love that the progress that you guys are making. But can you tell us a little bit more about that task force?

On waste, fraud, and abuse. It was just announced. It was Secretary Fineberg had released a fast.

In the case of a CR, do you see more or less funding flexibility on the horizon?

Get a low resolution. All right.

Good morning, ladies and gentlemen. My name is Grant Demeury. I'm the CEO of One Brief. Last time I talked to a Y Combinator audience was at my own

Hello. Okay, good morning everybody. Nice to meet you all. I am Matia. I'm one of the co-founders and CEO of Hop Arrow. We're building rockets that can deliver cargo to contested environments. And so today I want to talk about rocket cargo for contested logistics. Just to introduce myself, I'm an engineer by background. Previously founded a satellite propulsion startup. Led that to orbit on the third ever rideshare mission with SpaceX back in 2022. I then scaled the production of large-scale loitering munitions for the Ukrainians. My co-founder served in the Marine Corps. He was based out in Okinawa working on the MV-22 Ospreys, worked at SpaceX launching over twenty Falcon 9 and Falcon Heavy rockets during his time, and then he also led the NASA Eclipse lunar lander program at Mass and Space. So just to give a quick overview of our company, we were founded in 2024. Just this morning we announced that we've raised over eleven million in VC funding. So we're really happy about that. Currently delivering on a direct-to-phase-two SBIR with AFL that we've been really happy with. Also building out that relationship even deeper. We're based out in Orange, California, but we do a lot of our work at the Oklahoma Spaceport in Oklahoma. Currently a team of seven and just wrapped up the Summer 26 batch. So I think what we can all agree upon is that warfare has effectively already become autonomous across all domains. Air is kind of the most commonly talked about one when it comes to either drones with RPG munitions strapped to them or cruise missiles. I had the privilege of working on that, the cruise missile in the middle image, increasingly ballistic missiles, the same thing for sea, same thing for ground, same thing for space. And so when you start thinking about the Taiwan scenario, which is kind of the most commonly discussed situation right now, the problem that we face is how do you get to one of the most contested environments in the world, especially when the adversary is about four times closer to you than you are? You are being tracked by space domain awareness. There's potentially a blockade. You have a barrage of autonomous systems that are being thrown from the adversarial side. And so these are a lot of problems that we are thinking about how do we overcome, not just in Taiwan but in any sort of pure conflict that may come up. And so that's why we're building the world's first cargo delivery rocket. We're calling it Rook. Rook is able to launch from a standard forty-foot shipping container. So what that means is that we can launch it from pretty much anywhere on Earth in minutes. We reach a max speed of Mach 7. So that's hypersonic speed. And we have a range of about four hundred fifty miles. We can get to Taiwan from Okinawa in about fifteen minutes using our technology. And so that's the main thing is like the time to launch is about fifteen minutes. So we want to be really, really quick in letting war fighters from the moment that an order is put out to being able to launch. So this is just a general simplified concept of operations. We reenter, as I said, at hypersonic speed. We land on unprepared environments. So a lot of my co-founder's work was landing in, obviously with the NASA Eclipse lunar lander, being able to land on dust, on gravel, on unprepared surfaces. And so we've been super busy during the YC batch. Probably the coolest thing is that we've got our engine right here. We built the software that builds this engine. So we built a tool called Hop OS, and I'll talk about more of that later on. Then we put that engine that we hot-fired into our vehicle. So we did a half-scale prototype of Rook, hot-fired, did a static fire of the entire system, and then we demonstrated the deployment of drones out of our payload bay. So we can deploy drones, interceptors, electronic warfare payloads into a contested environment. The way we like to phrase this is that we want to deliver a fully autonomous twenty-first-century D-Day using rocket cargo. And so our secret sauce is that we use our intelligence layer called Hop OS to not just build our rocket engines but do a lot of things that were previously very manual and laborious internally, and we can do that in minutes. So not going to go through all of these tools, but the coolest one that we really want to highlight is Hop OS. Hop OS allows a user to put in high-level inputs for what an engine needs to look like, and they get out a full 3D geometry that's ready to manufacture. So that's that engine right there. It worked the first time. This is the coolest thing about Hop OS is that it builds verifiable engines. So we did this at the Oklahoma Spaceport. These are some more cool shots from up close when it was integrated into our vehicle. And so just to wrap up, what we need help with when it comes to, you know, getting support from DC in order to be able to succeed. To those that are familiar with the TACFI and STRATFI programs with the Department of the Air Force, that does require matching funding. And so we've just submitted our application for TACFI. But this is still a multi-month process. And so we're ready to move fast. The department is ready to move fast. We just want to make sure that we're continuing to engage with stakeholders and make them aware of the fact that they are slightly becoming the bottleneck in terms of getting this technology out to the war fighter. So with that, I'd like to thank you all for your attention. Feel free to grab me at any point and happy to talk rockets.

Ladies and gentlemen, we will now take a twenty-minute break for lunch. Please visit the exhibitors. Thank you.

Ladies and gentlemen, please take your seats. Our program is about to resume. Thank you.

All right, folks. Welcome back to the program. Our next fireside is one I'm very excited about. I first want to kind of take a moment of personal privilege and just give a shout-out to Eric Alberg, who's the author of Build for Defense. Eric left DIU a handful of months ago and has been working incredibly closely with all the YC defense companies over the last four months or so and has really been an incredible resource. And so we're really excited to talk a bit about his upcoming book, which we've provided advanced copies for all attendees. And I believe Eric's going to be doing some signings at the afterparty this evening. Eric is the author of Build for Defense, a practical guide for helping commercial companies enter the defense market. He previously served as a commercial executive at the Defense Innovation Unit, connecting emergent technologies with defense and intelligence needs. He now advises founders, investors, and companies on navigating that market. And Olivia Morat works on partnerships at Y Combinator, helping support companies after the batch. She's a graduate of Swarthmore College, where she studied art history and economics. Please welcome Eric and my colleague Olivia.

Right, let's set this up here. Thank you. Yes. Great. Thanks for joining me today, Eric.

Oh, thanks for having me. Pleasure to work with you the last four months or so, and thank you all for being here.

So the book is called Build for Defense. So who is this book for, and what does a founder walk away knowing?

Yeah. Well, I guess the book is really for the founders who think that, you know, winning their first contract is going to be the hardest thing. It's actually not. I mean, the first contract, of course, is an important milestone, but getting to that second or third or fourth contract, it can be quite a bit harder. And it really kind of depends on the archetype of the company that you're building. If you're building sort of a pure-play defense company that's kinetic, that's building a missile or a drone, your path to market is going to be the Department of War. It's a pretty obvious market. If you're dual-use and you're a startup, it can be really hard to grow two products simultaneously because you're trying to get commercial traction and trying to get DoD traction, and those are not the same thing. Commercial traction looks quite a bit different. And then you might just be a commercial-first company. You might be something like Microsoft and sell Microsoft Office or products like that. And if you're that kind of company, you probably want to think about subcontracting. You might not need a prime contract with the DoD. And so really the mistakes or the different decisions you have to make as a founder are really going to be different depending upon what sort of archetype you're going to pick. So yeah, this book is about sort of the gap between those three archetypes.

Nice. So you spent the last four months, like Luther said, immersed in the founders' problems who are building for defense. So what have those founders changed your mind about from the DIU?

Yeah. Incredible group of founders. I was just really struck by how much risk they were willing to take. And not just risk in terms of a startup and putting yourself out there. I mean, some of these companies have put themselves on the front lines in Ukraine or in sort of wartime conditions to test their products. But in addition to that, I mean, if you look outside at the YC companies, you see just the incredible breadth of technology, things that'll help maybe an intel analyst, things around wargaming, of course, UAS, group one to five even, meaning smaller drones to larger ones. And so, you know, I wrote the book about this gap sort of between the different archetypes, but really what I realized is that the book is for helping startups actually optimize for speed because they don't have a runway beyond maybe eighteen months at any given time. And so if they're not converting on whatever their business model is, they're not going to make it to that next milestone.

And what surprised you most about what's stopping them?

Sorry, say that again.

What surprised you most about what's stopping these founders?

Yeah. You know, I think that access is getting better. We heard from Under Secretary Michael and Under Secretary Hurst about changes that are happening to try to make it easier to access the department. At DIU, they've always sort of leaned forward into the startups, into the smaller companies, to help give them a way to access the department. So I don't think it's really that so much as it is understanding that, you know, the market that they might be pursuing is not probably what they think in the beginning. And so it's helping them sort of configure the way they think about their go-to-market, the way they think about their business decisions for defense versus sort of the way that most startups are taught, which is sort of the framework of a commercial go-to-market.

So, want to talk about the book. So it opens with two startup founders and an established contractor, and they're pitching at the same table. And so what did you see in that room that a technically strong founder would be least likely to understand on a first visit?

Yeah. So my job at DIU was diligence. And what that meant is I would sit in rooms where decisions were made on what contracts would be awarded to what companies. And it would generally be something sort of like this. There would be a table. There would be ten, twenty government folks around that table, active-duty program managers, acquisitions folks, federal contractors. And you'd have a startup come in, and they would, you know, look rather tired most times, but be casual and do an exceptional job at pitching to the people around the table. But pitching sort of optimized for the problem to solve and a very technically focused, sort of engineering-focused pitch. And you'd get to the question and answers, and, you know, people sort of didn't know how to engage. They sort of, it went into a black hole, if you will. And then, you know, after them, the defense prime would come in. They were all in suits and ties, looking very well-rested. And they would shake hands with people in the room. In most cases, they knew people in the room already from sometimes decades-long relationships. And, you know, they'd pitch, and they would get great questions and answers. And, you know, sort of that was this pattern that I would see over and over again. And it started to make me think, like, what is the startup getting wrong? Like, how are they not, like, the pitch looked great to me. Like, why isn't it? And I think it's because there are many people in the room that it takes to get to yes. It's not just the engineer. The engineer will be a champion in many cases because they understand how your technology is solving the problem. But there's a program manager in that room, and they're thinking about, does this fit the mission? In many cases, startups don't even discuss a mission when they're pitching, which is a huge mistake. There's an acquisition official. The acquisition official is taught to avoid risk at all costs. And so a two-person startup with five hundred thousand dollars looks like a lot of risk, maybe, to an acquisition official. And then maybe there's, you know, other members on active duty or other federal contractors who maybe just don't understand the Silicon Valley language. And so somebody sort of has to interpret that for them in order for them to understand.

Yeah. So a little bit more about acquisition and acquisition reform, because probably a lot of people in here are skeptical about acquisition reform. So what's changed?

Yeah. Well, it was really great to hear from Under Secretary Michael and Under Secretary Hurst. I guess two things in acquisition have changed. Probably one hasn't. The first is, you know, there are really good-faith efforts at reorganizing the department to make it more responsive to founders. And, you know, we heard that on the stage here before. When I was at DIU, that was the case. And I think that'll have long-term consequences, beneficial consequences for our national security. The second thing is there's more money. The budget has just been continuing to go up. Reconciliation is sort of on top of the base, adding to that. And so as Under Secretary Hurst talked about creating markets for startups, that's, you know, going to put a lot more wind at their backs. The one thing that hasn't changed, and unfortunately it won't change probably anytime soon, is the budget.

Yeah. The budget is an annual process. It's sort of arcane. It's sort of mysterious to a lot of founders. And, you know, it happens once a year. And we're at the end of the fiscal year today. Fiscal year twenty-seven starts tomorrow on October first. We'll likely be in a continuing resolution, which does not favor startups, quite frankly. That favors the incumbents. And so, you know, I think that the budget, I mean, if we really wanted to have a budget that was responsive to technology changes, we wouldn't do it on a year time frame. It'd be far more frequent, maybe quarterly or semiannually, to actually adapt and create more opportunities for startups.

Great. So next, I want to address an elephant in the room, which is, is defense tech a bubble?

Yeah. Cash moves quickly. Cash moves very quickly. Defense contracts do not move quickly, and founders are sort of caught somewhere in the middle.

Yeah. And I think that the challenge for a founder is to raise money to the next milestone. And I think when we kind of conceptualize product-market fit in the commercial sector, we think about that really in terms of customers and growth and how fast you can grow. And in the Department of War, it's a little bit different. You really need to fundraise to your first milestone, which is probably a demo or maybe a commercial solutions opening, a prototype project where you're actually trying to derisk that and optimize your product for the Department of War. And then you're trying to now raise again for the next milestone, which is probably, you know, something that comes after a prototype contract. Some internally people talk about it as a transition. It's a program of record or a longer term. And that's probably where you have product-market fit. And then from there, if you can get three, four, or five different Department of War contracts in production, multi-year agreements, you're probably on your way to actually thinking about what is the scale and size of this defense market that I'm trying to go after. And maybe you'll be what Under Secretary Michael called, you know, one of these new primes. You'll start building different types of products to chase other opportunities.

Yeah. So now that we all know how to build a defense startup after this fifteen-minute conversation, what should founders in this room do differently come Monday?

Yeah. So I think founders are always trying to do a million different things. I think one of the most important things is sequencing the things that are ahead of you and the things that need to be done. First of all, I think persistence with the vast array of people that you need to sort of expand your surface area to in order to find where you actually fit within the Department of War is sort of like the thing that you need to do yesterday. And if not yesterday, then Monday or whatever the next day of the week is. That means reaching out to twenty, thirty, maybe more people a day and consistently reaching out to them until you can say, you know, I've run this contract to ground or not. Because I think the biggest problem in the Department of War is people are not very good at saying no to you. If you go through an actual RFP process or a commercial solutions opening process, an actual, you know, where you submit your technology, you'll get a yes or a no, but you generally won't get a lot of feedback because there's a lot of people making the decision. It's actually quite hard for the Department of War to give you a very clear yes or no. So if you're sort of trying to get yes or nos from individual people along sort of that first engagement where you're expanding your surface area, I think that sort of gives you a very good foundation for having a defense tech startup. I think that's thing number one. I think the other thing is, you know, raise money and understand your capital stack in a way that, you know, understands that you're working in the national security business. You can't just take money from anywhere like you can in the private sector. Maybe you have to be a little bit more thoughtful about who's on your cap table, who you're giving up equity for money to. And that will get more and more important as you get more and more contracts, because those people on your cap table ultimately will be evaluated and maybe at some point a reason for someone not to fund you in the future.

Right. It's a good place to end. Thank you so much, Eric. And everyone, Eric's book is available outside. You've probably seen it on these tables and also at the happy hour. We're going to have a signing for his book, Build for Defense. So, Eric Alberg, thank you so much. Appreciate you.

Can we do one more voice-of-God reminder to the lobby to folks need to come in as we've got next panel starting. It's my honor to introduce Senator Tim Sheehy, who represents Montana in the United States Senate and serves on the Senate Armed Services Committee. He's a Naval Academy graduate and a former Navy SEAL officer. He founded Bridger Aerospace, an aerial firefighting company, bringing experience as both a military operator and entrepreneur. And Vivian Shin is a visiting partner at Y Combinator and the founder of education companies Juny Learning and Acy. She previously worked at Google, McKinsey, and as a startup operator, and studied computer science at Stanford. Please welcome the senator and Vivian.

Thank you so much for joining us, Senator.

Thanks for having me.

Of course. You have had an incredible career as a Navy SEAL officer, founder, and now senator. Tell us a little bit about your journey, sort of the lessons that you learned at each of those stints.

Well, probably more applicable today, Bridger Aerospace was our aviation company, but actually more applicable to this was my defense technology company, which now it seems like there's a defense tech company on every street corner. But in 2015 when we started it, defense tech at that point was when I was in the Bay Area trying to raise money from many of the folks who are now defense tech investors, they literally laughed at me. Literally like, wait, you're starting a defense hardware company. And quite literally laughed at me. And so that company was called Ascent Vision Technologies, ABT, and we invented a family of systems called the Lattice family of systems, Lattice, IMATIS, X-MATIS, and that was the first counter-drone program of record system back when counter-drone was again a thing most people hadn't heard of. This is 2016-17, and scaled that company from scratch, about two guys in a barn, and grew it to about three hundred employees and exited that to a strategic in 2020. And as a result, I think I'm the only person on Capitol Hill who has founded and scaled a defense company from scratch. And as a result, I'm passionate about defense acquisition reform. I'm passionate about clearing out the bureaucratic hurdles and the sclerosis that has created a dysfunctional buying system and a dysfunctional customer on the other side of the table. And as much as people want to criticize the primes, the Boeings, the Lockheeds, the Northrups, and blame them for where we're at, they certainly have some blame to bear. But the reality is the Pentagon trained those customers and created that ecosystem over thirty-five years of bureaucracy and sclerosis. So my top priority on the Hill is to reform that acquisition process, everything from specification to requirements to actually how we physically buy those items to then, of course, most importantly, how those items end up in the hands of the warfighter on the front line. And as a warfighter, several deployments overseas, my wife's also a warfighter. She's a Marine Corps officer. We take this responsibility seriously. So I've been leading most of the effort the last year and a half on the Hill to both lead the legislative process, but I'm also deeply involved with the department at the member level, secretary level, and a lot of our program offices, both in uniform and civilians, to make sure we're seeing the adoption of the technology and actually fielding it, because the military actually hasn't really had an innovation problem. It's had an innovation adoption problem. We have all these labs and all these AF Works, Softworks, all these DIUs, all these on-ramps, and all this, you know, mumbo jumbo. And it's like, how many labs and innovation commands do we have? It's ridiculous. Like, you know, and then we innovate and then it sits in a box and no one uses it. I'm more focused on getting that innovation and fast-tracking it to the front line. And we've done that in some corners of the military, but we want to try to make that enterprise-wide. And I think this leadership of the department now has really done that.

Well, that's amazing. Well, actually, that's a good place to start because I know a lot of founders in the audience are curious how you got your first government purchase order when you were running your company. Who took a bet on you? And what mistakes did you make and what kind of things would you tell them as well?

Yeah, I mean, made a lot of mistakes. And of course, knowing what I know now as a senator sitting in my office with people coming through every day, you know, I never went to the Hill as a founder. I was a Navy SEAL team leader who had no business experience, and we started the company, and it was me and a lot of my former teammates that started it from scratch. And we never went to the Hill. We never went to the Hill and advocated for contracts or for appropriations. In retrospect, if you know, Jared Isaacman and I are good friends, and we go back many years because we each had companies in a similar space. He, of course, runs NASA now, and we joke that if him and I had known what we know now back when we ran our companies, we would have spent a hell of a lot more time on the Hill with our hat getting passed around because, you know, both of us were kind of naive tech founders who just thought the best product would win, and we didn't realize that you have to go much further upstream to have max effect. But how we got our first customer was our initial business was Bridger Aerospace. We were fighting wildfire from the air, and we had an infrared sensor system that could sense fires more accurately from the air. And I got that experience having served several deployments overseas during GWOT. Having that airborne surveillance capability was a game changer and a lifesaver for us on the ground. And about the time I got out, the investigation was complete of an incident, the Yarnell Mountain Fire. You may have heard of it. It was made a movie about it called Only the Brave, where nineteen hotshots were burned alive on the side of a mountain in Arizona. And Eric Marsh, the team leader, as I read that debrief, you know, I could feel myself in his boots having been on the side of a mountain in Afghanistan on missions calling in air support. And I realized that him and his whole team died not because he made the wrong decision, but because he made the right decision with the wrong information. He did not know what the fire was doing and where it was going because he didn't have access to the type of information that I had half a world away fighting in Afghanistan. So we took that solution and applied it to wildfire, and in the process caught the eye of some customers in the defense space who liked what we were pushing out there. And we literally sold guerrilla style at the lowest level. And the Marine Corps LAD community became our first major customer who really took a leap of faith on us as they were dealing with the drone penetration problem back in 2016. And we had no air defense capability. We're still pretty soft in that regard, to be honest with you. But nobody had yet fielded anything capable of detecting, intercepting, defeating, or even identifying small drones. So they took a bet on us, and we, from back of a napkin to field it in combat in eight months. We're really proud of the systems we created.

That's incredible. And along that same vein, so it sounds like you sort of started as a dual-use product. I think there's a lot of founders in the audience who get pressured to do dual-use instead of, you know, focusing on one side or the other. Any advice that you would give them for that space?

Focus is key, and I think when you try to do everything, you do nothing well. And I think you have to focus on what's the point of your product. And, you know, when I was trying to raise money to scale my defense company, like I said, and everyone laughed me out of the rooms, which then when we sold the company for three hundred fifty million dollars and I didn't have a whole bunch of VC taking all the gains, okay, like I'm glad I didn't. I'm glad I couldn't raise money, but, you know, it was pretty frustrating at the time when I couldn't pay my bills. But the obsession with what the mission of the product actually is, I think, is incredibly important. And if you're trying to create a product for everybody, you're going to create a product for nobody. And if your product is a consumer product, then make it a consumer product. And I'm sure there will be or could be defense applications. If it's a defense product, then make it for your customer. And I think starting with a customer and the mission and working backwards always leads to the best product. Starting with a product and finding a customer generally does not. So I think figure out who your real customer is, focus on that customer, and if it becomes a dual-use product along the way, great. But especially in this current environment, I think the DoD is a real customer. I can promise you ten years ago, oftentimes it was not, especially for a startup. But now it is. And I think you can raise money, you can build a business, you can create a product pipeline that's real based on DoD's, not just their rhetoric, but actually what they're doing.

Makes sense. And then you also mentioned that, you know, in the appropriations acquisitions process, there probably could be some changes that could be made, especially for a lot of the founders that we work with. They're sort of in the prototype phase and they want to get to the scale up. So what kind of changes do you think that Congress could make to make that process easier?

I don't want us to have a defense industrial base. I want us to have an industrial base that the defense department partakes in. And I think this narrative that we need to have a DIB, we can strengthen the DIB, you know, increase the DIB, whatever. You know, Ford made most of our airplanes in World War II. You know, GM made, you know, they were making, you know, pizza pans, making hubcaps. You know, we have the ability, the best telecommunications company that's making the best phones for consumers is probably also going to make the best phones for warfighters and the best communication devices. And if we bifurcate the excellence of the American economy, we're not going to end up with the best players in both fields. And I think if you're making the best vehicles for the American consumer, that's probably also going to be the best vehicles for our warfighters. You're making the best communication devices, so on and so forth. And I think that's how we've seen in the last few years. I mean, if you remember, again, I keep heating going back to my founding years, but those are the years when Google and Microsoft wouldn't talk to the DoD and they had, you know, workers walking out of their buildings saying, "You took a dollar from the American Defense Department. That's a genocidal evil organization, even though I'm an American and live under this umbrella of freedom that they provide. I will not work at this company if you do business." And that was a real thing. If some of you don't remember that, that wasn't that long ago. That was like 2015-16 timeframe. Now the conversation has changed greatly. Thankfully it has, but we lost a lot of time.

That makes sense. Actually, that's a great segue into my next question, which is, you know, for a lot of these companies that have smaller orders, they're sort of small suppliers. How can Congress work with them to really scale up their production, potentially help finance it, or help them find ways that they could know a little bit more about the future before they invest?

Yeah. I mean, one trend we've seen at Y Combinator as well is the defense companies are raising some of the largest rounds at Demo Day, and then also sort of the downstream of their supply chain as well. Those companies are really scaling up as well.

Makes sense. And then, actually at Y Combinator, we also work with a lot of founders who served in the military like yourself. What kind of advice do you have for folks in the military who might want to start a company one day, or who already have?

Incredible. I think that's a great place to stop. But thank you so much, Senator, for speaking with us.

There we go. We do have some slides here as well, but check, check, click, click. Hopefully we do. Otherwise, this is going to be very difficult. There we go. Perfect. So, who we are? We're Arendelle. And what we do is we build the whole ecosystem, plug-and-play, for shooting down anything from fiber-optic drones all the way up to Gar-5s and newer jet-powered threats, actively deployed in combat, confirmed shoot-downs. And we're a team of all combat veterans. And why is this doing this? There we go. So, I'm sure a lot of people in this room, everybody's heard this: Patriots are great. They're very expensive. We can't build enough of them. And current systems that are in use in place as well are very expensive. When you compare that against a $50,000 Shahed, $80,000 if you have the Jetson fitted, there's a major issue in terms of economies of scale. And additionally, as well, a lot of primes, they sell the hardware. Most buyers as well cannot absorb that. The training doesn't necessarily go with it. A lot of kit sits in crates, ends up being unused while the threat actually develops. So where we play is we own the low-cost, attritable layer. So what we do is we shoot down anything from fiber-optic drones. In fact, actually, we've got a nice little infographic on the bottom. These are some of the things we've actually shot down in Ukraine right now. So fiber-optic FPV drones, Molas, Lancets. I particularly hate Lancets because they make no noise when they come in as well. They're very, very scary. Garan-2s, Garan-3s. So that's kind of your Shahed-136s and 236s as well as your Garan-5s, which is the newest system we're pushing out right now. We do that via our range of products. So we have our base platform, which is our Aloss system. This is our base interceptor platform. We have different variants depending on where we operate in the world. So our desert variant is slightly different to our cold-weather variant, for example. This is fully autonomous in that it does not require a pilot at any stage of the process. We've reduced months of training down to three mouse clicks: launch, pursuit, intercept. And essentially what you get is a nice live stream of this doing the work for you against the Shahed. Where if you're active military and you want to come have a look, we have some footage we can share with you as well. We also have our Hollow Sight. Correct me if I'm wrong, but I believe this is the lightest thermal-fused holographic sight in the world. It lets you spot people in the dark. And then we have our Orion headset as well, which we originally built as a sensor for our interceptors. So this is thermal-fused night vision with a rangefinder built in. You can look at a target, laser distance, reports bearing, heading, everything you'd need for a fires order. And then you could watch an AOS going in on that as well. But turns out we actually built a super powerful infantry tool, as this is the only thing in the world that allows you to shoot and move as a drone pilot. We also have our entire training track that goes with that as well. So we update our techniques every two weeks direct from the front line, and we train on everything from flying to engineering, navigation, as like a section commander for sergeants, corporals, depending on where you are, even down to counter-fortifications and interceptor drone flying as well. And we will do all of that with no Chinese components at any stage of the process. So this is essentially what we do. We operate under three budgets with one vendor: so counter, soldier, training. And we can actually do the managed services wrapper that comes in on that as well. So we train to equip. So if you need the plug-and-play capability, we spin up the whole thing from scratch. We'll skip ahead of this, and I think this is a very, very good point. The guy that made the slides — when we put primes, a lot of companies sell a system, and it's all well and good having a system. How do you actually use this system? How is this system deployed? How does this system stay updated and relevant as threats go? You look at the drone marketplace today, it's a game of cat and mouse. There's a new hardware iteration every couple of days. You know, when you're talking six months of authorizations to get something across the line, that's non-viable. You know, we have a new variant every two weeks on our hardware, every two weeks. And this is what it takes to actually shoot down drones in contested environments. Does it work under GNSS spoofing? We do. Does it work under electronic warfare? We do. And that's something that, being combat veterans, we learned the hard way. I still have big scars on my neck from where we got it wrong quite a few times as well. So, let's talk a little bit more on the team. And we have myself, James, my co-founder Dan sat front and center over there. We've got quite a bit of experience between us. We're surrounded by incredible guys. So, actually, there's one of the guys we have in there called Pedro. He's our capability lead. He shot down so many Shaheds by himself that the units stopped paying him the unit bonus because they're running out of money. And between the team, we shot down more Shaheds than half of NATO combined at this point. So if we don't know what we're doing, nobody does. In fact, actually, we shot down more Shaheds and Garan drones than the US Navy did over the recent Iran conflict as well. So pretty handy there. But I think the key line that we're trying to get across here: built by operators, for operators. So, we know full well that our equipment is going to be wrapped in sniper tape, dropped in a puddle. Every shiny bit is going to be covered up with some kind of matte tape, and it still needs to work. I really wish this would move a little bit quicker. So, here is what we're based around. We give the West the ability to outpace the threat. We bring that iterative development back, and we're directly plugged into the front line now so that countries that aren't necessarily exposed to these contact zones still get the benefits of that frontline knowledge. We have orders going through. We're actively deployed in Eastern Europe. We're actively deployed over the Gulf. In fact, we're one of the few interceptor companies that has confirmed hits over the Gulf and over Ukraine as well. And I don't have too much else to talk about. So that was us, Arendelle, giving the West the ability to outpace the threat. We've got a booth out there. If you want to see some interesting stuff, come and have a chat with us. Thank you.

All right. Well, thank you to the hosts. And I'm Edward Henson, the CEO of Zephr Fusion, where we are building compact, megawatt-scale fusion reactors for orbital applications. The team is comprised of a number of experts in the relevant fields. My co-founder and myself were lifelong fusion physicists coming out of Oak Ridge and Lawrence Livermore National Labs. So lifelong thermonuclear fusion physicists. We have engineers from Turan Space, NASA, Proxima Fusion, Commonwealth Fusion, Type One, and advisers from Relativity, Planet, Air Force Research Lab, and NASA, including with space nuclear experience. We got started with the project because every major space effort is power-starved. It's almost something we've forgotten about. There's a huge fraction of the total engineering effort that just goes into launching an asset that works around this problem. In practice, about 10 kilowatts is the working ceiling of what actually operates out there commercially. Skylab broke that ceiling in the early '70s and basically stands today outside of government assets. But whoever delivers me power in orbit will become a foundation layer of the space economy. This stands in stark contrast to the future a lot of us grew up reading about. There are by now decades of well-thought-out applications in manufacturing for novel materials, in microgravity transport, propulsion applications, and many more that simply await a source of this power. There's also compute as a major ambitious new effort. A lot of times it's discussed as essentially a discussion about how to get the power there. And as ambitious as it is, gigawatts have been proposed, none of the individual installations exceeds about 150 kilowatts per panel. And this is because solar scales with area. So if you are doing something under 100 kilowatts, that's probably the solution, or doing it using a distributed load. But if you want to get something powered at 10 megawatts locally, you're invoking an area that's going to span the base of the Great Pyramid at Giza in orbit. Chemical energy deserves mention because it powered the industrial revolution down here, but it gets us up to orbit but it doesn't pay its own freight beyond that. But what does pay its own freight is nuclear. So nuclear is a million times more energy dense than something you get out of a battery. And then fusion — that's fission and fusion on top of that — gives you another factor of 100 per unit fuel. So, you know, 1 to 10 gigawatt-hours per gram. So you can — yeah, it's a megawatt-day basically per gram. So why fusion in orbit? The top-line result of fusion research over the past few decades is essentially that you need lots of volume and you need lots of field inside that volume in order to confine the plasma well enough to heat it to fusion temperatures. This large volume then sets the size of the entire reactor. There's a bunch of layers of infrastructure that have to be built around it that set the total cost in the 10 to 100 billion range. So this is ITER. This reactor, this is a $65 billion piece of hardware that will achieve 500 megawatts thermal. What you can do in space is, of course, leverage the natural vacuum environment, and all you need — the only resource you need to provide is high magnetic field. And that, in the past 10 years, with the commercialization of tapes — this high-temperature superconducting tape — for the first time has become possible. And in the past five years, it's dropped by an order of magnitude in price. So then the expected performance of this type of reactor is very favorable compared to the best-in-class currently. Zephr's program has now initial designs for a 1 to 10 megawatt installation. This would be something that could fit in single-launch capability with room left for the payload. But what we are doing with our hands and feet now is developing Balas, which this is our first demo. It will field high-temperature superconducting tape in orbit, and it will levitate the coil according to a method that we've developed and patented out in front of it. So this will be a first-of-its-kind demonstration. We're in the process of signing launch paperwork for this. This should be late 2028. The ask would be that fusion have a lane alongside fission. So this leverages existing investments that the government has already made in this type of infrastructure because much is held in common with fission. So fusion has generally the same energy conversion needs, heat rejection pathways, and high-power bus work, etc. So a lot of the infrastructure can be developed in parallel. However, fusion has a non-hazardous bill of materials on the launchpad. So it has a distinct advantage there, and as I said, it operates with higher energy-density fuels. Another strategic aspect of fusion is that it can be used to create sensitive materials that would not otherwise be available, otherwise very difficult to produce. So with that, I'll — yeah, we're Zephr Fusion. We were founded a year ago, now up to a team of 10 people, and we plan our initial demonstration late 2028. Thanks.

In case you didn't notice, we are entering our space section of our programming, which is very exciting. And after this amazing panel that we've got, we're going to have the NASA administrator in a fireside chat. So I encourage folks who are out in the hallways to make their way in because this is some very exciting stuff we've got going on here. So Bram Shor is the co-founder and CEO of General Astronautics, which builds robots for research and manufacturing in microgravity. A Caltech-trained aerospace engineer, he previously worked at SpaceX's Starlink laser systems and industrial autonomous robots. Skylar Chan is the founder and CEO of Guru Space, which is developing lunar construction and infrastructure. He studied electrical engineering and computer science at Berkeley and previously worked on vehicle software at Tesla and a NASA-funded 3D printer launched into space. Alex Lisso is a co-founder and CEO of Inflection Space Systems, which is building spacecraft manufacturing capability. His engineering experience spans spacecraft designs, testing, operations, with work at Millennium Space Systems, Rocket Lab, Planet Labs, and Interloom. Jacob Assos is co-founder and CEO of Orca Aerospace, which builds AI spacecraft operations that run on board the vehicle. He spent more than a decade at Lockheed Martin in guidance, navigation, and control, including starting its first AI-focused team in that field. And last, but certainly not least, I'm really honored to have Jacob Reese, who is our moderator. Jacob very recently served as the chief of staff to Vice President JD Vance, both in the Senate and the Vice President. He previously advised Senator Josh Hawley and is a Stanford Law graduate. Please welcome to the stage Bram, Skylar, Alex, and Jacob in conversation with Jacob Reese.

All right. Thank you all for joining us. Really, really excited for this. So for each of you, what are you building, what exists today, and, you know, any other sort of introductory spin that you'd like to put on it?

Yeah, happy to kick things off. I'm Bram, founder of General Astronautics. We build super-intelligent robots for on-orbit and lunar applications. So today, everything from orbital warehousing to asset resupplies to cargo management is a labor problem, and we have a labor shortage. So General Astronautics is building the orbital fleet to fix that. Today we have robots that are 26 years old sitting on the International Space Station. They are decaying, and despite what they'll put out there, there's numerous problems with them, and they're not intelligent systems. And so General Astronautics is applying kind of the novel approaches with reinforcement learning and robot control policies to build fully autonomous robots.

Hey everyone, my name is Skylar Chan. I'm the founder and CEO of Guru Space. We're building America's moon-based company. Our goal is to build the first cities on the moon and Mars within our lifetime, before we die. And we have a mission that is going to the moon as early as next year to manufacture the world's first product on the moon, the moon brick, out of moon dust material. We're based in Hawthorne, California, and we're on a mission to change the course of human history once we build a foundational layer for America's moon base. Whoever gets there first to the very few resources that are left currently unclaimed on the moon will control the moon, and we have to make sure that we're the first ones here. So very honored to be on this panel today. Excited for everyone.

Hey everybody. My name is Alex Lisso. I'm the co-founder and CEO of Inflection Space Systems. At Inflection, we are mass-manufacturing spacecraft. We're targeting a production capacity of 10,000 satellites per year in the early 2030s. Today, manufacturing in the space industry is sort of structurally high-cost and low-volume. You know, it's very normal for a single spacecraft to cost millions of dollars, and a manufacturing volume in the hundreds per year is aspirational at best. We believe this fundamentally needs to change at a fundamental level if we're ever going to move infrastructure or industry off-planet. And it's really critical for this to happen really soon in America to ensure that we maintain our strategic edge as other countries sort of catch up to us in launch capability and cadence. So yeah, we have our first launch booked for about a year from now, and we're looking forward to getting flight heritage on our entire hardware and software stack. I'll leave it there.

Very cool. Hey everybody, Jacob Waski. Super excited to be here today. I am co-founder and CEO of Orca Aerospace. We are building super-intelligent spacecraft operators that live fully on board spacecrafts and satellites for fully autonomous systems to not rely on the fragile ground link anymore. So right now we believe that Orca is the only option for building and scaling constellations to be able to work with satellites and keep missions operational when ground stations are jammed, denied, or fully destroyed. We have our first launch with a major aerospace prime within the next six months, and we are going to be building the future of onboard operators. Thank you.

Great. Alex, what has to change to make spacecraft production repeatable so that you're not turning every project into a sort of new engineering project that has all sorts of new cost and time associated with it?

Yeah, totally. Yeah, thanks. A lot of things. I think, you know, top of mind for myself and our team right now is supply chain. So, you know, the individual piece parts that constitute a spacecraft — the microelectronics, the screws and fasteners, the adhesives even — are almost entirely, you know, uniquely made in a boutique way for space applications. This means that, like, not only are they really expensive, but they're prone to supply-chain bottlenecks and really rapid parts obsolescence. So, you know, if you design a satellite and you want to build more and launch more of them, often times you need to go back to the drawing board on some of these very small pieces and end up redesigning entire subassemblies or the entire spacecraft. So it ends up being, like you said, a new engineering project every time, even when you're notionally building the same thing over again. So the way we're trying to design around that is by using only terrestrial parts, you know, looking at established high-volume manufacturing industries like consumer electronics and drones, cars and the like. Making sure that the entire hardware stack is based only on these robust industries and these supply chains so we can build in a much more scalable and robust way. The other thing that comes to mind is, like, the interfaces that, you know, we use across the space industry. Whether that's between spacecraft that are docking and interacting, whether it's between spacecraft and their payloads. You know, space for so long has been like this almost science project, right, where we're trying to see what's repeatable, what works again and again. But there's a bit of organic standardization happening now across the industry where we all realize, oh, it's better if we all use Ethernet, where we all use the same voltage levels, the same mounting patterns, right? So I think it's going to be really important for that trend to continue and for, you know, partners on the private and government side to find more ways to sort of standardize interfaces and basically move quicker to get sort of new things integrated and launched really, really fast.

Jacob, great name. How do you get customers to trust the idea of taking decisions on the ground, bringing them into space, having those decisions? What sort of validation do you need to provide customers that they're going to get what they need?

Yeah, it's the same way that traditional aerospace, you know, new products like what Alex is building goes off the ground. You go from — you climb the TRL readiness level. You go with and test your operators from software-in-the-loop, processor-in-the-loop to hardware-in-the-loop. You test on flat satellites and then you do on-orbit tests like what we're launching early in March of next year. And each along the way, on each of your tests, you have metrics in place that you compare it to traditional human-in-the-loop human operators, and you see if your AI operator is meeting or exceeding the traditional ways. And you test that with thousands and thousands of synthetic missions and real missions that you compare it to and see can the AI operator perform as good or better. In our case, we've always shown that the AI operator performs significantly better than a human operator on the ground.

Bram, you're building robots for working in microgravity. Who's the first customer who's going to need this done often enough that you can make it a repeatable service rather than just an experiment that they buy one off?

Yeah, absolutely. So there are a number of customers. The first one largely is anyone today who pays for astronaut labor. So NASA currently figures astronaut labor at about $135,000 an hour. If you ask the private space stations, that number is about three times that, to half a million dollars an hour. It's not safe or scalable for astronauts to continue to be the labor providers for space. So we look at who is currently paying for astronaut labor on the International Space Station, who has requested space on the private space stations. It's the manufacturing of biologics, of metamaterials, of compute functionally, which we don't think of as an asset that we're manufacturing, but ever increasingly so it's a real possibility in space. And so one of these customers, Starcloud, is proudly one of the companies part of the $30 million of commercial LOIs that we've gathered. And so they will be kind of the first commercial customers. And then we see on the government side we have a ton of very interesting applications all the way from Golden Dome. We have orbital warehousing. We have orbital logistics. We kind of look at the way the US defense industry currently works. We have the F-35. When we're finished with the F-35, we don't throw it away and let it burn up in the ocean or whatnot. Instead, we bring it back and we resupply it and we launch it back up. And so our satellites are going to be no different. Especially, I mean, we saw two days ago we had Starship launch again. As we get larger launch vehicles, suddenly the economics of repairing assets in LEO make more sense. This is not to mention the higher-value, higher-technology assets that we're adding to LEO, to GEO, to the moon. The economics of repair make sense today and will only become more profitable.

Skyler, Guru's ambition is lunar infrastructure and construction. Obviously there's a mature version of that ecosystem. It's a really exciting vision, but between now and full maturity of that ecosystem, what are the products or services that customers are going to be able to buy that are useful right now?

If we're serious about building a moon base, the first thing that we need to solve is how do we turn lunar resources into the world's first-ever construction material on the moon. So the first step is we need to make, you know, a brick on the moon before we can build a moon base. Then we can go on to build things like landing pads, roads, warehouses, barracks. Literally look around the room here. Every single thing that we built on Earth has been built with concrete, has been built with construction material. Instead, right now the status quo is we have to bring all of this material from Earth to the moon, which is a huge problem. This is why people, when they look at moon bases or moon construction, they think it's crazy. If you break it down, if you can use the lunar resources on the moon locally and turn that into building material, that's the kicker. That's how you bring down your unit economics at scale. Not just for ourselves as a business, but for NASA, for partners, for everyone else in the industry. America wasn't built with just resources brought from outside. It was built with American resources. The same principle will be applied on the moon. And the first step is making the world's first-ever bricks on the moon as early as next year.

For each of you, when you think about the risks to your business and you think about where we're going in space, what has to go right for your core business thesis to be successful? And whoever is most excited to answer that question, go first.

I can go first. Yeah. I mean, it'll probably be similar to what you said too, because I think the standards and putting in place, you know, common standards across both hardware but also software. You mentioned a lot about the hardware standards that we're really trying to drive naturally to some cohesive standards. But the same thing needs to be true with software. The same thing needs to be true with data sources that you can ingest different pieces of software, different types of flight software, and different disparate data sources into one common synthesis engine. And that really needs to go right across the industry. We can't keep building up bespoke pieces of software with bespoke interfaces so that no new companies can go in and build up novel software that can really federate throughout the ecosystem and hardware. And I think that's what really has to be the next generation, the next evolution of our typical bespoke space architecture that we've been predicated on for the last few decades.

Yeah, I would certainly add on to that. Just we see kind of the incredible advancements in software, and then we look at it. We live in just an incredible age of abundance, an age of abundant intelligence, an age of abundant superintelligence. And we look at like all the domains that that's going to apply to. We're kind of at this point where everyone agrees that it's not an if but a when we get this translating to the physical world. So if we think about any sci-fi future that we imagine, we think about what any form of a dominant American space enterprise looks like. It requires the competence and the labor capabilities to own this domain. And so it really is not what needs to go right, it's how quickly it can be accelerated.

I think the elephant in the room in the space industry right now is launch, right? I mean, it's been a big year for launch with, you know, SpaceX going public and maybe winding down the rideshare program that the industry has relied on for so long, right? I'm really, really optimistic when it comes to launch. I mean, having worked at Rocket Lab and across the space industry, I've seen there's — I know there's a lot of really brilliant people and billions of dollars invested into alternative forms of launch, other rockets, right? We think about like 10, 15 years ago before Falcon 9 was really launching in a regular cadence, and there was not a ton — there wasn't much of a new space sector, right? But once Falcon 9 became like a repeatable, reliable ride to orbit, this entire incredible industry was sort of born. And I think, you know, when we see three, four, five more rockets come to market that are reliable and can launch at a really high cadence, I think we're going to see just an explosion of growth across the commercial and government space sectors. So I'm really optimistic when it comes to that. But I think, you know, that is a risk because, I mean, you can't have much of a space industry for any of us without getting to space on a rocket.

I know what Alex is saying, like the biggest problem is launch, right? Access to launch — that's a problem for everyone here who's trying to build in space. But on top of that, like when we do big things, like, you know, we've got ambitions to build a moon base, the question is often like what is that key technology risk that you have to do as a startup? I mean, for us, our core technology is building an autonomous robotic factory that goes out and excavates lunar regolith soil on the moon, processes it, compacts it, cures it, and then places the world's first product on the lunar surface. Now obviously this is like a crazy thing for some folks, and people ask, well, how do you derisk this? Like how do you ensure that this is actually something that's possible? When we're building a moon base, there's a whole sort of different set of technologies that need to occur, and especially launch, to get this right. Our take is that, okay, instead of, you know, for example building large structures on Earth and doing like huge demos, we should be focused on a critical path. Like what is the singular most important demonstration we need to prove to the world to increase our TRL to the max, to TRL 9, and show that this technology is even possible? Because at least for us, humanity has never built a product on the moon. Just think of pure facts like that has not been done before. So this is why if this is successful, this becomes a historic moment. And then now the question is, the key is how can you do this on a low-cost way, which is what our first mission is. And so actually this question has really been the thought process behind how we've designed our own technology missions for our roadmap.

We've got Jared Isaacman coming up soon. He's probably listening backstage, and so it's a great opportunity for each of you. If he's listening, what's the most important thing that NASA could do right now to help each of you with your major milestones? Or alternatively, if you'd rather talk about things that have happened, what's NASA been doing that's really helped you along the way? And Jacob, you can start.

Yeah, sure. I'll happy to start. For building up super-intelligent operators, we need training data for missions. And NASA's the best place that has the greatest history of operations, both operations that went incredibly well, but also operations that had faults and anomalies. And we need to be able to ingest and have access to all that type of data to build into our operators so it can learn from prior missions and understand what to do in all those types of situations.

Yeah, I would love to see more like commercial pathways for companies like ours to work with NASA, of course. You know, what I think of specifically is shortening the cycle time between maybe like science need identification and launch into orbit. You know, I know from experience a lot of spacecraft, a lot of payloads, vehicles go to space with excess payload capacity, right? So it'd be great to find more ways to, you know, just get science instruments up there, right? Like every kilogram counts, and if you have excess mass, we should be doing something with it, right? We should be doing cool science. We should be learning more about the Earth, the universe, the space environment. So, yeah, finding ways to really shorten that cycle time from like years to like months, and then basically move way faster with commercial companies would be really cool.

At Guru, we have a laser-focused mission, which is to build the moon base and to win the race and be the first to manufacture product on the moon. NASA is building a moon base. They're investing a lot of dollars into building this. We would love an opportunity to brief the administrator about our mission, see how we can make America the world's first bricks on the moon, you know, first ever made on the moon. Yeah, that's for us.

Yeah. So we live in just an incredible time where we, and the royal we as an industry, are incredibly fortunate to have the backing of the private capital markets at a time when simply no one else has had access to. And the key benefit of that is that we get to move on disjoint timelines. And while the government's timeline is rapidly increasing, we get to start today. We have started months ago, years ago. And so General Astronautics, we're building robots. We're going on a parabolic flight next month. We're going to do a fully autonomous demonstration of our robotic policy swapping GPUs in microgravity. We're continuing on our engineering pipeline completely disjoint from the numerous contracts that we're pursuing. And so the one thing that I would ask of Jared is we have robots ready, and there's some pretty cool opportunities on the moon, and our robots would be on those rovers to show humanity what can really be possible with American dominance, American superintelligence, and American labor in space.

We've got a little bit of time left, so I'll ask one more question. What do you think might surprise us the most about where commercial government space development's going? Like do you think there's something that's going to happen over the next few years and we're all going to look back and, you know, be on stages like this and say, I can't believe that moved that fast.

I think we could spend an entire panel on that, but I think the number one thing is that humans really suck at exponentials. We're really bad at estimating large numbers. We're even worse at estimating exponentials. And what is superintelligence if not humanity's greatest exponential? And so I can sit here and I can conjecture what I imagine it might be, but I simply think it's going to be unimaginable, and we just got to build towards that.

Anyone have a definite guess about the

Exponential and what it might look like?

Sorry, what was that?

Anyone have a very biased take if that's all right? I think the exponential is it all comes down to, let's just boil it down for a sec, like remove space for a second. Every single technology revolution in human history has always come down to humans learning how to make use of resources in a more intelligent way. The exponential has always been like how we figured out how to unlock a new set of resources that we haven't tapped into. For all of human history, we've been on Earth. We've built real estate on Earth. We've been using resources on Earth. But for the first time in human history, we can go again, bias to the moon and use those resources, like around 38 million square kilometers of free real estate that we can turn into products, infrastructure. It's like the Louisiana Purchase 2.0, but we don't have to buy anything. It's it's incredible. And so I think like this is the exponential moment in our history where like 30 years everyone's going to be like, 'Oh my god, like this is so obvious. Like we should be building infrastructure there on a new place because that's how every single technology revolution has started where a lot of people are like this is crazy at first, then we prove that's possible and we continue building the technology needed to support this exponential growth.'

I'll take it a step further. I think you asked kind of what will surprise people. I think people will be surprised at what we accomplish in our lifetimes, the next 20, even 10 years. Uh, what gets me jazzed up, I mean, thinking about this panel right here, the technologies we're working on, if you combine them. I mean, we have thousands of satellites that are autonomous that can, you know, interact with things in space and supported by lunar infrastructure, refueling stations and comms networks. That's what you need to like mine the asteroid belt, right? Like the crazy stuff that people think is super sci-fi is actually physically possible and enabled by the technology that people are building today, uh, when we combine it in the right way and, uh, build lots of it. So, I think people will be shocked, um, in in 10 years with what we're starting to do and do in space.

I fully agree with all that and the exponentials is my big bet for constellations and mega constellations and the whole need for AI operators and why you can't do things like collision avoidance on the ground anymore. But I'll take it one step further as well. But the need also is going to come from the war fighter. I feel like a lot of what we're seeing right now is how the war fighter and, uh, on orbit warfare is actually starting to occur. And I really do think that we'll be surprised as the battlefield shifts from on the ground, what we're seeing in Ukraine right now, to on orbit and how that becomes the most contested area that we as startup founders really need to shift our mindsets and focus to build the best technologies for not only our commercial partners but also for the war fighter.

It's incredibly exciting. Thank you for all the work that you do.

We have time for one one or two questions if, uh, folks have a question.

Any questions?

Yes.

Hey, Scott Freeman from International Preparedness Associates. Um, we actually work at NASA now helping to train astronauts at the neutral buoyancy lab. My question to you is, as you moon, as you, uh, factor in what you're doing on moon base, are you thinking of the human interaction with your robots?

Thanks for the question. Yeah, our robots are designed, our factories are designed to be as autonomous as possible because this decreases the risk of, um, having like human, like it's very costly, as Bram is mentioning as well. It's very costly to have an astronaut on the moon to operate these factories. So we've designed these factories from the get-go to be as intelligent and autonomous as possible so that we can increase the supply capacity of output of, uh, not just bricks by the way. I mean this is the atomized unit of the key technology which is the construction capability to do all kinds of things. Uh, so that's how we're approaching it right now. Eventually we're going to want to have a vision where we have cities on the moon and Mars which implies that there's a human element there which is exactly on our road map. Eventually want to have places where humans live on the moon and Mars, which I think personally this is like the most exciting thing that we can work on in our lifetime. I mean, what a beauty it is that we can actually have humans live on the moon and Mars. We could have been born a thousand years later, thousand years in the future. We're born today in 2026. Here we are where we can make products on the moon in this decade. Thank you.

Any other final questions?

All right.

Do you got one, Luther?

I don't. Go ahead, Jacob. All right. Well, uh, thanks so much for, uh, sharing everything that you guys are doing. It's an amazing time to, uh, be a founder. It's an amazing time to be innovating right now. And, uh, we're just really, really grateful for all the work that you're doing. Excited to see what happens. So, thanks so much.

Thank you.

Thank you.

Heat. Heat.

I think this is one that a lot of you have been, uh, highly anticipating. Uh, so now we have a fireside with, uh, uh, Jared Isaacman who is NASA's 15th administrator, an entrepreneur, pilot and astronaut. He founded payments company Shift4 and co-founded Draken International which provides military aviation training. He commanded Inspiration4, the first all civilian orbital mission, and Polaris Dawn during which he performed the first commercial spacewalk. Do Ashi Desyaki is co-founder and CEO of Spacium which is building fully automated refueling stations in orbit. Her background spans orbital mechanics and rocket propulsion, including work in interplanetary transfer models and rocket systems. Please welcome administrator Jared Isaacman and Ashi to the stage.

Thank you so much for being here. Uh, it's really exciting and thank you wifey for this event. So my first question for you is, for a startup building space capability that might serve both civil exploration as well as national security, what would you advise the founders to find their first mission and their first customer?

Yeah. Well, I want to, uh, just since I know a lot of these, uh, where a lot of these questions go, opening opening disclaimer. NASA is like a really terrible buyer. DOD is a great great buyer in a lot of regards. You all you have to do is look at our our budgets to know, uh, to know that that that trajectory. But meaning, uh, especially for like the the big prime type players, we buy a handful of really exquisite things. But what we do really well is help mature technology and that should be very positive for a lot of folks in this room. We'll probably talk about that on Moonbase and other tech demonstrations. But in terms of like, hey, I want to build something in space and I want to I want to be able to appeal to as many potential buyers as possible. I think it'd be very smart to think through right from the get-go what overlaps both national security needs, uh, and potentially NASA's requirements, uh, as well. Where to put your attention? I would say, uh, if well if you're going to events like this and other, uh, space related conferences, AFA for example or, uh, you know any of NASA's events, what are we all complaining about that don't that don't have an owner? Just I mean right now what would you hear a lot of? Well, you'd hear a lot about launch. Uh, if you want to get into that world, that's so be it. But there is an immense amount of demand to put more payload mass into orbit. But you hear things like hypergolic thrusters. So all the payload buses that NASA procures science missions on, uh, have hypergolic thrusters. Do satellites have hypergolic thrust. So you hear immense supply chain issues on that. But I would say, uh, yeah step one is like listening to where people's pain points are right now, uh, in terms of problems that exist without owners. No one is saying that, uh, you know, oh that company's got that under control no problem. And we deliver within our our time frames and then yes for sure look at where there's overlap space is still extremely these are very early days right now there are not a lot of customers that out there so if you can be solving a problem that has applicability to NASA, the DOD, other civil providers, that's a that is a great place to be.

Okay, and so how should a five-person company respond to NASA's interest in lunar capabilities? Also where should they start and what purchasing pathways could could it be open?

Yeah, I I mean I would say that is an excellent place to start for a lot of the the companies, uh, that would be in this room is Moonbase is an incredible opportunity for you all. I mean we put the demand signal out for lots of landers, lots of rovers. So this is this is actually more akin to how we did things at NASA in the 1960s to build up to very challenging outcomes. Mercury before Gemini, an awful lot of Apollo missions before the the Eagle landed. That's the right way to do it. We're doing lots of landers, lots of rovers to execute on what we refer to as the science of survival. You should all love that because the the alternative approach which we were doing more in recent history is the just build the giant glass dome with the nuclear power plant next to it. It's going to go to one prime contractor with a hundred subcontractors with dozens of international partners all making their contributions. Then it just gets canceled after we throw away $20 billion or something. So we have invited industry, we've invited Artemis Accord partners to say, 'Look, we we're buying these landers and rovers to learn. Yes, we'd like to learn about what we should ultimately lock in for power, communication, surface mobility, logistics. Have at it. There is going to be a lot of payload mass and volume available in these. And we have lots of different avenues to interact. I would highly advise talking to Carlos, uh, Galan. He's our moonbase viceroy. But we have, uh, we have, uh, CBER and, um, Nextep and a lot of programs out there. We've been dropping RFIs like crazy on who's got good ideas that you want to test out on lunar surface. Haven't been there in a long time. That is a great way to mature, uh, technology versus again thinking in in this context it's going to be like a prime dominated event. It's not it's going to for the next six years on the moon base there's going to be a lot of opportunities to prove out technology of which to not to get ahead. I would highly steer you towards robotics and I know it's an area of great interest to yours. The astronaut bouncing around on the moon thing is very cool. It's very inspirational. Believe me, it's like the last choice. Uh, you know, you you want to send them outside when something broke to fix it. Uh, every time we put astronauts out in that extremely harsh, dangerous, demanding environment, uh, you're taking risk and, uh, and risk with not a lot of, uh, rescue options on the lunar surface like you have on the International Space Station. So point being is we are going to need to dial in robotics. If the moon is our technical proving ground to go to Mars, we're going to get really really good at robotics and lunar surface. It's an area it's a steer I'd give you if you're looking at, uh, surface payload, uh, opportunities.

So that brings me to my next question. So which space programs make sense for NASA to buy commercially and which require the agency to take a different role?

Yeah. So it's somewhat of a actually I don't even know if it's an unpopular position. I assumed it would be. Um, a lot of people thought I would come into this because frankly I'm only in this position right now because I had the opportunity to go to space twice through commercial space industry and as such I'm I'm a a champion for commercial space. But I also acknowledge some of the limitations associated with it which is not every problem can be solved by just slapping commercial on it and assuming that's a solution. So space is really hard and the economy associated with is very immature. What I would say is I am, uh, I think NASA, I think DOD, I think industry would naturally gravitate, uh, towards buying services, you know, commercial services when it's very clear you are one customer of many and you are not propping up the entire industry as a as a sole customer because in that respect really you're just acknowledging that we don't have enough of a budget to do it. The company you're buying the service from doesn't have enough of budget to do it. So they're going to borrow private capital to finance it. And then NASA which we should have quite literally like lowest cost of capital is paying, you know, 20% hurdle rates or something launch observation and communication and all the associated agencies there's markets there for it. So what do I mean by adjacencies? When we say launch observation communications I mean, you know, you're you're you're doing a variety of sensing satellites that also serve DOD, agriculture, weather, space weather. Great. I'm I'm very sure that you can continue to build out those platforms and instruments and have a service model associated with it. Juice it up extra with, uh, super intelligence makes lots of sense. Uh, launch, do I would I put transfer stages in that? Of course, like that, you know, we're going to have our our trans moon railroad of of sorts with transfer stages bringing payloads back and forth. Like I believe that will be a useful service. The more you get into low TRL stuff, the riskier it is to say that should be a commercial service. Um, you know, we took some hits early on with moonwalking as a service, uh, space suits on that. Was no no fault of the company or what it just we're the only foreseeable customer for that for some time and NASA also didn't play its part by actually helping drive an outcome. We got convinced at some point if it's a service just sit on your hands and everything will be delivered. So we're course correcting there but if it's low TRL you probably want some sort of a cost plus to mature to high TRL and then you offramp to fixed firm price and if you're truly one customer of many it probably should be a service-based model.

So at Spacium we work on in-space refueling. So what would make NASA a buyer of refueling as a service rather than sponsor of another demonstration?

Yeah. So it it, uh, it's a it's a good question and this is where I would say we're probably not one of your your best customers today for that. I think DOD is going to use prop all the time. Uh, I mean it's a that we we've got we've got dog fighting in space these days. So, uh, they're going to use a prop and it would probably make a far more sense to go and refuel it, service it, enhance its capabilities than just expending more dollars on another on a, uh, another, um, you know, another orbiting asset of sorts. See, with NASA, you know, we nail our trajectory and and send Nancy Grace Roman to L2, uh, we've got 23 years of of fuel on it now. Uh, because we're just stepping. Like we really don't want to move a whole lot, uh, when we're collecting imagery of the of the universe like that. So, uh, what we need to do is take advantage recognize your capabilities. It's in the same way as say like we would be crazy to build a new telescope today that didn't take in account the fairing size of a New Glenn or a Starship at some point. Like we'd be crazy not do that. As industry capabilities are mature and it's like we can count on on on-orbit, uh, servicing. So whether that's refueling or even on-orbit assembly, which for sure, right? We're never going to try and build the whole damn thing on one rocket anymore. So that robotic assembly is going to be is going to be critical. But, um, we just need to build vehicles that take better advantage of it. I want us to commission and the president's very supportive a vision powered, uh, Starfleet if you will where we are sending fission powered spacecraft to the outer solar system to Mars and back. I mean you could do every two-year type missions on this. You're going to have to top off xenon and you're going to have you're going to probably chemically augment it. So you're going to top off your hypergolics before you send it back out. So we just have to, you know, start our capabilities are on our roadmap need to measure up with what your your capabilities are that are maturing but I I I think probably DOD is going to be a better first customer.

So because you're talking about capabilities, so in the future for NASA to be a customer, um, is NASA looking for more proven reliability from like DOD or like compatible interfaces because there's no standard interface in the like currently in the market or like a customer committed like the DOD. Is that where the NASA is looking for?

And you're referring to space-based refueling in that regard.

Uh, I suspect that, you know, the DOD will establish the standards. We do have a lot of, um, you know, presidential executive orders that, uh, try and ensure there's, uh, dialogue and cooperation for all purposes. The National Space Council is, uh, is chaired by, um, Director Katzios from OSTP that kind of brings us all together in a room. We do a space summit with, uh, SECAF and and NRO and chief of space operations to talk about these things. I suspect they're going to be the bigger user up front. So we'll probably, you know, we'll ask for our input and we'll help support it. Um, but, uh, the inverse is probably we will I I suspect establish the standard with industry as we mature, uh, and demonstrate technologies on the lunar surface of this is what, you know, surface water interfaces will look like or this is what surface prop transfer interfaces or power interfaces will look like for rovers and other things.

Can you also tell me where do NASA and defense customers have genuinely shared requirements and purchasing plans rather than simply overlapping interests and how could a startup find those opportunities?

Yeah, I I mean our standards are are are across all of infrastructure. So, uh, from our stage zero launch complexes here, we need we need the same we we need lots of launch pads and access. Uh, we need prop transfer lines that go out there. We care about launch vehicles, uh, and low-cost ability to accelerate mass to orbit. We care about transfer vehicles the same. We generally use a lot of the same, uh, you know, storeable propellants and cryo propellants. So there's a lot of things that are applicable right up until the point where our missions go in different directions. But even then you you you can actually have a lot of overlap in communications. Look the the the, uh, chairman of the joint chief of staff said that this is, uh, from the surface of our oceans to cislunar space is a warfighting domain. So we care a lot about, oops sorry, we care an awful lot about cislunar space because, uh, we're building a moon base. So we're going to need communication, uh, comm relay surface comms comm relay observation capabilities to support our moon base out there and they're going to need it because they're going to need space domain awareness which is also beneficial to us in that. So every step of the way all the way out there we're a common customer. Uh, we might even be on the same bus. Uh, you know what they're doing for space domain awareness to look out for us in cislunar space might be also being a communication relay. You don't know. So there's a lot of opportunities there for right up until the mission diverges.

What can you share about the next steps for commercial low earth orbit stations and the role NASA expects to play in that?

Well, I would just say that I, uh, I I absolutely value our presence in low earth orbit. Uh, so I think that there may come a day first of all it's an it's an unbelievable achievement. I'm sure many of you know this. I mean but for more than 25, you know, years there hasn't been a time that you didn't have astronauts orbiting above you on ISS. An amazing accomplishment, great laboratory, taught us how to keep people alive in a very demanding environment. And now we're going to extend that. We're going to extend that to the to the lunar surface itself. But until that lunar base is operational or until such time as we have exhausted everything we can learn from the unique environment of microgravity, we will have a presence in LEO. And what's important is not to accept a gap because we have a problem doing that. We've done it before when we gave up the shuttle and had a dependency on the Russians for 10 years. And we're never going to allow that to to happen again. And we're not always on time or on budget. So, we want to be very careful in this transition. And part of that is making sure that if it is a model that is dependent on NASA being one customer of many that other customers can get there. And that is why we prioritized our discussions earlier this week with Starliner. It is not a secret. SpaceX has said it many times. They will, you know, sunset Falcon and Dragon, which is going to give a great opportunity, by the way, to the rest of the launch industry. Uh, but that means we need to have continuity to lower Earth orbit. It's why we're, uh, we have a get well plan with Starliner. It's why we're extending additional missions. It's why we're going to help crew rate it over to Vulcan as a spacecraft so that astronauts can get to the ISS and commercial astronauts can get to future commercial space stations. Without transportation, that model's dead on arrival, right? So, um, we got to we got to work that.