The Exchanges

Q So what's the main difference between using something like that versus what you're using?

A So our airframes right now are, are mostly made out of, um, carbon plates. So carbon is really light and really strong. Um, but it doesn't have some of the advantages of what they were doing, uh, with those metal bodies is that you get to use it as a heat sink. So we actually do this on our drone now where the bottom plate is a, an aluminum plate, and we, we, uh, contact the, Motherboard and the radios with thermal interface material when we close out the drone with that bottom plate. Um, and so that acts as a big heat sink, but we're still using, it's just a flat plate that's cut into a shape in two D versus having to be cast or CNC'd, which is just a lot cheaper for, for mass manufacturing.

AI assessment note: “our airframes right now are, are mostly made out of, um, carbon plates”

Q This was a question I asked Saronic, but how do you deal with completing missions when communication goes down, but they might still be active? Do they still complete the mission? How do you, how do you deal with loss of communication?

A Yeah, so, um, with this drone, if it gets jammed, then that's kind of game over, because this one isn't autonomous, but we're also announcing Archer AI, which does have autonomous capability. One of those things is terminal guidance, where basically, uh, jamming is usually the strongest on top of valuable targets, and so it just gets exponentially harder if you're an operator, if the operator is sitting 10 kilometers away, as you try to get within hundreds of meters of the target, The strength of the jamming is just so high compared to your communications link. So that's where a lot of drones fail. So with Archer AI, we are, um, introducing the terminal guidance feature where once the pilot has selected the target and the drone has a lock on it, it doesn't need input anymore. So even if radio comms get cut, it will continue in and hit the target. Um, we'll be expanding on that feature set and, and trying to build Um, more and more useful autonomy that does allow for better mission success in contested environments and, you know, when comms are totally lost, but usually it's actually a, a gradient where, you know, comms might be spotty and you need something to kind of get you through a rough patch or get you right through the end of the mission.

AI assessment note: “even if radio comms get cut, it will continue in and hit the target”

Q Sean is incredibly involved with the El Segundo crew. Now you've expanded to Torrance, but what is it like working with Sean?

A Sean's amazing. Um, I, I think he was so far ahead of the curve on hard tech in general. Um, I mean, it, it really like is a true passion for him where, you know, a lot of VCs have kind of jumped on the hype train recently. Um, but when I met Sean three years ago, even before he invested in NEROS, you know, he was explaining to me his thesis of hard tech and why it's so important to invest in Manufacturing and how, you know, manufacturing has left America, but we need to bring it back, and all of these things that are really, really popular ideas now, like Sean was way ahead of the curve on, um, and he's just been a fantastic partner, so it's, it's great to be doing another round with him.

AI assessment note: “Sean's amazing... and he's just been a fantastic partner”

Q I mean, let's talk about where those are coming from. So how many drones does China produce a year? How many drones do other geographies produce a year? And how did America get left behind so bad?

A Yeah. So China is supplying drones and components to both sides. So to, uh, Ukraine and to Russia, and they have by far the strongest drone and just electronics industrial base. The way America got left behind was not caring about consumer electronics manufacturing being done domestically. So, um, as with many areas of manufacturing, we have just offshored for the last 30 years, uh, you know, really optimized for the short-term profit margin, um, and let that manufacturing be done somewhere else, and that somewhere else is primarily China. And so, the national security implication of this was not really well understood And especially until drones started becoming such an important part of the battlefield and a modern arsenal, um, because what goes into one of these is it looks much more similar to, uh, you know, what goes into your laptop, your iPhone, um, any other consumer electronics product versus a traditional weapon system. And so that, that was something we identified early on was like, to be able to scale drone production, we're going to have to go quite deep into the supply chain. Um, we're gonna have to design our own components, build our own components. Um, and you know, today everyone in the, the defense, uh, startup ecosystem is struggling with suppliers that are not set up for volume, not set up for scale or, or lower cost systems. Um, but yeah, China has been th…

AI assessment note: “tens of millions of drones per year easily, maybe in the hundreds of millions.”

Q What kind of playbook are you using for that?

A Uh, I don't think the playbook exists. I think it's like we've, uh, it's a bit of a scary problem because right now our factory benefits so much from the engineers sitting right next to the production line, and we have to essentially figure out how to productize the production line itself and have it run without just constant sustaining engineering. I think recently the production org has gotten Far better at this, or they, like, been much less reliant on the engineering team to keep things worrying on a, on a daily basis, but, um, then we need to have someone who owns, like, they can't be the person who runs production here, but they also need to have all, basically all the context of how production here works, and then go be able to do it in other places, so it's a very hard problem. I, I don't know if there is a playbook for it.

AI assessment note: “I don't think the playbook exists.”

Q What is the process like when you get there? What is the whole process like?

A Well, it totally depends. Like, if you are a more, like, traditional weapons manufacturer, and, and your products are included in a, in an aid package, like, my understanding is you don't really have much insight or control over what happens. It just sort of gets shipped out by the US government, and that's, that's not, um, it's harder for you to be directly involved. Our approach was just go to Ukraine ourself with the stuff, and then meet the people face to face, and literally hand it to them, so that then we could get Get that direct feedback. I think a lot of companies tried to go over or had their stuff sent over, and then the first time around it didn't work, and then instead of persisting and saying, okay, well we're gonna fix the stuff that didn't work and try again and try again, just ended up walking away. Um, and, and to me that's really disappointing. Uh, like I, I, I think a lot of companies unfortunately would rather Develop on a test range in California, and then just sort of put their head in the sand when the thing doesn't work in the battlefield. Um.

AI assessment note: “meet the people face to face, and literally hand it to them”