Anduril Industries and Hadrian Strike Strategic Partnership
PLUS: How Anduril Industries is competing with defence primes
Good morning Earthlings 👽️ 🖖
Wow, yesterday was a doozy. Two deep-tech startups grown-out of Peter Thiel’s Founder’s Fund just struck a partnership. Today, we’ll dive into Hadrian, Anduril, and what their promising partnership means for America.
In today's edition of Earthlings...
🏭️ Hadrian rebuilding American manufacturing
🛡️ Anduril Industries competing with defence primes
🤝 Anduril and Hadrian strike strategic partnership
Californian defence tech heavyweight, Anduril Industries, and advanced manufacturing maverick, Hadrian, are linking arms in a strategic partnership set to shake up the industry. With Hadrian on the task of supplying and crafting precision parts, Anduril’s autonomous defence suite is about to level up. They’re both tackling very hard, government-level problems in the physical world (and space).
Before diving into the partnership, here’s a primer on these two deep-tech companies (FYI: “deep-tech” refers to startups that develop tangible engineering innovation or scientific advances):
🏭️ Hadrian: Rebuilding America’s Factories
Founded by Chris Power, Hadrian is a precision manufacturing startup on a mission to rebuild American manufacturing to ensure the West comes out on-top of the bubbling geopolitical deep-tech race. The company uses complex machinery to make precision parts for rockets and satellites by blending automation and high-skilled labour. At a high level, Hadrian is leveraging software to build machines that turn tribal knowledge (i.e., unwritten knowledge within a company or individual that is not widely known) into software, processes, and jobs. While the company relies heavily on software, its main innovation is in the world of atoms. Part of Hadrian’s strategy is to answer the question: “How can we automate 80% of things that should be automated while creating great American manufacturing jobs to do the 20% that only humans can do?” If this mission fascinates you, Packy McCormick wrote an excellent deep-dive into Hadrian and a16z had an hour-long conversation with Chris Power about Hadrian’s aspiring vision.
Hadrian is fresh off a $90 million Series A financing round, and is now rapidly expanding with Factory 1 in Hawthorne and their newly minted Factory 2 in Torrance, California. The factories are “abstract” in that they are not set up for a single product, but are flexible and adaptable to accommodate different products as needed.
Enter: Anduril Industries.
🛡️ Anduril: A New Era of Defence
Anduril was also seeded by Founders Fund, incorporating in June 2017 and driven by four tech and defence heavyweights: Trae Stephens, Palmer Luckey, Matt Grimm, and Joe Chen. Despite the fact that it’s been around for six years, it’s already winning Department of Defence (DoD) contracts against incumbent defence primes like Lockheed Martin, Boeing, and Raytheon. Back in 2021, the company won a five-year, $99 million production transaction agreement with the Pentagon’s Defence Innovation Unit for its counter-drone tech. The company is known for its innovations in AI-powered command systems, autonomous vehicles, and customized command and control software.
On a deeper level, Anduril is helping to decentralize the way that wars are fought by putting more capabilities, powered by AI and its LatticeOS operating system, into the hands of each American soldier. As defence becomes more autonomous, sheer troop count should become less of a deciding factor. Ultimately, Anduril’s mission is about deterrence. The founders believe that pacifism is not a way to protect the world, and violence is deterred by the presence of force, not its absence.
Anduril’s frustration: there are misaligned incentives in defence contracting leading to inefficiency and less innovation. Very big picture, Anduril is trying to build the next major defence prime, meaning they don’t want to be a subcontractor to major contract holders like Raytheon or Boeing. These deep-rooted problems have inspired a new wave of bold startups competing for these government contracts by taking VC money, and striking fixed-based pricing contracts that incentive efficiency to maximize profits.
Contract bloating of defence primes: The incumbent defence primes get paid on what's called a “Cost-Plus“ basis where they’re paid for the total cost of completing a contract plus a 6 to 10% percentage of profit on top. Primes are incentivized to move slowly since they actually make more money when they come up with more expensive systems, and even more money when it breaks because they get to sell more parts. Palmer Lucky explains that it’s a really bizarre contracting system that America created in World War II to take over the U.S industrial machine and turn it into an industrial war machine because companies like Ford were saying, “Hey I can't even quote you for this project to make a tank because I've never really, you know, built a tank?!”.
🤝 Hadrian & Anduril: A Partnership Made in the Heavens
This partnership means Anduril can hit the gas on their production of key components and precision parts, harnessing the raw power of Hadrian’s proprietary manufacturing process. And with Hadrian's software-first approach to automation, they're bringing a flexibility and scalability to Anduril that would make traditional defence manufacturing cost-prohibitive.
“Hadrian is an ideal partner for Anduril,” said Matt Grimm, Anduril Co-Founder and COO, confidently. He highlighted the need for swift and efficient production for defence manufacturing, asserting that "deterrence begins on the factory floor". Anduril's partnership with Hadrian is set to feed that need and then some, ensuring a mitigation of interruptions in defence supply chains.
Mike Hsu, Anduril's Head of Supply Chain, didn't mince his words, pointing out that America’s national security rests precariously on supply chains that are far too brittle. "It's a system where cold production lines and unproductive workers are a feature, not a bug," touting the fast and flexible approach to production that Hadrian brings to the table.
It's a no-brainer. Chris Power, Founder and CEO of Hadrian, was clear that “pairing the world’s most transformational manufacturing company with the most disruptive defence company just makes sense.” He voiced Hadrian's dedication to overcoming supply chain bottlenecks, and inspiring a new generation of manufacturers to support America’s national security needs and space aspirations, a commitment they share with Anduril.
Watch this space, folks. This is just the beginning of the American manufacturing and defence revolution.
📰 In Other News…
Following Firefly Aerospace’s strategic acquisition of Spaceflight Inc., the former co-founder and CEO of Spaceflight has joined a major law firm to lead its efforts in supporting the commercial space industry (SpaceNews.com)
Muon Space, a Silicon Valley startup building a climate-monitoring constellation, celebrates its first satellite sent into orbit June 12 on the SpaceX Transporter-8 rideshare flight (Space.com)
Rare 'warped' supernova revealed through space-time phenomenon predicted by Einstein (Live Science)
🐦 Tweet of the Day
Pilot safely lands plane uninjured after a huge bird struck his windshield in the Los Ríos Province, Ecuador 😳
🤖 AI Art of the Day
That’s it for today, Earthlings.
Thanks for reading - we’ll see you next time! 🧑🚀