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Luckey: Defense Industry, Once Shunned, ‘Now Cool’

Palmer Luckey, who has built Anduril Industries Inc. into one of the most talked-about military tech companies in the U.S., says defense technology has made a previously shunned industry “cool” to a younger generation of talent in the AI age.

Speaking to the Tech Innovation Forum in Irvine on May 1, the 31-year-old said he sees a huge shift from the days when Google and other Silicon Valley stalwarts would turn up their noses at miliary work.

“Now defense technology is cool. The war in Ukraine has made a bunch of people at least temporarily change their minds, which I intend to leverage to the fullest,” said Luckey, wearing his customary Hawaiian shirt, shorts and sandals.

Game Changer

Luckey has navigated his fledgling 2017 startup to become a major player today, rubbing shoulders with defense contractor titans, such as RTX (formerly Raytheon Technologies) and American Rheinmetall Vehicles LLC, with much of Anduril’s work built on cutting-edge AI applications.

Anduril’s signature product, Lattice, based on AI, can be used in many robotic products that rely on perceiving surrounding areas. For instance, it allows robotic military submarines to decide, without human intervention, whether to follow a target, try to blow it up or take a different course of action.

Then there are the company’s recently unveiled fighter-like drone and a flying interceptor known as Roadrunner. Ukraine has been relying on Anduril’s drones in countering Russia’s invasion of that country.

“AI is changing the game in a lot of ways because it allows you to deploy large numbers of systems in a much more intelligent way and a much more useful way than we’ve been able to do before,” Luckey told Bloomberg television in an interview broadcast May 6.

3,000 Workers

The cutting-edge work has helped Anduril to draw young talent, but OC needs more, Luckey told the audience at AV Irvine.

He’s drawn almost 3,000 employees to his company, which is based on a sprawling site in Costa Mesa and has various locations around the country, as well as in the U.K. and Australia. Anduril headed toward a valuation of $10 billion last year.

In fact, his company has been turning out new products at a very rapid pace. On May 6, Anduril introduced the Pulsar series of electronic warfare tools.

Pulsar, which has been in use for several years but only disclosed to the public this month, uses AI and electromagnetic forces to counter and jam drones and other threats.
Luckey praised Sam Altman, the CEO of OpenAI.

“I’m very partial to what’s going on with AI. I think Sam Altman is an incredible leader,” he said.

Eye of the Beholder

Luckey, an AI proponent, is dismissive of its widely concerning dangers.

“It’s the exact same argument that people made against the printing press,” he said.

He acknowledged that moving local high tech into defense presents its own set of problems. While Silicon Valley can profit despite stumbles, he said, “that is not the case with aerospace and defense in Orange County. There is a world where you can imagine all of us disappearing over the course of about two years.”

“We’ve got tough customers. We’ve got tough funding pipelines,” Luckey told the forum.

The forum was part of the Orange County Innovation Week, which was a collaboration of Octane, UCI and the Orange County Business Council.

Luckey: ‘I Want LAX in Orange County’

Anduril Industries Inc. founder Palmer Luckey, an enthusiastic booster of Orange County, has taken obvious delight in zinging Silicon Valley ever since he was fired by Facebook’s Mark Zuckerberg.

But in a turnaround during an appearance billed as a “fireside chat” before several hundred attendees at the Tech Innovation Forum in Irvine on May 1, the defense company founder turned his verbal guns on OC. The following are excerpts, selected from the event’s official audio recording:

• “We need basically vast tracts of Section 8-style housing for young engineers to move into shi**y, little, crappy apartments so that they can afford to live in Orange County. We need that.”
• “There’s no easy foothold in Orange County. The things that you can do after, maybe, after 8 p.m.” “Have you guys ever tried to go to a restaurant after 8, maybe 9 if you’re lucky? Like, the kitchen closes at 8:30 p.m.”
• “It’s really bad here. You don’t even see this in much less developed areas. The problem is you’ve got these community people. They’re like ‘Oh, we don’t want the noise. We don’t want the drinking. We also don’t want the traffic.’ But if you want the economic productivity and you want that flywheel, you have to make some of these compromises.”
• “Can we just make, like, a radioactive zone where we shove all of the young people that do all this? Maybe.”
• “We need to stop crippling John Wayne Airport.”
• “The artificial limit on the number of passengers it can move—it’s not the number of flights. It’s the number of people that are moved, which means that even if you build larger planes that are much quieter, you actually don’t actually get any gain. It’s an artificial limit.”
• “John Wayne Airport is missing out on quieter aircraft. They’re missing out on things that would be good for noise because of those rules. There’s a lot of flights that would be hugely economically accretive to Orange County that would allow major corporations to base large offices here and it doesn’t happen because the airlines are not allowed to put in the flights that make sense.”
• “I want LAX in Orange County. And I want it to be flying all over the world and we can be an international hub. I’m never going to win that war. The community people hate it too much. But there is surely some compromise that involves revisiting (the agreement on passenger number restrictions). And I’ll fight you on it.”

The current passenger cap at John Wayne Airport is 11.8 million annually, which is not scheduled to be raised until Jan. 1, 2026.

The initial settlement agreement was worked out locally in 1985, and has been amended twice.

A spokesperson for the city of Newport Beach, which would presumably be most affected by an increase in flights overhead, told the Business Journal the city was “politely” declining to comment on Luckey’s remarks.

Orange County Supervisor Katrina Foley told the Business Journal by e-mail:

“I appreciate Mr. Luckey’s perspective about growing our economic base and creating more opportunities for major corporations to base their large offices here in Orange County. I share that goal. Based on my meaningful conversations with many CEOs, they care most about the cost of housing in Orange County and how to bring their workforce to Orange County.

“We’ve successfully maintained the curfew while increasing passenger counts since 2000. As we work collaboratively with our federal partners and airlines to support technological advances for cleaner, quieter airplanes, we will likely see increased passenger travel. It’s really about reducing the noise overhead, not the number of people in the planes.

“However, until then, with eight schools and thousands of residents under the flight path, the county has an obligation to do our part to enforce the settlement agreement and serve as good stewards to protect our local community.”

The Business Journal will be looking at the pros and cons for young people of working in Orange County in a future print edition.

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