I mean it's not like it's saas where you can expect cheaper alternatives to emerge from anywhere in the world to capture the market.
Building tech for DoD takes a lot of things (i) access to ITAR restricted tech, (ii) access to capital, (iii) and DoD actually willing to work with you, where being a domestic player helps.
There is nothing hilarious about Anduril claiming to be more affordable gear when it's actually much cheaper than the current players that supply DoD.
The issue with all peacetime weapon systems is that they necessarily have to work within the peacetime procurement system. They become optimized for capturing contracts, not capturing battlefields. Anything that's actually optimized for capturing the battlefield, in the absence of a real battlefield to capture, fails to win the contract and languishes in some bankrupt startup.
Usually the way wars go is that the first 2 years are spent in utter chaos as the belligerents realize that all their plans don't survive contact with the enemy, and then you get rapid technological development, usually from outside firms that were initially part of non-defense industries, once the belligerents actually get serious about winning the war.
The US has been at war for a long time though. Iraq, Afghanistan, Somali pirates... Ukraine and Israel are some of the proxy wars we have a hand in (how much is up for debate). While what you say is true, weapons do get tested in the field and that wins.
The weapons get tested, but there isn't the existential threat that drives people to actually change their behaviors in response to that data. If the Ukrainians jerry rig a $5k drone to work as well as a $50k missile, the US congress isn't going to cancel their contract for $50k missiles. If we were facing a peer adversary directly though, being able to get 10 times the firepower with the same resources might be a much higher priority.
Further, not everything gets tested when all you're facing are non-peer adversaries. For example the only US Navy ship currently in service that has ever sunk an enemy ship in combat is the USS Constitution, which did so more than 200 years ago.
Against adversaries whose industrial base and social structures are 200 years behind us. That gives us weapon systems that are adapted to fighting adversaries whose industrial base and social structures are 200 years behind us.
We've been very lucky (in a sense) that ambitious leaders who actually can get technologically-savvy workers to follow them generally prefer to work within the American system and fight over ad clicks, purchases, and management fees rather than physically making war. I'm not all that confident that the U.S. military would win vs. say SpaceX, Amazon, or Google. Moot point as long as it's more profitable to sell things than take things, but we would be very screwed if we fought an adversary with peer-level technology, population, and manufacturing base.
> I can see them capturing US DOD budgets, but predict that much more cost effective competitors emerge internationally.
The selling point of Anduril according to one of its founders has always been "Make billions of dollars while saving the US government tens of billions of dollars."
I don't think people really understand how much money is thrown around willy-nilly within the Department of Defense. Anduril's offering to sell drones here with individual purchase prices in the $100k-$500k range here. Compared to the alternatives used for this role it's 1-2 orders of magnitude cheaper.
They're not $500k. And currently it's $4M missiles shooting down $10k ones, and you need to often shoot several of them to ensure that you down the target.
I guess it’s ok if the gdp difference between the 2 warring countries is at least at the same order of magnitude. Actually dollar numbers probably don’t matter as much as dollar/unit gdp
I'm not sure this is "more affordable" in total, it's just more affordable per projectile. It's a lot like a 5" gun on a destroyer. If you ignore the cost of the ship, it's about $1,200 per shot. A bargain compared to a Tomahawk or SM3.
The DoD often goes overseas. Most navy ships are built in Italy (the big ones are built in the US, but most are smaller). Even when things are built internally, the DoD often looks to various allies for critical parts.
The US DoD is not buying any naval ships from Italy. In fact I'm not aware of a single ship in the US Navy that was built outside of the United States.
Splitting the difference to reach the true situation:
* The US Navy contracts for shipbuilding outside of the USofA, and
* The foreign company builds for the US Navy take place at shipyards within the USofA.
eg:
“Austal’s Alabama-based shipyard is currently contracted on 11 different vessel programs for the US Navy and Coast Guard, and it is a source of pride seeing this vessel visiting our home. Plus, its Australian and historical heritage makes it all the more special.”
The U.S. Navy said on Thursday it awarded a contract worth more than $5.5 billion to Italy's Fincantieri to build its newest class of warships, known as frigates.
The contract is for detailed design and construction of the lead ship, with an option to buy nine more. If the navy exercised all options on the contract, delivery of the 10th ship would occur in the mid-2030s.
The ship will be built at Fincantieri's Marinette Marine shipyard in Marinette, Wisconsin.
The two examples given are an Italian company and an Australian company that are operating from US shipyards while remaining non US owned companies.
They do operate via US registered wholly owned subsidiaries which is a matter of bookkeeping.
In both instances the US Navy has sourced knowledge and skills from non US companies and paid them to provide service via shipyards on US soil .. with oversight from existing established home soil operations eg: Austral Marine Division in Australia.
And then requisite QC processes during serial manufacturing to ensure that the system will stand up to storage in some bunker for decades before being shipped across the world, abused by late teenaged soldiers as they hump it around some forlorn battlefield and, finally, maybe, used in anger.
To the folks who want to cut Anduril slack, let me just say that these cost 5-6x a Shahed. In war, like in chess, if you manage to trade crappy little pieces for rare big pieces, you win. And if you decide that your strategy is to trade expensive big pieces for crappy little ones, you usually lose. The US has avoided losing by fighting small countries against which it has an overwhelming advantage, which keeps its hot wars short. If it were to fight a long hot war against a near peer (hello, Taiwan Straits), its dumb decisions about bloatware would quickly catch up to it.
Setting aside the budgetary considerations, quality is its own quality, as Stalin never really said. That is, if you can manufacture tens of thousands of payload-bearing model airplanes for less than the price of a Tesla, then you can DDOS any air defense system in the world. Its million-dollar missiles will soon be exhausted, and your radio-controlled offensive will have won.
They are a prime wrapped in VC funding, and like most defense contractors, they are egregiously overpriced compared to the cost of materials.
I can see them capturing US DOD budgets, but predict that much more cost effective competitors emerge internationally.