WEBVTT - Palmer Luckey Talks Tech

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<v Speaker 1>Bloomberg Audio Studios, podcasts, radio news.

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<v Speaker 2>Well, Cesday two is well underway, and with that in mind,

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<v Speaker 2>let's go to Bloomberg Tech co hosts Caroline Hyde and

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<v Speaker 2>Ed Ludlow, who are on the ground in Las Vegas

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<v Speaker 2>with Palmer Lucky he is the founder of and Duryll

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<v Speaker 2>over to you guys.

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<v Speaker 1>Thank Katie, thank you very much. Indeed, and we are

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<v Speaker 1>on the floor of CS. But we got some serious

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<v Speaker 1>conversations to have, not just about retro technology that has

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<v Speaker 1>been brought back by Palme Lucky in one of his startups,

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<v Speaker 1>but we also want to talk about ANDREIL because very

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<v Speaker 1>much defense SEC is in the IVS storm.

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<v Speaker 3>Right now.

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<v Speaker 1>We have two truth social posts coming out from the

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<v Speaker 1>President talking about the publicly traded defense companies shouldn't be

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<v Speaker 1>doing stop buybacks, shouldn't be paying dividends, and need to

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<v Speaker 1>focus on investing in America.

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<v Speaker 3>Where do you think that.

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<v Speaker 1>Is being pointed at and why do you think it's

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<v Speaker 1>being announced now?

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<v Speaker 3>Well, you can probably guess I fall on this issue.

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<v Speaker 4>President Trump is saying that he wants to see defence

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<v Speaker 4>companies building new plants, building new factories, delivering on time,

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<v Speaker 4>and then maintaining systems cost effectively, and that's I mean,

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<v Speaker 4>trying to do more. That is why I started in

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<v Speaker 4>early years ago, because I looked at the United States

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<v Speaker 4>and defense industrial base and realized we weren't moving fast enough,

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<v Speaker 4>weren't building new plants, we weren't building the new technologies.

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<v Speaker 3>That we needed.

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<v Speaker 4>And so I'd say I'm I'm broadly aligned. Personally speaking,

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<v Speaker 4>I think dividends and buybacks are actually very very different

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<v Speaker 4>in their tenor, and I think probably I'm much more

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<v Speaker 4>on the sides of not allowing these companies to do dividends,

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<v Speaker 4>certainly not when they're years behind on critical programs where

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<v Speaker 4>they are failing.

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<v Speaker 3>To invest in new things.

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<v Speaker 4>Stock buybacks are a little different because you're investing in yourself.

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<v Speaker 4>You're racing I believe that my future is better than

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<v Speaker 4>my past. That's different than a dividend, which effectively ends

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<v Speaker 4>up just being a tax on tax payers to pay

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<v Speaker 4>for defense, straight into the pockets of public market investors.

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<v Speaker 3>So I look at these those things a little differently.

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<v Speaker 4>Big picture, if these companies were doing really well, and

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<v Speaker 4>if they were living up to their end of the bargain,

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<v Speaker 4>I don't think you would see any action from Trump

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<v Speaker 4>or others on this. It's really a reflection of how

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<v Speaker 4>many problems we have with our defense industrial bases.

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<v Speaker 5>These are you'll compare to this, right, Parma, You compete

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<v Speaker 5>against them for contracts.

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<v Speaker 3>That's the same pot of money. That's right, and you know,

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<v Speaker 3>to be fair.

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<v Speaker 5>In the time that you and I have been doing interviews,

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<v Speaker 5>you are typically transparent. One of the provisions that the

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<v Speaker 5>president proposes is a salary cap of five million dollars.

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<v Speaker 5>In the Bloomberg story outline some of the comp of

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<v Speaker 5>those CEOs. Would you be willing to say what you

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<v Speaker 5>pay yourself to Anderill and if you would abide by I.

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<v Speaker 3>Pay myself one hundred thousand dollars a year.

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<v Speaker 5>So significantly less than a five million dollar cap.

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<v Speaker 4>True, But I also own a lot of my company,

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<v Speaker 4>and so so you know this this measure is not

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<v Speaker 4>really written in a way where it's intended to hit

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<v Speaker 4>new companies starting new things.

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<v Speaker 3>You know.

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<v Speaker 4>Act like if Kelly Johnson were alive today and he

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<v Speaker 4>owned a bunch of you know, Lockheed Martin or north

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<v Speaker 4>from Grummer or Raytheon, I don't think that anyone would

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<v Speaker 4>have nearly much of a problem with him. Yeah, I

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<v Speaker 4>pay myself a hund one thousand dollars a year. That's

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<v Speaker 4>my compensation package. I own a bunch of ander all

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<v Speaker 4>because I started the company. That's so my motivation is

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<v Speaker 4>to try and build in the biggest thing possible. I

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<v Speaker 4>will say people are fairly critigue and said, but Palmer,

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<v Speaker 4>you know, are you really a neutral party here? Are

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<v Speaker 4>you really in a position to comment given you're competing

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<v Speaker 4>with these companies? And I'd say two things. One, these

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<v Speaker 4>measures do apply an equal measure to me. I now

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<v Speaker 4>cannot pay dividends. I now cannot be stock buive acts

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<v Speaker 4>if I'm not investing in new plants, if I'm not

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<v Speaker 4>doing these two things. The other thing is it's always

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<v Speaker 4>tricky when you want to I'm in defense because I

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<v Speaker 4>wanted to help solve these problems.

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<v Speaker 3>Right. It's actually the same thing with like mod Retro

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<v Speaker 3>in the gaming.

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<v Speaker 4>Space, like, oh, of course Palmer would criticize these other

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<v Speaker 4>game companies, after all, he's in the gaming space. It's like, yeah,

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<v Speaker 4>but I'm in the gaming space because I want to

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<v Speaker 4>solve these problems. It's kind of this like catch twenty two,

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<v Speaker 4>like like if you're outside it, they'll say, well, why

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<v Speaker 4>don't you do something about it then and you do

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<v Speaker 4>something like who cares what you're doing, You're just part

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<v Speaker 4>of the problem. It's always been emotionally difficult for me.

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<v Speaker 1>We also have posts that President Trump is thinking more

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<v Speaker 1>than a trillion should be invested in the area of

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<v Speaker 1>defense budget budget not an.

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<v Speaker 3>Anti defense or anti defense company. That's not for sure.

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<v Speaker 3>That's for sure.

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<v Speaker 1>What's interesting is your company is Dare I say it

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<v Speaker 1>considering going public?

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<v Speaker 3>Yes? Would your CEO?

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<v Speaker 1>Do you think the CEO that needs the business when

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<v Speaker 1>it's com public should be under these sorts of restrictions

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<v Speaker 1>from an executive order? Do you think that that's going

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<v Speaker 1>to be an ish?

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<v Speaker 4>I think that when you are on the doll and

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<v Speaker 4>when you're effectively run on the public's wallet, that the

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<v Speaker 4>public should be able to impose whatever restrictions they want

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<v Speaker 4>on you. I like, you're not asked whether it should

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<v Speaker 4>be like, if I am getting paid by taxpayers, they

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<v Speaker 4>should have the ability to elect people, elect representatives, elect

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<v Speaker 4>who will then nominate people who can hold me to

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<v Speaker 4>account in any way they wish. If they want to

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<v Speaker 4>say that I only pay myself five million dollars until

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<v Speaker 4>I'm caught up with my schedules, they should be allowed

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<v Speaker 4>to do that.

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<v Speaker 3>If they say that I'm not allowed to pay myself one.

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<v Speaker 4>Dollar until I get caught up, I think they should

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<v Speaker 4>be allowed to do that. When you are working on

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<v Speaker 4>the PU, when you are working on taxpayer NIME, there

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<v Speaker 4>is no level of oversight or intervention that I am against. Conceptually, now,

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<v Speaker 4>I think some of these might be bad moves, they

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<v Speaker 4>might not necessarily help the defense spase, But in concept

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<v Speaker 4>I think everything should be on the table, and I

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<v Speaker 4>think it's even good.

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<v Speaker 3>Maybe there scarce of people.

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<v Speaker 4>Sometimes you don't necessarily go to people and say this

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<v Speaker 4>is the way it's going to be forever. You say

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<v Speaker 4>this is how it's going to be until you get

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<v Speaker 4>your act together. You remember being a teenager and your

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<v Speaker 4>parents say you're grounded until X, Y and Z bring

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<v Speaker 4>up your grades, solve your problems.

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<v Speaker 3>And then we will talk about altering the deal. You say,

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<v Speaker 3>but this deal has so many problems. If it's life,

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<v Speaker 3>this my whole life.

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<v Speaker 4>If I'm grounded for the rest of my life, that

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<v Speaker 4>means I'll have no social life. And your parents are

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<v Speaker 4>not necessarily looking at ground you for life. They're saying,

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<v Speaker 4>right now, you're grounded. And I think that that's what

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<v Speaker 4>you're seeing right now. It's not necessarily a lifetime.

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<v Speaker 3>Let me jump in here.

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<v Speaker 5>I want to bring the Bloomberg television audience the reporting

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<v Speaker 5>because these are two truth social posts by the president.

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<v Speaker 3>That's right, their proposals.

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<v Speaker 5>But what Bloomberg's reporting in their last hour is that

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<v Speaker 5>he is considering an EO according to sources, to make

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<v Speaker 5>this happen. Answer this derail on track with the pledges

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<v Speaker 5>and commitments it's made in Ohio, the projects that it

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<v Speaker 5>is contractually obliged to the military on, not just in

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<v Speaker 5>this country but around the world.

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<v Speaker 4>There are a handful of things where we are not,

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<v Speaker 4>but in most cases we are. So like you brought

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<v Speaker 4>up Ohio, we're building this is a huge plant arsenal

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<v Speaker 4>one in Columbus, Ohio, where we're building autonomous spider jets

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<v Speaker 4>and a bunch of other things, building about six million

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<v Speaker 4>square feet there. We're actually ahead of schedule on that.

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<v Speaker 4>We had a bunch of people from Ohio that we

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<v Speaker 4>hired the first round of factory workers.

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<v Speaker 3>We've brought them out to.

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<v Speaker 4>California on our dime, so we were housing them, we're

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<v Speaker 4>paying them, and we brought them so that we can

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<v Speaker 4>put them into our existing factory, teach them how ANDRO works,

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<v Speaker 4>you know in doctrinate them into our way of manufacturing,

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<v Speaker 4>our way of thinking.

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<v Speaker 3>And we've actually already finished that training.

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<v Speaker 4>Process and we've already sent them back to Ohio where

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<v Speaker 4>they're helping stand up the factory. We're going into production

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<v Speaker 4>this summer and we have a new batch of people

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<v Speaker 4>that have already been sent back. So on Arsenal one,

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<v Speaker 4>we are ahead of schedule. We are hitting our commitments.

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<v Speaker 4>I think we're building a new plant to build new things,

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<v Speaker 4>and we're doing it on our own dime. We're spending

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<v Speaker 4>nine hundred million dollars of our own money to build

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<v Speaker 4>this plan.

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<v Speaker 1>Where aren't you are very transparent? In some places you're not?

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<v Speaker 1>Are the weapons working is you want them to? Are

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<v Speaker 1>they performing in the field?

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<v Speaker 4>So some of these things I can talk about, some

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<v Speaker 4>that I can't talk about. But like, for example, I

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<v Speaker 4>have a project that is a man portable counter UAS

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<v Speaker 4>system and oh Androl sorry I am Androl in my perspective, Yeah,

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<v Speaker 4>sorry about that. Androl has a project building a man

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<v Speaker 4>portable counter UAS system. We really wanted to have that

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<v Speaker 4>actually fielded right about now, and instead, because of a

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<v Speaker 4>variety of research. Look, we're developing basically a thing that

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<v Speaker 4>goes on a person and it shoots down drones that

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<v Speaker 4>are trying to attack you.

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<v Speaker 3>It's turned out to be a more technically challenging problem

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<v Speaker 3>than we thought.

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<v Speaker 4>Now in that case, it's not a failure of you know,

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<v Speaker 4>like we're not building a factory or we don't want

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<v Speaker 4>to invest. It's just it's a harder technical problem than

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<v Speaker 4>we thought. I suspect that we're going to continue to

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<v Speaker 4>run too those if you if you only build things

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<v Speaker 4>with no technical risk, you're not trying hard enough. I think,

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<v Speaker 4>androle will continue to do things that from time to

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<v Speaker 4>time will turn out to be harder than we thought.

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<v Speaker 4>But you know, I just need to flip more heads

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<v Speaker 4>than tails.

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<v Speaker 1>When we're thinking about where you stand, where US stands

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<v Speaker 1>versus China, yep, where does it intens of drone technology?

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<v Speaker 1>We're in this context of a geopolitical strain that started

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<v Speaker 1>this year off with Venezuela. We look now to Russia.

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<v Speaker 1>How do you see China and the Taiwan question.

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<v Speaker 4>China has an incredibly strong drone industry. It is largely

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<v Speaker 4>a result of state intervention. It's largely a result of

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<v Speaker 4>industrial policy, of supply chain investments that the government has made,

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<v Speaker 4>and even trade deals that China has made around the

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<v Speaker 4>world to allow for these drones to freely flow out

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<v Speaker 4>in other marketplaces. Yeah, China has the best rone industry

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<v Speaker 4>in the world. It's not even close. It's definitely a

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<v Speaker 4>weakness that the United States has. Now you saw recently

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<v Speaker 4>this ban on Dji drones. The intention there is to

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<v Speaker 4>try and fix that. You can fix these things. The

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<v Speaker 4>US is capable of building drones, it's just we aren't

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<v Speaker 4>capable of competing with the labor laws, emissions laws, and

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<v Speaker 4>prices from coal plants, et cetera that you see in China.

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<v Speaker 3>So I'm hoping that this band on Dji.

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<v Speaker 4>Drones results in a strong US drone market popping up

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<v Speaker 4>to take its place over the next one two three years.

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<v Speaker 4>Androl actually as a drone that we were showing off

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<v Speaker 4>in Japan recently that's made with one hundred percent Japanese parts.

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<v Speaker 4>Japan is another nation that can build their own drones.

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<v Speaker 4>They don't need Dji, but it's hard for that to

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<v Speaker 4>make economic sense when China's allowed to flow the market.

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<v Speaker 5>Let's pivot and talk about modern retro sure for the

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<v Speaker 5>lay person, No, I got to do it. That's why

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<v Speaker 5>you're here right. Your background's in virtual rally and you've

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<v Speaker 5>basically rebirthed the game Boy. I don't know if there's

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<v Speaker 5>some IP we'll issue on that.

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<v Speaker 4>So mod Retro is actually a company I started when

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<v Speaker 4>I was about fourteen years old, combining retro technology and

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<v Speaker 4>modern technology to build these kind of tributes that bring

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<v Speaker 4>the best of both worlds. So like we make, for example,

0:09:51.920 --> 0:09:53.760
<v Speaker 4>something called the mod Retrochromatic. Think of it as like

0:09:53.920 --> 0:09:56.720
<v Speaker 4>the ultimate tribute to the Nintendo game Boy. It's a

0:09:56.760 --> 0:09:59.360
<v Speaker 4>game Boy cartridge compatible.

0:09:58.840 --> 0:10:00.920
<v Speaker 3>Console that has an illumin magnesium shell.

0:10:01.160 --> 0:10:03.640
<v Speaker 4>Instead of a plastic window over the screen, it has

0:10:03.679 --> 0:10:07.040
<v Speaker 4>a lab grown sapphire crystal window. It's the largest sapphire

0:10:07.240 --> 0:10:10.400
<v Speaker 4>crystal window of any product ever, way bigger than you

0:10:10.400 --> 0:10:12.480
<v Speaker 4>would typically see on like a rolex or something, because

0:10:12.520 --> 0:10:15.480
<v Speaker 4>I've got to cover an entire screen. We're also building

0:10:15.480 --> 0:10:17.280
<v Speaker 4>a new console called the mod Retro M sixty four,

0:10:17.280 --> 0:10:19.640
<v Speaker 4>which plays Nintendo sixty four games. I think of it

0:10:19.800 --> 0:10:21.960
<v Speaker 4>again as like the ultimate Nintendo sixty four. What would

0:10:22.000 --> 0:10:24.280
<v Speaker 4>it look like if the Nintendo sixty four were built

0:10:24.280 --> 0:10:26.960
<v Speaker 4>with no with you know, money, is no object, the

0:10:27.040 --> 0:10:29.840
<v Speaker 4>ultimate thing, and we've got some other new stuff coming

0:10:29.880 --> 0:10:32.040
<v Speaker 4>down the pipe as well. But you know, I've been

0:10:32.040 --> 0:10:34.480
<v Speaker 4>coming to cees for seventeen years now. First year I

0:10:34.520 --> 0:10:36.920
<v Speaker 4>came with twenty ten. I think it was sixteen or

0:10:36.920 --> 0:10:38.400
<v Speaker 4>seventeen years. All the time, I had to use a

0:10:38.440 --> 0:10:40.160
<v Speaker 4>fake ID to get into the show because you had

0:10:40.160 --> 0:10:41.840
<v Speaker 4>to be an adult and you had to be industry.

0:10:41.960 --> 0:10:42.920
<v Speaker 3>So I just had a fake.

0:10:42.760 --> 0:10:44.439
<v Speaker 4>Business card and a fake ID, and I pretended to

0:10:44.440 --> 0:10:46.760
<v Speaker 4>be from a different company. Now I'm coming with a

0:10:46.800 --> 0:10:48.960
<v Speaker 4>real ID and with a real company, and I'm seeing

0:10:48.960 --> 0:10:51.040
<v Speaker 4>all my friends from the VR days, all my friends

0:10:51.120 --> 0:10:53.679
<v Speaker 4>from the Retro days, and of course a lot of

0:10:53.720 --> 0:10:54.719
<v Speaker 4>defense presence here too.

0:10:54.880 --> 0:10:56.120
<v Speaker 1>Can mod Retro be?

0:10:56.679 --> 0:10:59.840
<v Speaker 4>Mod Retro is never going to be as big as

0:11:00.640 --> 0:11:05.200
<v Speaker 4>It's never going to be as big as it pardly currently. Look,

0:11:05.240 --> 0:11:07.840
<v Speaker 4>you've got a couple dozen people building things for people

0:11:07.840 --> 0:11:09.920
<v Speaker 4>who really really care about this stuff. I think that

0:11:09.920 --> 0:11:11.960
<v Speaker 4>there's some things we have coming down the line that

0:11:12.000 --> 0:11:15.160
<v Speaker 4>are going to be more broadly interesting. For example, we're

0:11:15.160 --> 0:11:17.960
<v Speaker 4>working on something I won't get into the details because

0:11:18.000 --> 0:11:19.920
<v Speaker 4>I'm not supposed to talk about it. It's a TV

0:11:20.000 --> 0:11:22.920
<v Speaker 4>that works, so you know, if you've ever bought a

0:11:22.920 --> 0:11:25.320
<v Speaker 4>smart TV and had problems, imagine a TV then instead

0:11:25.360 --> 0:11:26.719
<v Speaker 4>it just did what it was supposed to.

0:11:26.960 --> 0:11:28.640
<v Speaker 1>I guess he was complaining about is TV today.

0:11:29.080 --> 0:11:29.720
<v Speaker 3>Yeah, I was.

0:11:30.440 --> 0:11:32.440
<v Speaker 4>Look, there's a lot of things that we're working on

0:11:32.640 --> 0:11:35.320
<v Speaker 4>that are kind of learning from the lessons of the

0:11:35.360 --> 0:11:36.560
<v Speaker 4>past and trying.

0:11:36.360 --> 0:11:37.440
<v Speaker 3>To just bring them into the future.

0:11:37.559 --> 0:11:39.680
<v Speaker 4>Like what would you rather have a smart TV or

0:11:39.679 --> 0:11:42.720
<v Speaker 4>a TV that shows what you plug into it? I

0:11:42.720 --> 0:11:44.480
<v Speaker 4>think I know what most people would want, but that's

0:11:44.480 --> 0:11:45.760
<v Speaker 4>a pretty retro idea.

0:11:45.960 --> 0:11:48.480
<v Speaker 3>Unfortunately, now to a television that works.

0:11:48.520 --> 0:11:51.840
<v Speaker 5>Pa Ma Lucky, founder of Anderrail, founder of mod Retro,

0:11:52.200 --> 0:11:55.800
<v Speaker 5>also cto andeil I would say, frankly, could not have

0:11:55.840 --> 0:11:58.480
<v Speaker 5>had a more timely conversation given the headlines of the day,