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What makes the Roadrunner reusable drone different

Anduril Industries has unveiled two new AI-powered combat drones that can fly at hundreds of miles per hour, the Roadrunner and Roadrunner-M. The drones were designed to aid against other high-tech drones that enemy combatants are using against the US military. Anduril Founder Palmer Luckey joins Yahoo Finance to discuss the design of the drones and how the company will fare with its contracts with the US and allied military forces going forward.

Luckey explains how his company has the competitive edge: "Because we're a defense product company, more than a defense contractor, we don't make money by dragging contracts out, we don't make money by having more costs so we could have more plus. We make money when we move fast. We make money when we are efficient. In a world where 80% of the major weapons programs are going to just five companies...there is a lot of room for a company like Anduril to come in."

In Josh Lipton's article, you can learn more about Anduril's Roadrunner and why Joe Lonsdale of Texas-based venture firm 8VC says the "integrity and ability" of the company's founders is one of the reasons why he invested in Anduril.

For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.

Video Transcript

JOSH LIPTON: Defense tech company Anduril has now unveiled its newest product. RoadRunner is an AI-powered combat drone that can fly at hundreds of miles per hour. It's just the latest product from Anduril, which competes with big established defense contractors like Lockheed Martin and Northrop Grumman.

Now to talk more about Anduril's portfolio, strategy, and future is founder Palmer Luckey. Palmer, thank you so much for being here. And I want to dig right in to RoadRunner, Palmer. Just walk me through why you decided to build this product, Palmer. What's the problem you all are trying to solve for?

PALMER LUCKEY: Well, we launched two PRODUCTS RoadRunner and RoadRunner-M. RoadRunner is a vertical takeoff and landing high-speed jet aircraft. That's powered by two thrust vector turbojet engines. RoadRunner-M is a variant airframe of the Roadrunner product that is equipped with a high-explosive warhead, a long-range seeker. And that allows it to go after high-speed jet-powered threats that the military is facing.

So whether they're suicide drones, group three, four, five UAS that are launching strikes on our troops and our partners, these are the types of vehicles that are becoming a massive threat to our troops and to our partners and to our allies. We started working on this two years ago, because I saw this becoming a huge threat. I didn't believe that the United States had the tools we needed to address these ever more deadly drones that our adversaries are throwing against us. RoadRunner is the result of that.

In two years, we've used our own money to build something that is capable of going up against those high-end threats. And we already have one US military customer. And we're going to be rolling it out to a whole bunch more in the very near future.

JOSH LIPTON: And Palmer, can you give us any kind of insight or color into the price of Roadrunner? You've secured one customer already, as you noted. But any color you can provide about the price point?

PALMER LUCKEY: RoadRunner is a hell of a deal. We are selling it right now today for low hundreds of thousands of dollars. And that is in low-rate production. It's going to get even cheaper as we make more of them, even cheaper as we optimize the design. And we're competing with systems that cost more, sometimes up to millions of dollars. And our system is reusable and recoverable, where theirs is not. It's really not even close.

JOSH LIPTON: And Palmer, more generally, taking a step back, you all at Anduril, you're competing against big established defense companies, Palmer. So Lockheed Martins, Northrop Grummans, these are big companies, deep pockets, sizable R&D budgets. They've got long histories with US government agencies. For investors listening right now, Palmer, what are Anduril's competitive advantages there?

PALMER LUCKEY: We have really good people. We have really good process. We set the right incentives. Because we're a defense product company more than a defense contractor, we don't make money by dragging contracts out. We don't make money by having more costs, so we can have more plus. We make money when we move fast. We make money when we are efficient.

And in a world where 80% of the major weapons programs are going to just five companies, in a world where almost 60% of those programs have only a single bidder, there is a lot of room for a company like Anduril to come in. Our mission from the beginning was to save taxpayers hundreds of billions of dollars a year as we make tens of billions of dollars a year. We're not there yet. We've got a long way to go. But I think that we're well on the way.

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