China Outbuilds America 230-to-1. Saronic Has a Plan

Key Takeaway

The US can build 100,000 gross tons of ships per year while China builds 23 million—a 230:1 advantage. Last year, America built 9 naval ships but retired 19, moving in the wrong direction. The solution: autonomous vessels that can be built at scale (2,000+ per year vs. 6-8 years for a destroyer), cost a fraction of traditional ships, and keep sailors out of harm's way while delivering equivalent firepower.

Episode Overview

Saronic co-founders Dino Mavrukas (former Navy SEAL) and Vib Alka discuss how their autonomous ships are revolutionizing naval warfare. They explain how their Corsair vessel became the first autonomous ship to rescue downed pilots in the Strait of Hormuz, demonstrating that autonomous platforms can save lives without putting additional soldiers at risk. The conversation covers America's shipbuilding crisis, China's 230:1 production advantage, and how Saronic is using vertical integration and software to build ships faster and cheaper than traditional defense contractors.

Full Transcript

Transcript of China Outbuilds America 230-to-1. Saronic Has a Plan from All-In Podcast. Auto-generated from episode audio; may contain minor errors.

All right, everybody, welcome back to the All In interview series. I am thrilled, really thrilled because Saronic is a defense company that has been doing amazing work and we are so lucky to have the co-founders here on the program. Welcome to the program, Dino Mavrukas. How are you, sir? Doing well. Thanks for having us. And your co-founder here, Vib Alka car. Let's talk a little bit about Saronic. And we're going to get into everything, but you were in the news. You were in the news because you're making autonomous ships and one of these was used recently in the Strait of Hormuz, I understand.

understand. understand. I'm going all [singing] in. As your wealth grows, have you noticed how much more complex things get between investments, tax strategy, and estate planning? Managing it all is a full-time job that you didn't ask for. Creative Planning can help. Their coordinated team of investment managers, CPAs, and affiliated estate attorneys can do much of the heavy lifting so you don't have to. Creative Planning, where wealth works together. Go to creativeplanning.com/allin. creativeplanning.com/allin. creativeplanning.com/allin. I'm going all in. I got to start there, Dino. Tell us about the mission.

Tell us what happened. This is the first time an autonomous autonomous autonomous ship has ever rescued folks in the field and then we'll get back into your history and everything, but I think that we got to start off with this story cuz it's incredible. It It's just a huge story and I look I can't get into too many specifics of the operation and the mission for for obvious reasons, but before we get into what it means for the country, what it means for our company, I mean, without saying the most important thing is that those two pilots came home safely regardless of how they got there, right?

Now, what we were able to demonstrate through this partnership with the Navy like for us it the Navy actually trusted us in this moment. Lives are on the line. We're going to send this autonomous platform to go and rescue these folks. This is not a patrol, this is not maritime domain awareness, this is the highest stakes of the highest stakes. There's downed American pilots in the Straits of Hormuz and they're like Corsair, which you actually see right over my right shoulder, which is our 24-ft fully autonomous speedboat for tho- for those that that don't know.

Um he said we're going to use that to rescue the pilots. And that's that's actually like a milestone moment for the country. And I can tell you I'll tell you a personal story firsthand of kind of what this means. But you know this, like leaving people behind in the US military just it's not a thing. Like the US military does not do it. Right? Like I was in the Navy SEAL teams for 11 years from 2004 to 2015. Uh my last 5 years were on SEAL Team 6.

I personally experienced 2005, there were four SEALs trapped on a mountainside in Afghanistan, and the helicopter got shou- got shot down while going to rescue them. So what we were able to prove in this moment was that you can go and rescue people without putting additional soldiers in harm's way. That's that's the impact of what this had. That's what it means for the country. And for our company, it was just an extremely proud moment where the Navy trusted us in this high-stakes environment. high-stakes environment. high-stakes environment.

Absolutely incredible. And obviously thank you for your service. I and I know you can't get into too many details, but I've been reading all about it. it. it. And I got to wonder when when these two pilots pilots pilots did they know that this was an autonomous ship? When the ship comes rolling up and they're like somebody sent them a message, "Hey, you're going to get picked up by the autonomous ship. Grab the side of it. Climb on board." Like what's the protocol for the autonomous ship picking up two folks?

Are they swimming out to it? Like I just got to get a little color on this before it becomes a movie. I mean it's the first time that it that it happened, right? And when a ship when a boat pulls up to you and there's nobody on it, you know, you can very quickly deduce that it's fully that it's an autonomous boat. And you know, these pilots were in the water for I don't even know how long. They're in a completely contested environment. We're in a conflict with Iran.

They're in the Straits of Hormuz, and we can go through the dynamic there. But, they looked at this platform and said that that's my way home, right? That that's how I get out of here. I love it. All right, let's step back a bit here. You're a Navy SEAL. Vib, you've worked in this space for a while, while, while, and you previously worked at Anduril, I understand. understand. understand. The mission, as I understand it, for the company company company is to greatly increase our ability in America to produce ships.

And for people who don't know, the amount of amount of amount of tonnage, the number of ships that we're able to make in America and most Western countries is very low. But, there's an adversary in the Pacific who is able to produce a lot of ships. It's known as the Chinese Communist Party. So, maybe from first principles, you could just explain what you're building and why it's important, and just how insane the incompetence of the West in terms of building ships has become. I mean, we are really bad at making ships right now.

Am I correct? We're beyond bad. Let me I'll take a step back and just kind of highlight where we're at, and then I'll let Vib go through what we're doing about it, how how we're changing that dynamic. But, Jason, what you were saying, right? Just to put it in context, the United States can build 100,000 gross tons of ships every year. Gross ton is this volumetric measure of ship. So, if you build, you know, a 200-ft ship, that's different than an 800-ft ship, but let's compare apples to apples.

100,000 gross tons. The Chinese, which you referencing, can build 23 million gross tons. So, they can outbuild the US 230 to 1. And it wasn't always the case, right? right? right? 30 years ago, the Chinese didn't have this capability. They had 5% of the world's shipbuilding capacity. Today, they have 57% of the world's shipbuilding capacity. And actually, that problem's getting worse because worse because worse because the the the the Communist Party is just constantly subsidizing the entire industry. So, they're undercutting the commercial market on price.

They're not just subsidizing the direct cost to build. They're subsidizing raw material and labor costs. So, the ship built in the United States is actually five to six times the cost of that same ship built in China. And so, they keep getting more and more orders. So, that number of 57% is just going up. How did they get that capability? Is that because as a manufacturer to the world, they needed to ship out products? So, they did this in a commercial way first, or is this always very intentionally, we need to own the South Pacific?

Pacific? Pacific? around the commercial market, and then I'll talk about I want to talk about the status of our Navy. Like, where the naval fleet is today, what that means, and then where the Chinese Navy is and where that's going. Because again, 30 years ago, the Chinese Navy was a littoral backwater Navy. Today, they have nuclear submarines, aircraft carriers, and hypersonic missiles. So, there's a massive massive change over the last 30 years. And what's happened in the US shipbuilding industry is completely declined. completely declined. completely declined.

So, the US naval fleet has 296 ships today. There's a congressional mandate, statutory minimum statutory minimum statutory minimum of 355 ships that was set by Congress in 2018. That was 8 years ago. Last year, we built nine ships, but we retired 19 naval vessels. So, we're We're in the wrong the completely wrong direction. The Chinese delivered somewhere in the ballpark of 30 ships. Their fleet size is around 370. They'll be at 450 before you know it. But the commercial market is where that discrepancy lies even larger, right?

They delivered over 1,000 commercial ships last year. The United States built five. Five. 1 2 3 4 5. One hand. Wow. Wow. Wow. So, if a conflict actually kicks off, and we saw this in the US in World War II, where we had the production capacity, where we're building thousands of vessels every year. If a conflict kicks off, that commercial capacity isn't going to go to building cargo containers anymore. It's all going to flip to defense capacity, and it's going to be building for what the Chinese Communist Party needs to to win a conflict.

And that's what we have to be building towards. That's what we're doing at Saronic. That's why we're thinking, "Okay, how do we build mass? How do we build scale in whatever it is that we do?" And so, how do you do it, Vib? I would think, and listen, I'm a neophyte here, but if these are autonomous ships, well, you can remove things. Like, you don't need beds. You don't need a commissary, and you don't need latrines. And I don't know what percentage of a Corsair or battleship are battleship are battleship are there to there to there to support humans on the ship.

But I got to think it's half the mass of it is to is to keep humans on it. Am I directionally correct? correct? correct? I think half is a little half is a little excessive, but Okay. Okay. Okay. there's a significant percentage of the components, the cost, the labor that actually goes into catering to human beings on board. Um I would say at a high level, you know, you're really reducing the complexity of the entire product, right? Um you don't need to worry about a separate electrical system for humans.

You don't need to worry about, as we mentioned, doors, bathrooms, stairs, etc. Um and then at the end of the day, you can actually start to end-to-end optimize a lot of different things. So, even if you look at Corsair, for example, you know, if you were to buy a commercial 24-foot boat, it's unlikely to go 1,000 nautical miles. miles. miles. Um it's also unlikely to drive and have the control authority of the boat that we built here because you don't have to again you don't have to worry about, you know, a person feeling, person feeling, person feeling, you know, you know, taking shots in the middle of the ocean.

Yeah. Um and so you can actually optimize across a bunch of different areas. Naval architecture, the speed, range, and payload of the craft itself, and then again reduce a lot of the complexity where you're removing subsystems that are meant for humans. Yeah, and the Corsair, which is my favorite ship just based on the name, I believe from my research this may it was originally meant like a pirate ship or a privateering ship, but it's is it now standard lingo that that's a 24-foot boat and and has a certain profile, do you know?

Is that Is that how these designations come about, the names of these ships? I mean, I wouldn't say that Corsair is now universal 24-foot autonomous surface vessel. It's a name of our product lines and we chose it very purposefully and we chose all our names purposefully. Even the name of the company, I mean, we were talking about, you know, our Greek heritage before the show and where that came from. You know, the Saronic Gulf is a Gulf off the coast of Athens where the Battle of Salamis happened.

It's one of the most famous naval battles in history. It came after the Battle of Thermopylae or the famous stand of the spar 300 Spartans and it was the naval battle between battle between battle between the Greeks and the Persians where the Greeks were wildly unmatched. The Persians had much, much larger ships. They had a much larger fleet and the Greeks were able to lure them into this narrow strait and used smaller, more maneuverable products to ultimately defeat the Persians. Now, cost is part of this in terms of these ships in the field and the number of ships.

My understanding of our contemporary China is that they don't build a lot of big ships. They build a lot of ships. So, they've got a lot of smaller and and very varied number of ships, if I'm correct there, then the cost becomes the issue because building a bunch of aircraft carriers, I keep hearing that supersonics are going to take out all these uh aircraft carriers in the first 15 minutes. Viv, is is that true what we hear that, "Hey, we need smaller ships, faster ships?" And what is the cost of something like, you know, the Corsair that you used on this incredible mission?

mission? mission? Yeah, I would say, you know, at a high level, the goal is mass, right? Um like large-scale attritable mass. And yeah, if if an aircraft carrier takes 10 years to build and 13 billion dollars, like you're not really achieving that. Um I think there's always going to be like kind of a role and responsibility for for a craft like that. Um but ultimately, you're right. Like if you're big and and, you know, very obvious to find and you can find you from space, etc., um you know, it's it's a real risk.

When you reduce, you know, the the overall cost of like just doing things in the ocean, right? Like that's ultimately where the autonomous piece comes in. Um you can deploy at scale. You can monitor a large a larger body of water with less people. Um and ultimately, what you're what you're really getting to is removing people from harm's way, right? Um so, what when we think about designing and kind of thinking through the price points of these things, these things, these things, the comparison to mancraft isn't really um um um necessarily even comparable as you get into larger ships, right?

Um for for us, it's really a question of like what is the cost that you would typically have to use humans for and how much is that actually being reduced by having a large autonomous fleet? Corsair's a million bucks or something, do you know? The the Corsair costs about a million? a million? a million? Yeah, I want to go back to we'll get that. I want to go back to one thing you said earlier and it's like China's building both very large ships and a lot of ships.

They're They're doing it all, right? And when we think about, okay, how do you actually change the paradigm for the US Navy? It's let's actually boil it down to unit economics. Let's think about this like a commercial company. How do you that mentioned like payloads? What are you actually moving on the ocean? One of the most important metrics is VLS tubes. So vertical launch systems. It's basically how many big Tomahawk missiles can you carry on a ship? It's how much firepower are you fielding? So let's use an example of that, right?

A destroyer, naval destroyer costs about $3 billion. 3 billion? 3 billion? 3 billion? 3 billion. And I'm not even getting into the sustainment and maintenance costs over the life cycle of the destroyer. I'm just talking about what it costs to buy. If we do that, it's 10 10 billion over 30 40 years. $3 billion, 6 to 8 years to make. You carry you can field about 96 VLS tubes. So I'm going to round up. I'm going to make that 100 for easy math. So on average, you're fielding somewhere between 10 to 15 VLS tubes per year at a cost of 30 million per tube.

Marauder, Marauder, Marauder, I won't give you the exact price or cost, but can reduce that cost by a significant amount, but we're building 20 Marauders for we're going to be building 20 Marauders per year at our shipyard in Louisiana. Right? So now you can field we can carry the equivalent of 16 VLS tubes on the back of that 180 ft fully autonomous ship. So now you can field 320 VLS tubes per year as opposed to 15, and you could do it at a fraction of the cost.

This is how you actually save the taxpayers hundreds of billions of dollars, and you get more capability into the field faster. I mean, that's just extraordinary thinking about it. What do you lose by not having humans on it? You know, are we going to be faced with a moment in time where these are kind of like drones, you know, where there's no pilots. They're just pilots in a shipping container dropped somewhere either, you know, in the middle of America and doing it remote like we've done.

And is that the future of warfare with these ships or and what do you lose when you don't have a team there on the boat? And what is the criticism valid or invalid that people have of unmanned ships? Well, Well, Well, I'm going to let him talk about the way that we're using software because I think the the criticism to your question is, well, what happens if we're in the middle of the ocean and the ship breaks down, who's going to fix it? It's not It's not that we don't need this technology.

It's folks that aren't used to technology saying, oh, how's the technology actually going to work? And that's what we're proving out every single day. To your point of like, what do you lose by not having people on them? Look, it all it all boils down to the mission. the mission. the mission. Right? And this is why we partner so closely with the Navy. This is why we work with actual operators is like, what are you using? What are you delivering? If the mission is long-range fires, we're packing a bunch of VLS tubes on the back of Marauder.

You actually don't lose anything. Right? You're just delivering those capabilities into the field while keeping people out of harm's way. And that's a very, very important part of the equation. But if our ships, let's be clear, like if our boats and ships aren't accomplishing the mission, then they're not relevant. They're not going to be used in the first place. And there is going to be some mix. I don't know what that mix is. I don't think anybody really knows what that mix is of manned and unmanned ships.

So, what you're going to see in the Navy is like a hybrid Navy. So, the things that you're missing from having people on the ships forward deployed decision makers in the environment, you can actually have out there on manned ships, but you're using unmanned ships to put into combat areas and conflict areas to keep those people very safe. very safe. very safe. Fab, take us through the production of these. How do you achieve speed at it? You know, uh friend of the pod Elon Musk with the Teslas, over time, he eventually eventually eventually built the full stack.

In the beginning, if you had a Tesla, you would look at the the shifter and you'd be like, "Hey, that looks like my Mercedes." And that's because they had their steering column from Mercedes, one of the early investors. The HVAC was from somebody else. But eventually, he had materials coming in one side of the factory, cars coming out the other, and he made every single thing in that car. He was now no longer dependent on any third-party manufacturers or a supply chain, you know, and famously the HVAC, I think, in the Model 3 and Y when it came out, reduced massively the drain on the battery, right?

So, it's purpose-built for that mission. So, I'm assuming you're doing that from first principles, principles, principles, but what what's the secret to this rapid production and lower-cost production? Yeah, listen, I think there's, you know, within the shipbuilding industry at large, there's a bunch of different challenges of of why the production isn't as high as it should be. And one of those core reasons, and the Navy's talked about this extensively, is is investing in the supply chain. Right? Um when you don't when you only build five commercial ships a year, your genset manufacturers, the marine engine manufacturers, also don't have to produce at a very high rate.

So, one of the things that we get the luxury of doing, um by being vertically integrated, is that we get to work with these manufacturers directly, do non-recurring engineering work, invest in really digitizing a lot of the components that historically have been very analog, right? Um you know, you asked earlier like, "What do people What do the people do on the ships? Like, what are they going to do if if the ships are autonomous?" Well, when you think about, you know, Dino mentioned the life cycle of these ships are 30 years, you think about a ship that was built 30 years ago, you know, you have people that are doing extremely manual things in the engine room that today should be extremely trivial to automate through software.

through software. through software. Um and so, a lot of that work actually gets completely absorbed by the software stack, and so you don't have to worry about it. Um and as we choose components, we invest in the supply chain, we invest invest in the industrial base, we actually help bring all of these analog components that for a long time were, you know, meant to be operated by humans, we give them software APIs, we make sure that they can be controlled by, you know, MCPs or software stack somewhere else and can be, you know, remotely accessed and whatnot.

Um whatnot. Um whatnot. Um So, the complexity is going to go down massively when you're building one of these, yeah? these, yeah? these, yeah? Absolutely, yeah. And and you know, frankly, I don't think that the person who's sitting in the engine room is super thrilled about it anyway. No, not a great day. You're actually changing the um you're democratizing the decision-making, right? Like now there's going to be you have more mass out in the ocean, more sailors are going to be making decisions about what those what that mass is going to be doing and where assets are going to be instead of worrying about, you know, coolant pressure in an engine, right?

Um and so, you know, when we think about the the actual design, there's there's a lot of different variables there. There's some components that are commercial off-the-shelf, right? Elon in the early days um from a compute perspective, they had to invest in ASICs, right? The compute stack wasn't there to run, you know, large models and and run inference and power budgets that they wanted to. In 2026, it's a totally different game, right? Um and so, there's there's a lot of different parts of the supply chain that, you know, sometimes we're looking at, you know, investing in the industrial base and making sure that, you know, our engine manufacturers and genset manufacturers are keeping up.

Um on the other side, there's there's particular components that we're like, "Hey, the marine industry actually hasn't had this level of investment in in a long time, so we're going to have to build this in-house." Um you know, a couple of examples around that are related to a lot of electronics related to the sensors and compute. Um but, you know, bunch of different things there that that help us build and assemble quickly. quickly. quickly. I'm going all in. Starting business usually means juggling a bunch of different services just to look legit.

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But, you also are moving out, I assume, of this cost-plus world and you're just figuring out, "Hey, what what's the right price for this?" And take us inside that paradigm shift. You have these primes and then you have these upstarts. And it seems like seems like seems like based on history, the incumbents sometimes don't take this lying down. So, take us inside the paradigm shift from cost-plus from cost-plus from cost-plus to what these, I guess they call the new primes, like yourself and Anduril, are doing.

doing. doing. Yep. And I'll just define cost-plus everybody's listening. Basically, means "Hey, we're we're going to go build you something, Mr. Government, and however long that takes, however much it costs, you're just going to pay us 10 to 15% on top of that." So, I'm actually incentivized, and I'm not saying there's malicious intent, but I'm incentivized to make it take longer and cost more because if it costs a hundred million dollars, well, then I only make 15 million dollars. But, if it costs a billion dollars, then as a company, I make a hundred and fifty million dollars.

So, there's this perverse incentive to drive up costs. Now, that's not the only reason the industry is where it is today, but we're we're very encouraged encouraged encouraged by the push from the administration to adopt things at at speed and scale and to do that quickly and to do that differently, and to move away from cost plus. You had it like we invest our own capital. Today we're we're just about 4 years old. We've raised 2 and 1/2 billion dollars in private capital. We're pouring that into R&D.

I remember when we decided to build Marada, again 180 foot ship. Viv and I were talking and he was like who who who who's crazy enough to go and build a ship on IRAD? And he was like well well we are. Cuz that's what the country needs. That's what it demands. That's what's we're going to go do. And our investors are giving us the capital to go do it. They're actually entrusting us with that capital. That's the reverse of what's happening in the large primes where their investors are kind of demanding share buybacks.

They're saying give us our capital back. So the country very much needs us to build for needs companies like us to build for the future. Um and when you look at what the administration is doing even just in shipbuilding, just recognizing that shipbuilding is a critical strategic industry, right? The president one of the first things he did was put out the maritime executive order. That was followed with the maritime action plan, right? There's ships act sitting in Congress. You had the secretary of war give a whole speech on defense acquisition reform talking about how we're going to push the department to be better, to move faster, to work with companies like us that are building on firm fixed price contracts that are focused on delivering at speed and scale and driving down cost for the taxpayer.

So all of that is extremely encouraging, but I want to be I also want to be clear here on the flip side. We're in the early days, Jason. Like Yeah. Yeah. Yeah. very early days. When you look at the overall defense Department of War's budget budget budget 1% 1% 1% goes to autonomous systems. That's not nearly enough. Make that 5%, make that to I don't know the right mix, but it needs to go up and it needs to go up quickly. up quickly. up quickly. I'll I'll just add one more thing that um that you know, historically shipbuilding, you know, the design is bifurcated from the builder, right?

So, the design someone gets paid to do the design um and the ground up general assembly and all that. Like it's handed off to a totally different person to go and build a ship. Um and I think there's a statistic out there that's like 70% of sequence critical components on on some Navy ships are sole source suppliers, like single source suppliers. Um and so, to Dino's point, it's not just that you're incentivized to to take longer, it's that you're not incentivized to change that necessarily um because you know that you're still going to get paid.

Um whereas like from our perspective, when you own the design, you own the shipyard, you know, software engineers, shipbuilders, naval architects, and welders can all all sit down and eat lunch together in the yard. Um there's end-to-end optimizations that you get that, you know, the the system from a from a historical perspective just wasn't set up to gain. Yeah, let's do a little uh look at what happened in the Strait of Hormuz. Uh we weren't able to control it completely. Doesn't seem like anybody in history has been able to uh control it.

If we were to fast forward and you had your entire fleet, you had let's assume uh not unlimited, but massive capacity, how would you would you be able to secure something like the Strait of Hormuz with these autonomous vehicles? And what might that look like? Take us into a, you know, scenario 5 years from now. What would it take? That's the type of scenario that that we're building for. I think before talking about the scenario, let's talk about the Strait of Hormuz itself, right? The environment, the part of the world, like what neighborhood is it in, right?

It it connects, so you have the Persian Gulf, which is 200 miles wide, which narrows down to a 20-mile wide strip, which is the Strait of Hormuz, and then it connects to the Indian Ocean and connects these large oil-producing countries to global markets. On the one side of the Persian Gulf, you have you know, Iraq, Kuwait, Saudi Arabia, UAE, Qatar, and Oman. And on the other side of the Persian Gulf, the north side is all controlled by Iran. So now, Iran is saying, "Well, how how are we going to disrupt traffic in the Strait of Hormuz?" Well, it's only a 20-mi wide stretch.

I can use missiles, I can use fast attack vessels, I can use naval mines, I can use cheap drones, cuz I don't have a large distance to cover. I can launch these things anywhere from shore. So, it becomes this completely chaotic environment that sending in naval destroyers into or trying to get commercial ships past becomes extremely dangerous. So, using large numbers of autonomous vessels, you can combat these threats in completely different ways. You can offer scale, persistence, and risk reduction in ways that, you know, manned vessels just can't.

And again, won't get into too many of the specifics on the types of operations that we're building towards, but autonomy is a way to counter these effects these these um these effects that are over well or like really aren't meant to be countered by traditional manned ships alone. We can counter that with scale and technology and keep people out of harm's way. Well, you have some small ships. Yeah, you got the Cutlass and you got the Spyglass in this uh you know, build out. Those are 6-ft, 15-ft, or whatever.

We actually started with those and I and I'll give you an interesting story. We actually don't build those aren't we haven't productized those. Those were great subscale demonstrators, but our real flagship product is Corsair. And when you talk about again the the scenario in the Strait of Hormuz and what type of volume can we bring there? Like it's not only 5 years in the future, we could build 2,000 Corsair per year right now at our manufacturing facility in Austin. So, I I know you live in Austin.

We'd love to show you around. When you see it, it, it, when you see it, it actually comes to life. You're like, "Oh, wait. You can actually build thousands of these vessels every single year." How many would you need? A thousand? 5,000 in the Strait of Hormuz? I don't think you need It's a 20-mi wide strait. strait. strait. So, you're just going to And and they This is their offensive strategy. They have these speedboats that they use. I don't know what they're called, but They call them fast attack vessels.

Fast attack vessels. These guys essentially are kamikaze, right? They just zip in, you know, no regard for safety and their life, etc. And and they will attack. They're using fast attack vessels. They're using cheap drones. So, you have to be able to have counter UAS capabilities. They're They're using mines. They're just floating mines into the strait without regard for what those mines may set off. So, it's a really complicated environment that you need to bring a lot of capabilities towards. towards. towards. Yeah, but it sounds like they've with artificial intelligence, which is the next card that I think is going to turn over, you put these corsairs out there, could they with AI be able to, you know, be using satellite data from Planet or whoever's providing it to just or a military satellites and just zip out there and know say somebody's putting out some mines.

Hey, somebody's putting out some of these fast attack vehicles. Just intercept them. And now they have an actual cost, human life, and a limited amount of resources. And hey, we're America and we have you guys building ships at scale. They don't have this ability to build AI-based ships. So, talk about what AI on these ships could do eventually. Yeah, so I would say today, Yeah, so I would say today, you know, there's a bunch of different, you know, machine learning applications that run on our boat today.

Um there's heavy amounts of compute on all of our crafts um that allows people to have tons of capability, whether it's, you know, the navigation and kind of the autopilot or self-driving of the craft itself, or compute for payloads, whether that's counter UAS, as Dino mentioned, or or a bunch of other things, really. Um there's a variety of different mission sets. The end state here is that, you know, you have a distributed fleet, you know, across the ocean that, you know, invariably like cuz the ocean is a treacherous place like by default.

Without war zone, like the ocean's still bad. Um you know, salt water hits your antennas, you lose you lose comms. Uh so, there's a bunch of different radio communications on this. There's a bunch of different sensors. Um all of those things kind of are networked together with ML, with a bunch of different software uh components of the software stack, to make sure that you can basically translate intent from a commander or sailor, and then result in a mission outcome. Let's talk, Dino, a little bit about the adversary, China, and they have started to put weapons on robots.

I'm assuming that they're doing the same if they're willing to put it on a, you know, one of those dog robots, like the Spot robots. They're putting weapons on them. They're demonstrating it. And whatever they're demonstrating, they've already got in production. Let's just call it what it is. And they're not signing some UN treaty to not put autonomous and AI weapons. This is a different type of adversary. And I'm sure North Korea and and other bad guys are doing similar things. We have um I believe treaties where we're not allowed to put weapons and use AI-based weapons.

Am I correct about that in the West here? West here? West here? There's a autonomous weapon system standard called 3009 that basically outlines exactly how AI can be used on an on an autonomous system, yeah. Tell us all about that. Like cuz this is the RoboCop scenario. This is the robotic soldier or the robotic boat that's able to engage the enemy without a human, you know, if it loses comms, or to do a kamikaze mission, which seems like something we might have to do. These are things we might have to do, Dino, versus the Chinese, cuz they're not signing these treaties.

They're not thinking ethically. They are not respecting the Declaration of Human Rights. They've got their own playbook, yeah? yeah? yeah? And I think that the important thing to to articulate here is especially when you use the kind of Robocop example and just to kind of quell people's fears a little bit is even in that example where we're sending boats off the off of Taiwan and we're in the Taiwan Strait and they're engaging, we're still using artificial intelligence to bifurcate between an enemy vessel and a friendly vessel, between a non-combatant and a combatant.

And people are still making the decisions and setting the mission intent. It's just government policy that's setting, "Okay, when are you authorized to engage versus not?" Artificial intelligence actually just gives the military the opportunity to one operate at a greater scale and then operate more efficiently. These aren't robots actually just making decisions on when to go to war or not. Got it. So, it says, "Hey, this is a bad guy. Hey, our recommendation is to, you know, neutralize it." And then a human has to say, "Okay, neutralize it." But if you're up against an adversary who says, "Hey, no, no, we built this thing.

Anybody comes in to the blockade in Taiwan, which, you know, we think is, uh, you know, a pretty significant non-zero probability in our lifetime. lifetime. lifetime. If you're up against somebody who says, "I'm just going to have these ships kill anything that's not our ship." Period. Full stop. Then we lose, don't we? No, because the the technologies that all you're doing is putting policy thresholds and approval thresholds into the technology. There's a real-world scenario where doomsday scenario, we go to World War III, the Taiwan Strait is a complete conflict.

Exactly what you said, our commanders are going to make that same judgment. Right? They're going to be like, "Hey, if anything, there's no fishing boats out here right now. Yeah. Yeah. Yeah. There's no cruise ships coming through the Panama Canal. damage. damage. damage. If you're not a friendly If you're not a friendly vessel, you're an enemy vessel, and that's that. And our technology is actually enables that what we were talking about earlier is like the autonomy, the artificial intelligence, and everything else is there, and you're building the policies into the software based on government procedures and when those authorizations need to be in place, place, place, those authorizations will change based on on on the threat environment that we're in.

Is the plan for you to sell to our allies? And what are the rules there? Because it sounds like we need as many ships for our navy as we can get. But if you can get up to capacity, then hey, the French, the Germans, and the English have essentially been just stopped making ships, right? And they they they have very deprecated military. It's my understanding is the only people who are really doing a great job at this are the folks in South Korea, which I believe are building but one ship for us.

So maybe you could talk about the other top countries in the world, democracies, and our allies, and what their capability is, and then your ability to help arm them and sell to them. them. them. I mean, very very focused on our allies and partners. If you talk to the Department of War, if you talk to the United States Navy, they actually want our allies and partners to have these capabilities as well. This is This is going to be a combined effort, right? We mentioned earlier that China has 57% of the world's shipbuilding capacity.

That's not limited to just that one industry. We could go industry by industry and talk about their manufacturing might and their manufacturing dominance. Um so you really do need a combined effort. You need our allies and partners to have this technology. We're talking to to to um our allies in Asia, obviously, and Europe, and in the Middle East right now about getting not only our our products there, but also how do we stand up, you know, domestic production in those countries. How do we give them the sovereign capability?

How do we have production lines overseas so that they're already forward deployed if we get into a conflict in the first place? Pretty amazing stuff and you have an announcement today I understand that we're going to share with the All-In audience for the first time. That's right. So, we've been working on Port Arthur for a long time now. So, Port Arthur just for the listeners is our shipyard of the future. This is going to bring American ship building back to a place that we haven't seen since World War II.

Um to be clear we're already operating a shipyard. We have a shipyard in Franklin, Louisiana. That's where we're building Marada. We're ramping that up to 20 Marada. We can bring that up to 50 Maradas per year every single year. And that is a 100-acre shipyard. What we're doing at Port Arthur is 10Xing that. We're looking at a shipyard that is well over 1,000 acres. We've been doing this search for over a year now on what is the ideal location for this shipyard. Where are we going to find the right partner, the right land, the right workforce, the right community to be a part of?

Um and we're proud to announce that we found that in Brownsville, Texas. So, we're We're headquartered in Austin. We're going to be basing Port Arthur in Brownsville. We're going to start on a 800-acre plot of land, which in and of itself 800 acres is now the largest shipyard in the United States. Amazing. Amazing. Amazing. Just to give you a sense of scale. We have the opportunity over time to scale that to 4,000 acres. We're going to invest billions of dollars into this project. We're going to create 10,000 jobs over the next 10 years.

years. years. And we're going to bring ship building in this country back again to a place that we haven't seen since World War II. And we're just grateful for the partnership from the state, from Governor Abbott, from Cameron County, and then the city and the port of Brownsville for making this happen. I mean this is one of the great things Viv about being based in Texas. They let us build things in Texas. Yeah, as a recent resident here, it's pretty amazing to live in a state where the state's like, "What do you want to build?

How can we help?" as opposed to opposed to opposed to hey, uh you know, "F off." like they told uh Elon in California and he got the message received reply uh to that lunatic. So, maybe we can talk a little bit about operating Veben Texas and the crazy support you get from Abbott and everybody. everybody. everybody. One of the questions that we used to get like back in the day was, "You guys are a maritime company, there's no water in Austin. What are you guys doing there?" Um and I would say like, you know, Austin has this like magical um kind of nexus of both digital and physical labor forces.

Like, you can find software talent, you can find AI talent, you can find designers. Um but you can also tap into, you know, the industrial base from San Antonio, from the oil and gas industry in Houston. Um and when you marry those two together, like you can actually start to co-design these things across the entire stack, right? I mentioned earlier, like typically ship design and ship build is is totally independent. Um but I mean, with Port Arthur, we get the luxury of like greenfield designing what the the the the manufacturing plant for ships should look like.

look like. look like. Um and so, you can design the you can you can optimize the design of ship for the yard and the design of the yard for the ship. And it's very similar to kind of like, you know, how how companies today like do hardware software co-design on chips, right? You design the compiler and they fit together to optimize both for for the other. Um and you we can we have the luxury of being able to do that for for ships here and um I I can't think of a better place to do it than Texas.

Well, and uh Starbase is right down the block, SpaceX obviously. Uh and Elon's made that work and I think it's like a four what maybe four, five, six-hour drive down to the coast, yeah? So, you guys can either zip there on a PJ or you can just drive. So, it's pretty straightforward. straightforward. It's easy for logistics. What what SpaceX has did has done in Brownsville is incredible. I think what Brownsville has has done for SpaceX and helping them build out, build the community down there. Um we were very impressed, very very excited to be basing Port Alpha there.

And look, at the end of the day, it's the people that are going to make this work. It's it's the labor force, it's the workforce. Viv mentioned it earlier, and we can talk about, you know, why the American shipbuilding industry has declined so much, but much, but much, but it's the supply chain and the workforce that has suffered the most. And so, like, one of the things we focus on is really, how do we rebuild that workforce? How do we upskill existing talent to advanced manufacturing?

How do we take somebody that's building a car at Ford and get them building ships very, very efficiently, very quickly, right? And that all actually all starts with the design. If you design a ship from the ground up from a first principles approach to be more simplistic, to be designed and manufactured at scale, then you can put in the training, the work instructions, the processes, and everything else, where where where hey, let's go make this much faster. Let's train, let's build the workforce. And then, let's be honest, like, you have to make it cool for young people to go work in a shipyard again.

You have to pay them good wages. Like, every one of our employees, every welder, every pipefitter, um they have good wages, the same benefits as our Silicon Valley software engineers, they have equity in our company. company. company. Um they're they're fired up. Like, I mentioned our our shipyard in Louisiana, like, people are fired up down there. And it's not just the workforce, it's the community. Like, some of the stories I hear when I'm down there are like so encouraging. Like, people are like, "I'm wearing my hat in the grocery store, and people are coming up to me saying, 'You guys are kicking butt, keep building ships.'" Because nobody else in the country is doing what we're doing.

we're doing. we're doing. And these are great salaries. People are getting paid significant amounts of money, obviously, to work in manufacturing at your company, at down at Starbase. and now you have these two incredible companies. incredible companies. incredible companies. I I don't know if there's any other ones in Brownsville, but this is a small community. There's only like 200,000 people down there. This is going to be an incredible boom town. Oh, it's going to be incredible. It's going to be awesome. It's going to be incredible.

And I mentioned earlier like the cost of building ships in the United States, and the United States just isn't competitive in the commercial market. And again, we can go through the specifics and what happened over time. Five to six times the cost of building a ship in China. We think just by investing in product and processes and new shipyards, we can cut the cost of a ship in the United States in half. So, if you have a ship that costs $300 million, we can get that under $150 million.

And that's not by simply just paying people less. We're paying people more, but we're investing in our product. We're investing in the process. We're designing the product to be built that way in the first place. So, we're making the investments that are needed for long-term sustainability and to rebuild the workforce. the workforce. the workforce. All right, if people want to come work with you, Vib, how can they apply? They're a career page, and what are you looking for? What what talent do you need to come do this incredibly patriotic duty patriotic duty patriotic duty and go work at Saronic?

Yeah, I mean, saronic.com. We have a careers page. careers page. careers page. You can you can reach out on Twitter, LinkedIn, whatever you want. We're we're we're hiring pretty aggressively right now. I would say that you know, the biggest thing you know, we look for generally speaking is you know, especially 2026 when you know, ChatGPT and Claude are getting so much better every year. It's pretty important right now to be fairly, you know, neuroplastic. You know, be ready to adapt for what the future looks like.

Computing is changing. changing. changing. You know, there's there's going to be agents that can help you on the manufacturing floor, too, to assemble faster if you have an issue. There's all these digital systems that are that are kind of changing the paradigm here. I mean, when we first got to Gulf Craft in in down in Louisiana, a lot of the processes were were pretty much pen and paper, right? And that's pretty common across most shipyards. So, like kind of bringing that into the 21st century really quickly, I mean, it's just going to require people to be thoughtful, thoughtful, thoughtful, adapt to the future, and and really be passionate and excited and about about kind of building the future.

Yeah, go to the website saronic.com, join the mission. There's 300 jobs listed on the website. There's something there for everybody. And listen, just as a fellow Greek, Dino, you know, we were obviously the cradle of innovation and where science, math, technology, art, and everything happened, but we were also the great warriors. warriors. warriors. And we patrolled the sea. Obviously, Greece has a lot of coastline. So, you're you're doing our Greek our brothers and sisters and ancestors proud. proud. proud. of Greece has a lot of coastline, and they're actually big in the shipping industry.

So, now I can yeah. yeah. yeah. So, so now I hear more more often than not now, oh, it's good to see a Greek in in building ships. I you know what? I can sleep now at night. I was very worried about the Strait of Hormuz. I was worried about the Pacific theater and South China Sea. Dino, now that I know that my Greek brother is on top of this, this, this, my head's going to hit the pillow. I'm going to go right I'm going to sleep like a baby tonight.

I know you got us covered. Thanks so much, guys. And sincerely on behalf of all Americans, like thank you for doing this work. You know, this is something where where where we really need technologists and entrepreneurs entrepreneurs entrepreneurs to really help us innovate because we're falling behind, and we're the good guys in this. We're the ones who are spreading democracy and freedom and protecting that. The only thing in the world that isn't trending in the right direction, man, if you look at lifespans, if you look at you know, infant mortality, if you look at people's standard of living, everything is trending in the world in the right direction except the spread of democracy which has been on the decline in our lifetime.

Let that sink in, folks. More people living under authoritarians than democracies. It's It's a modest amount, but you've seen the statistics, I'm sure, Vibin and Dino. And we need to have a great military. We need to have this advanced technology if we're going to maintain the number of people living under a democracy of in in freedom and hopefully increase it. A lot of bad guys out there. And you know, just thank you so much for doing this work. That's right. Well, thank you for having us.

And I will end on a positive note where Look, we're we're seeing that starting to turn around in a really big way. It's not just Saronic. You mentioned Anduril, there's SpaceX and Palantir before that. And now there's just a big wave, a big push into defense tech because people realize the importance and the magnitude of the moment that we are living in right now. I I tell our team, I'm like, this is our generation's version of the space race. Make Make no mistake about it. And we cannot lose.

So, that's how hard we're working at Saronic. That's how we're working with a sense of urgency. And there's a lot of other companies into the coming into the space that are working with that same sense of urgency. So, I'm I am very optimistic. I know this country can do it. When we put our minds and and we get a collective effort behind something, nobody can beat us. So, So, So, Nobody can, yeah. Nobody can beat us. And listen, if you were thinking of going Listen, it's no no dig to anybody, but if you're thinking about going and optimizing an ad network at some big tech company, like incredibly boring.

And it's incredibly meaningful. You'll get 20, 30 years into your career and you say, "What did I do?" Go work at Saronic. You'll get couple of years into your career and you say, "I'm doing important work." That's right. That's right. Every person that walks through the door every single day is quite literally changing the world. And we remind them of that and they know it. Yeah. All right, Vib. Dino, thank Thank so much for coming on. And we'll see you next time on the All-In interview.

I'm going all in.