Brian Schimpf, CEO of defense tech company Anduril, says that the nature of modern armed conflict has fundamentally shifted—and that the U.S. military’s supply chain is dangerously unprepared for it.
“The U.S. and Israel did something like ten times as many strikes in the first month of the war as they did in the entire Gulf War,” Schimpf said at Fortune‘s Brainstorm Tech conference in Aspen on Monday. “This is the new normal of what these conflicts are going to look like.”
Schimpf’s remarks opened on a pointed note: back in March, when he was interviewed for a profile of Anduril in Fortune, he predicted that the Strait of Hormuz could still be blocked by the time the Brainstorm Tech conference rolled around. It was.
For Schimpf, that’s not an anomaly, it’s the new blueprint. Modern conflicts, he argued, are no longer primarily about destroying military assets; they’re about strangling economies. Data centers, oil refineries, and shipping lanes are the targets now, and low-cost drones have made striking them cheaper than ever. “The economic warfare that is effectively the Strait of Hormuz, this is the new normal of what these conflicts are going to look like,” he said.
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For the U.S. he said, the new reality is a particularly tricky problem. It’s “essentially impossible to inflict economic pain on China without catastrophic economic pain on the U.S.,” Schimpf said.
That logic flows directly into how he thinks about Anduril’s business. Schimpf was especially candid about supply chain fragility. He noted that the U.S. fired through roughly 850 Tomahawk missiles in four weeks of conflict with Iran—burning through a stockpile that the Pentagon had been replenishing at a rate of about 90 per year.
His proposed solution is not just redesigning weapons to be more manufacturable—it’s moving upstream into raw materials. “We’re looking at how do we secure supply of germanium years out,” he said, pointing to China’s systematic acquisition of critical minerals, including rare earth magnets and copper film suppliers, as a strategic stranglehold the U.S. has been slow to counter.
The CEO was equally as candid speaking about the current defense tech valuation frenzy—where some companies are raising at 50x or even 100x forward revenue. “I do think there is a bit of a bubble.” He invoked the Uber-and-Lyft dynamic, arguing that in any hot category, roughly 90% of returns accrue to the top two players, and that companies chasing stratospheric valuations are setting themselves up for an impossible growth bar. Anduril has been deliberate about its own pricing, he said, but acknowledged the temptation is real.
An Anduril listing on the public markets is a long-running subject of speculation. Schimpf, when pressed on the IPO question, declined to give a timeline. In March, the company raised a $5 billion Series H raise at a $61 billion valuation, led by venture capital firms Thrive Capital and Andreessen Horowitz. Last week, Anduril cofounder Trae Stephens told Fortune he saw the company ideally going public in the next couple of years.
Schimpf, however, made an argument for the advantage of remaining private. “Right now, we’re in a hype-y time. We’re growing like crazy. Why would we go out right now? We don’t need to, he said.” Schimpf laid out a simple 3-point framework for contemplating an IPO: If you go public in the middle of a “hype cycle,” when growth is slowing, or when you’re more than two years from profitability, and you’ll have a bad three-year stock return. Anduril checks at least one of those boxes, he said, citing the current industry-wide hype cycle, and therefore sees no rush.
Brian Schimpf, CEO of defense technology firm Anduril, spoke at Fortune’s Brainstorm Tech conference, emphasizing a significant shift in the nature of modern warfare and the U.S. military’s inadequate supply chain in response to these changes. He noted that the scale of military strikes in recent conflicts, such as the ongoing situation involving Israel, outstrips historic levels, indicating a new norm where conflicts involve extensive economic warfare rather than merely targeting military assets.
Schimpf pointed out that the modern battlefield now includes economic targets such as data centers, oil refineries, and shipping lanes, with low-cost drones making these attacks increasingly feasible. He referred to the ongoing tensions in the Strait of Hormuz as a prime example of this economic warfare paradigm. The implications of this shift are significant for the U.S., as Schimpf argued that inflicting economic pain on adversaries like China would also result in substantial harm to the U.S. economy.
Addressing the fragility of the U.S. defense supply chain, Schimpf referenced the rapid consumption of Tomahawk missiles during recent conflicts, which highlighted the disparity between the rate of military supply replenishment and actual usage. He emphasized the necessity of not only redesigning weapons for better manufacturability but also securing upstream access to critical raw materials, particularly in the face of strategic competition with China over key minerals.
Schimpf also discussed the current frenzy in defense tech valuations, where some companies are experiencing extraordinary multiples on forward revenue. He expressed skepticism about the sustainability of these valuations, citing the uneven distribution of returns typically seen in hot market sectors. This concern is coupled with Anduril’s approach to pricing, which remains deliberate despite the industry’s temptations.
Speculation about a potential public offering for Anduril has been ongoing. While the company recently raised $5 billion in a Series H funding round, Schimpf refrained from providing a specific timeline for an IPO. He articulated a preference for remaining private in the current environment, arguing that going public during a « hype cycle » or while still far from profitability can lead to poor stock performance. He laid out a straightforward three-point framework for considering an IPO, emphasizing that the current conditions do not necessitate rushing into the public market.
In summary, Schimpf’s insights underscore the evolving landscape of warfare, the critical vulnerabilities in the U.S. military supply chain, and a cautious approach to corporate growth and public market entry in a rapidly changing defense technology sector.
