[Wen/Observer Network Xiong Chaoran] On October 10, local time, Palmer Luckey, founder of Anduril Industries, a U.S. artificial intelligence military company, complained in an interview with Bloomberg TV that the U.S. defense manufacturing supply chain relies too much on China.
“We have to get out of China’s supply chain,” said Lukaku, “we need to reindustrialize, we need to have our own rare earth supply, and we need to produce our own chips and computers, and China has a lot of influence.”
At the same time, as the Sino-US economic and trade game continues, Shyam Sankar, chief technology officer of Anduril, exaggerated that the conflict between the two countries has been "brewing for nearly 50 years." On the other hand, Brian Schimpf, CEO of Anduril, declared that the current tariff confrontation would be a "long-term conflict" between the United States and China, and "we must be prepared for it".
According to Bloomberg, Anduril Industries is the largest of many defense technology start-ups in the United States. These companies aim to use artificial intelligence and autonomous software to command drones, fighter jets, submarines and other vehicles to realize the modernization of the U.S. military.
The report emphasized that the United States is vigorously developing this industry mainly because of "increasingly fierce competition with China."
Schmidt said he expects the company's revenue to double this year to more than $2 billion, and production will also increase by 400 percent, while LeChi said the company's output could grow again next year.
Companies such as Andrill Industrial and another listed company, Palantir Technologies, have long regarded China as a potential rival and are aiming to develop U.S. defense technology.
Sankar said China is “stronger in terms of overall production capacity,” but that the United States “has the best software in the world.”
Risk investors have increased their attention to defense in recent years, both due to concerns about geopolitical tensions and optimism that U.S. procurement policy reforms may be conducive to start-ups.
Some in the industry are concerned that the United States may be at a disadvantage in the drone arms race with China, so the desire to expand manufacturing capacity is also part of the high-cost plan to build a new U.S. defense plant. According to research agency PitchBook data, investors invested $20 billion in U.S. defense technology in the second quarter of this year, up 200 percent from the same period last year.
Anduril's high-level hype on the "decoupling" of the U.S. defense manufacturing industry from China comes at a time when China issued two announcements on October 9 on strengthening export controls on rare earth-related items.
According to the new regulations announced by China's Ministry of Commerce on October 9, China will implement export controls on some overseas rare earth-related items and rare earth-related technologies containing Chinese ingredients. According to the Financial Times, this means that all magnets that contain Chinese rare earth components or are produced by Chinese rare earth mining, smelting and magnetisation technology need to be approved by foreign companies when exporting them.
The new regulations coverage contains 0.1% or more of China's rare earth components, foreign-made rare earth magnets and some semiconductor materials, as well as the items listed using rare earth mining, metallurgy separation, metal metallurgy, magnetic materials manufacturing, rare earth secondary resource recycling and recycling related technologies produced abroad, these items will apply from December 1; for the items listed originated in China, the new rules will be implemented immediately.
In addition, for most export licenses for military use, China is "principally not permitted"; China will also "approve case by case" for export applications involving the development of AI with potential military uses.
On October 9, the spokesperson of the Ministry of Commerce answered a reporter's question on strengthening the export control of rare earth-related items, saying that rare earth-related items have dual-use attributes for military and civilian use, and it is an international practice to implement export control on them. To this end, the Chinese government controls some overseas rare earth-related items containing Chinese ingredients in accordance with the law, with the aim of better safeguarding national security and interests and better fulfilling international obligations such as non-proliferation.
As a responsible big country, China's implementation of controls on related goods reflects the consistent position of firmly safeguarding world peace and regional stability, and actively participating in international efforts to prevent proliferation.China is willing to strengthen communication and cooperation with all parties through the multilateral export control dialogue mechanism, promote compliance trade, and guarantee the security and stability of the global industrial supply chain.