Video · 2026-05-19 · 12m · 30 moments

Is Defense the Next Trillion-Dollar Category? | a16z American Dynamism Summit

✦ AI generated

GUEST Dino GUEST Duffy GUEST Honorable Duffy GUEST Dino Mavrookas

timeline · colored by role

Claim◆

Autonomy unlocks the speed and scale needed to bend the economic cost curve of shipbuilding, since you can't out-compete China on material or labor rates so you must fundamentally redesign ships to use less steel and far fewer labor hours.

Dino Mavrookas argues that since the US can't beat China on cheaper steel or labor rates, the only path to competitive shipbuilding is redesigning ships from first principles for software autonomy and digitization, radically cutting steel and labor hours.

transcript

Dino Mavrookas: The real unlock to autonomy is speed and scale. Right? If I was sitting up here telling the secretary how we're going to build the same ships that we've been building for the last 50 years or the same ships that they're building in China, we're just going to do it better, faster and cheaper. I mean, he should just politely ask me to leave. You have to bend the economic cost curve.

gives example · 1

Claim◆

Warfare will always require some human involvement at some point, but you should never send a human into danger if a robot can do it instead — the real value of autonomy is that it unlocks speed and scale, not just task replacement.

Dino argues autonomy's core benefit isn't just removing humans from danger, but enabling ship-building and operations at a speed and scale impossible with traditional crewed platforms.

transcript

Dino Mavrookas: warfare will require humans involvement at some point but I've seen it and you should never send a human if you have the ability to send a robot. You just shouldn't do it. So let's leverage robotics and protect human life where we can. The real unlock to autonomy is speed and scale.

gives example · 1

Claim◆

Robots should be sent into danger instead of humans whenever that capability exists, and warfare will still require human involvement at some point, but autonomy should be leveraged to keep people out of harm's way wherever possible.

Dino frames autonomy's core value as a moral imperative: never risk a human life on a mission a robot can perform, using robotics to protect people while acknowledging warfare will still need humans at some point.

transcript

Dino Mavrookas: Warfare will require humans involvement at some point but I've seen it and you should never send a human if you have the ability to send a robot. You just shouldn't do it. So let's leverage robotics and protect human life where we can.

Claim◆

You should never send a human into a combat scenario when a robot can be sent instead.

Dino Mavrookas states that while warfare will always require some human involvement, robotics should always be used in place of humans wherever possible to protect human life.

transcript

Mechanism◆

Autonomy's real value is that it lets you redesign ships from first principles to use less steel and far fewer labor hours, bending the cost curve so you can out-build China without buying cheaper steel or labor.

Dino argues the real unlock from autonomy isn't the robot itself but the ability to radically simplify ship design, cutting steel and labor hours so the US can out-produce China despite paying the same input costs.

transcript

Dino: The real unlock to autonomy is speed and scale... You have to bend the economic cost curve. You have to build ships cheaper. You have to build ships faster. The only two levers you have to pull are material costs and labor costs.

Mechanism◆

Building cheaper, faster ships requires bending the economic cost curve through first-principles design that fundamentally uses less steel and fewer labor hours, since the US can't out-buy China on either steel or labor cost.

Dino Mavrookas argues that since the US can't win on cheaper steel or labor rates than China, shipbuilders must redesign vessels from first principles for software autonomy and digitization to use less material and labor.

transcript

Dino Mavrookas: You have to bend the economic cost curve. You have to build ships cheaper. You have to build ships faster. The only two levers you have to pull are material costs and labor costs. We're not going to buy steel cheaper than they're buying it in China. So, you have to take a first principles design to the ship and just fundamentally use less steel.

explains mechanism · 1gives example · 1

Mechanism◆

Ships must be redesigned from first principles to use less steel and far fewer labor hours, because you can't win a shipbuilding cost race with China on material or labor prices alone — you have to change the design itself through software autonomy and digitization.

Dino argues the only way to out-compete China on shipbuilding cost is to redesign vessels from first principles for autonomy, since neither steel nor labor can be bought cheaper than China's rates.

transcript

explains mechanism · 1gives example · 1

Mechanism◆

Since you can't buy steel or labor cheaper than China does, the only way to bend the shipbuilding cost curve is a first-principles redesign that fundamentally uses less steel and fewer labor hours.

Dino explains that with material and labor rates fixed by global competition, the only lever left is redesigning ships from first principles to use less steel and enable software-driven autonomy.

transcript

explains mechanism · 1gives example · 1

Data

Saronic's first autonomous ship required roughly 50,000 labor hours to build, versus 7 to 9 million labor hours for a traditional destroyer, showing the scale of efficiency autonomy unlocks.

Dino Mavrookas cites a stark labor-hour comparison between Saronic's autonomous vessel (Marada) and a traditional Navy destroyer to illustrate the magnitude of savings autonomy-driven redesign enables.

transcript

Dino Mavrookas: Marada's using is about a 50,000 labor hour on our first ship. Just for order of magnitude, put it in frame of reference. Apples and oranges comparison here. I'm going to acknowledge that up front. But a destroyer is 7 to 9 million labor hours. So, that's the scale and speed that autonomy unlocks.

explains mechanism · 1

Data

Saronic's first autonomous ship took roughly 50,000 labor hours to build, compared to 7-9 million labor hours for a traditional destroyer.

Dino cites a concrete labor-hour comparison to illustrate the scale of efficiency autonomy-first ship design can unlock versus legacy naval shipbuilding.

transcript

Mechanism

Shipbuilding should be redesigned to be as simple as assembling IKEA furniture, so people without 15 years of specialized welding experience can build ships effectively, rebuilding the workforce and the culture around shipyard work.

Dino argues that instead of relying on scarce veteran welders, ships should be designed simply enough that a broad workforce can be trained quickly, quoting his manufacturing lead's IKEA analogy.

transcript

Dino Mavrookas: Design the ship so you actually don't need 15 years of welding experience to build it in the first place. Then you can actually rebuild and retrain the workforce. I'll steal one of the lines from our head of manufacturing. He says, 'Less like an encyclopedia, more like IKEA.' It's like everybody can build furniture.

Mechanism

Ships should be designed simply enough that workers don't need 15 years of welding experience to build them, so the industrial workforce can be rebuilt quickly.

Mavrookas describes designing ships to be as easy to build as IKEA furniture, so that workers from other industries (auto, aerospace) can be quickly trained into shipbuilding, rebuilding the maritime industrial workforce.

transcript

Dino Mavrookas: It goes back to the first principles approach design of the ship. Design the ship so you actually don't need 15 years of welding experience to build it in the first place. Then you can actually rebuild and retrain the workforce. I'll steal one of the lines from our head of manufacturing. He says, 'Less like an encyclopedia, more like IKEA.' It's like everybody can build furniture.

Example

Shipbuilding designs should be simplified so that anyone who can build a car or an airplane can be trained to build a ship quickly, shifting shipyard work from requiring 15 years of specialized welding experience to something closer to assembling IKEA furniture.

Dino describes redesigning ships so they don't demand 15 years of welding experience, comparing the goal to IKEA-style simplicity so workers from other manufacturing industries can be retrained to build ships fast.

transcript

Dino Mavrookas: Design the ship so you actually don't need 15 years of welding experience to build it in the first place. Then you can actually rebuild and retrain the workforce. I'll steal one of the lines from our head of manufacturing. He says, "Less like an encyclopedia, more like IKEA." It's like everybody can build furniture.

Example

Ships should be designed simply enough that workers without 15 years of welding experience can build them, so the shipbuilding workforce can be trained like assembling IKEA furniture rather than reading an encyclopedia.

Dino says the industrial workforce problem is really a design problem: if a design requires 15 years of expertise, that's the company's fault, and simplifying design ("more like IKEA") is how you rebuild the labor base fast.

transcript

Dino: Design the ship so you actually don't need 15 years of welding experience to build it in the first place. Then you can actually rebuild and retrain the workforce. I'll steal one of the lines from our head of manufacturing. He says, 'Less like an encyclopedia, more like IKEA.'

rebuts · 1

Mechanism

Shipyards should design vessels simple enough that workers without 15 years of welding experience can build them, like IKEA furniture designed for anyone to assemble.

Mavrookas says rebuilding the maritime workforce starts with simplifying ship design itself, quoting his head of manufacturing's line that shipbuilding should be 'less like an encyclopedia, more like IKEA.'

transcript

Claim

Production capacity, historically calibrated to the defense budget, is the biggest constraint on fulfilling foreign military sales, so the Pentagon is now incentivizing contractors to expand production with their own private capital instead of government handouts.

Duffy explains that the Pentagon has shifted strategy over the past two months, structuring deals that push traditional defense contractors to self-fund production expansion rather than depend on government handouts.

transcript

Duffy: production really is the biggest constraint for us when it comes to fulfilling our foreign military sales orders. And production is generally kind of calibrated to what the US Department of budget looks like. We can no longer live within those constraints and you've seen some of the deals that we've been able to do with traditional industry in the last 2 months where we've incentivized them to expand their own private capital to expand production with their own funding.

provides context · 1

Fact

Production capacity, not budget appropriations, is now the biggest constraint on fulfilling foreign military sales, so the Pentagon has started incentivizing traditional defense contractors to expand production using their own private capital rather than relying on government handouts.

Duffy explains that production capacity has become the binding constraint on foreign military sales, and describes recent deals that push traditional industry to self-fund production expansion instead of depending on government handouts.

transcript

Duffy: We can no longer kind of live within those constraints and you've seen some of the deals that we've been able to do with traditional industry in the last 2 months where we've incentivized them to expand their own private capital to expand production with their own funding, which I think then instead of being a handout from the US government as it's traditionally been, incentivizes industry to do what Dino is doing with his company.

Mechanism

The Pentagon should incentivize defense contractors to expand production using their own private capital rather than relying on government funding handouts.

Duffy explains that production capacity, long constrained by Pentagon budgets, is now being expanded through deals that push traditional defense contractors to invest their own private capital rather than depend on government handouts.

transcript

Duffy: You've seen some of the deals that we've been able to do with traditional industry in the last 2 months where we've incentivized them to expand their own private capital to expand production with their own funding, which I think then instead of being a handout from the US government as it's traditionally been, incentivizes industry to do what Dino is doing with his company.

Claim

The Pentagon should incentivize traditional defense contractors to fund their own production expansion with private capital rather than relying on government handouts, giving industry ownership over efficiency and capacity.

Duffy explains that production capacity, not budget, is the real constraint on foreign military sales, and recent deals have shifted the model so contractors invest their own capital to expand production instead of waiting on government funding.

transcript

Duffy: we've incentivized them to expand their own private capital to expand production with their own funding, which I think then instead of being a handout from the US government as it's traditionally been, incentivizes industry to do what Dino is doing with his company, which is really modernize how we're take ownership on the actual efficiency and production capacity that they're producing.

Claim

A defense shipbuilder must also succeed commercially, otherwise it stays dependent on the next government contract for survival instead of sustainably providing wartime production capacity during peacetime.

Mavrookas frames Saronic's massive Port Alpha shipyard as a bet on the commercial maritime market, arguing that without commercial viability a defense manufacturer just becomes reliant on the next government contract.

transcript

Dino Mavrookas: Port Alpha is a generational project. We're looking at building one of if not the largest shipyard in the world... our goal is to provide the Department of War wartime production capacity during peacetime. And if we can't enter the commercial market in a viable economic manner, then we're just looking to the government for the next contract vehicle and the next paycheck to support our company's longevity.

Claim

A shipbuilder that cannot succeed in the commercial market is ultimately just dependent on the next government contract for survival, so building commercial viability is essential to giving the Department of War reliable wartime production capacity during peacetime.

Dino describes Port Alpha as a generational shipyard project meant to unlock the commercial maritime market, arguing that without commercial viability a defense shipbuilder is just waiting on its next government paycheck.

transcript

Dino Mavrookas: Port Alpha is a generational project. We're looking at building one of if not the largest shipyard in the world focused on autonomous platforms, focus on the future of the maritime industry, unlocking the commercial market, building larger vessels, cargo containers, bulk carriers, oil tankers, things that enable things like energy dominance.

Example

Saronic must succeed in the commercial maritime market, not just the defense market, or it risks becoming permanently dependent on the next government contract for survival.

Mavrookas frames Port Alpha, a massive new autonomous shipyard, as essential to entering the commercial market so Saronic isn't perpetually dependent on government contracts for its survival, tying this to national energy dominance and wartime production readiness.

transcript

Dino Mavrookas: Port Alpha is a generational project. We're looking at building one of, if not the largest, shipyard in the world focused on autonomous platforms, focused on the future of the maritime industry, unlocking the commercial market, building larger vessels, cargo containers, bulk carriers, oil tankers, things that enable things like energy dominance.

Claim

Saronic must succeed in the commercial shipbuilding market, not just win defense contracts, or else it risks depending on government contract cycles for survival; its real mission is providing wartime production capacity during peacetime.

Dino frames Port Alpha and commercial shipbuilding as essential to Saronic's long-term survival and its broader mission of maintaining wartime production capacity during peacetime.

transcript

Dino Mavrookas: What our goal is is to provide the Department of War wartime production capacity during peacetime. And if we can't enter the commercial market in a viable economic manner, then we're just looking to the government for the next contract vehicle and the next paycheck to support our company's longevity.

Claim

A defense manufacturer that can't succeed in the commercial market will remain permanently dependent on the next government contract for survival, so entering commercial shipping is essential to long-term viability.

Dino frames Port Alpha's commercial ambitions as existential insurance: without a real commercial business, a defense shipbuilder is just waiting on its next government paycheck indefinitely.

transcript

Dino: if we can't enter the commercial market in a viable what an economic manner, then we're just looking to the government for the next contract vehicle and the next paycheck to support our company's longevity.

Claim

Relying on a single, unprofitable, defense-only supplier for a bespoke design creates fragility, so prioritizing commercial-first, producible designs builds resilience into the defense industrial base.

Duffy argues that sole-source, bespoke defense suppliers create dangerous fragility, and that making commercial viability and producibility a primary design input builds resilience across the defense industrial base.

transcript

Duffy: Commercial first is a major element of our acquisition transformation strategy and the resilience it provides the industrial base. It's really frustrating how much fragility we encounter within the traditional defense industrial base because we have a sole supplier that's not really that profitable that was a feeder to a design that was bespoke for the defense industry. And all of a sudden, we've really created our own set of vulnerabilities here.

supports · 1

Claim◆

The traditional defense industrial base has become fragile because it depends on sole suppliers running unprofitable, bespoke designs, and prioritizing commercial-first, producible designs would build resilience and remove that vulnerability.

Honorable Duffy explains that commercial-first design is central to the Pentagon's acquisition transformation strategy because reliance on unprofitable sole-source defense suppliers has created dangerous industrial fragility.

transcript

Honorable Duffy: It's really frustrating how much fragility we encounter within the traditional defense industrial base because we have a sole supplier that's not really that profitable that was a feeder to a design that was bespoke for the defense industry. And all of a sudden, we've really created our own set of vulnerabilities here.

Claim◆

The traditional defense industrial base is fragile because it often relies on a single, barely-profitable supplier building a bespoke design just for defense, so prioritizing commercial-first, producible designs would create resilience and reduce vulnerability.

Duffy argues that sole-supplier, defense-only designs create hidden fragility, and that making commercial viability and producibility a primary design input would make the industrial base more resilient.

transcript

Duffy: It's really frustrating how much fragility we encounter within the traditional defense industrial base because we have a sole supplier that's not really that profitable that was a feeder to a design that was bespoke for the defense industry. And all of a sudden, we've really created our own set of vulnerabilities here.

supports · 2

Claim◆

The traditional defense industrial base is fragile because it often relies on a single, not-very-profitable supplier building bespoke designs, so prioritizing commercial-first, producible designs would create resilience for the Department of Defense.

Duffy says commercial-first design is core to the Pentagon's acquisition transformation strategy, because reliance on unprofitable sole-source suppliers building bespoke defense-only designs has created hidden vulnerabilities in the industrial base.

transcript

Duffy: commercial first is a major element of our acquisition transformation strategy and the resilience it provides the industrial base. It's really frustrating how much fragility we encounter within the traditional defense industrial base because we have a sole supplier that's not really that profitable that was a feeder to a design that was bespoke for the defense industry. And all of a sudden, we've really created our own set of vulnerabilities here.

Claim◆

The traditional defense industrial base has created its own vulnerabilities by relying on unprofitable sole suppliers building designs bespoke to defense, making commercial-first, producible design essential to resilience.

Duffy says the Pentagon's own acquisition habits — bespoke designs from unprofitable sole suppliers — created industrial fragility, and prioritizing commercial-first, producible designs is key to building resilience.

transcript

Duffy: it's really frustrating how much fragility we encounter within the traditional defense industrial base because we have a sole supplier that's not really that profitable that was a feeder to a design that was bespoke for the defense industry. And all of a sudden, we've really created our own set of vulnerabilities here.

Claim◆

Rebuilding what the country needs for the next century is a generational opportunity that requires more founders, more builders, and more people in government pushing for change, not any single company solving it alone.

Dino closes with a call to action: this is a generational, whole-of-country opportunity that needs more founders, builders, and government allies, not one company solving it alone.

transcript

Dino: There's a real generational opportunity to build what this country needs for the next 100 years, and we need more founders. We need more builders, and we need more folks in government like the secretary pushing for change. This isn't a one company one person is going to solve this problem. We need a partnership across the country.

extends · 1

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