Brian Schimpf, CEO of defense technology firm Anduril, warned that economic warfare has become the defining feature of modern military conflicts, posing significant challenges for the United States. Speaking at Fortune's Brainstorm Tech conference in Aspen, Schimpf emphasized that traditional military engagements are being overshadowed by strategies targeting critical infrastructure like data centers, oil refineries, and shipping lanes.
'The economic warfare that is effectively the Strait of Hormuz, this is the new normal of what these conflicts are going to look like,' Schimpf said.
Schimpf noted that low-cost drone technology has made striking these economic targets easier than ever, dramatically altering the landscape of warfare. He pointed to the U.S. military's recent engagement with Iran, where 850 Tomahawk missiles were expended in just four weeks—far exceeding the Pentagon's replenishment capacity.
Supply Chain Vulnerabilities
Schimpf highlighted the fragility of the U.S. defense supply chain, particularly in securing critical materials like germanium, rare earth magnets, and copper film. He stressed that China's strategic acquisition of these resources has created a stranglehold that the U.S. has been slow to counter.
Defense Tech Bubble?
The Anduril CEO also addressed the current frenzy in defense tech valuations, cautioning that many companies are pursuing unsustainable growth targets. 'I do think there is a bit of a bubble,' Schimpf said, comparing the situation to the Uber-and-Lyft dynamic, where 90% of returns accrue to the top two players. Anduril remains private for now, with Schimpf arguing that going public during a 'hype cycle' could lead to poor stock performance.
As Schimpf concludes, the U.S. must rethink its defense strategy to address economic vulnerabilities and secure its supply chains in an era where traditional warfare is increasingly obsolete.