Alexander

$MRLN Here is a longer form post why I invested in Merlin Labs. Keep in mind the main risk here is slipping of the timetable as defense procurement is not super fast and high assurance autonomy is hard, but I am patient at a ~650 million market cap, since this easily could be a 30B market cap in 10 years. The main reason I am invested is the big idea in combination with the CEO and the right strategic fit: The forming thesis is that instead of pouring billions in building new flashy airframes it's way more valuable first to retrofit the existing legacy fleets with autonomy. Especially since airframes like the KC-135 are projected to have a useful life over 100 years+. Past 30 years trillions where spent on airframes in commercial and defense Merlin has found a beautiful way to leverage all that spend and making existing operational platforms better. Second is that it is solving a problem nobody is solving at that scale. Most defense tech companies love to do the sexy hard stuff like mission autonomy for CCA and drones like Anduril and Shield are doing, but Merlin is building an high assurance backbone pilot for these systems. The military is developing A-GRA open architecture that allows for a plug and play mission autonomy software for CCA like Anduril's Fury and their Lattice/Hivemind software to be swapable. Merlin is among others are actively contributing to the new open A-GRA architecture. My speculation is that in the end for CCA that Anduril, Shield and others will develop the offensive mission autonomy via Lattice, but that the US DOD prefers a fully FAA / NDP compliant high assurance backbone pilot for basic pilot duties. Anduril, Shield and others are not building an FAA / NDP compliant autonomy solution, since that would probably be a 5 year process and would have to change their autonomy architecture to become high assurance. A-GRA allows for a best of both worlds and in the end remember the customer is king, so whatever the US DOD wants it gets irrespective of Anduril and Shield's their preferences. In addition Merlin has also actively mentioned that they are looking to integrate mission autonomy capabilities under their bigger tent. Interestly Merlin Labs acquired EpiSci, but in the end did not follow through since the strategic rationale for the deal no longer held and Merlin doubled down on in house efforts. My read here is that tactical autonomy like autonomous dogfighting for CCA is a really hot space where Anduril, Shield and others have a lead and big funding. It makes more sense to partner down the line then to compete head on for Merlin Labs. What is very interesting though is that Merlin will do bolt on acquisition for the platform to acquire mission capabilities like Medical transport, Cargo, Aerial firefighting along side internally developed missions aerial refueling etc. This combines the Merlin high assurance pilot with mission specific autonomy applications. But what I really was impressed by is the strategy of the claw walk run approach. Instead of pushing for full autonomy head on for which the US DOD is not ready and failing like Xwing did (now acquired by Joby) or doing remote pilot only (Reliable Robotics) Merlin took a best of both worlds approach. Like Xwing it is building a full autonomy solution, but then retrofitted in large manned aircraft that will start out with semi autonomous capabilities and grow from there. Nobody has this approach and that is why Merlin does not really have any competition, but the model is beautiful. By going semi autonomous first based on a fully autonomous architecture unlike Xwing they can get into production programs with the DOD today. Once installed on the KC-135 and C-130J fleets semi autonomous capabilities grow over time, but importantly US DOD pilots are directly feeding extremely valuable flight data into Merlin's AI enabled full autonomous solution. By providing a semi autonomous solution, they basically are getting paid by the US DOD to built their fully autonomous solution. That is brilliant. Even though their is no production contract to date US DOD pilots are already actively collaborating with Merlin under their existing contract to optimize the semi autonomous product. So by the time the real contract for the fully autonomous KC-135 and C-130J comes around for competitive bid competitors like XWing, Reliable Robotics and the primes have zero chances of winning it. By then Merlin will have a solution that has been trained by millions of flight hours and direct US DOD pilot feedback. It will literally be a forged in fire type of solution. By doing semi autonomous today, they are locking in these platforms for fully autonomous tommorow and nobody is doing this for these manned aircraft like Merlin is doing. By capturing and dominating the KC-135 and C-130J will be a perfect beachhead to get commercial cargo narrowbody airframe contracts from Fedex and UPS. (5 years) That in turn will allow them to be in the prime position to enable commercial autonomous passenger flight some day (probably 15+ years) Just like with AST Spacemobile Merlin Labs aside from DOD contracts has best of breed partnerships with GE to develop a digital backbone for the autonomoy core, Northrop Beacon program as testbed for defense autonomous flight and integration with Honeywell Anthem’s advanced avionics suite. This is validation for me the technology is as promising as advertised. Once you understand the model it's beautiful.

Drone swarms are here. This technology could stop them.

Amazon must have offered a low price for this deal, because Delta is signing on for a service that they don't yet know for sure that Amazon will be able to provide. Starlink is already a proven in-flight high-speed Wi-Fi provider and could outfit Delta's fleet by end of 2027. Almost all of Delta's competitors have signed on with Starlink.