Anduril's valuation doubled from $30.5 billion to $61 billion in under a year, and the company is reportedly in talks with investors at close to $100 billion. Its revenue more than doubled to $2.2 billion last year, but $100 billion works out to roughly 45 times that number, while the traditional defense primes trade at low single-digit multiples. Anduril's own CEO, Brian Schimpf, says there is a bit of a bubble. Mike and Neal agree. The real question is what happens to the Pentagon, and to the taxpayer, when it pops. The conversation starts with who these companies actually are. Anduril was founded in 2017 by Palmer Luckey, who had just been fired from Facebook after selling Oculus, along with co-founders who came out of Palantir. It is named after a sword from The Lord of the Rings. It began with border security and now builds the Lattice battlefield software platform along with drones, interceptors, and missiles. Mach Industries is a very different company. Ethan Thornton founded it in 2023 after dropping out of MIT at 19, and it builds five autonomous systems, from a vertical takeoff jet drone to a cheap counter-drone interceptor. Mach's valuation went from $470 million in June 2025 to $3.7 billion this month, and it does not disclose revenue. How did we get here? Mike and Neal trace the Pentagon's path from hundreds of prime contractors in World War II to a handful, and what that did to competition and cost. Fighter programs take decades, and the F-35 keeps growing past a trillion dollars. Mike calls it regulatory capture. Neal adds that the primes got brilliant at building exquisite, expensive hardware just as software became the more important half of the fight, and startups could iterate faster than Boeing or Northrop ever could. Add Silicon Valley's change of heart — from the Google employee revolt over defense work to founders who now want to build for the military — and the Pentagon's attempt to play matchmaker through the Defense Innovation Unit, and the opening for a new kind of prime is obvious. Both hosts give Secretary Hegseth credit for going after how acquisition programs are run, even as they disagree about almost everything that follows. Then the money. Defense tech venture funding hit $12.3 billion in the first half of the year by one PitchBook count, more than all of last year. Anduril is growing fast and guiding to roughly double its revenue again, but it is still losing money. Neal brings the founder's view. As the CEO of Airloom, he has given and received the same advice — Uncle Sam is both the best and worst customer, with big contracts but lumpy revenue that startups cannot wait two years for. A dual-use company can raise private capital and win defense dollars, and each helps the other. It also has a civilian market to fall back on if it never becomes a program of record. Mike, the founder of Aclymate, remembers a veterans founder meetup where dual use was the whole play, and notes that companies now go straight to defense. He asks what the dual-use story is for a battlefield sensor fusion company. That is where the two split. Mike is skeptical of how the neo primes got where they are. He points to insider connections and no-bid contracts, and to companies that used to say "if we build it, they will come" now asking for money up front. In his view, they are starting to behave like the old cartel, with venture capital pushing toward a few winners and everyone else acquired or wiped out. He says he knows good people at Anduril and does not know Luckey personally, but the pattern reminds him of past eras of confident outsiders who did not understand the underlying systems. Neal reads the motives more generously. He sees real patriotism and a technologist solving a real problem, and in his own experience in the trenches, he has watched people win on merit and questionable technology lose. His argument is that America fell behind on defense innovation, private capital showed up, entrepreneurs followed, and the warfighter gets better technology as a result. They agree on the essentials — there is a bubble, and the status quo was never acceptable. So what should happen instead? Mike wants the Pentagon to open the playing field so venture capital cannot squeeze the market. That means giving the services more discretion to buy every year and keeping enough competition that margins get squeezed instead of exploding. Neal wants the Pentagon agile enough to bet heavily on Mach and Anduril today and on something completely different next year. The shared answer is a wider field, more frequent purchasing from more suppliers, programs that can change direction, and dual-use companies that can survive if Washington does not buy on a straight line. In the mailbag, a viewer in Nottingham asks whether Mike and Neal miss flying the F/A-18. Mike says it was a blast, but he has filled out that part of his life. Neal says he misses it and would have flown until the day he died. An electrician of 40 years says nearly every electrical device is made in China. Mike pushes back — the United States is still the number two manufacturing power, and the higher-end the product, the more likely it is built here. Goods, bads, and others — Mike's good is $1.9 billion from the Department of Energy for 31 grid projects across 26 states, which he credits to Secretary Wright as a key unlock for American energy security. His bad is ProPublica's reporting on Senator Susan Collins and a defense contractor's $150,000 donation, routed through a shell company, to a pro-Collins super PAC. Collins denies wrongdoing, and Mike uses the story to argue for deeper reform of how defense acquisition and funding work. His other is the Pentagon's new wargame-style evaluation for officers seeking their first star, which he calls a reasonable start while arguing the military needs to do far more to develop strategic thinkers. Neal's good is Mexico's energy ministry projecting 80 percent wind growth by 2030, to 15 gigawatts, while American wind slows down. His bad is the Wall Street Journal report that President Trump rejected Iran's seven-day ceasefire proposal and expects to resume bombing after the midterms. His other is the Pentagon asking industry how fast it can build more weapons, a reminder that the country is not ready for the next conflict. Got a take? 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