Blended-wing-body aircraft manufacturer Natilus recently announced a strategic partnership with automotive AI company Palantir. The partnership seeks to deploy an AI-based operating system to accelerate the development of Natilus’ flagship models, the KONA and HORIZON.
In an interview with Design & Development Today, Natilus CEO and Co-Founder Aleksey Matyushev breaks down the decision to partner with Palantir, the ongoing search for additional manufacturing space, and what separates the company’s flagship models from the rest of the aviation industry.
Devon Verbsky (DV): What sparked this relationship with Palantir?
Aleksey Matyushev (AM): It’s essentially twofold. My background has been in the aviation industry for 20 to 30 years. One of the big pieces that the aviation industry has challenges with under the hood that not a lot of people see are the paperwork trails. One of the companies, and one of the oldest aviation companies had a lot of paper pushing through the entire organization. We lived and died on paper. When you think about Boeing, the first fully computerized airplane was in 1997. Prior to that, everything was designed by pen and paper. So when Palantir approached us, we started thinking about what could be done in the aviation sector as they’ve had similar successes with other customers and large players like Airbus. I was excited about what the potential of it is to streamline a lot of our workflows, communication throughout production, procurement, and engineering.
Palantir is very unique because they’re essentially a data aggregating house. But what they can do with that data, workflows, and insights throughout the company is unique. It becomes what they call the ‘operating system of the business.’ So a lot of the success under the hood within other companies has been that digitization. Additionally, the insights with artificial intelligence from collected data is amazing. It reduces the amount of time our engineers spend on workflows, allowing us as management to gain insights into challenges surrounding certain pieces as they move from design development over to the manufacturing floor, maintaining a better relationship with our supplier base.
DV: What does the picture look like if this partnership doesn’t happen?
AM: Much less progress all in all. We’ve started building with their team already. We had their team and engineers over last week, and even though it’s early days and every single solution is custom, what we saw has already gotten the team excited.
DV: This decision comes hand-in-hand with site selection for your new U.S. manufacturing facility. What’s the status on the new site?
AM: We have two products to date, so we’re thinking about it as phase one and phase two. Phase one is centered around the first product, the regional freighter, the Kona. Phase two is then taking what we learned and scaling that into the Horizon passenger configuration. It’s a crawl, walk, run approach. We have facilities here in San Diego today, but it’s become very apparent that the infrastructure that we have around us in the airport is not enough to sustain large scale manufacturing.
Building a factory is a long-winded process as I found out over the last eight to 10 months, it takes three years. Looking at our timetables for product developments, the answer was we have to start now to start thinking about it and working it in parallel. We started site selection already, and what we’re looking for is quite unique. We’re trying to cast a very wide net. Airport infrastructure is number one, then access to talents and of course local government incentives to help us grow. We’ll still maintain engineering here in San Diego, but as we start thinking through the larger scale of the company, we have to open up our net a little bit wider.
DV: When do you foresee these aircraft becoming fully operational?
AM: At the moment we’re in assembly mode. Our first full scale prototype, the regional freighter, we have here in San Diego, where we are building flight hardware right now. It’ll fly in the next 24 months, and then customer delivery starts about 24 to 36 months after. That puts us into the 2028-29 timeframe for customer deliveries.
DV: Part of this partnership is a focus on supply chain resilience and efficiency. Have newly enacted tariffs had any impact on operations?
AM: It’s a tough question. We’ll always see what tomorrow brings, but as of today, ‘not really’ is the answer. A lot of the tariffs right now have been put on aluminum, but we have an all-carbon airframe with only a couple of aluminum components. All of our large suppliers of avionics and engine technology are local to the United States primarily. If not, Canada, which hasn’t been tariffed quite as much. So there’s a little bit of an effect, but we’re more concerned about carbon fiber.
Our suppliers are here in the U.S. but what does their supply chain look like? It has started to shift our decision making for the longer term, but we’re just trying to see, ‘What does this look like over the next three to five months when it goes steady?’ Right now, the markets are going up and down as things change and evolve. It’s hard to make decisions based on that. In the near term, we feel that we’re in a strong position, but on the longer side when we actually enter production, I think we’ll probably be thinking about it differently six to eight months from now.
DV: What separates Nautilus from it’s competitors?
AM: I think the market is wide enough for more than one of us to play in. Everyone’s product is different in some way, and so is the technology stack. We’ve found our market is commercial. With the regional freighter, we are normalizing technology on the smaller side. We’d like to focus on the narrow body category. We believe that that is the biggest market over the next 20 to 40 years. And it’s a natural, scalable solution to move from an 85 foot freighter to 118 foot passenger aircraft. Also, our technology stack is more conservative.
Saying that there’s room for both of us to play in the market is something certain airline players are realizing as well. It’s great, normalizing the configuration, making the conversations easier with airlines. It’s a question of whether we want to be successful and can we play in the same ecosystem.