Closing Bell - Manifest Space: Phased Arrays Activated with CesiumAstro CEO Shey Sabripour 8/10/23

Episode Date: August 10, 2023

As constant connectivity through satellite constellations becomes more acute, a new wave of consolidation is afoot. Dish Network and Echostar are merging in a move to combine the companies to gain an edge in the 5G competition. But with demand driven higher, startups like CesiumAstro stand to benefit. CEO Shey Sabripour joins Morgan to discuss 6G internet, spotty WiFi and putting the company’s technology to the test.

The world is becoming more digitized and the need for constant connectivity more acute. It's spurring companies to build out new satellite constellations, wireless carriers to strike new partnerships, and it's fueling a wave of consolidation. Case in point, the reuniting of two Charlie Ergen-founded companies, Dish Network and EcoStar, in a move to combine satellite and terrestrial tech for an advantage in the 5G ecosystem. I'm always concerned about all competition. I mean, that's my job. But I can say the market is much larger.

And I think that, you know, ever since I've been in telecom some 40 years ago, I have never heard that there's been enough bandwidth and there's been enough connectivity. And today, after all of those years with all the investments that have been made, the demand is far higher than the supplies. As the communications landscape evolves, it's also driving demand for the cutting-edge capabilities that will help enable these new networks to thrive. Take Cesia Mastro, a startup focused on active phased arrays. I give high-speed, high-throughput data to all of us, whether it's on our mobile phones or in our cars or in any other

platform on the plane, you need this technology. And that's why 5G is moving towards this technology and 6G will be dominated by this technology. So I started this company to really bring this technology that's been around for decades, more than 80 years, to the masses. Very different than the way it was used in only niche applications. CZM Astro has raised funding from Airbus Ventures, L3 Harris, and Kleiner Perkins, to name a few. There are satellites on orbit already testing its technology. And founder and CEO Shea Sabropor says more demand for more data means more business for CZM Astro. So much so, in fact, Sabroport says he's even turning

down some prospective customers. In this episode, we talk 5G, autonomous vehicles, even why airplane internet connections can be so spotty. I'm Morgan Brennan, and this is Manifest Space. So I think let's just start at the beginning. I guess if you could just share a little background on CESI and Mastro and specifically what the company does and why you started it. Right. I mean, I started the company after about a couple of decades, 24 years at Lockheed Martin Space Systems Company as an electrical engineer. I worked on a number of geostationary, commercial, and government satellites. And I found a couple of particular technologies to be very important for the future of telecommunication.

One of them is this technology called active phased arrays, which is one of the technologies being used for 5G and then coming for the next decade, 6G and beyond. To really deliver high throughput, high speed data, everything that's mobile requires a different kind of technology than what we're used to seeing today. And active phased arrays are the core core technology you can think of them as as important as the internet itself in using the this resource that we call the spectrum the electromagnetic spectrum to use it properly and to be able to give high speed high throughput data to all of us whether it's on our mobile phones or in our cars or in any other platform on

the plane you need this technology and that's why 5g is moving towards this technology and 6g will be dominated by this technology so i started this company to really bring this technology that's been around for decades more than 80 years to the masses very different than the way it was used in only niche applications. So if the technology has been around for 80 years, how come this is just happening now? Well, a number of reasons for that. It's happening because as we add more and more users to the network, you know, when population needs their data on their mobile platforms, our smartphones

and cars and our other vehicles, airplanes and everything else, we all expect and demand more data to our devices. And before when, and there's this spectrum electromagnetic or radio waves, radio frequency is limited in how much you can put through it. And different bands are good for different reasons. High frequency bands are good for certain applications and low frequency bands are good for, let's say cellular technology and it is now's the time for it because the technologies that can make it prolific are available now thanks to the advancements in crash avoidance technologies in cars and technologies in general just advanced chips and processing power. This technology is now ready for mass production and more economically feasible for many more

applications than it was before a few decades ago where they were only used in the jet fighters and perhaps in navy ships and things. Now you can actually use them for many more applications. So what does that mean in terms of the opportunities for Cesium Astro? How quickly can you take this technology and deploy it in a much bigger, broader way? And what does that mean in terms of some of these different markets or applications that you just mentioned? Yeah, I mean, I saw this coming years ago. I really felt that just the way our compute technology changed from mainframes to personal computers and now our mobile handsets. I saw that

the telecommunication infrastructure has to change. It is very stovepipe right now. Most people think that because we have mobile devices in our hands, that telecommunication has also advanced at the same rate as distributed computing has, but it hasn't actually. It's still quite stovepiped. And I've always believed that information should get from one place to the other, regardless of what network it's using, whether it's through satellites or through cell towers or other fiber optics, other means. Each technology is good for a certain application.

I think a hybrid system is ultimately the way to go. And so the core technology that makes all of this possible for the future to make secure, low latency, resilient communication is this technology that we're working on. I can tell you that, as you know, our cell phones or mobile phones are much more than just a telephone to us. They are sensing everything that we do. They are interacting with us. They're with us everywhere we go. And so the connected mobile phone is one element, and then the connected home, and then the connected car, and connected airplanes, and connected mobile devices are really taking on a different meaning in our lives and in our future.

And as I said before, the radio spectrum is limited, and you have to use it in a more efficient way. And so now all of a sudden, because we've made this technology accessible to many, many people without having PhDs in radio frequency or antenna technology, we're getting customers from commercial satellites like low-Earth orbit constellations. We're getting customers from the Department of Defense. We're getting customers from in-flight connectivity for aircraft, for drones, for cars.

We have a number of major car manufacturers who have spoken with us about their connected car of the future. And we've spent a lot of time and investment in making that possible. So as you know, we introduced our in-flight connectivity terminal a couple of months ago in Space News. And that's just one of the examples. I can tell you more about our connected car applications and many other features. I definitely want to talk about the connected car applications.

But first, just I guess, pardon my ignorance, in terms of this technology, is it being deployed on satellites exclusively? Or like, how does this work? Where does it actually show up? Right. It is a technology. For example, if Morgan, you're familiar with traditional geostationary satellites, which are about 36,000 kilometers above the equator. Most satellite communication for broadcasting used the traditional satellites that are in geostationary, meaning that when you're at 36,000 kilometers, the satellite rotates with the same speed as Earth and every 24 hours, and the satellite remains a stationary so you can point your dish antenna towards the satellite and leave it alone. You don't have to touch it or anything else,

which has been used for broadcasting for many, many years. And it's a good method of using satellite for that purpose. But latency is high, typically is around a quarter of a second for a round trip signal. Antennas need to be larger. And in general, as we have demanded more and more point-to-point communication rather than broadcasting, these geosatellites, all the signals from, let's say, CNBC and HBO and others get uploaded to the satellite, and then it broadcasts to the entire country. But you can imagine for

point-to-point communication, that's not very feasible. When I want to download a page, my information shouldn't be broadcast to the entire country. You want to put the information where the user is. And so because of this and because of the requirement for low latency communications, low Earth orbit has become a good place for putting these kind of satellites such as Starlink, such as Amazon Kuiper to come and many others. But when you're in low Earth orbit, in order to stay in orbit, the satellite orbits the Earth every 90 minutes, so it's much, much faster.

As these satellites go overhead, they cross horizon to horizon in less than 10 minutes, in a few minutes. And so you can't have these dishes mechanically track the satellites. You can, but it's not very reliable. So that's where multi-beam phased arrays come in. These technologies allow you to electronically steer these beams, these radio frequency beams, to track these satellites and connect to multiple satellites such that you can maintain connectivity. This is one of the reasons that you don't really

get good internet on airplanes because traditionally they were mechanically steered dishes towards these large geo-satellites. Now with the advent of low-earth orbit satellites, you need flat electronically steerable multi-beam antennas that track multiple satellites, make before break it's called. You track one satellite and the other one picks up the next satellite and hands it off. This is the kind of technology that enables us to have good connectivity, high-speed connectivity in cars, maybe even mobile phones someday, and drones and everything else in our lives. Very cool. I'm glad I asked that question.

And I appreciate the comparison to traditional broadcast, perhaps unsurprisingly. So when you talk about this and this need for point to point, I mean, it makes perfect sense when you start talking about things like connected cars and not just in terms of cars that are much more high tech with the dashboards and your ability to download data and interact with the car. But I imagine also longer term autonomous driving as well, right?

Yes, very much so. Autonomous driving really, really relies on this. Autonomous driving really requires a new level of safety and resiliency in connectivity than what we're used to. The true level four, level five autonomy really relies on a resilient multi-layer connectivity. And I can get into it more as you wish. Sorry, I maybe interrupted you. Please finish your question. No, that's it. I would love to get into it because I think, you know, autonomous driving, for example, has been, you know, one of the big promises, robo taxis and the like. It's been one of the big promises and one of the big things that's been talked about for so long and we haven't seen it come to fruition yet. And the role that this type of level of connectivity plays in the ecosystem to enable it, I think it's been overlooked. So I'd love to get your thoughts on this and what this means.

Yeah, let's get into it. I mean, what makes autonomous vehicles, autonomous driverless cars possible? It's been promised for a long time now. It was supposed to be in 2016, 17, 18, 19, and now 24. Probably we're still six to 10 years away, at least for day-to-day cars. I mean, certainly some truck applications where they're mostly on highways and some of the applications are kind of possible right now and are possible and are being tested. But for the day-to-day to really eliminate the drivers, there's a new level of safety required and regulations around this demand that a new level of safety and connectivity to be

implemented. Let's see why that is. These things rely, whether it's a camera system or LIDAR, rely on a number of sensors to collect data and information from the surrounding. These systems typically use some sort of a neural net or AI engine that needs to be trained, to be trained in all sorts of environments and applications. And each car nowadays has several hundred sensors that send the information in multiple modalities, be it camera or visible or ultrasound or LIDAR into processing units across the car. And this information needs to be uploaded to a central system that feeds and trains this neural net or AI engine. So every car, every modern car can generate

hundreds of gigabytes, if not a terabyte of data every day that needs to be collected and processed to eventually train these cars. Remember these cars, we as human beings, if you see a person, a child waves to their parents on the other side of the street and jumps in the middle, you know, behind the car, automatically when we're driving the car, we know that that person or that child, when behind the car is going to come out the other end and jump in front of the

car. But if a system, a computer has not been trained on that specific example, may not detect it and make mistakes. So you really have to train this system in all sorts of edge cases to achieve the five, nine redundancy and safe resiliency that's required. This is where connectivity comes in. To collect all this data from all the cars, traditional cell tower mobile platforms are not enough, and they're very expensive for the car manufacturers. So there's a new generation of fifth-generation non-threshold network or satellite connectivity is required to collect all this information from all the cars, monitor and learn all of our behavior, all of our responses to these edge cases, and eventually train the machines to act more like us and enable this

autonomy of the future. That's just one example, not to mention other modalities, other types of connectivity that's required. We expect infotainment. We expect telematics, meaning being connected at all time at multiple levels, not only by cell towers, not only to GPS, but also to satellites and other types of communication, as well as V2X, which is called vehicle to everything, vehicles to traffic lights, to other

cars, to human beings, to buildings and to roads. So all of this requires a new level of telecommunication technology. And at the center of all this, to make this possible, is this, one of the technologies that I feel is the most important is this active phased array technology that CGM Astro has been developing and taking it to the next level. Sorry for the long answer. No, it's great. And when you lay it out like that, you can see how massive the commercial opportunities are for this. And I realize that there are defense and national security opportunities too, government opportunities. You recently won an Air Force contract to develop these phased array antenna for remotely piloted drones, for example. And when I look at your list of blue chip investors, some of those names

are more traditional aerospace and defense, which I think speaks to the dual use capabilities of this technology as well. It is very much dual use. It's a technology, of course, I spent, as I said, many years, all of my professional career pretty much in aerospace and defense. And as you know, General Hyten a couple of years ago made a statement. He's now retired, but made a statement that I'm really not investing anymore in these gold-plated, I'm paraphrasing, sort of behemoth, juicy targets, these large geostationary satellites. I do think there's still a good place for some applications for these large geostationary satellites. As I said, for

broadcast applications, you can't beat it. It's really good to be able to broadcast to large areas of the Earth. You know, three geosatellites can pretty much cover most of the Earth. But as General Hyten said, you know, if one of them gets shot down by our adversaries or they fail, we kind of have some blind spots. But so even the Department of Defense is adopting this low-Earth orbit satellite technology, such as the proliferated warfighter space architecture from a space development agency

who's one of our customers, is taking it to a new level where lots and lots of low Earth orbit satellites create a network of detection and communication. And it's very resilient, it's very low latency, it has a much more higher throughput, and it's resilient because if one of them fails or is damaged, there's much more redundancy in the system. It's truly a distributed system. And again, this is where our technology shines because you cannot really rely on mechanically steered antennas to constantly track thousands and thousands of satellites. The only technology

that can make this happen are electronically steerable antennas. And this is, as I said, this technology has been around for a long time. This is this technology used in radar in nose cones of jet fighters. You know, that's how you track multiple enemy missiles and multiple enemy airplanes. And now we're using it for telecommunications with bringing it into the masses by a number of intellectual property and trade secrets that we have developed to make this cost a lot less and make it a lot more efficient and more powerful for these kind of applications. So what's going into developing, producing and deploying this technology? I guess,

where are you in that process and what's the growth trajectory? Right. I mean, I founded the company in January of 2017 and we're six and a half years into it. We introduced our Gen 1 product about a year and a half, couple of years ago, and that product is now on many, many applications going forward. We just had a launch actually with NASA Ames a couple of weeks ago on a rocket lab rocket. Those satellites are in orbit now and using our technology. We have a launch coming up every quarter from now till 27 with our Gen 1 products, which is only supposed to be sort of an introductory product, but it's already found its way to all sorts of customers and generating revenue for us with lunar missions,

customers that are putting rovers on the moon and establishing connectivity in a cislunar space, essentially enabling the internet in space for lunar missions and future Mars missions. We have found customers, as I said, that are interested for a connected car, for drones, as you mentioned. We have found applications in other defense applications for sensing and as well as traditional satellite in LEO orbit. A lot of LEO constellations that are coming up have baseline cesium products. Our company is growing really fast. We're at about 150 people now.

We'll be at a couple hundred people by the end of the year. Our Gen 2 products products which are much much more capable have uh many many more beams independent beams and uh are coming out by uh february next year we uh you may have also read that uh we got another contract from space development agency with raytheon as our customer for for this leo architecture of space development agency and we have a few more announcements that we're going gonna make very soon about the growth of the company in drones, in aircraft. We made our first in-flight connectivity connection to a geo-satellite a couple of weeks ago,

and we're gonna be testing this on helicopters, on autonomous aircraft, on an Airbus aircraft next year, and many, many more applications, which I can't get into in this environment. Yeah. Which sounds like maybe it's either news that has yet to be announced or is classified. Got it. All right. So it sounds like it's all systems go for you. What is the long-term vision for the company? Where do you see the company headed in the coming years? And as you deploy more of these products and you see more applications in more industries?

You know, I think, as I said, I think active phased array is one of those general purpose technologies, truly one of those general purpose technologies, meaning the kind of technologies that really have a wide ranging worldwide, you know, socioeconomic impact around the world. You know, I've always believed there are sort of, if you can imagine three technologies that are really important for the next couple of decades, one bucket, I call them sort of life sciences, technologies, things that sustain human life on this, you know, floating spacecraft we call planet Earth, you know, the sustainment of life, sustainable energy, and clean water, clean food, technologies that are related to sustaining life on this. Long before we become multi-planetary species, we're all stuck on this spaceship that we call Earth. So technologies

that allow us to create a healthy environment on this Earth, one of those areas that I think there's going to be a lot of investment. The other bubble, the other area I feel has to do with advanced compute technologies, edge computing, AI, AGI, and machine learning. I think that's another general purpose technology that's going to change the world beyond imagination. And whereas, for example, Google and companies like Google catalog all the human knowledge, AI is able to actually disseminate the right amount of information, the net information to the population of the world so that that knowledge can be shared. All human knowledge can be shared and hopefully more prosperity for all people around the world. The third part of this is connecting all of this information to the entire world. So if you have all of this combination of all of human knowledge that advanced computing, quantum computing,

and AI can make available, you need to connect it to the entire world and to all of our machines, to all of our robots, to all of our cars and handsets and people. And so that's where I think having advanced telecommunication technology that connects everything with high speed and high throughput, not the traditional, it shouldn't matter how the information gets from one place to the other. It shouldn't be that, you know, you're locked into one provider. Your information should be able to go to anywhere in the most secure, fastest, most resilient way possible. And so that's why I call phase the rays, the next general purpose technology, much like steam engines and transistor and internet itself. Are you, now I know you've done, you've gone through Series B last year,

and you do have investors like Airbus Ventures and L3Harris and Heiko and Kleiner Perkins and Honeywell and Franklin Templeton, to name a few of them. Are you planning to raise more capital anytime soon? Yeah, I mean, even though our Series B, most of the money is still in the bank, we're doing really well as a company because we've generated a lot of revenue and growing. But there's so much demand right now for our technologies that we're literally turning down some customers because there's just so much we can,

we want to make sure we're successful on the commitments that we have made. So we're actually, we would like to double our team within the next year. So we're in the middle of a raising series C as I said, not because we're running out of funds, but because we want to scale the company. We're at a point where every entrepreneur wants to be at that hockey stick. And we really are at the tipping point of that hockey stick and are raising a series C to double and triple our team because many, many customers, both in defense and commercial, in all sorts of platforms are coming to us, including car companies and wanting our technologies.

And so that's the reason we're raising more money. Yes. Who do you compete with? Or are you really the only game in town when it comes to this technology? You know, there are traditional aerospace and defense companies that have had this technology, at least core active phased array technology in their portfolio. And the reason startups do better, it's not because we're smarter or just like we have access to smarter engineers. In general, I think R&D and advanced technologies develop better at startups and smaller companies because at big companies, when you still have a limited number of engineers and when you win a major program like GPS or other

programs that are you know multiples of billions of dollars a lot of your talent goes to work on those programs and are committed to those programs national security programs for several years so you really don't have a lot of focus and talent in developing core technologies advantages of startups like ours are that we have focused for six and a half years on one thing, very, very focused on one thing. And so it makes us very unique. There are a couple of other companies, startups that are focused on phased arrays, they're more passive. There's two types of phase there is active arrays and passive arrays

and companies like high meta and two types of phased arrays, active arrays and passive arrays. And companies like Kaimera and others are passive phased array technologies. They have certain use cases in their future. I believe we're the only active phased array company with certain technology. There are other active phased array startups, but we're the only one with certain characteristics and IP in our technology and sort of are leading this effort in the startup world. Again, not to take away from traditional companies like L3Harris and Lockheed and Boeing and many others who've developed this for decades and decades, but to make it like Lego blocks where hardware and software seamlessly work together. And you can build very sophisticated systems

with a few building blocks that you see on our website such that anybody can use it, that you don't need PhDs to use this. That has not been available in the past. If you went into a big company and wanted to phase the right product, it would be a multi-hundred million dollar effort. We wanted to build a product that kind of like an iPhone came out of the box and it worked with all the hardware and software and tools that a customer needed so that they can focus on their mission. And in that sense, that's where we're unique. We've made this technology now available at a fraction of what a traditional large defense contractor

could build to our customers, many of our customers. And if you look at the customer set that we've announced, you can see why they're coming to us. It's because they get the same performance at an order of magnitude less cost. And yeah, so in that sense, there's only a handful of companies that are doing this. And I believe we're one of the unique active phased array ones that is doing this. And certainly the demand is there, as you have just explained so well. Shea Sabroport, thank you so much for joining me.

Appreciate it. The CEO and founder of Cesium Astra. It's my pleasure. Thank you so much for taking the time. I really enjoyed it. Thank you so much. That does it for this episode of Manifest Space. Make sure you never miss a launch by following us wherever you get your podcasts and by watching our coverage on Closing Bell Overtime. I'm Morgan Brennan.