Closing Bell - Manifest Space: The SPAC Comeback, Military AI, & Future of Defense Tech 8/22/25

Episode Date: August 22, 2025

SPACs, or Special Purpose Acquisition Companies, are back – with aerospace & defense tech startups embracing the moment. Merlin, a startup focused on deploying AI into cockpits, is the latest to do so. The company announced a reverse merge with a SPAC led by Inflection Point Asset Management, valuing the company at $800 million pre-money and raise hundred of millions of dollars in proceeds. CEO Matt George joins Morgan Brennan to discuss the prospects of going public.

Special purpose acquisition companies, SPACs, are back. And some aerospace and defense startups are embracing the moment. Take Merlin. The 7-year-old startup just announced its reverse merger with a SPAC led by inflection point asset management. It's a deal that will value Merlin at $800 million pre-money and raise hundreds of millions of dollars in proceeds. Founder and CEO Matt George says it will allow Merlin to move more quickly for customers. We had a couple great options around what to do next, and a SPAC was a really efficient way to get out into the public market and doing so with a bunch of committed capital. So as part of the deal, we announced over $120 million of committed capital at announcement before we even announced the deal.

We are expecting to add to that pretty significantly before we list. Merlin is developing and deploying artificial intelligence in cockpit, injecting autonomy into a military aircraft with a plan to bring that capability to commercial jets in the future. Our biggest and sort of most public contract is with Socom for the C-130J, and we've now expanded that to include the KC-135 for our mobility command to enable those folks to go from two crew down to one on those large aircraft, freeing up our pilots to go do higher-acognition missions and to be much more of a mission commander versus just some of the very, very basic pilotage.

On this episode, Merlin's Matt George, on this emerging, age of autonomy and on the things that can be done by the startup as a publicly traded company that weren't possible staying private. I'm Morgan Brennan, and this is Manifest Space. Joining me now, Matt George, the founder and CEO of Merlin. Matt, it's great to speak with you today. Thank you. Great to see you. So before we get into the news, first is a little bit about what Merlin is. Yeah, so aviation has a really long history in the world of connecting people, connecting places. We had the propeller age, we had the jet age, and at Merlin, we're really excited to usher in the autonomous age, where we're able to do a bunch of really cool new things

with airplanes and go use the sky in new ways. And now you're going public. We are. We're going public a little bit later this year, which has been pretty exciting and an exciting process, but most importantly allows us the resources to go invest behind our customers and make sure that we're moving features out into real life, into the air, and into our customers aircraft a little bit more quickly. So yeah, exciting times. So you're going public via a reverse acquisition, what's better known as a SPAC or a special purpose acquisition company. Why did you decide to do that? How did that come together? Yeah, so we had a couple of great options around what to do next.

And a SPAC was a really efficient way to get out into the public market and doing so with a bunch of committed capital. So as part of the deal, we announced over $120 million of committed capital at announcement before we even announced the deal. We are expecting to add to that pretty significantly before we list. So it's been an efficient way for us to get out into the public domain, into the public markets, and doing so with a bunch of committed capital onto the balance sheet. Now, you're a defense tech startup is how I would categorize you. You're very focused on AI and autonomy. And of course, we know that that is something that not only is the government very focused on as well, but also investors. So I just wonder what you think of it,

think what it means to be going public at this moment. It's funny, defense tech has been cool, but when we first started the company in 2018, we had so many folks would not call us back because we were working on defense tech. So defense tech is really important, not just for us, the country. And we think it's really important that defense tech companies start to go public and go into the public markets in order to go capitalize on the momentum. So we can actually go fuel the capabilities in a way that is longstanding and actually allows us to go chip back some the lead that some of our adversaries have gained on us in the past couple years. And so by being public, you can do that and do that more efficiently than if you're private.

We can. And we can also do things that we couldn't do when we were private, like mergers and acquisitions and make sure that we have a real portfolio of autonomous solutions to offer to our government partners and customers around the world. So what are the types of solutions that you currently offer and that you want to offer? We're really excited to be flying real airplanes for our customers and our partners. Our biggest and most public contract is with Socom for the C-130J. And we've now expanded that to include the KC-135 for Mobility Command to enable those folks to go from two crew down to one on those large aircraft, freeing up our pilots to go do higher cognition missions and to be much more of a mission commander versus just some of the very,

very basic pilotage. What did it take to be able to enable that? So for us to enable that transition to autonomy, we had to take the best of what's been happening in autopilot and then start to add some new AI skills on top. So just because you have an AI hammer does not mean that everything is an AI nail. So we've tried to blend the best of both worlds, both from very traditional flight controls and AI together, in order to go deliver a really robust and certified platform for our customers. And do you expect that you're going to be in more aircraft more quickly as this technology is now tested and has proven its safety and its capability? Yeah. So we're joking that we're going to need a bigger hanger. You know, we're in Boston, so the home of all of the Jaws memes. But we are

actually going to go need a bigger hangar. So we've got a huge backlog of customers who have been asking us to do all different types of airplanes. And going public allows us the resources to take that Merlin pilot, which is what we've developed, and start to deploy that on a number of different aircraft types. And if we do that, all of those pilots can start to collaborate together to really do some interesting things in the air that weren't possible. Do you work with other AI-related companies to make all of this happen? Like, do you work with certain LLMs? for example, like, how does this work? Yeah, we've tried to take an approach of working with the best in particular domains.

We have tried to stay as agnostic as possible to any one particular LLM or any one particular methodology. And we've designed the system to have hooks for a variety of both learned and much more traditional algorithms as we go deploy those on airplanes. So the Merlin pilot that is flying aircraft in the air, can you? you take that, make tweaks to it, and then apply it to other domains, or does it have to be a new technology, a new capability that's built from the ground up? We're building that same core brain.

And while we can take that brain and put it into different types of aircraft and different form factors, one of the things we're absolutely considering is how we can go take that brain and put that into other domains, either directly or collaborate. So, for instance, the defense customer very much might want to have a autonomous surface vessel on the ocean collaborating with a maritime patrol aircraft, which then could collaborate with a vehicle on the ground. So thinking through what the future of that, you know, sort of autonomous brain for a variety of different vehicles could look like is something that's really exciting and something we're working through in very real time. How did you get the idea to found this company in 2018? I think life's too short to work on boring stuff.

So I previously started a company, and we sold it, and I used my first couple paychecks from that company to learn how to fly. And it's something that every little kid dreams of, or I think every little kid dreams of. So when I got the chance to start a new company, what could be cooler? I think nothing could be cooler, but I'm biased, of combining autonomy and aviation. And we were super blessed with the opportunity to go play with giant flying robots all day. So it's not been a bad way of spending seven years of my working life alongside a great team all around the world.

Do you see this technology as having commercial applications as well? We do. We have from day one been dual certifying the system both for military use and civilian use. So a couple of years ago, we announced certification basis for takeoff to touchdown autonomy. And if all things remain the same, we will likely be the first company to certify, takeoff, to touchdown autonomy in the civil airspace. And we're doing that in a really unique program between the New Zealand Civil Aviation Authority in a joint certification program between them and the U.S. Federal Aviation Administration.

So to what, to fly aircraft long distances? To fly aircraft long distances commercially, but still with pilots aboard. I think it's going to be a very long time before you see a totally uncrewed aircraft that is carrying passengers. But we're working with a number of partners around the world on what autonomy could do in commercial aircraft to go improve safety, which especially given some of the latest accidents and incidents, is never been more important to be able to go get that right. Does that speak to your partnership with Honeywell and some of the others that you work with in the aerospace industry? Aviation has a history of being really safe, and one of the ways that we can make aviation safer is working with folks like Honeywell and a number of the avionics companies to start to imbue

their avionics with AI to better empower humans and potentially reduce human air. How quickly are you growing? I guess break down the numbers for me, since I know you are getting ready to go public, you are starting to file some of that information and where you see this headed. We went into COVID, the first days of COVID with like seven people. We grew most of the company, you know, sort of over COVID and have been doubling at a pretty regular cadence, you know, ever since. So we're a little shy at 200 folks and we'll double the headcount here in fairly short order, combining some of the best to the best in both, you know, autonomy, but also in traditional avionics and aerospace. And most of that is government, most of the revenue you're generating is government derived at this point?

Most of our revenue is derived from the government, but the same technology that we are deploying with our government partners is the same technology that you'll start to see on civil aircraft as well. Yeah. When do you expect that piece of the puzzle to kick in in a more meaningful way? Stay tuned. You'll see some announcements from us in the coming months about some meaningful deployments of the Merlin pilot in the civil airspace. But once again, we're flying the Merlin pilot nearly every day out of our test facility in Quonset, Rhode Island. in civil airspace. So not a long way off, but stay tuned. Okay. Matt George of Merlin. Thank you. Appreciate 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.