Why Laser Beams Are the Hottest New Tech in Defense
Colonel Wayne Sanders from Bloomberg Intelligence discusses directed energy weapons (lasers and high-powered microwaves) as emerging defense technologies that could reduce reliance on expensive munitions. The conversation covers how these systems work, their deployment challenges, supply chain constraints, and their role in a layered air defense strategy alongside traditional missile systems.
Summary
The episode features Joe Wiesenthal and Tracy Alloway interviewing Colonel Wayne Sanders, Senior Defense Research Analyst at Bloomberg Intelligence and former U.S. Army officer specializing in military intelligence and cyber operations. Sanders explains that directed energy weapons fall into two categories: high-energy lasers, which concentrate energy into narrow beams to attack single targets like a sniper rifle, and high-powered microwaves, which emit wider beams to disable multiple targets' electronics simultaneously, comparable to an electronic shotgun.
Sanders traces the history of laser weapons from the 1960s through failed programs like the chemical laser initiatives (MIRACL, YAL-1 aboard a 747) that were too large and logistically intensive. The fundamental breakthrough needed is solving the size, weight, and power (SWAP) problem—current systems require either shore power connections or massive onboard generators. A 50-kilowatt laser on a Striker vehicle requires shore power, while the military aims for a one-megawatt laser by 2030 capable of defeating hypersonic weapons traveling at Mach 5.
The economic motivation is clear: the U.S. military faces a problem of using $4 million PAC-3 interceptors to destroy $30,000 drones, leading to munitions depletion. This has created demand for a three-tier defense system: exquisite missiles (PAC-3, SM-6) for serious threats like hypersonic weapons; mid-range solutions (Coyote, APKWS, Vampire systems) for moderate threats; and directed energy weapons for drone swarms and low-cost targets. Israel demonstrates this layered approach with Arrow systems for ICBMs, David's Sling for medium threats, Iron Dome for short-range threats, and Iron Beam lasers as the newest addition.
Sanders explains that operational decisions about weapon deployment follow a hierarchical authority structure, with tactical commanders focused on force protection and higher-level strategic commanders concerned with economic costs. AI integration remains in the "human-in-the-loop" phase for targeting decisions, helping with data processing and threat identification but not autonomous strike authorization.
The discussion addresses critical supply chain vulnerabilities: China controls 85-90% of rare earth minerals like terbium and dysprosium essential for the magnets and components in directed energy systems. The directed energy market is projected to grow from $6-8 billion currently to $12-24 billion over the next decade, transitioning from R&D (which has consumed $15 billion so far) into procurement contracts awarded to five companies including Anduril and Castilian.
Weather and atmospheric conditions present operational limitations for lasers that missiles don't face, and the power generation requirements constrain deployability, making these systems more suitable for base defense than mobile operations in contested environments.
About this episode
<p>Our guest today is Colonel Sanders. More precisely, we speak with Wayne Sanders, a retired US army colonel who is currently senior defense research analyst for Bloomberg Intelligence. During his military career, Sanders specialized in cybersecurity and weapon systems research and his work for BI has recently focused on directed energy weapon systems — better known as lasers. Just a few decades ago, programs like Star Wars, the Reagan-era missile defense system, seemed like a pipedream; today lasers can shoot down missiles and much more. Sanders tells us about the physics problems researchers had to solve to make laser weapons a reality, why we still don't have laser guns, what makes a weapons system "exquisite," the economic costs that factor into battlefield decisions, and the unique supply chain constraints that affect laser development.</p> <p>Read more:<br /><a href="https://www.bloomberg.com/news/features/2026-09-03/uss-abraham-lincoln-sailors-in-pattaya-tell-of-strain-after-months-at-sea?utm_medium=referral&utm_source=podcast&utm_campaign=odd_lots&utm_content=article">Weary US Sailors Lay Bare War’s Strain During Thailand Shore Leave</a><br /><a href="https://www.bloomberg.com/news/articles/2026-09-02/german-navy-tests-ballistic-missile-for-the-first-time-at-sea?utm_medium=referral&utm_source=podcast&utm_campaign=odd_lots&utm_content=article">German Navy Tests Ballistic Missile for the First Time at Sea</a></p> <p>Only <a href="http://Bloomberg.com">http://Bloomberg.com</a> subscribers can get the Odd Lots newsletter in their inbox each week, plus unlimited access to the site and app. Subscribe at <a href="https://www.bloomberg.com/subscriptions/oddlots?in_source=oddlotspodcast">bloomberg.com/subscriptions/oddlots</a></p> <p><a href="http://bloomberg.com/subscriptions/oddlots">Subscribe to the Odd Lots Newsletter</a><br /><strong>Join the conversation:</strong> <a href="https://discord.gg/oddlots">discord.gg/oddlots</a></p><p>See <a href="https://omnystudio.com/listener">omnystudio.com/listener</a> for privacy information.</p>
Key Insights
- High-energy lasers and high-powered microwaves operate on fundamentally different principles—lasers concentrate energy like a sniper rifle for single targets while microwaves emit wider beams like an electronic shotgun to disable multiple electronics simultaneously.
- The U.S. military faces an economic problem where expensive exquisite munitions are being depleted by cheap drone threats, creating urgency for a three-tiered defense system combining expensive interceptors, mid-range solutions, and directed energy weapons.
- Directed energy weapons have been in development for over 60 years with $15 billion in R&D spending, but the core unsolved problem remains size, weight, and power requirements—most systems still need shore power connections, limiting deployment flexibility.
- Israel's multi-layered air defense system (Arrow for ICBMs, David's Sling, Iron Dome, Iron Beam) is being studied globally as a model for how to optimize resources by matching specific threats to appropriate weapons rather than using premium systems against all targets.
- Operational weapons selection decisions are distributed across hierarchical command levels, with tactical commanders focused on force protection regardless of cost while strategic leaders balance economic constraints, creating natural incentives for economization at higher echelons.
- China's control of 85-90% of critical rare earth minerals like terbium and dysprosium creates significant supply chain vulnerabilities for directed energy weapons, forcing the Pentagon to negotiate domestic production agreements with companies like MP Materials.
- The directed energy market is transitioning from primarily R&D spending into procurement, with five defense contractors receiving contracts for tens of thousands of low-cost containerized munitions rather than the traditional volumes of exquisite missiles.
- AI in military targeting remains in the human-in-the-loop phase for strike authorization, with AI helping process data and flag anomalies but human commanders retaining final decision authority, reflecting deliberate caution about autonomous weapons systems.
Topics
Transcript
Did you ever notice how you spend hours shopping online only to pause a checkout because you wonder if you trusted enough to hit buy now? Agentic Commerce is testing that moment more than ever. That's where PayPal comes in. With 25 years of checkouts, 400 million consumer accounts globally, and the benefit of fraud protection. So no matter where a purchase starts, it ends with trust. Built for payments, growth in Agentic. PayPal Open. Built for all business growth, and agentic. PayPal Open. Built for all business. Visit paypalopen.com. Some people treat ChachiPT like some kind of smart search engine, and some use it to get work done. ChachiPT Work is a new way of working in ChachiPT that…
Full transcript available for MurmurCast members
Sign Up to AccessMore from Odd Lots
What's Behind the Big Surge in US Government Bond Yields
Economics professor Daryl Duffy explains that rising US Treasury yields are driven primarily by massive government debt issuance relative to limited investor demand, rather than inflation concerns. He discusses the Treasury's buyback program, the Fed's balance sheet challenges, and the structural constraints on both fiscal and monetary policy's ability to control yields.
Adam Posen Thinks Things Could Get Very 'Messy' for the Fed
Adam Posen discusses Fed Chair Kevin Warsh's Jackson Hole speech, giving it a B- grade while highlighting concerns about the Fed's inflation trajectory and Warsh's preference for discretionary policymaking over clear forward guidance. Posen argues the Fed was late to hike in 2022 and early to cut in 2023, and warns that without explicit commitment to bringing inflation down at a specific pace, markets and policymakers may face confusion about the Fed's true intentions.
Richmond Fed’s Tom Barkin on the Surprisingly Resilient Real Economy
Richmond Fed President Tom Barkin discusses the surprisingly resilient U.S. economy despite persistent inflation and higher rates, attributing consumer spending to accumulated wealth and creative borrowing strategies. He addresses Fed communications, AI's economic impact, housing market dynamics, tariffs, and data center construction while emphasizing the need to understand synthesis of ground-level business sentiment rather than isolated anecdotes.
How a Sardine Gets From the Ocean to a Can
Becca Milstein, founder and CEO of Fishwife, discusses how premium canned fish is sourced, processed, and marketed, while addressing the current global sardine shortage driven primarily by climate change and water temperature shifts rather than overfishing. The conversation explores supply chain complexities, the growth of the premium tinned fish category, and how emerging DTC brands compete in food retail.
Brad Setser on the US's Unusual Japanese Yen Intervention
Brad Setser explains the recent US-Japan yen intervention, discussing why East Asian currencies have weakened despite strong trade surpluses, the unusual use of euros in the intervention, and why Japan's fiscal position may be better than commonly perceived.