I’m not sure if you’re a “gamer” or not… but I am.

I’m of that generation that started with Mario Bros. (when it was first released), grew up with Tony Hawk Pro Skater and the likes of Solid Snake (Metal Gear),  Master Chief (Halo), and iteration after iteration of CoD (Call of Duty).

CoD: Ghosts from 2013 is one of my favurites. And by far and away the best soldier in CoD: Ghosts was a German Shepherd called Riley.

He wears a vest with a radio and camera on his back. You could creep him through the long grass and drop a guard before anyone knew he was there. He was also pretty good at taking down helicopter pilots!

The inclusion of a military dog in the world’s most popular combat game was a welcome sight. Dogs have been used in the military for decades, and the German Shephard is one of the preferred breeds for their resilience, toughness, obedience and fearsomeness.

So, to see it get a high-tech level-up on CoD for us all to play was a lot of fun. But now Riley’s coming into the real world. And not like the military dogs that are widely used today in combat, but a levelled-up version, a genetically engineered version, complete with high-tech tactical gear and “cybernetics”.

Yes, we’re on the cusp of Warhounds entering the service, and it’s very much thanks to the world’s most powerful military company.

Warhound is the name of a company that came out of stealth mode with a $200 million investment from Sequoia, the CIA’s venture arm In-Q-Tel and Cathie Wood’s ARK Invest, among others.

The round values it at $1.2 billion.

It’s the brainchild of Ben Lamm, who runs Colossal Biosciences, the outfit that unveiled “dire wolves” last year and Palmer Luckey, founder of Anduril.

I’ve already written to you before that I think Anduril may be the most important military and defense company in the world. And that Palmer Luckey might be the real incarnation of Tony Stark… all this only reinforces my view.

So, what does Warhound do?

The idea is to take the best working dogs America has, mostly Belgian Malinois and German Shepherds, edit their genes to strip out faults like hip dysplasia and muscle wasting, and to sharpen their senses and physical abilities for better combat work.

They are of course cloned thanks to Viagen, which Colossal bought last November, and the first pups are expected in 2027.

Seems very sci-fi, and some people say unethical. But it’s worth saying the American Humane Society is certifying this.

But, why?

Apparently, America has an immigration problem. A dog immigration problem. More than 80% of its military dogs come from Europe.

Added to that each has a 55% chance of flunking training, and some of the dogs that fail are put down. And there’s the cost. Data from 2020 cost per dog at about $9,000 from an American breeder, and training one can top $60,000.

That’s a lot of capital going to waste for more than half that never make the grade.

Now the inference some will walk away with here is cyborg dogs.

But that’s not the case. Warhound’s press release talks up “cybernetic augments,” not cyborg half robot dogs.

Lamm was more down to earth when he told TechCrunch where Anduril’s specifically made military kit goes:

“On top of the dog, not in the dog.”

Think bulletproof vests with sensors that feed data back to the handler, plus goggles, ear protection and Anduril’s Eagle Eye tech.

So, while there is genetic manipulation, we’re looking more at Riley rather than RoboCop… or RoboDog.

It should be said that the valuation of $1.2 billion for Warhounds is very much focused on the part Colossal is bringing to the table. Anduril’s contribution is the design and manufacturing of the technology these warhounds will carry and use.

So, for Anduril it’s a 100% captive market. And so far as we know, there is no one else on earth doing this.

But while America is amid a military dog shortage, it’s not like this is a $1 trillion industry by any stretch.

And why bother with this if Boston Dynamics has equally capable and certainly more bulletproof robot dogs coming to a warzone near you?

I suggest the real valuation here is the tooling and technology that can allow the genetic engineering of mammals.

I know it might start to get a little too sci-fi for some at this point, but we are fast approaching a world where the combination of genetic wizardry and cybernetics converge in humans.

Start to pull in pieces of the puzzle, from the work going into robotic exoskeletons, and brain interfaces like Neuralink, to some of the combat technology coming out of Anduril, and then genetic engineering like this from Colossal Bioscience, and the future of military starts to take on a very interesting shape.

The early money in this kind of tech gives you an indication of where things head next. And while you can’t invest directly in Warhounds, I think we’re moving into a big market opportunity coming for biotech.

What we see here is an alpha signal that money is prepared to move into biotech that might make people a bit squeamish and a bit uncomfortable.

When you follow the money you find the opportunity, and genetic biotech is a big part of the market where I think a lot more money is going to flow.

More soon,

Lewis Maguire