Arda Bets on AI to Bring Manufacturing Jobs to U.S.

Bob McGrew has raised $230 million for Arda, an AI manufacturing software company valued at $1.5 billion. Its founders pitch factory automation as a way to bring production and jobs to the United States. In an exclusive interview with CNBC Tuesday, McGrew said Arda’s software has already been deployed with military technology company Anduril.

Arda is building software to help manufacturing engineers automate production. Altimeter Capital, Accel and Khosla Ventures led its funding round. The company combines its proprietary models with open-source models and some frontier models to run its software.

The case for domestic production

Manufacturing can be “human-intensive,” McGrew said, particularly when factories need to adapt production lines to a new weapon or drone design. “When a design changes, you can retrain a human in a day — but it takes three to six months in order to change the automation to reflect the new design,” he said. Arda, he added, has built software that lets manufacturing engineers build assembly lines faster.

That difference between retraining workers and updating automation lies at the heart of McGrew’s case for flexible production. When product designs change often, he said, “the only place you can really build your product is in East Asia, because you need an army of human workers who can be retrained quickly, and you can't wait for automation to catch up.” Robotics comes next on Arda’s product roadmap.

McGrew also pointed to the Trump administration’s effort to onshore manufacturing. “No one has ever successfully built a smartphone in the U.S.,” he said. “Never successfully assembled one, and so if you can build a smartphone in the U.S. that is not taking away American jobs. That is bringing American jobs.” Arda’s proposed contribution is automation that could help factories change production faster. McGrew said factory automation could bring manufacturing and jobs to the United States.

Investors and the manufacturing market

Altimeter’s Apoorv Agrawal led the funding round. He met McGrew when they both worked at Palantir. Agrawal called manufacturing a large market, though much of it takes place overseas. “Manufacturing globally is a $16 trillion industry. In the U.S. alone, it's $3 trillion,” he said. “We think that Arda, and the vision that they've outlined, will continue to capture a significant portion of that. Yes, the price is steep today, but the long-term opportunity is very high.”

McGrew spent more than a decade as Palantir’s product and engineering lead. Arda’s other co-founders are Augustus Odena, who helped start Adept and previously worked at Google and Meta, and former Palantir engineers Alex Mark and Jakob Frick.

From OpenAI to Arda

McGrew joined OpenAI in 2017 and worked on the reasoning capabilities of early models before ChatGPT launched. He left in a 2024 wave of high-profile departures that also included chief technology officer Mira Murati and co-founder and chief scientist Ilya Sutskever.

He remained through the weekend in November 2023 when Sam Altman was abruptly fired and rehired. McGrew wanted to stay long enough to ship OpenAI’s reasoning product, which he called the “last key breakthrough left before AGI,” or artificial general intelligence. “I said, if I could just ship that, I'd be happy with my career at OpenAI, and I'd be ready to move on to something else,” he said.

McGrew recalled conversations with Altman, Dario Amodei, who left to start Anthropic, and Sutskever about “what it would look like when a model could write your email for you.” He called OpenAI “an amazing place.” He hadn't spoken publicly about Arda until that week.