US Army announces contract with Anduril worth up to $20B

The U.S. Army said late Friday that it has signed a 10-year contract with defense tech startup Anduril. The deal could be worth up to $20 billion.

According to the announcement, the contract starts with a five-year “base period,” with the option to extend the deal for an additional five years, and it includes Anduril hardware, software, infrastructure, and services.

The Army describes the agreement as a single enterprise contract consolidating what had been “more than 120 separate procurement actions for Anduril’s commercial solutions.” 

“The modern battlefield is increasingly defined by software,” said Gabe Chiulli, the chief technology officer at the Department of Defense’s Office of the Chief Information Officer, in a statement. “To maintain our advantage, we must be able to acquire and deploy software capabilities with speed and efficiency,”

Anduril was co-founded by Palmer Luckey, who was previously known for selling VR startup Oculus to Facebook (now Meta). Facebook fired Luckey after controversy erupted following a news report that he’d donated to a pro-Trump political group.

Luckey has repeatedly insisted that the media misrepresented his political views, but according to a recent feature in The New York Times, Luckey and Anduril have been embraced by the second Trump administration, thanks to his vision for remaking the U.S. military with autonomous fighter jets, drones, submarines, and more. The company (named, like Palantir, for a magical object in “The Lord of the Rings”) brought in around $2 billion in revenue last year, the NYT says.

Separate reports suggest that Anduril is in talks to raise a new funding round at a $60 billion valuation. 

This announcement also comes as the Department of Defense is locked in a dispute with Anthropic, with the AI company suing the DoD over its designation as a supply chain threat following a failed contract negotiation, while OpenAI has faced consumer backlash and at least one executive departure after signing a Pentagon deal of its own.

In a post on X, Luckey argued that Anthropic’s attempt to draw red lines around the use of AI in autonomous weapons or domestic mass surveillance is “an untenable position that the United States cannot possibly accept.”