US Army awards up to $20B contract to Anduril

The U.S. Army announced late Friday that it has entered into a 10-year agreement with defence technology startup Anduril, potentially worth up to $20 billion.

As outlined in the official announcement, the agreement begins with a five-year base term and includes an option to extend for an additional five years. The scope of the deal covers Anduril’s hardware, software, infrastructure, and related services.

According to the Army, the contract is structured as a single enterprise agreement that consolidates more than 120 separate procurement actions related to Anduril’s commercial offerings.

“The modern battlefield is increasingly defined by software,” said Gabe Chiulli, chief technology officer at the Department of Defence’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 is widely known for selling his virtual reality startup Oculus to Facebook, now Meta. Luckey later left Facebook after controversy arose over reports that he had contributed to a pro-Trump political organization.

The organisation consistently maintained that his political views were misrepresented in media coverage. However, a recent report by The New York Times indicates that both he and Anduril have gained support within the second Trump administration, largely due to his vision of transforming the U.S. military through technologies such as autonomous fighter aircraft, drones, submarines, and other advanced systems. The company, whose name — like Palantir — is inspired by a magical artefact from “The Lord of the Rings,” reportedly generated around $2 billion in revenue last year, according to the publication.

Additional reports suggest that Anduril is currently in discussions to raise a new round of funding that could value the company at approximately $60 billion.

The contract announcement comes at a time when the Department of Defence is engaged in a dispute with AI company Anthropic, which has filed a lawsuit after being labelled a supply chain risk following unsuccessful contract negotiations. Meanwhile, OpenAI has faced consumer backlash and at least one executive resignation after reaching its own agreement with the Pentagon.

In a post shared on X, Luckey criticised Anthcriticizedance on limiting the use of AI in areas such as autonomous weapons and large-scale domestic surveillance, calling it “an untenable position that the United States cannot possibly accept.”