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

The U.S. military said late Friday that it has signed a 10-year contract with the start-up of defense technology Anduril. The deal could be worth up to $20 billion.

According to the announcementThe contract starts with a five-year ‘base period’, with the option to extend the deal for a further five years, and includes hardware, software, infrastructure and services from Anduril.

The Army describes the agreement as a single enterprise contract that consolidated “more than 120 separate procurements for Anduril’s commercial solutions.”

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

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 had donated to a pro-Trump political group.

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

Separate reports suggest Anduril is in talks to start a new financing round at a valuation of $60 billion.

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