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

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

The agreement begins with a five-year “base term,” with an option to extend for an additional five years, and includes Anduril’s hardware, software, infrastructure and services, according to the announcement.

The Army describes the agreement as a single enterprise contract that combines “more than 120 separate procurement activities for Anduril commercial solutions.”

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

Anduril was co-founded by Palmer Lackey, who previously sold VR startup Oculus to Facebook (now Meta). Facebook fired Mr. Lackey following a controversy that erupted after he reportedly donated to pro-Trump political groups.

Although Mr. Lackey has repeatedly claimed that the media has misrepresented his political views, a recent feature in the New York Times says that Mr. Lackey and Anduril were embraced by the second Trump administration because of his vision for reshaping the U.S. military with autonomous fighter jets, drones, submarines, and more. The company (like Palantir, named after the magical object in “The Lord of the Rings”) made about $2 billion in revenue last year, according to the NYT.

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

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