Palmer Luckey’s Defense Startup, Anduril, Raises $1.5 Billion to Produce AI-Powered Weapons

Palmer Luckey has come a long way from hacking together virtual reality headsets in a garage. Today, the Oculus VR founder’s defense tech startup, Anduril, announced that it has raised $1.5 billion in addition to developing a new manufacturing platform to produce “tens of thousands of autonomous weapons” a year.

The funding round, led by Founders Fund and Sands Capital, could help the seven-year-old Anduril transition from a flashy defense industry upstart to a more serious US defense contractor.

It also reflects a shift in military thinking, as policymakers adapt to the prospect of battlefields ruled not only by tanks and fighter jets, but also by drones and artificial intelligence, and they search for ways to ramp up America’s capacity to produce military hardware to match that of a prospective adversary such as China.

In addition, Anduril is betting that it can parlay a lean and efficient tech industry approach to manufacturing into a new way of producing weapons systems at scale. The company says it has developed an AI-powered manufacturing platform, called Arsenal, to speed up the production of its growing armory of drones and other hardware.

Greg Allen, an expert at the Center for Strategic and International Studies, says the Pentagon is getting more serious about working with nontraditional defense contractors and investing in small, cheap, autonomous systems. “The stars are aligning in terms of the [Department of Defense] changing its approach, new companies coming with a different approach, and the venture capital community finally willing to put big money at risk to make things change,” he says.

Anduril says that Arsenal will follow the kind of approach used in high-tech manufacturing by companies like Apple and Tesla. This means designing products with manufacturing in mind and using software to monitor and optimize manufacturing operations. The company says it will also rely on a supply chain that is more resilient because it will source components primarily from the US or allied nations.

The company says it will spend several hundred million dollars to build the first factory of this kind, the sleek Arsenal-1, at an undisclosed location. Anduril has already ramped up its manufacturing capabilities in recent years, with a factory in Mississippi for building solid rocket motors and another in Rhode Island for producing drones.