Propelled by a changing geopolitical climate and technological progress, defense innovation is undergoing rapid acceleration. This rise in innovation is mirrored by a substantial increase in investment within the sector.
Agile startups leveraging cutting-edge technologies like artificial intelligence (AI), robotics and advanced materials are attracting substantial capital from both venture capitalists and government-backed initiatives — according to McKinsey, global venture capital investments in defense companies rose 33 percent year-on-year in 2024.
The US is spearheading this trend, with defense spending on the rise. The Biden administration requested US$849.8 billion for defense in its 2025 fiscal year budget, up 4 percent from 2024. This figure rose to approximately US$1.06 trillion after a legislative bill approved this past July added US$156 billion to the total US military budget for 2025.
Anduril Industries, a privately owned California-based defense technology firm, is one company near the center of this defense sector boom. Co-founded in 2017 by Oculus creator Palmer Luckey, Anduril is working to reshape US and allied military capabilities with AI, autonomous systems and advanced robotics.
The firm has secured significant US government contracts, including US$159 million from the US Army for a mixed-reality system and a potential US$642 million from the US Navy for counter-drone technology.
Collaborating with the US Department of Defense and Microsoft (NASDAQ:MSFT), Anduril is advancing projects like its Integrated Visual Augmentation System, crucial for modernizing military operations with augmented reality and AI.
This comprehensive overview explores Anduril by examining its operations, market value and investment opportunities.
What is Anduril?
Anduril, a defense tech innovator, is reinventing traditional military contracting.
Founded by a group of Silicon Valley technologists after Luckey sold his virtual reality startup, Oculus, to Meta Platforms (NASDAQ:META), called Facebook at the time, the company’s mission is to deploy autonomous systems and sophisticated software for the US Department of Defense and allied governments.
Its flagship platform, Lattice, is an AI-powered command-and-control system that integrates data from a wide range of sensors, drones and surveillance equipment to create a real-time 3D battlefield, without relying on centralized command centers. This decentralized approach enables quicker threat detection, classification and tracking at the tactical edge, with AI algorithms analyzing data to offer operators actionable tactical options and recommendations.
The system supports multi-domain operations, allowing a single operator to control multiple autonomous assets across air, land and sea. Lattice also expedites decision-making and response in combat by automating target engagement with human oversight. To protect critical infrastructure like borders, ports, power plants or communication hubs, the platform offers real-time monitoring and security by integrating sensor data from physical, aerial and maritime systems to detect anomalies and threats, automatically generating alerts and coordinating responses.
The company maintains that its system’s edge computing provides continuous awareness even in challenging network conditions, minimizing false alarms and optimizing security.
Other major products include unmanned aerial vehicles, such as the Fury autonomous air vehicle; Altius fixed-wing drones and the Anvil quadcopter interceptor designed to neutralize hostile drones and missiles.
How much is Anduril worth?
Anduril closed its latest funding round on June 5, raising US$2.5 billion to secure a valuation of US$30.5 billion, more than double its US$14 billion value in August 2024. The company’s prominent investors include Peter Thiel’s Founders Fund, Andreessen Horowitz, General Catalyst, Lux Capital and D1 Capital Partners.
Founders Fund contributed US$1 billion in the latest round, marking its largest single investment ever.
The defense firm’s growth has been bolstered by hundreds of millions of dollars in defense contracts with the US and UK governments for surveillance towers, autonomous drones and networked defense systems. Lattice was even selected for surveillance networks by the US Space Force in 2024.
Also in 2024, Anduril, together with General Atomics, outperformed legacy defense contractors Boeing (NYSE:BA), Lockheed Martin (NYSE:LMT) and Northrop Grumman (NYSE:NOC) to win competitive contracts for the US Air Force’s Collaborative Combat Aircraft program. This program, which includes Anduril’s autonomous Fury fighter jet, aims to develop drones designed to operate alongside manned fighters like the F-35.
The Air Force began ground testing Anduril’s prototype in early 2025. As of late August, reports indicate that the drone’s flight tests are imminent or have begun, marking a significant milestone in the program
The company has also secured a US$99 million Air Force contract to advance autonomous prototyping projects through its Lattice platform and a US$100 million agreement to transform Army Next Generation Command and Control software, integrating capabilities from partners like Palantir Technologies (NASDAQ:PLTR), Microsoft and others.
Strategic technological collaborations further amplify Anduril’s capabilities.
In addition to the company’s partnership with Microsoft to develop Integrated Visual Augmentation System for the US Army, a deal valued at up to US$22 billion, Anduril also collaborates with Meta Platforms on virtual and augmented reality tools for the military, and with OpenAI to bolster AI defenses against drone attacks.
However, Anduril’s partnership with Palantir is arguably its most important. The two companies maintain a strategic and evolving alliance that enhances their respective strengths in autonomous systems and AI-driven data analytics for defense applications. In late 2024, the two companies formed a consortium to accelerate AI capabilities for national security by merging Anduril’s edge-based Lattice software platform with Palantir’s cloud-based AI platform.
This alliance, which expands to include other leading tech firms, aims to deliver cutting-edge, integrated defense solutions more efficiently and challenge traditional defense contractors.
Their joint efforts focus on integrating Palantir’s Maven Smart System with Anduril’s Lattice to enhance battlefield reconnaissance, autonomous operations and real-time AI-driven decision making.
Additionally, Anduril’s Menace edge hardware has been adopted as the preferred platform for Palantir’s deployed AI software, further solidifying their integrated ecosystem for advanced operational capabilities.
On the industrial front, Anduril announced in early 2025 a US$1 billion investment to build Arsenal-1, a large-scale drone and weapons manufacturing complex in Ohio. The company said it will create thousands of jobs and enable mass production of aerial and maritime drones that are powered by Lattice.
Internationally, Anduril’s Ghost Shark program for the Royal Australian Navy highlights its ability to rapidly translate innovation into operational capability. This AU$1.7 billion autonomous undersea vehicle initiative, moving from concept to production in less than three years, demonstrates the company’s strength in co-development and risk-sharing with government partners, delivering scalable maritime autonomy to address critical regional security challenges.
Collectively, these developments underscore Anduril’s value proposition as a leading autonomous defense tech innovator capable of outpacing traditional defense timelines, forming strategic government and industrial partnerships, and establishing manufacturing infrastructure that supports rapid scaling of innovative, AI-powered defense platforms.
How to invest in Anduril?
Currently, Anduril is a private company, and its shares aren’t listed on major stock exchanges.
This means that direct investment is generally limited to venture capital, private equity and accredited investors who access pre-initial public offering (IPO) shares through specialized marketplaces or platforms.
To qualify as an accredited investor, individuals typically must have a net worth of over US$1 million, excluding their primary home, an annual income above US$200,000 (or US$300,000 jointly) or be established financial professionals. Accredited investors may negotiate purchases with existing shareholders.
Even so, investors seeking exposure to the defense industry have a variety of options.
These include investing in publicly traded firms with exposure to the defense and AI markets, such as Palantir, Honeywell International (NASDAQ:HON), Lockheed Martin, General Dynamics (NYSE:GD), L3Harris Technologies (NYSE:LHX), Northrop Grumman, CAE (TSX:CAE,NYSE:CAE) or Boeing.
Investors may also explore thematic exchange-traded funds (ETFs) that track stocks in the robotics, AI and aerospace markets, such as the Global X Robotics & Artificial Intelligence ETF (NASDAQ:BOTZ) and the ARK Innovation ETF (ARCA:ARKK). There are also defense sector ETFs, which often include major contractors in the same innovation ecosystem as Anduril. Examples include the Invesco Aerospace & Defense ETF (ARCA:PPA), the iShares US Aerospace & Defense Index ETF (TSX:XAD) and the Global X Defense Tech ETF (ARCA:SHLD).
What’s next for Anduril and defense technology?
Demand for autonomous defense is surging amid rising global security challenges and increasing investor and government interest in advanced solutions. While Anduril’s IPO timeline likely remains a few years away, its disruptive model and high-profile contracts signal robust future growth and continued private market interest.
As always, investors should perform due diligence and consult with financial professionals before engaging in pre-IPO investments or indirect holdings.
Securities Disclosure: I, Meagen Seatter, hold no direct investment interest in any company mentioned in this article.
