The US Army announced a contract with Anduril worth up to $20 billion

The US Army announced late Friday that it has signed a 10-year contract with defense technology startup Anduril. The value of the deal may reach $20 billion.

According to the announcement, the contract begins with a five-year “base term,” with an option to extend the deal for an additional five years, and includes Anduril hardware, software, infrastructure and services.

The Army describes the agreement as a single enterprise contract that brings together what were “more than 120 separate procurement actions for Anduril’s commercial solutions.”

“The modern battlefield is increasingly defined by software,” Gabe Cioli, chief technology officer in the Department of Defense’s Office of the Chief Information Officer, said in a statement. “To maintain our edge, 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 virtual reality 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 New York Times article, Luckey and Anduril have been embraced by the second Trump administration, thanks to his vision for remaking the US military with autonomous fighter planes, drones, submarines, and more. The New York Times says the company (named Palantir after a magical object in The Lord of the Rings) generated revenue of about $2 billion last year.

Separate reports indicate that Anduril is in talks to raise a new $60 billion funding round.

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