Palmer Luckey
Anduril Industries CEO Brian Schimpf has defended the defence technology company's growing list of multi-billion-dollar US government contracts amid scrutiny over co-founder Palmer Luckey's close ties to the Trump administration, saying the company has enjoyed strong growth under leaders from both political parties.
Speaking to CNBC's Squawk on the Street, Schimpf pushed back against suggestions that Luckey's political connections have helped Anduril secure lucrative Pentagon deals. "We've done incredibly well under [President Joe] Biden," Schimpf said. "That was one of the biggest ramps that we've had as a company. I'm a lifelong Dem and have great relationships on both sides of the aisle of this."The comments come as Anduril faces increased scrutiny after winning major defence contracts while Luckey takes on a more prominent role in US defence policy circles.
On October 6, the company announced a US Navy shipyard contract worth up to $2.9 billion, just days after Luckey was named to the Pentagon's Project Meridian initiative. Earlier this year, Anduril also secured a multi-year Department of Defense contract valued at up to $20 billion.
Billions in contracts
On October 6, Anduril announced a shipyard contract with the Navy worth up to $2.9 billion. The award came days after Luckey was named to a Department of Defense group known as Project Meridian.
In March, the company also won a multi-year Pentagon contract worth up to $20 billion. The appointments of Luckey and SpaceX CEO Elon Musk to the initiative have prompted concerns over whether executives whose companies receive billions in federal contracts should have an active role in shaping defense strategy.Schimpf rejected the suggestion that political connections influence awards. “The reality is that the [Department of Defense] has just an incredibly structured process for how they evaluate all these incoming bids,” he said.
“So everything goes through these very competitive processes, and we win based on the merits.”
Political donations
Musk has given more than $276 million to Republican groups since July, CNBC reported this week. Luckey, who helped raise money for Donald Trump’s 2020 campaign, has donated more than $500,000 to Republican candidates and GOP-aligned groups this year, according to a CNBC analysis of Federal Election Commission filings.
$90 billion tender offer
Separately, Anduril this week opened a tender offer to employees in 16 countries that would value the company at $90 billion, five months after it topped a $60 billion valuation. Schimpf said the structure lets Anduril offer employees liquidity without the distraction of stock price swings. Like Anthropic, OpenAI and Databricks, Anduril has benefited from abundant private market funding, which has allowed companies to delay going public.Luckey has said he intends to eventually take the California-based company public. Schimpf told CNBC in July that Anduril is not rushing into an IPO, noting that a hype cycle is “a bad time” to debut. “This allows us to stay really focused on what we need to do, which is a massive, unprecedented ramp in defense production that we need to execute on over the next couple of years,” Schimpf said of the tender offer.
AI and the use of force
Founded in 2017 to challenge traditional defense contractors, Anduril has built a reputation for autonomous unmanned systems, drone boats and software supplied to the U.S.
Department of Defense and allied militaries. It is among a growing number of defense startups deploying systems overseas, including in the Middle East, as the U.S. government looks to expand next-generation capabilities.The use of AI-equipped systems has raised ethical questions about human oversight. Anthropic’s recent dispute with the Pentagon stemmed from a disagreement over the use of its models in military conflict.Asked about the issue, Schimpf said that decisions about the use of force ultimately rest with people. “Fundamentally, anytime you are making critical decisions about use of force or how to employ these, or what the consequences are of your actions, that is fundamentally a human decision,” he said.