59Bloomberg Businessweek October 7, 2019
president than in fulfilling the Pentagon’s enduring need for
reliable technology. Some companies, Stephens says, have
complicated things for themselves by concealing or down-
playing their defense work, leaving employees who are uncom-
fortable with such projects to feel, justifiably, that they’ve been
lied to. “They said, ‘We didn’t sign up to develop weapons,’ ”
Stephens says. “That’s literally the opposite of Anduril. We will
tell candidates when they walk in the door, ‘You are signing
up to build weapons.’ ”
A
nduril’s origins date to conversations Stephens had with
his colleagues at Palantir Technologies Inc., a data-analysis
company Thiel co-founded in 2004. They thought a software
startup focused on high-tech military applications could out-
maneuver traditional contractors. At first, according to Matt
Grimm, who spent seven years at Palantir and is now Anduril’s
chief operating officer, it wasn’t so much a plan as a bonding
exercise as they sat in airport lounges or attended each other’s
weddings. “It’s like that idea, ‘Hey, we should all go camping
sometime!’ But it doesn’t really happen,” he says.
Palantir executives had experienced the frustrations of try-
ing to win federal contracts. Until he left the company in 2013,
Stephens worked to sell technology to the government, a job
he describes as “yelling as loud as possible into the void.” The
shouting did eventually pay off. Palantir sued the U.S. Army in
2016 for refusing to consider it for a large intelligence contract.
It won the case and, this March, landed the contract itself,
which could be worth as much as $800 million.
Such doggedness helped Palantir open the government’s
door to startups, but the push for change also came from
the inside. In 2015, Ashton Carter, then President Obama’s
defense secretary, took a series of actions to make the govern-
ment a friendlier business partner for what Pentagon bureau-
crats call “nontraditionals.” After Trump won the presidency,
Stephens was appointed to the Defense transition team. He
later joined the Defense Innovation Board, a central part of
Carter’s reform effort.
Stephens had also begun looking for defense startups in
which Founders Fund could invest. Luckey, who’d sold his
virtual-reality company, Oculus VR Inc., to Facebook for
$2 billion in 2014, was also looking to put some of his windfall
into upstart military contractors. Founders Fund had backed
Oculus, and he and Stephens had become friends over time.
Luckey’s career had veered off course just before the 2016
election, when theDaily Beastreported that he’d donated
$10,000 to a pro-Trump group that grew out of a Reddit mes-
sage board, r/The_Donald, known for incubating right-wing
memes and conspiracy theories. Luckey’s money was dedi-
cated to putting up insulting billboards about Hillary Clinton.
Almost immediately, he disappeared from Facebook’s campus,
and in March 2017 the company announced he was no longer
an employee. (Luckey says he was fired because of his poli-
tics, a claim Facebook Chief Executive Officer Mark Zuckerberg
denied before Congress in April 2018.)
With Luckey now a free agent, he and Stephens got to
work on Anduril, recruiting a handful of people who’d been
at Palantir or Oculus. Their plan was to follow the approach
that had worked for Luckey with virtual reality: combine low-
cost, widely available components with sophisticated software.
Luckey figured the bar would be relatively low. Despite the lore
of the U.S. military’s technical prowess, he argues, the defense
industry has been stagnant for decades. “How is it there’s so
many billionaires and no Iron Man?” he asks, referring to the
fictional weapons-manufacturer-turned-superhero.
Luckey’s colorful public persona was bound to influence
Anduril’s brand, for better or worse. At one point early on,
he showed up at a Japanese anime festival dressed as a char-
acter from a video game, in a costume consisting of a bikini
top and fishnet stockings. (He generally avoids cosplay in
the office, but he lays on the comic book references pretty
heavy no matter the situation.) Such antics haven’t been a
liability, even in the buttoned-up defense business, says Joe
Lonsdale, an early Anduril investor. “He’s a more serious
person than people realize.”Anduril’s first contract, awarded in 2017, was to provide
electronic surveillance technology to U.S. Customs and Border
Protection (CBP) for the U.S.-Mexico border. Luckey was a
strong proponent of the work—a logical way, he says, to demon-
strate Anduril’s technical vision. Of course it also made Anduril
instantly controversial by tying it to the Trump administration’s
harsh anti-immigration rhetoric and policies.
Luckey at times has seemed to embrace this connection.
Almost immediately after his departure from Facebook, he
traveled to Washington to advocate for digital border security
alongside Chuck Johnson, a right-wing internet provocateur.
Even the company’s name called to mind the administration’s
nationalist rhetoric: In the Lord of the Rings trilogy, Anduril is a
sword whose elvish name means “Flame of the West.”
Critics described Anduril as either a technological mani-
festation of Trumpism, an amoral profiteer, or both. Luckey
saw the outrage as useful. “We were telling people that border
security is not going to be the last time there’s a controversy
around something we’re working on,” he says. Not all Anduril
employees are pleased. Grimm, who describes himself as an
“Obama fanboy” and the most liberal member of the founding
team, grimaces when the subject comes up. “The goal was not
to set out and say, ‘We’re the border security company,’ ” he
says. “It was actually quite frustrating for us through the first
year and a half, because of course that was the narrative.”