Virtual disruption: The unicorn reimagining military tech

The re-election of Donald Trump has introduced new uncertainty, bringing both risks and opportunities for business.

Seizing the moment, tech billionaires have asserted a new place in the public eye. Whether it’s Elon Musk embarking on his unprecedented cost-cutting exercise to the US government or Jeff Bezos trying to build a new generation of spacecraft, tech billionaires are pushing for a new future unlike any time in the past half-century.

Palmer Luckey, founder of Anduril Industries, in 2023.Credit: Bloomberg

One such billionaire, 31-year-old Palmer Luckey, is reimagining the future of war and building the weapons and defences for future conflicts. Luckey made his name in his late teens developing and then in 2014 selling his consumer-oriented virtual reality headset business – known as Oculus VR - to Facebook for a cool $US2 billion ($3.1 billion).

When Facebook fired him over his support for the then-insurgent Trump, Luckey was forced to consider a new path forward. Dressed in his trademark Hawaiian shirt, shorts and thongs, Luckey set about creating a new company: this one aimed not at retail consumers but at governments.

Anduril specialises in autonomous systems, drones, missiles and robotics. The company’s AI-enabled data crunching can mesh multiple sources of information together in real-time.

The Ghost Shark can dive 20,000 feet below the surface of the sea.

From the first Gulf War to Russia’s invasion of Ukraine in 2022, the data-saturated world of war has increasingly resembled a live-action video game. Anduril wants to marshall the torrent of information into a useful advantage on the battlefield – in service of the US and its allies.

Anduril Australia’s chief executive David Goodrich explained: “A future great power war will not be won by the side with the most advanced drones or capabilities, or even the cheapest advanced capabilities,” he said. “It’s going to be won by whoever can sort through and share the vast quantities of information the fastest.”

Rather than building aircraft, tanks and submersibles and then adding software to control the equipment – as has been done by defence companies that make jet fighters and tanks – Anduril’s design is guided by the needs of its software. And like updates to operating systems, the design of its defence systems can be continually altered, creating new iterations as a mission evolves.

As battlefields in Ukraine and in the Middle East show, in this era, information is everything.

Andrew Glynn, Anduril’s VP of engineering, says: “Our systems are constantly evolving with the threat. It could be an annual cycle for the hardware. It could be a fortnightly cycle for our software that we’re patching new software into the field as we’re understanding new threats in the domain.”

In the seven years since Anduril has existed, it’s rolled out systems like Anvil, an unmanned quadcopter designed to intercept other drones by ramming them, or the Road Runner, an autonomous vertical take-off anti-drone interceptor.

Lattice, the user-interface system for control, digests data and uses AI to simplify the picture into useful decisions for the operator.

Unlike the peace, love and globalisation ethos of Silicon Valley, Anduril (named from Tolkien’s The Lord of the Rings, meaning “flame of the West”) exists to serve the US and its allies.

David Goodrich OAM, CEO of Anduril Australia.

The company opened in Australia in 2022, with the $US140 million contract for an autonomous submersible, Ghost Shark, jointly produced with the Royal Australian Navy and the Defence Science and Technology Group.

“Ghost Shark is designed in Australia by all Australian engineers for deployment with the ADF,” Goodrich says.

The boxy sub is designed to be capable of intelligence-gathering, surveillance, reconnaissance and striking targets.

It recently completed a 100-hour continuous journey, and is on track to soon complete its first 1000-nautical mile journey.

Like many Silicon Valley companies in this era of disruption, Anduril’s goal is to change the world. In practice, there is almost a messianic sense of purpose. But companies can change history. The Cold War need for missile guidance created the demand for the first microchips in 1959, which set in motion the information revolution today.

In Australia – as in the US – Anduril wants to help cultivate and revive a long-languishing defence industrial base, a shared objective of the multi-year, multi-nation AUKUS agreement. “We realise that if we are to transform this nation and re-equip this nation, we cannot do it ourselves, right?” says Goodrich. “We have to change mindsets … inside of Defence, outside of [the] defence industry.”

“Our goal,” Goodrich says, “is to positively disrupt the defence industry ecosystem, which we think needs disrupting”.

Glynn, the engineering VP, had worked in the US for the aerospace giants, flush with specialist engineering talent. In Australia, given its size and geography, “We don’t have many people; we have to find a way to go create a solution to a problem.”

What Glynn has seen with the Ghost Shark is “that innovators are generalists. We can take on new and complex problems and solve them better than I’ve seen ... engineers in other countries do.”

Anduril’s Pulsar electromagnetic warfare system deployed in Australia. It can be used for jamming or to defend against drones.

The living memory of World War II is fading – and with it, the memory of how Imperial Japan sought to cut off Australia from shipping and communication with North America. Today, China is one of the largest producers of autonomous submarines.

Having sovereign capability would allow Australia to effectively fend off adversaries, even if its sea lanes were cut off. Such sovereignty means not just designing the sub locally, but fostering local suppliers. Anduril is building a factory “capable of manufacturing large numbers” and has identified suppliers. In some cases, Anduril provided capital to expand their production capabilities, Goodrich said.

Last year, Anduril won a three-year contract to fit out Royal Australian Air Force Darwin bases with sensors and provide continuous monitoring services to prevent intrusion by drones. Anduril’s AI-driven system knits together sensors and equipment to respond to intruders across the military bases in the Northern Territory.

Although Anduril – currently valued at $US28 billion – produces autonomous drones and uncrewed subs, the company grew out of technology designed for understanding and responding to the complex environment: virtual reality powered by artificial intelligence.

The Long-Range Sentry Tower-82 can operate autonomously in remote areas.

Rather than detecting electronic impulses and tracking signals that would be fed into a traditional control centre, Anduril’s systems in Darwin use machine learning to “learn the pattern of life” in the environment, and then it then tracks anomalies in the pattern, which are then presented in a meaningful and coherent way to a human operator.

Anduril Australia’s vice president of strategy, Pete Quinn, says that at one point, while deployed in the rugged bush environment, Auduril’s systems had to “learn” that a “kangaroo was not a bird”.

The unique and harsh climate of the Northern Territory proves a tough training ground.

“The system gets better over time; it actually understands the environment, what’s normal, what isn’t.”

Goodrich says that Darwin has the “largest number of lightning strikes in the world, and it rains like you would never believe ... It is a really tough environment for any technology to survive”.

While the future of war by its nature is uncertain, one need only look at Russia’s 2022 invasion of Ukraine or the ongoing conflicts in the Middle East to see how drones, virtual reality, and battlefield innovation could unfold in a bigger war.

Drones’ specific technology is updated, improved or adapted on a weekly and sometimes daily basis for the battlefield to adapt to the changing tactics of adversaries, environmental conditions, or capabilities of technology.

The constant reiteration of drone models points to another reality of modern war: advanced computing power is changing the cost dynamics.

The effect of drones in battle is a bit like mobile phones on civilian life. Crucial weapons have become smaller and more cheaply made. The economics of their use has changed as a result.

UNSW academic Oleksandra Molloy, who studies the effect of AI on technology and flight, says, “the proliferation of cheap, expendable drones” frustrates traditional air defence platforms.

The big radars are made to detect big jet fighters and jet-sized drones, but they struggle to see drones the size of lawnmowers, she said.

So an emerging challenge of counter-drone defence, Molloy says, is its cost-effectiveness. The use of cheap drones “compels an adversary to spend disproportionately more resources to counter a threat than to deploy a threat.”

Call it a shift in the winds of war.

The United States learned this in the Red Sea last year as it shot down inexpensive Iranian-supplied drones targeting civilian tanker ships. US missiles can cost more than a million dollars to take down a drone that costs less than one-tenth of the price to make.

And Moscow has learned this as Ukraine, a nation without a navy, has sunk two dozen Russian ships deployed in the Black Sea with the help of domestically built sea drones, which can deliver over 300 kilograms of explosives at distances of up to 800 kilometres.

The Ukrainian adoption of drones has “the potential” to “reshape naval warfare and the balance of military power at sea,” wrote UMass Dartmouth professor Brian Glyn Williams, an expert on drone warfare.

The evolution on the battlefield has not gone unnoticed in the market.

ETF provider Global X forecasts global military spending on drones to rise from $US25 billion this year to $US45 billion annually by the end of the decade.

“Drones priced under a million dollars are capable of neutralising high-value targets such as tanks and warships,” the ETF provider writes.

“Growing evidence of efficacy and the accelerating use of drones will likely fuel a specialised value chain of manufacturers, software developers, and AI innovators, all working to enhance the capabilities of these systems, potentially driving a surge in global military drone spending,” Global X writes.

As viral content on social media “disrupts” politics, business, and show business, drones are disrupting war by creating a “financial burden” for a targeted adversary, which must spend generously to defend against them. Over time, the defender can be worn down financially.

In a future war, as in Ukraine today, “quantity matters”, says Molloy. “The more drones a state can produce, the more sustainable its drone operations and the more credible its threat to stay the course”.

For that reason, Molloy believes a counter-drone system must be cheaper than its target.

And any successful deployment of inexpensive drones must complement larger, more expensive systems, Molloy says. “There should be a balance.”

Anduril is betting on a robotic, autonomous, data-driven vision of future conflict. It’s not alone. The incoming Trump White House team consulted Anduril’s executive chairman, Trae Stephens, on revamping the US military, Fortune reported in November. And Fast Company reported that venture capitalist-turned-senator-turned-Vice President J.D. Vance holds a small share of Anduril, too.

Chris Zappone travelled to Canberra as a guest of Anduril Industries.

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