Defense tech companies like Anduril hope Trump can streamline military contracts

• Anduril, founded by Palmer Luckey, is developing AI-powered drones for the military.
• Anduril says Trump’s promise to cut bureaucracy could make defense contracts simpler.
• Others in the defense industry are less optimistic.

Tech billionaire Palmer Luckey’s bet on the defense industry is paying off at Anduril, the drone-making company he founded. Now, the company says President-elect Donald Trump’s promise to slash government bureaucracy will open the doors even wider.

Brian Schrimf, Anduril’s CEO, told Yahoo News this week that Trump’s promise of “streamlining the bureaucracy” in the government is one of the first steps to improving efficiency in the defense contracting process.

“There’s just so many roles, so many things that make it hard to do what we really need to do as a country, to move out, to take risks, to actually just build the military we need to have,” Schrimpf told the outlet.

Analysts told Business Insider that revamping the defense contract process, however, would be difficult.

“It’s not like the defense secretary can say, ‘eliminate all bureaucracy and issue a contract in 30 days,’ and everyone says ‘absolutely we’ll get everything done in 30 days,” Scott Sacknoff, president of aerospace and defense investment firm Spade Index, told BI.

Sacknoff said that procurement reform in the defense industry is not a new concept and that the Defense Department is always restructuring its contracting process.

“I’m sure there are efficiencies that they’ve been working on for years,” Sacknoff said.

Richard Aboulafia, managing director at AeroDynamic Advisory, a consulting firm, said that reforming the defense industry will take time.

“A friend of mine likes to joke; we’re big believers in procurement reform; here’s a headline about it from 1865,” Abaulafia told BI.

Anduril has turned heads in the defense contracting industry since Luckey, who first made his fortune as the founder of virtual reality company Oculus, founded it in 2017. Last month, the company unveiled the new AI-powered Bolt-M drone, which is small enough to fit in a backpack.

According to DefenseScoop, a military news blog, Anduril developed the drones as part of $249 million in contracts awarded to Anduril, AeroVironment, and Teledyne FLIR to provide the Defense Department with drones that explode on impact.

Schrimpf said the most important steps to improving the defense contracting process are to slash government bureaucracy and pivot to building cheaper autonomous systems. He said it would be critical for the United States to “tap into all those commercial suppliers” within the country to compete in the global defense economy.

“Our approach to this has been ‘OK, how do we think about uncrewed autonomous systems that can be made in a different way’… how do we really tap into what’s actually possible with the things that companies like Tesla have learned of how do you build at scale, build these complex things fast and cheap,” Schrimpf told Yahoo.

Defense tech industry leaders like Luckey and Eric Schmidt, the former Google CEO who later founded the AI drone startup White Stork, have said that AI-powered autonomous machinery is the future of warfare.

At a tech event in Saudi Arabia last month, Schmidt said that “the cost of autonomy has fallen so quickly that the drone war, which is the future of conflict, will get rid of, eventually, tanks, artillery, and mortars.”

Sacknoff told BI that autonomous drones are “definitely a trend.”

“Every 20 years, the defense sector sort of goes through a cycle where, here are the new technologies that will have a greater impact on defense and military,” he said.

Sacknoff said the military defense business is always looking for a “counter” to the newest technology and that the growth of autonomous drones would likely bring more innovations to stop them.

“The next phase will be someone — and they already are — working on developing the technology to be countering drones,” he said.

Anduril did not immediately return a request for comment.