Palantir and Anduril: Shining Beacons of Defense Innovation
The new guide to defeating Mordor...
A part of our private capital arm Headwinds Defense Advisory’s series on tangible paths to reinforcing our great power status.
Simply, Palantir and Anduril serve as guides for what is right. The defense tech community, DoD and ultimately congress (the ones really paying the bills) should obsessively study the success of these two companies, continue to propel them forward, and promote a policy environment that ensures similar companies can enter into play. Moreover outside the beltway, the brightest talents of the tech community and those capital markets supporting their growth now have an exemplary case of two incredible businesses creating valuable tech that also fills an inevitable yet lucrative gap that is the “security dilemma” of our anarchic world.
Palantir and Anduril have fulfilled what Headwinds considers three critical criteria for a successful company in this and arguably other tech fields: 1) Mission oriented 2) Accelerated innovation 3) Asymmetric output. These aren’t easy buzzwords or participation-trophies being handed out; I truly believe Palantir and Anduril have carried out these three feats on a level beyond their peers and other companies in general.
Mission-oriented (but actually)
The C-Suites at every Fortunate 500 would likely jump up to say their company follows some sort of mission in line with some unique culture. Eye roll. It’s easy to pretend this is happening at those companies; but rarely are those “missions” creating something genuinely meaningful that drive an entire company to fight for something. Some medical companies may be an exception. So, it’s around a meaningful mission that the founders of Palantir and Anduril have so brilliantly built a culture obsessed with tackling risks that threaten our very existence. See, Alex Karp and Palmer Luckey and their teams understand that we in the West are in a very real fight for our lives against both the kinetic and non-kinetic threats from China and Russia and their extended axis of North Korea, Iran, Venezuela, and several others. We see their threats every day in the form of attacks on the sovereignty of our allies and disruption of our democratic institutions; some are less apparent like mis- and disinformation campaigns and attacks on our critical infrastructure. Non-state actors are part of the mix, but at this point most are controlled by one of the axis powers.
The founders and CEOs don’t need to advertise the mission either — it naturally permeates, it’s inherent. In one of the best indicators, Palmer Luckey recently pointed out in an interview that they don’t need to attract talent because that talent will naturally be attracted to the meaningful work at Anduril vice the shallow motivations of Silicon Valley. Karp has pointed out similar trends.
Beyond the headlines, the leaders seem to be aware that the worst threats are not necessarily those attracting significant attention but ones that are subtle, slow, or postured for future implementation. The fights they lead may involve a physical battlespace or digital one, but ultimately it comes back to a fight for survival. This mission thus revolves around principles like the protection of sovereignty, innocent lives, fundamental human rights, and democratic norms. The average employee understands their role in directly contributing to a civilization-level impact. Unlike creating an algorithm for social media clickbait or some AI that does what every other AI already does, this mission has an outcome that’s not just useful for society but necessary. Yet notably, even major defense contractors like Northrup Grumman, Lockheed Martin, and RTX haven’t been able to create a culture like this despite tackling similar threats. From personal encounters, many at these companies feel like cogs in a machine, as these large organization are perceived as an extension of government and all the bureaucratic annoyances that come with that. Size here is important. I’ve come across highly effective teams within the major defense contractors united around their specific mission, but they are usually at the mercy of divergences one tier above and competition with other programs to the point of a fragmented mission for the overall organization. The smaller an organization the easier it is to cultivate a unique culture; Palantir and Anduril, though expanding, have managed to at least keep a perception of “small” compared to the Lockheeds and Northrups of the world. Part of the advantage, aside from skin-in-the-game, mission-oriented leadership, is fostering genuine enthusiasm within the workplace: aggressively innovating in new areas with readily visible impacts, not just building a new version of the same system…
Accelerated innovation
Sure, everyone is innovating, but the rapid pace at which Palantir and Anduril have innovated is truly impressive, especially for their size and relatively new status. Other government programs take years to build; everything from the Joint Enterprise Defense Infrastructure (JEDI) cloud, the Distributed Common Ground System (DCGS), and basic cybersecurity upgrades, to radios, radars, aircraft, and ships. Meanwhile, the two darlings churn out new systems that have incredible impact within a year to a few years.
Something important to note about all their systems as we move forward: most of the bees link back to a beehive. In the end, Palantir and Anduril are building truly cohesive ecosystems.
On the cyber and information warfare front, Palantir gave us Gotham, a platform that integrates, visualizes, and analyzes data to aid intelligence operations with actionable insights. Also Foundry, a data integration platform that enhances collaboration across various defense networks. Palantir was using AI exceptionally in all domains, before the AI hype of 2023. Their programs have worked so well it’s no wonder they’ve increasingly built trusted partnerships with the commercial side in the past several years, in industries from financial monitoring to auto racing to supply chain logistics to medical manufacturing. Anduril has also made a name for themselves in AI, especially with Lattice, an operating system that connects various autonomous systems for situational awareness and mission management.
In autonomous systems and robotics, Palantir is providing software integration for the Robotic Combat Vehicle (RCV) program, which allows for the navigation of uncrewed vehicles by fusing data from multiple sensors and allowing for teleoperations of unmanned ground vehicles (UGV). Anduril’s Ghost includes a family of autonomous drones designed for surveillance, reconnaissance, and target acquisition, while Fury is their multi-mission group 5 autonomous air vehicle (AAV). Anvil is a counter-drone system for precise and low-collateral intercept of Group 1 and 2 threats, and another aerial countermeasure, the vertical take-off and landing (VTOL) Roadrunner, operates at high subsonic speed with high G-force maneuverability, plus a recovery and REUSE (!!!) capability. Both operate from launch boxes. Anduril also has Pulsar, an electromagnetic warfare system designed to identify and counter electronic threats, including drone jamming and geolocation services.
Some more infrastructure for ISR and building situational awareness includes Anduril’s Menace, a mobile command and control system for distributed operations in dynamic environments, and Sentry Towers for automated surveillance. Palantir’s Skykit is a very handy operations/intelligence portable unit (can even be carried as backpack) that includes a small drone. Tactical Intelligence Targeting Access Node (TITAN) is a joint project where Palantir leads the software development and Anduril handles hardware design. TITAN integrates multi-domain sensors to provide real-time intelligence for precision targeting and operational support.
A friendly reminder that all these systems are being built with AI-integration and a cohesive ecosystem in mind, the kind necessary for deterrence and that would also provide an incredible advantage in a more distributed great power conflict. These systems are addressing challenges in unconventional warfare areas. At Headwinds we also believe in the need to rapidly shift capital into these areas to both deter or win future wars. Palantir and Anduril understand the outcome of a future war will very likely not come down to a surface engagement between destroyers or platoon versus platoon shooting match. They’re building future-proof systems with an asymmetric input:output ratio in mind…
Asymmetric output
Recently, it's become commonplace to compare a $2 million American missile to its target, a $2,000 Houthi rocket. Although we took effective and necessary action, it’s easy to see why the American taxpayer is infuriated (this trickles into other issues by the way). Strategists share in the frustration as well. Best not to mention that the Red Sea is just a blip of the excesses. Despite our $840 billion-plus budget, we (the United States) have become overextended as a global force, always playing catch-up or clean-up. So why not focus attention on more efficiently developing large impact systems at a vastly lower cost? So far, there are several limiting factors, mainly tied to lobbying interests and how most of the budget still goes to big, conventional projects (aircraft, ships) versus the asymmetric ones, though we may be on a better track in terms of R&D priorities per the latest budget.
The type of systems Palantir and Anduril are building are addressing this challenge; it appears they understand the power of asymmetry, in defense and offense. Anduril has called their solutions, “affordable, distributed mass.” As mentioned when discussing mission-focus, the two companies’ visions are in line with a keen understanding of our enemy’s growing capability to deliver asymmetric effects in the form of affordable mass; thus our response has to be smarter, not merely building up the same large systems that become more vulnerable to new threats by the day.
Without getting too into specifics, programs like Gotham and Lattice provide a similar capability with a cleaner display and more adaptable integration than conventional tools, plus autonomy, at a lower operational cost with less training complexities and and extensive maintenance requirements. Essentially, more humans can be removed from the loop for just as effective (if not more) of an outcome.
Between the reusability of systems like Roadrunner, the development of affordable mass, superior exploitation of AI and performance in cyber operations, it’s clear Palantir and Anduril have mastered the asymmetry we so desperately need. There are more domains to penetrate as well.
In terms of the West’s defense against the dark arts, supply is simply still not meeting demand. We’re on an unsustainable path to defending against threats small and large. The first step is a reality check that the status quo won’t work; we need to look to more asymmetric and effective options. But herein lies an incredible opportunity. We have the greatest talent in the world, we have the capital, we have the means for infrastructure — the defense apparatus needs to ensure more Palantirs and Andurils emerge, and capital needs to step in to these opportunities.
Disclaimer - Headwinds Capital Advisory is invested in Palantir and the author is invested in Anduril via a VC fund.