Palmer Luckey: The self-taught engineer who became a billionaire with the war in Ukraine

By Jeremy Bogalsky

It’s a cloudy spring day with 15 degrees Celsius at the Anduril Industries outdoor test site in the arid hills of Southern California – a bit chilly but suitable for observation. “We have a good field of vision,” explains Palmer Luckey, the billionaire founder of Anduril, who became rich in 2014 by selling the Oculus VR virtual reality startup on Facebook for $ 2 billion. Cool temperatures mean little thermal distortion, making it easy for Anduril’s watchtowers to spot migrants trying to cross the US-Mexico border.

The self-taught child prodigy of technology – who will turn 30 in September and “upgrade” to “miracle man”, as he jokes, gives his engineers the signal to show why investors are going to throw another 1 billion in Anduril, increasing the amount of funding raised since 2017 to $ 1.8 billion. Luckey owns 11% of the company, a percentage that, if added to the money from the Facebook deal, raises its current net worth to about $ 1.4 billion. last round of financing in June, as it is expected to increase Anduril’s capitalization by 70% to $ 8 billion).

An ground-based infrared sensor detects a truck on the road in the test area and immediately activates a web-mounted camera to focus on the object. An artificial intelligence program called Lattice, which is Anduril building technology, zooms in on the truck and recognizes it as a vehicle. The test predicts that the truck disappears behind a hill, and then a silent black unmanned helicopter – called the Ghost – is launched to maintain eye contact. The screen shows the truck stopping: a man comes out and launches a drone. A radio frequency sensor receives a signal from the drone and recognizes that it is a Chinese-made DJI P4. Lattice immediately describes the man and the drone as “suspicious”. To neutralize the drone, a canister is opened and a drone – called Anvil – takes off with impressive speed. Its mission: to shoot down the drones that have invaded its control area.

“We can ignite the batteries, ignite the drone and go fast,” said Luckey, who despite the weather wears his distinctive work uniform: flip flops, Bermuda shorts and a Hawaiian shirt. “We definitely have an advantage on the field when it comes to drone versus drone combat,” he adds cynically.

Eight years ago, Luckey received rave reviews from the press (including a cover for Forbes) as the quiet child prodigy who pioneered virtual reality. Three years after Mark Zuckerberg took over his startup, Luckey was fired from Facebook amid a backlash over his support for Donald Trump at the 2016 presidential election.

He soon founded a new startup in the defense industry, in collaboration with the Founders Fund of billionaire Peter Thiel and executives from the espionage software company Palantir. After Luckey’s spiritual departure from Silicon Valley, the tangible came. Anduril is based in Costa Mesa, closer to San Diego military bases than in the center of Metaverse in Menlo Park.

He may have lost friends who criticized him as a warlord, but today Luckey feels justified. After the Russian invasion of Ukraine, in the territories of which there are Anduril systems without the company revealing exactly which one, some people apologize for their criticism. “They now realize that ‘it’s very important for the United States to have more advanced weapons,'” he said.

The way he makes these weapons is also the key to understanding why Aduril stands out. Luckey’s company, which is estimated to have revenue of $ 150 million in 2021, is developing much of its technology at its own expense, in a high-risk move that reverses the normal way defense companies operate. Instead of waiting for the Department of Defense to launch a multi-year process of setting technological standards and announcing bids for their development, Anduril produces weapons systems and surveillance technologies that the government deems it will want – if they are effective.

“We want to be the first company that comes to mind when the Department of Defense needs something,” said Luckey.

Anduril plans

Anduril is expected to run two new projects in the near future. The first concerns a fast-armed drone that, as Luckey reveals, is even intended to replace manned fighter jets in intercepting enemy aircraft. The second is a large surveillance drone designed to launch and land vertically (so that it does not need runways). In addition, it will be able to travel long distances autonomously, making it potentially suitable for the vast expanses of the Pacific Ocean. So far, there is no official request from the Pentagon for either project.

Marrying Luckey’s past and present, Anduril is also developing a sophisticated simulation tool that combines Lattice with a Carbon Games video game machine, a studio acquired by the company in 2019. It will enable the Department of Defense to run thousands of type scripts “what if…” regarding the development of war conflicts, which will be shown both with VR glasses and on regular screens. At the same time, it will assist Anduril in its decisions about which technology to develop next.

Luckey says he is confident that his technologies are superior to those of the defense giants, but the opportunities at Anduril are not easy. According to federal revelations, 39 lobbyists pushed Washington in favor of Anduril in 2021. The company recruited a strong team of Washington and Pentagon veterans, led by Christian Brose, a former chief of staff. The team is pushing to curb atherosclerosis acquisitions and scrap tenders based on a plethora of tests and bake-offs.
Luckey himself spends a lot of time in Washington. “People want to believe that if they create the best product, then you will win. Reality does not work that way,” he said.

Luckey’s course

Luckey took his first home lessons – from his mother – in Long Beach, California, while he took his first engineering lessons working in cars with his father. Eventually, he settled in the half-garage and built things like high-power lasers and coil guns, which fire high-velocity missiles using electromagnets. In his mid-teens he began upgrading old game consoles with tiny electronic systems to make them portable. Games led to virtual reality: he started collecting bulky old VR headphones (the basic technology dates back to the 1960s) and making crafts. His breakthrough was when he realized that he could replace their expensive, heavy-duty optical media with cheap and lightweight ones if he used software to manipulate images. Thus was born the Oculus Rift, the VR headset that Luckey created at the age of 16 – and that was what caught Mark Zuckerberg’s eye.

While Luckey was on Facebook, he did even crazier things: he built a ramit engine in his pool and started talking to Trae Stephens, a Founders Fund partner, about creating a startup that would be active in the defense industry.

Peter Thiel had instructed Stephens to find the next Palantir or SpaceX to take advantage of the government’s “deep” coffers. Stephens, a Palantir veteran, found nothing worthwhile and was encouraged to create a company from scratch that could pay off. Stephens and Luckey agreed that the Department of Defense’s biggest drawback was the software: senior officials viewed it as a simple addition to large weapons systems. Luckey was not interested in doing anything in this area – until he was “abandoned” by Facebook.

Stephens recruited his best friends from Palantir: Brian Schimpf – to take over the software and CEO position – and Matt Grimm to run the business. But after a “bad” experience selling software at the Pentagon (while Stephens was at Palantir), the team set out to integrate Artificial Intelligence into the Department of Defense: futuristic weapons based on cutting-edge software. Luckey, as Stephens had hoped, would earn Washington’s respect.

“Smart people, especially engineers, want to be around Palmer because he’s overstimulated,” says Stephens, the company’s president. Luckey’s creativity is out of control, he adds, but the other founders of the company are there to put it on track. “When fed properly, it ‘s stormy.”

In 2017, start-up Anduril sold to the Customs and Border Patrol an idea that came to fruition: watchtowers that automatically detect people and vehicles trying to cross the border illegally, removing the burden of routine patrols from the human side. In 2020, the Agency signed a contract worth up to $ 250 million with Anduril – until last year 176 towers had been built on the border with Mexico.

In January, Anduril reached its biggest deal: it took over responsibility for US Special Operations Command defense drones, in a contract that would bring it nearly $ 1 billion over the next 10 years. The immediate future holds another great opportunity. The Pentagon wants to connect all surveillance systems and weapons in order to have a complete and unified picture of a battlefield and to be able to decide on its movements from a distance, without the risk of cyber attacks and interference. The program is called Joint All Domain Command and Control, or JADC2, and Anduril and other companies – such as Palantir and C3 AI based in Redwood City, California – are claiming tens of billions of dollars.

Anduril hopes the Lattice software system will be effective. In a 2020 US Air Force test, Anduril combined radar with its sensor towers to detect incoming cruise missiles and channel data to target multiple weapons systems, including an F-16 and a Paladin, neutralize them. It is worth noting that the system required the supervision of only one member of the Air Force.

“Anduril Towers are top notch,” said Nicolas Chaillan, who until last September was head of software for the Air Force. Chaillan, who challenged the commitment of Air Force Chiefs of Staff to JADC2 in a public resignation letter, warns that the project could fail as upgrade efforts are carried out alone and not in combination.

If this modernization effort fails, as has happened in the past, Luckey does not care. After all, in addition to the contracts it has signed with the US government and is in force, Anduril now has a full “chest” with VC funds. “The Pentagon should not worry about what will happen to Palmer Luckey,” he said, “but whether it will find the next Palmer Luckey.”

“They need to be interested in how they can turn successful people like me into my 19s – with good tech knowledge and interesting ideas – into successful salespeople. At the moment, there is no way in that direction,” Luckey said.