Anduril Industries Inc. is preparing to build a drone factory in Ohio the size of 87 football fields, a project that heralds a new era for the defense industry — one where tech startups are a big deal.
In an industry long-dominated by a few established players, changing battlefield technology has spurred the Defense Department to take a closer look at young tech companies. Their sci-fi sounding projects include autonomous submarines (Anduril), high-powered microwave weapons (Epirus Inc.), and aircraft capable of flying more than five times the speed of sound (Hermeus Corp.).
A few tech companies have already hit it big: Palantir Technologies Inc. and Elon Musk’s SpaceX, both heavily involved in defense, are each worth more than Lockheed Martin Corp. and RTX Corp., formerly Raytheon. While most upstart contenders won’t reach those heights, stymied by technological challenges and labyrinthine government contracting rules, venture capitalists see a big opportunity. Investors plowed more than $130 billion into defense tech startups since 2021, according to PitchBook data, double the amount from the previous four years.
Going forward, techies are particularly optimistic about incoming president Donald Trump, who has kept Silicon Valley close by at Mar a Lago — including inviting Anduril’s chairman over for advice. Trump and members of his coterie have pledged to revamp US defense, cutting waste and modernizing how weapons are made and procured. In 2025, tech startups and the people who run them, are poised to be even more influential.
Here, 10 of the defense tech startups to watch this year, in no particular order:
Company Anduril
CEO Brian Schimpf
Valuation $14 billion
INDUSTRY Drones, weapons, software
Headquarters Costa Mesa, California
Anduril may be the tech industry’s most famous defense company — with an arsenal of mini fighter jets, autonomous submarines and AI software to control them. Soon, it will begin construction on a 5 million square-foot factory (the size of 87 football fields) with the capacity to churn out tens of thousands of autonomous weapons. Backed by prominent investors like Peter Thiel’s Founders Fund and Andreessen Horowitz, Anduril is known for its colorful co-founder, Palmer Luckey, and its well-connected chairman, Trae Stephens. The company is also a prolific acquirer and has inked several notable partnerships, including with OpenAI to level up its drone defense capabilities. Unlike many aspiring defense contractors, Anduril already has billions in contracts with the US government and allied countries. Fun fact: One of Anduril’s first checks came from Vice President-elect JD Vance during his days as a VC for Revolution Capital.
Company Shield AI
CEO Ryan Tseng
Valuation $2.8 billion*
INDUSTRY Drones and software
Headquarters San Diego
Why fly a drone, when you can fly a swarm of them? Shield AI makes an autonomous drone called V-BAT, along with software called Hivemind. The software, which also operates drones along with jets and quadcopters, lets aircraft analyze and react to a battlefield in real time – without GPS or prior knowledge of an area. Backed by groups like Andreessen Horowitz and the United States Innovative Technology Fund, the company aims to increase V-BAT production this year, furthering its ultimate goal: swarms of autonomous systems to deter enemy attacks.
Company Applied Intuition
CEO Qasar Younis
Valuation $6 billion
INDUSTRY Autonomous vehicle technology
Headquarters Mountain View, California
Applied Intuition’s AI software has long helped the likes of Toyota Motor Corp. and Porsche AG develop and test their autonomous driving technology. Now, the startup’s defense division is increasingly doing the same for the US military — winning millions in defense contracts to map aerial, maritime and land environments, simulate new ones, and use the data to improve unmanned systems. Its software allows soldiers to coordinate attacks using autonomous drones from multiple vendors – important as the number of weapons makers grows. Up next, the company is expanding its domain offerings to include space.
Company Epirus
CEO Andy Lowery
Valuation About $1 billion
INDUSTRY Electronic weapons
Headquarters Torrance, California
With a high-powered microwave system that can zap drones out of the sky, Epirus specializes in short-range air defense, using its electronic weapons to take out swarms of 100 drones or more. The US Marines have purchased a portable version of the tool, which can be towed behind a vehicle and is designed to operate in remote environments with limited power. The company has inked more than $100 million in contracts with the Defense Department, which is set to use the technology this year in the Middle East.
Company Hermeus
CEO A.J. Piplica
Valuation $400 million
INDUSTRY Hypersonic aircraft
Headquarters Atlanta
Hypersonic travel is movement at more than five times the speed of sound: fast enough to cut a seven-hour transatlantic flight to 90 minutes, or evade most weapons defense systems. Hermeus is one of a number of companies working on hypersonic tech, developing both commercial aircraft and tools for defense and national security. It’s still early days – Hermeus’ government contracts total around $60 million — but Russia’s recent display of hypersonic weapons in Ukraine could increase the urgency. With backing from Khosla Ventures, Canaan Partners and Sam Altman, Hermeus recently completed its first ground test at Edwards Air Force Base. It plans to fly its first aircraft soon.
Company Re:Build Manufacturing
CEO Miles Arnone
Valuation Undisclosed
INDUSTRY Manufacturing tech and services
Headquarters Framingham, MA
A common lament of US defense watchers: America doesn’t make anything anymore – leaving the “arsenal of democracy” outgunned by China. Companies like Re:Build Manufacturing hope to bulk up America’s industrial might. The startup has raised $557 million from backers like General Catalyst and acquired a dozen companies since launching four years ago. It engineers, designs, tests and manufactures a range of products for everything from medical supplies to missile parts, and has secured more than 20 defense-related deals with the Defense Department and American defense manufacturers.
Company Scale AI
CEO Alexandr Wang
Valuation $13.8 billion
INDUSTRY Artificial intelligence
Headquarters San Francisco
In the coming age of modern warfare, there may be no more important technology than AI – but AI is only as good as the data that goes into it. Scale uses scads of contract workers to tidy up and tag images, text and other data that can then be used for AI training. Recently, Scale has strengthened its ties with the government, working with the Pentagon’s Chief Digital and Artificial Intelligence Office, and has served as a link betweens the tech and defense industries. Last year, the startup rolled out Defense Llama — a version of Meta’s Llama large language model intended for military use.
Company Skydio
CEO Adam Bry
Valuation $2.5 billion
INDUSTRY Autonomous drones
Headquarters San Mateo, California
Initially sold to consumers as a cool way to record mountain biking and other exploits, police on patrol and soldiers in warzones like Ukraine now use Skydio’s drones. The company’s autonomous aircraft are programmed to recharge at remote docking stations, helping them fit into a larger national effort to produce cheaper, more effective weapons at scale. The startup is also working to thwart electronic attacks, or jamming.
Company Firefly Aerospace
CEO Jason Kim
Valuation $2 billion
INDUSTRY Space vehicles
Headquarters Cedar Park, Texas
Firefly, the maker of lunar landers and orbital vehicles, is set to make its first moon landing this month carrying NASA supplies — one of dozens of missions the company has planned for this year. The startup sells its technology to both businesses and the government, and has a growing defense operation. This fall, Firefly raised $175 million in fresh funding, and won approval to use its Elytra spacecraft to launch and maneuver military satellites.
Company Astranis
CEO John Gedmark
Valuation About $1 billion
INDUSTRY Satellites
Headquarters San Francisco
Astranis makes cheap, high-orbit satellites about the size of an industrial washing machine — flinging its technology into space on behalf of companies, small countries and the Pentagon. It expects to launch five commercial satellites this year, and aims to scale up quickly, with plans to launch 100 in 2030. In October, the US Space Force selected Astranis to design a fleet of GPS satellites to thwart the jamming of transmissions, with the goal to launch the first eight by 2028. It’s one of 15 defense-related deals the company has struck so far.
