The Anduril Thesis

Since Contrary Research was founded in 2022, we’ve written over 500 individual company reports and dozens of industry deep dives. In particular, we’ve covered high-profile companies like OpenAI, Stripe, and SpaceX. Each of those companies followed a similar trajectory. An exceptional team identified a deeply underappreciated opportunity that would grow into unbelievably large markets powered by fundamental technological unlocks, from LLMs to open source or payment processing, that serve as tailwinds for those businesses.

But as we set out to cover Anduril*, we came to realize that it was different. There is, perhaps, no other private company so uniquely shaped by almost 100 years of military, geopolitical, and industrial history. In fact, to best understand Anduril’s business, we realized you must first come to appreciate that rich history. Not only because it’s helpful context, but because Anduril’s founders have built their business as a direct counter-position to so many aspects of that multi-decade history.

We also began to see Anduril as different from other companies we've covered in another respect: we believe it might become the most important company of the century. That's because if it succeeds in its mission to revitalize America's defense-industrial base, it could help deter the next great power conflict. This is not only critical to US national interest, but to the welfare of the global economy.

These realizations led us down a rabbit hole of research on everything from geopolitics to the history of defense procurement. What began as an in-depth long-form piece of online writing grew, over the course of several years, into what became ***The Anduril Thesis:*** a 300-page book that, as far as we’re aware, is the most comprehensive single piece of research on the company ever written.

Read The Anduril Thesis

A deep dive into the company redefining defense technology

Order Here

Anduril exists within a construct that the majority of human history reinforces: there have always been people willing to use violence to pursue their interests. Armed conflict between groups is as old as history itself. Despite thousands of years of reaffirming evidence, there have been incidental pockets over time where different groups have tried to present this idea as outdated and no longer true.

In 1909, an English economist and politician named Norman Angell wrote a book called The Great Illusion, where he laid out the case for why war in Europe had become impossible and that spending money on building militaries that could deter conflicts was a waste since those resources would be better spent on building a utopia. The book was the number one bestseller at the time! Five years later, World War I started.

The end of the Cold War gave birth to a multi-decade window which many viewed, yet again, as the beginning of the end for armed conflict. During the 1990s, for the first time, one country (the United States) and one system of government (liberal democracy) appeared to have no rivals. A popular essay, reminiscent of Angell’s “Great Illusion,” referred to this as “the end of history” in 1989.

But with the rise of China and the revanchism of the Russian Federation, that period of unipolarity has proven to be short-lived. The end of history was a mirage. The US is once again entering into a period of competition with adversaries who have diametrically opposed values and ideologies. Western values are not unique to the US, but they are also not universal. The concepts of human rights, liberal democracy, strong checks and balances, and individual liberty are not shared universally – and are actively repudiated by its chief adversaries.

The US has squandered much of the technological and industrial lead that made the US military such a formidable deterrent in the Cold War. It continues to rely on outdated exquisite platforms like tanks, fighter jets, and aircraft carriers to project power, making it ill-prepared for modern conflict. Meanwhile, its industrial capacity has been hollowed out, and its defense industry has descended into a morass of perverse incentives, regulatory capture, and special interests.

That’s where Anduril comes in. Anduril is attempting to transform the model of the American defense industry for the first time in almost 100 years – not just by creating and selling next-generation weapon systems, but by fundamentally changing the way the US military buys and fields technology and, as the company put it in its mission statement, “rebooting the arsenal of democracy.”

If Anduril is successful in this mission, it has the potential to become one of the most impactful companies of the 21st Century. There are two reasons for this. First is the sheer size of the market it’s going after. In the US alone, the Department of Defense represents a $1 trillion agency that holds $4.1 trillion in assets, employs 3.4 million service members and civilians, and operates on 4.8K sites in more than 160 countries. Globally, allies of the US in NATO spent an additional $400 billion on military expenditures.

Secondly, and more importantly, is the fact that global stability (and survival) may very well depend on the US’ ability to maintain credible deterrence against its great power adversaries. A great power war in an age of nuclear weapons and AI would be, to put it mildly, catastrophic. Yet with each year that the United States’ defense industry continues to stagnate, such a catastrophe becomes more likely. If Anduril is able to successfully kick-start innovation in American defense, it may reverse this trend and restore the US’ ability to maintain credible deterrence and, in so doing, prevent the next major war.

The level of depth and complexity behind this reality is what inspired us to write The Anduril Thesis; both the weaknesses of the industry that led to the need for a company like Anduril in the first place, and the way Anduril has been forced to counter-position itself against the status quo. Anduril was also shaped by a rapidly changing conflict landscape, including the return of great power conflicts and extended tactical ground warfare.

Read The Anduril Thesis

A deep dive into the company redefining defense technology

Order Here

In order to properly explain Anduril, it's necessary for us to cover both the rich history that shaped the military reality the company would be born into, and the rapidly evolving landscape of modern warfare. Given the sprawling nature of these topics, we’ve organized the contents of The Anduril Thesis into six parts:

1. The Evolution of The Defense Industry: From the use of radar during World War II, to the golden age of American military industrialism throughout the Cold War, to the cost controls and consolidation of the post-Cold War era, and the supposed “end of history.”

2. Modern Conflict & The Defense Industry Today: The American military is built on conflicts of yesteryear. We’ll unpack how large exquisite systems that don’t talk to each other are being invalidated by networks of drones, sensors, and systems that are often autonomous.

3. The Reintroduction of Urgency: Next, we’ll touch on what changed. The US, as the sole remaining superpower, became notoriously complacent about geopolitics after the end of the Cold War. It is now being forced to awaken from its stupor by the resurgence of China and other foreign adversaries.

4. The Anduril Thesis: The story of Anduril was shaped by this hundred-year backdrop of change in the defense industry, modern conflict, and geopolitics. Anduril's thesis is that the US needs to build a network of autonomous drones, sensors, weapons, and systems to be effective on the modern battlefield, and that the US cannot afford to wait until after the next war breaks out to modernize and scale its defense systems.

5. A Company Breakdown of Anduril: Within that context, we’ll unpack each of Anduril’s products, and how the company operates against its competition.

6. Anduril’s Future: Finally, we’ll touch on what lies ahead. The tailwinds and risks that are facing both Anduril as a company, and the US as a military power.

Over that breadth of context, we leveraged over 500 individual sources; that included dozens of interviews with Anduril’s founders. Across that library of commentary, we noted the word “hope” appearing in the sentiment of the Anduril team around 45 different times. Hope is an integral part of the story that Anduril is telling the world about itself and about the US’ military capabilities. Despite the team’s acknowledgment of the defense industry’s failure to imagine, Anduril was built out of a hope for a better path forward.

Anduril was very much not built as a disruptive force to throw out the entire legacy system and build a new defense apparatus from scratch. Anduril was built deliberately to counterposition itself against the status quo of hubris and stasis that prevail in the defense industry. This is evident from the experience of the founding team to the fundamental guideposts of the product philosophy.

Much of the thesis behind Anduril stems, poetically enough, from the Tolkien mythology the founders chose to honor by naming their company Anduril, which means “flame of the West”. Anduril’s mandate is not just to defend a specific nation, but a set of ideals and values. Liberal democracy with checks and balances. A fundamental protective view of human rights. The belief in strong rule of law. Despite any flaws that the US and its allies may have, Anduril believes that they are worth defending. As Faramir, the character Tolkien believed was most like himself, said in The Two Towers:

*Contrary is an investor in Anduril through one or more affiliates