The Navy was attempting to launch and recover more than 30 drone boats from a combat ship off the coast of California in May when more than a dozen of the uncrewed vessels failed to carry out their missions. The boats had rejected their inputs and automatically idled as a fail-safe, making them “dead” in the water. The botched experiment quickly became a potential hazard to other vessels in the exercise. Military personnel scrambled overnight to clean up the mess, towing the boats to shore until 9 a.m. the next day. The drone boats were relying on autonomy software called Lattice, made by California-based Anduril Industries. The Navy said the exercise was handled safely, but the incident alarmed Navy personnel, who said in a routine follow-up report that company representatives had misguided the military. In comments that were unusual for such a report, which was viewed by The Wall Street Journal, four sailors warned of “continuous operational security violations, safety violations, and contracting performer misguidances (Anduril Industries).” If the software configuration wasn’t immediately corrected and vetted, they wrote, there would be “extreme risk to force and potential for loss of life.”

Since its founding in 2017, Anduril Industries has become one of the hottest companies in a crowded field of defense-tech startups, promising to deliver hardware and software that will usher in a new era of autonomous warfare and equip the U.S. military with the speed that only a startup can offer. The privately held company was valued at more than $30 billion in its last funding round and has scored an impressive number of military contracts to build prototypes of everything from unmanned jet fighters to mixed-reality headsets to battlefield-management systems. The company’s founder, tech billionaire Palmer Luckey, has made his convictions clear. “We spend our own money building defense products that work, rather than asking taxpayers to foot the bill. The result is that we move much faster and at lower cost than most traditional [large defense companies],” Luckey said in a TED Talk published in April. “Unlike traditional contractors, we build, test and deploy our products in months, not years.”

move fast and break your own things!

The startup’s fast-moving approach comes with its share of setbacks—during closed military exercises, at private drone ranges and even on the battlefield in Ukraine. In California, a mechanical issue damaged the engine in Anduril’s unmanned jet fighter Fury in a ground test over the summer ahead of a critical first flight for the Air Force. In August, a test involving its Anvil counterdrone system caused a 22-acre fire in Oregon. And in the exercises with unmanned boats over the summer off the coast of California, Anduril’s Lattice software struggled to command and control vessels. Anduril’s only real battlefield experience—in Ukraine—has been marred by problems as well, including vulnerability to enemy jamming, according to former employees and others familiar with the systems in Ukraine. Some front-line soldiers of Ukraine’s SBU security service, for instance, found that their Altius loitering drones crashed and failed to hit their targets. The drones were so problematic that they stopped using them in 2024 and haven’t fielded them since, according to people familiar with the matter.

“The challenge will be, can they deliver? They have minimum viable products in a bunch of different areas,” said Bryan Clark, a former Navy strategist who is now at the Hudson Institute. After the Journal inquired about the incidents, the company said that its methods can lead to testing failures. “We recognize that our highly iterative model of technology development—moving fast, testing constantly, failing often, refining our work, and doing it all over again—can make the job of our critics easier,” the company said in a statement. “That is a risk we accept. We do fail … a lot.” Representatives from Anduril and those who defend the company say that it is encountering the same sorts of issues that occur in any weapons development program and that the company’s roster of engineers is making impressive strides. They say that none of the incidents suggest fundamental problems with its products and that the point of testing is to challenge the software, find the bugs and fix them. The company said it has maintained a “near continuous” presence in Ukraine to update its software and weapons, and that its drones have proven effective against a large number of Russian assets.

Software setbacks

Anduril’s software platform, called Lattice, aims to connect various weapons systems to enable a single servicemember to control a range of drones. On its website, the company says Lattice can orchestrate “machine-to-machine tasks at scales and speeds beyond human capacity.” The platform “lets us deploy millions of weapons without risking millions of lives. It also allows us to make updates to those weapons at the speed of code,” Luckey said in April. But in some Navy exercises, Lattice has fallen far short of servicemembers’ expectations, according to documents, defense officials and people familiar with the matter. In some cases, operators have had to manually send commands to boats or control them remotely with a device due to the software’s shortfalls, the people said. During the May exercise with drone boats in California, unmanned boats made by BlackSea Technologies were relying on Lattice when they began to idle in the water. The boats were rejecting commands and were unable to reliably maneuver away from other traffic, prompting a safety stand-down, according to people familiar with the exercise. Anduril said the failure wasn’t Lattice’s fault, but rather a bug in the software on the boats, made by BlackSea Technologies. Anduril said it identified the root cause, fixed the problem and returned to the exercise a few days later to successfully complete autonomous mission plans. BlackSea Technologies referred questions about the exercise to the Navy since its boat, the Global Autonomous Reconnaissance Craft, is an official Navy program. BlackSea also said that its boat is designed to work with a range of software and that it has successfully operated with a half-dozen other software stacks. A Navy spokesperson didn’t comment on the companies involved, but said the exercise had multiple mitigation measures in place and didn’t create risk to force or potential for loss of life. He said the boats went “dead in the water” as an automatic fail-safe, which prevented them from causing damage or injury. Three people familiar with the exercise said the problem was Anduril’s because it was the company’s responsibility to implement its software correctly. The authors of the preliminary report, who said Anduril had misguided the military, couldn’t be reached to comment.

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Trial by fire

During an August drone intercept test in Oregon, Anduril’s Anvil counterdrone system crashed and caused a 22-acre fire near the Pendleton Airport, according to an incident report obtained by the Journal through a Freedom of Information Act request. The report said Anduril had tried to put out the flames with its own vehicle, but three trucks from the local fire department had to be brought in to extinguish the fire. Anduril said it has since developed a mitigation plan for impact and intercept testing at the range to mitigate or avoid any fires in the future. Photographs show a scorched and mangled drone, and satellite images reveal the extent of the damage to the terrain. Major defense companies that have been testing for decades typically understand their boundaries and have adequate mitigation measures on site, analysts say. “Anduril is less prepared institutionally to do this, so they are finding their way around,” said Jonathan Wong, a senior policy researcher at Rand, referring to the fire. The drone range declined to comment. Anduril said that the test was conducted in accordance with all range safety procedures. It said the fire was a possible known outcome and not a system failure. “We test five days a week nearly 52 weeks out of the year at several of our test sites across the US,” the company said. “We expect things like this to occur once in a while due to the volume of tests.”