Oculus founder Palmer Luckey: Silicon Valley firms should do more defense business

Krystal Hu
Reporter

Palmer Luckey, the 26-year-old entrepreneur best known for founding Oculus, the AR company he sold to Facebook for $2 billion, is calling for more tech companies and investors to get into the defense space.

After getting fired by Facebook in 2017, Luckey started his own defense company, Anduril Industries, and has been “very proud of “ his work for the military, including making autonomous drones and autonomous sensors for the U.S. Department of Defense and NATO.

Military contracting work is a space big tech companies have shied away from. Google pulled out from a Department of Defense program known as Project Maven after protest from employees. Recently, some Amazon shareholders scrutinized the internet giant for selling facial recognition to the government.

“Those people refuse to work on national security problems, partly for ideological reasons, partly because it makes it harder for them to play in the consumer space, partly because they're afraid of a tech media that is by and large, anti-military,” Luckey said at the Collision Conference in Toronto.

Luckey said it’s a void that needs to be filled. Traditional defense companies Northrop Grumman and Lockheed Martin are known for making fighter jets, submarines and aircraft carriers, but they are not particularly known for cutting-edge artificial intelligence or vision. Anduril, the two-year-old startup he founded, aims to provide a platform so top talent could do military work “unapologetically”. Anduril has reportedly won contracts from Project Maven after Google dropped out.

Luckey, who is also an investor in other defense companies, said it’s difficult for them to attract venture capital money.

“If you're an investor doing pattern matching, it's reasonable to say, well, there are literally only two unicorns in the whole defense space in 30 years,” he said, referring to Palantir and SpaceX, which are funded by Peter Thiel and Elon Musk, respectively. “Why would I invest in you knowing that you're probably going to be one of the many to hit the cutting floor?

Luckey said he was motivated to enter the industry by Russia and China — rising strategic rivals of Washington.

“I knew that we needed more companies with smart people and lots of investment working to make sure that Russia and China don't dictate the future of warfare, so they don't dictate the norms behind how artificial intelligence is used, behind how cyber warfare tools are used,” Luckey said. “And I felt like I had a responsibility to do something with the money that I had made that would make a difference. And this felt like a place where not enough people were doing their duty.”

Palmer Luckey, Oculus VR, and Deirdre Bosa, CNBC, on Centre Stage during day two of Collision 2019 at Enercare Center in Toronto, Canada, on 22 May 2019. (Photo By David Fitzgerald/Sportsfile via Getty)

Keeping politics to himself

As a self-identified libertarian, Luckey said he would not work on urban surveillance and acknowledges tech innovations for warfare could cause unintended consequences. But he said his project can help the U.S. government and military get more information and make better decisions, so fewer civilians would be hurt.

His military work isn’t the only thing that makes Luckey a controversial Silicon Valley entrepreneur. In 2016, he was criticized for donating $10,000 to a pro-Trump organization.

“I don't want to sound like too much of a rich person, but $10,000 just isn't that much to me. And you know, I think that I didn't realize just how provocative that could be, and how upset people can get around this stuff,” Luckey recalled.

He said he doesn’t regret the donation, but he has learned to be more low-key on some issues — “just keep your politics to yourself, and find somebody else to be your champion.”

Krystal covers tech and China for Yahoo Finance. Write to Krystal via krystalh@yahoofinance.com or follow her on Twitter.