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U.S. Army Memo Flags “Very High Risk” Security Flaws in Anduril–Palantir Battlefield Network

The U.S. Army’s next-generation battlefield communications system, developed by Anduril Industries and Palantir Technologies, has been labeled “very high risk” due to critical cybersecurity vulnerabilities, according to an internal Army memo reviewed by Reuters.

The September 5 memo—written by Gabriele Chiulli, the Army’s Chief Technology Officer and authorizing official for the NGC2 (Next Generation Command and Control) prototype—warned that the system’s “current security posture” could allow adversaries to gain “persistent undetectable access” to sensitive battlefield data.

“We cannot control who sees what, we cannot see what users are doing, and we cannot verify that the software itself is secure,” the memo stated, citing fundamental issues in user access controls and data monitoring.

The NGC2 platform, designed to connect soldiers, sensors, vehicles, and commanders through real-time data sharing, is central to the Army’s modernization drive. Developed in partnership with Microsoft and smaller defense contractors, the project aims to replace legacy communication systems with a unified, AI-enhanced digital backbone.

However, the internal review found that the platform allowed all users to access all applications and data, regardless of clearance level or mission relevance, and lacked logging tools to track user activity. One third-party application integrated into the system was found to contain 25 high-severity vulnerabilities, while three others each had more than 200 issues requiring review.

The memo’s findings—first reported by Breaking Defense—have amplified criticism that Silicon Valley’s “move fast and break things” ethos may be ill-suited for military-grade systems requiring airtight security.

Anduril, founded by Palmer Luckey, dismissed the concerns as outdated. “The report reflects an old snapshot, not the current state of the program,” the company said. Palantir responded that “no vulnerabilities were found in the Palantir platform.”

Army Chief Information Officer Leonel Garciga, Chiulli’s supervisor, acknowledged the seriousness of the findings but said most issues were fixed within “weeks or even days.” He added that only one remaining application still required security improvements and that Palantir’s Federal Cloud Service could soon receive “continuous authority to operate”, allowing faster updates.

The NGC2 system was awarded a $100 million prototype contract earlier this year, as part of a broader Pentagon effort to integrate AI, autonomous systems, and real-time battlefield intelligence into defense operations. Palantir also holds a $480 million contract for Project Maven, the Pentagon’s AI surveillance initiative, while Anduril recently secured $159 million to develop advanced mixed-reality and night vision systems.

Despite assurances from developers, the memo raises profound questions about data control, cybersecurity, and insider access—all crucial concerns as the U.S. military increasingly relies on software-driven decision-making in combat.

On Wall Street, the revelations hit Palantir’s stock, which fell 7.5% on Friday. Anduril, still privately held, has said it plans to go public.

The incident exposes the tension at the heart of the Pentagon’s modernization push: how to harness Silicon Valley’s speed and innovation without compromising the security of national defense networks.

Palmer Luckey, Backed by Palantir’s Joe Lonsdale, Launching Crypto-Focused Bank Erebor

Tech billionaire Joe Lonsdale, co-founder of Palantir, announced his investment in Erebor, a new U.S. digital-only bank founded by Palmer Luckey, co-founder of defense tech company Anduril. Erebor aims to fill the gap left by Silicon Valley Bank’s collapse in March 2023, which severely impacted startups and venture capital firms dependent on SVB’s services.

Erebor has applied for a national bank charter and plans to serve tech companies across sectors like artificial intelligence, cryptocurrency, defense, and manufacturing, as well as individuals connected to these industries. The bank’s name, drawn from Tolkien’s The Lord of the Rings, references the Lonely Mountain fortress known for reclaiming treasure.

Headquartered in Columbus, Ohio, with a secondary office in New York, Erebor intends to operate with a digital-first approach. Leadership includes Owen Rapaport and Jacob Hirshman, a former advisor to stablecoin company Circle.

The bank plans to hold stablecoins—a crypto asset class pegged to fiat currencies—to facilitate faster cross-border payments and digital financial services. Erebor aims to become “the most regulated entity conducting and facilitating stablecoin transactions,” signaling its focus on compliance in the evolving crypto banking space.

Besides Lonsdale, Erebor’s backers reportedly include Peter Thiel’s Founders Fund. Neither Luckey nor Lonsdale are expected to be involved in daily operations.

Anduril Industries Valued at $30.5 Billion After $2.5 Billion Fundraising Round

Defense tech startup Anduril Industries has more than doubled its valuation to $30.5 billion in a fresh funding round where it raised $2.5 billion, the company announced Thursday. This latest capital injection follows last year’s raise of $1.5 billion, which valued the company at $14 billion.

The new funding round was led by Peter Thiel’s Founders Fund, which contributed $1 billion. Other existing investors also increased their stakes as part of the Series G financing.

Founded in 2017 by Palmer Luckey, Anduril specializes in autonomous defense technologies such as sensors and drones. The company has risen rapidly amid growing demand for affordable, automated defense solutions.

Anduril recently formed a strategic partnership with Palantir Technologies to create a consortium aiming to jointly pursue government contracts, aligned with Pentagon efforts to reduce defense spending.

Founders Fund has been a key backer since Anduril’s inception, with co-founder Trae Stephens also serving as a partner at the investment firm.