Away From Silicon Valley, the Military Is the Ideal Customer

In the drone business, however, he is not alone. A host of start-ups are building similar technology for the military. Shield AI, founded by a former member of the Navy SEALs, is in San Diego, not far from Anduril. Teal Drones, whose founder emerged from Mr. Thiel’s internship program, is in Salt Lake City.

The Defense Department is hungry for small drones that will track objects and fly into buildings, combat zones and other dangerous areas with little help from remote pilots. Self-piloting drones will become a key part of fighting and other military activities in the years to come, said Mike Brown, director of the Defense Innovation Unit, a Pentagon organization that aims to facilitate cooperation between the military and the tech industry.

“We need to make sure we have friendly sources to buy from,” he said.

Though some of the start-ups say their drones have already been used by the military, the technology is still in the early stages of deployment. But it raises concerns that artificial intelligence systems, used in tandem with weapons, could erode the role of human decision-making in combat.

Asked if their drone technology could be used alongside weapons, some start-ups say it could. This, they argue, will be an essential part of U.S. efforts to maintain military parity with other countries. “Most people understand that this is part of what the military does,” Mr. Luckey said.

Shield AI is fashioning autonomous drones for intelligence, reconnaissance and surveillance in combat, and it says U.S. Special Operations Command has already used them in the field (which the Defense Department confirmed). A Shield AI co-founder, Ryan Tseng, said this kind of technology, like Anduril’s, could be used with weapons.

But Skydio, a drone company in Silicon Valley founded by former Google employees, is more cautious. “We are not putting weapons on the drone,” the chief executive, Adam Bry, said. “Weaponization is the one thing where you want less automation, not more.”