Drones, missiles, and warships were, for a long time, deemed uninvestable in Silicon Valley—or, at minimum, contentious.
Consider 2018: Googlers were storming out over their company’s involvement in the AI military initiative Project Maven, and Anduril was the anomaly, a multi-million defense-focused startup soon to be headlined as “the most controversial startup” in tech. VCs touched defense rarely, if at all.
Today, they can’t get enough. Anduril, now valued at $61 billion, is joined by a growing class of “neo-primes,” from autonomous shipbuilder Saronic, last valued at $9.25 billion, to drone maker Shield AI, at $12.7 billion. Defense has exploded into a consensus growth area among VCs, seen as ripe for AI-fueled innovation. The numbers bear it out: in the first quarter of 2026, VCs deployed a record $19.8 billion into defense tech across 262 deals, according to PitchBook. (For comparison: That number in Q1 2024 was $5.7 billion, and in Q1 2025 was about $17 billion.)
The vibe shift is sending valuations into the stratosphere. Early-stage defense startups are raising millions and fetching multiples from 17 times to 50 times revenue (sometimes even higher).
With the market running so hot, the inevitable question that emerges: Are we in a bubble? At Fortune’s Brainstorm Tech conference in June, Anduril CEO Brian Schimpf answered with a nuanced but decisive “Yes.”
