Anduril’s $1 Billion Long Beach Gamble: Why Palmer Luckey’s Drone Empire Is Doubling Down on Southern California

When Anduril Industries announced its $900 million Arsenal-1 factory in Ohio last January, the message was clear: the company was moving production to the heartland. So why is it now committing another billion dollars to a 1.1 million-square-foot campus in Long Beach, California, just 40 miles from its Costa Mesa headquarters?

The answer lies in what Arsenal-1 can’t provide: proximity to the aerospace talent cluster that Anduril needs to design the next generation of autonomous systems, not just manufacture them.

• The Development: Anduril announced Thursday it will build a 1.1 million-square-foot research and development campus at Douglas Park in Long Beach, with construction starting this year and the first building expected by late 2027.
• The Investment: The Long Beach Chamber of Commerce values the project at more than $1 billion, with construction costs alone running into the hundreds of millions. The campus will bring 5,500 new jobs, including software developers, flight-test teams, and research specialists.
• The Source: Long Beach Post first reported the expansion Thursday.

The Long Beach campus fills a gap Arsenal-1 cannot

Anduril’s new Long Beach facility will house six buildings totaling 750,000 square feet of office space and another 435,000 square feet dedicated to research and development. The company will lease land at Douglas Park from Sare Regis Group, the same developer that built Rocket Lab’s nearby headquarters. Anduril’s corporate headquarters will remain in Costa Mesa.

The location sits within what local boosters call “Space Beach,” a cluster of aerospace startups that have grown around Long Beach Airport. That ecosystem includes Rocket Lab, Virgin Orbit’s former operations, and dozens of smaller suppliers. Anduril cited this existing talent pool, combined with the region’s defense manufacturing history, as the primary draw.

“That combination of history, talent, and industrial infrastructure makes Long Beach a natural place for Anduril to continue scaling its operations,” the company said in its announcement.

The campus also sits 90 minutes from Anduril’s flight test site in Capistrano, a logistical advantage the Ohio facility cannot match. For a company that went from clean-sheet design to first flight of its YFQ-44A autonomous fighter drone in just 556 days, having engineers and test pilots within driving distance of each other matters.

Anduril’s manufacturing footprint now spans both coasts

The Long Beach announcement comes as Anduril races to build the production capacity the Pentagon is demanding. The company’s Arsenal-1 facility in Columbus, Ohio is a 5-million-square-foot manufacturing complex designed to produce tens of thousands of autonomous systems annually. That $900 million investment, which broke ground last year with initial production targeted for mid-2026, will handle volume manufacturing of systems like the Fury drone and Roadrunner interceptor.

Long Beach serves a different purpose. While Arsenal-1 is optimized for mass production, the new California campus focuses on the R&D and engineering work that feeds those assembly lines. The 5,500 jobs Anduril promises are weighted toward software developers and research specialists, not production workers.

This two-campus strategy mirrors how the traditional defense primes have long operated: engineering centers on the coasts, manufacturing in lower-cost regions. The difference is speed. Anduril is building both facilities simultaneously rather than over decades.

Recent contracts show why Anduril needs this capacity

Anduril’s expansion comes amid a surge in Pentagon orders. Earlier this month, the company secured a $23.9 million contract to deliver more than 600 Bolt-M weaponized drones to the U.S. Marine Corps under the Organic Precision Fires-Light program. Deliveries run from February 2026 through April 2027, with Marines fielding the systems operationally this summer.

That contract follows an initial batch of 250 Bolt-M systems the Marines tested over 13 months. Anduril has ramped production to over 100 units per month, with plans to hit 175 monthly by year’s end.

The company has also positioned itself as a key player in Pentagon AI initiatives through its partnership with OpenAI for counter-drone systems and a 2024 consortium agreement with Palantir Technologies to jointly bid on government contracts. That Palantir deal integrates Anduril’s Lattice autonomous software with Palantir’s AI Platform, creating a combined offering aimed at displacing traditional defense contractors.

Palmer Luckey’s trajectory from garage tinkerer to defense mogul

Anduril’s co-founder Palmer Luckey was a Cal State Long Beach student when he invented the Oculus Rift virtual reality headset in his parents’ garage. He sold Oculus to Facebook for $2 billion in 2014, left the company in 2017 amid controversy, and founded Anduril that same year with veterans from Palantir.

The company’s $1.5 billion funding round in August 2024 valued it at $14 billion. By late 2025, that valuation had more than doubled to $30.5 billion, fueled by the Pentagon’s push for autonomous systems to counter China. Anduril ended 2025 with 7,000 employees.

The Long Beach expansion brings Luckey’s defense empire back to where his tech career started. Whether that’s sentimentality or strategy, the result is the same: Anduril is betting big on Southern California’s aerospace ecosystem even as it builds manufacturing capacity elsewhere.

Long Beach sees Anduril as validation of its aerospace revival

Long Beach Mayor Rex Richardson characterized Anduril’s expansion as a “major vote of confidence” in the city’s embrace of advanced manufacturing and aerospace companies. The announcement came weeks after swimwear brand Pentland Brands (owner of Speedo) said it would relocate its North American headquarters from Cypress to Long Beach.

Richardson has shaped his economic agenda around job creation, promising 4,000 new openings across the city by 2028. Anduril’s 5,500 jobs, plus thousands of temporary construction positions, blow past that target from a single project.

The mayor’s office sees Anduril’s arrival as proof that Southern California can compete for defense tech investment against states like Ohio and Texas that have aggressively courted the industry. Whether that holds depends on whether the state’s regulatory environment and cost of living drive away the talent Anduril is counting on.

DroneXL’s Take

We’ve tracked Anduril’s rise from Palmer Luckey’s post-Oculus pivot to its current position as the Pentagon’s favored autonomous systems contractor. This Long Beach expansion tells us something the Ohio announcement did not: Anduril sees itself as more than a manufacturer.

The company’s challenges have been real. Our November coverage of Altius drones crashing during Air Force tests and Ghost drones failing against Russian jamming in Ukraine showed the gap between marketing claims and battlefield performance. Those problems require engineering solutions, not just production scale.

Long Beach gives Anduril a West Coast engineering center close to its test ranges and the aerospace talent it needs to iterate quickly. Arsenal-1 gives it manufacturing muscle. Combined, the two facilities position Anduril to capture the Army’s planned purchase of 1 million drones over the next two to three years.

The question is whether the company can execute. Anduril has committed roughly $2 billion to facility buildouts in under 18 months. That’s an aggressive capital deployment even by Silicon Valley standards. If production stumbles or contracts get delayed, those buildings become expensive problems.

Expect Anduril to announce additional partnerships with local colleges and the Long Beach school district within 90 days. The company mentioned workforce development programs in its release. That’s both community relations and a pipeline play. Anduril needs thousands of trained workers, and it’s cheaper to build them locally than import them.

Editorial Note: AI tools were used to assist with research and archive retrieval for this article. All reporting, analysis, and editorial perspectives are by Haye Kesteloo.