Anduril CEO warns against IPO in hype cycle as valuations hit $61B

Anduril CEO Brian Schimpf said the defense-tech company is in no rush to go public, warning that a hype-cycle IPO would destroy long-term returns.

Anduril Industries Chief Executive Officer Brian Schimpf said the defense-tech company is in no rush to go public, warning that an IPO during the current hype cycle would backfire on investors as the sector's valuations climb to "crazy high" levels.

"We define a successful IPO as our investors got a good return three years from actually going out. A bad time to do that is in the middle of a hype cycle," Schimpf told CNBC's Julia Boorstin at the Allen & Co. Sun Valley Conference on Thursday.

Anduril, which makes drones and AI-powered weapons, doubled its valuation to $61 billion in a $5 billion funding round in May, making it one of the most richly valued private technology companies. The broader US defense budget is on track to reach $1.5 trillion under President Donald Trump's military reindustrialization push, fueling demand for defense-tech products and services.

Schimpf's remarks come as prediction markets assign just a 9.5% probability to an Anduril IPO before 2027, according to Polymarket data, even as rival AI companies Anthropic and OpenAI have confidentially filed to go public. The defense-tech IPO pipeline faces a reassessment if the CEO of its most valuable private player is unwilling to test public-market appetite.

"We're seeing crazy high valuations on the expectations of future growth and all of those different things," Schimpf said. "I'm not sure that the market is particularly rational on the pricing right now."

The CEO's skepticism extends beyond his own company. He described some peers as "dangerously leading into overvalued territory in a way that could backfire." The warning carries weight given the trajectory of recent tech IPOs: shares of Elon Musk's SpaceX, which listed in June, have lost about a quarter of their value since their opening day, trading just above the $150 offer price.

Anduril has the financial flexibility to wait. The $5 billion raised in May, combined with long-term government contracts, means the company faces no pressure to tap public markets for capital. Founder Palmer Luckey has said he "definitely" aims to take the company public but has not set a target date.

The broader IPO market remains tepid despite pockets of activity. Stripe, valued at $159 billion in a February tender offer, carries just 7% odds of a 2026 listing on Polymarket. Discord sits near 44%, though that has dropped 19 percentage points in one month. Prediction market data shows investors are skeptical that the biggest private names will test public-market demand this year.

For Anduril, the calculus is straightforward. The company operates in a sector where government spending is hitting all-time highs, and its technology — autonomous drones, AI-powered surveillance, and missile systems — is central to the Pentagon's modernization strategy. Waiting for a calmer market window, Schimpf argued, is the only way to ensure that the investors who backed the company's growth see the returns they were promised.

The last time a major defense-tech company attempted a public listing in a frothy market was in 2021, when several special-purpose acquisition companies brought defense startups to market at valuations that later collapsed. Anduril's decision to wait, if it holds, could set the tempo for the entire sector, forcing rivals to either follow suit or test public-market demand on their own.

This article is for informational purposes only and does not constitute investment advice.