'It's good to scare people sometimes': Anduril founder Palmer Luckey says he 'broadly' backs Trump's new defense regulations

• Anduril founder Palmer Luckey has voiced support for the Trump administration's new regulations on the defense industry.
• An executive order signed on Wednesday targeted defense contractors for underperforming.
• "It's good to scare people sometimes," Luckey said in an interview with Bloomberg.

President Donald Trump's new defense regulations are sending ripples through the industry, and that's a good thing, according to Palmer Luckey.

"It's good to scare people sometimes," Luckey, the founder and CEO of defense technology startup Anduril, said in an interview with Bloomberg TV.

"President Trump is saying that he wants to see defence companies building new plants, building new factories, delivering on time, and then maintaining systems cost-effectively," Luckey said in an appearance on "The Close" on Wednesday.

"I'd say I'm broadly aligned," the Anduril founder said, adding that "trying to do more of that is why I started Anduril years ago."

On Wednesday, Trump criticized major defense contractors for issuing large dividends to shareholders, doing stock buybacks, and offering "exorbitant" pay packages while underperforming in a post on Truth Social.

The president backed his rhetoric with action, signing an executive order that would ban defense contractors from stock buybacks and dividends "until such time as they are able to produce a superior product, on time and on budget."

The order caps defense executive salaries at $5 million, tying their annual compensation to on-time delivery, increased production, and operational improvements.

"These measures do apply in equal measure to me. I now cannot pay dividends. I now cannot do stock buybacks if I'm not investing in new plants," Luckey told Bloomberg.

The Anduril founder told Bloomberg he pays himself a salary of $100,000 a year, in addition to owning "a lot" of Anduril.

Luckey's startup, which makes autonomous weapons, is valued at $30.5 billion as of June 2025 and is considering an IPO. The company's mission is to modernize the US military through technology, including surveillance devices, air vehicles, and autonomous weapons.

As the United States hustles to modernize warfare, Anduril has emerged as the face of the defense tech boom and proved it can compete for contracts with legacy defense contractors like Lockheed Martin and Boeing.

"If these companies were doing really well, and if they were living up to their end of the bargain, I don't think you would see any action from Trump or others on this. It's really a reflection of how many problems we have with our defence industrial base," Luckey told Bloomberg.

Without specifying, he added that he thought some of Trump's proposals "might be bad moves" for the defense base, but that "in concept," everything should be on the table.