Could Anduril’s AI-driven drones, subs help Taiwan counter China?

China’s potential launch of a military campaign to take control of Taiwan is driving diplomatic matters in the Pacific. So the self-governing island is upping its military readiness game with a new high-tech defense partnership.

Taiwan’s leading defensive research organization, the National Chung-Shan Institute of Science and Technology, recently signed a memorandum of understanding with U.S. defense tech company Anduril Industries. The deal signals a major step toward building out Taiwan’s artificial intelligence-driven command and control infrastructure and expanding its fleet of unmanned systems.

Anduril’s founder, Palmer Luckey, was on the ground in Taiwan on Monday, Aug. 4, speaking to students about the role of AI and next-generation technologies in national defense. His message underscored Taiwan’s growing emphasis on advanced, networked warfare systems to counter what many believe is an inevitable military threat from China.

Next-gen tech

At the heart of the new agreement is Anduril’s “Lattice” software — an open-source command and control (C2) platform designed to integrate data from across the battlefield into one real-time, user-friendly interface. Lattice is the backbone of the company’s Next Generation Command and Control (NGC2) system, which Anduril recently won a $99.6 million contract from the U.S. Army to implement within the service.

Taiwan’s adoption of this system is a direct move to modernize its military’s decision-making capabilities. By fusing sensor data from drones, radar systems and other platforms into a unified picture, Lattice promises to give battlefield commanders the speed and clarity needed to outmaneuver potential adversaries.

A drone-first strategy

Taiwan’s pivot to unmanned platforms is already well underway. In July, the country’s Ministry of National Defense announced plans to produce nearly 50,000 drones domestically within two years. That effort is bolstered by overseas buys, including 730 Switchblade 300s from AeroVironment and nearly 300 Altius 600Ms from Anduril. Both are tube-launched, loitering munitions — small, nimble drones designed to circle above the battlefield and strike high-value targets.

The Altius 600Ms are larger than the backpack-sized Switchblades and are designed for launch from vehicles. The drones reflect Taiwan’s commitment to building an asymmetric warfare strategy that can blunt the impact of China’s much larger and better-resourced military.

Though the new memorandum does not detail which specific unmanned systems Anduril and Taiwan will codevelop, the potential scope is vast. One possibility: Anduril’s Fury combat drone. It’s a jet-powered platform designed as a “loyal wingman” for piloted aircraft. Unlike the U.S., Taiwan does not operate fifth-generation fighters like the F-22 or F-35. That opens the door for Taiwan to consider fielding Fury-class drones as front-line combat assets, rather than just as support vehicles.

Maritime systems are also on the table. Anduril’s Dive-XL, an autonomous submersible already in service with Australia’s Ghost Shark program, could be another area of cooperation. The Dive-XL can be equipped with the Copperhead, a torpedo-like underwater drone capable of delivering explosive payloads.

A strategic fit

The Taiwan-Anduril partnership isn’t just about buying hardware. It’s about adapting a new defense innovation model. Specifically, Taiwan may attempt to replicate America’s “Other Transaction Agreement” (OTA) approach — an agile, flexible contracting method used to fast-track advanced technologies into the hands of warfighters.

U.S. agencies, including the Defense Innovation Unit, use OTAs to bypass traditional procurement bottlenecks and speed up collaboration with firms like Anduril, Palantir and OpenAI. The goal is rapid iteration, modular system design and tech-driven decision advantage. Those factors are all a perfect fit for Taiwan’s strategy of combining speed and information superiority to deter aggression.

With thousands of drones in the pipeline, AI-powered battle management tools coming online and new partnerships shaping the future of warfare, Taiwan is betting big on innovation to keep Beijing at bay.