A defense technology start-up backed by Silicon Valley billionaire Peter Thiel announced Wednesday that it is producing a long-range cruise missile designed to be built quickly and cheaply, as a monthslong U.S. war against Iran has burned through weapons stockpiles faster than the defense industrial base can replace them.
The start-up, Covenant, unveiled its heavy-payload missile, called Anthem, describing it as a mass-producible alternative to the exquisite, expensive munitions long favored by the Pentagon’s traditional contractors. The company said the weapon has completed roughly 200 test flights but has not yet been used in combat.
A New Entrant In The Missile Business
Covenant said it has already secured approximately $150 million in orders, with deliveries scheduled to begin in 2027. The company opened a 105,000-square-foot production plant in Dallas on Wednesday to anchor its U.S. manufacturing line, and plans to bring a 110,000-square-foot facility online in Saxony, Germany, later this year, along with a smaller production and research site in northern Israel.
The Dallas facility is targeting production of roughly 1,000 Anthem missiles in its first year of full-rate manufacturing, which is slated to begin in the first quarter of 2027, before scaling toward an eventual capacity of 5,000 units annually.
Inside The Anthem System
Anthem is a ground-launched, heavy-payload cruise missile carrying more than 200 kilograms, or roughly 441 pounds, of payload, and is powered by a solid rocket motor for launch and a heavy-fuel jet engine for sustained cruise flight. Covenant has said the missile is intended to operate alongside established long-range weapons such as RTX’s 1,000-mile-range Tomahawk and Lockheed Martin’s roughly 600-mile Joint Air-to-Surface Standoff Missile-Extended Range, rather than replace them outright.
Michael Kaufman, Covenant’s co-founder and chief executive, said the war effort against Iran had exposed the limits of a defense-industrial base built for smaller, peacetime demand. “The West needs to be prepared for wars against countries such as Russia and China,” Kaufman wrote in a post on X. “The real challenge is not replacing the weapons that have already been consumed. It is building a new arsenal capable of overwhelming scale.”
Kaufman made a similar point in a written statement marking the Dallas plant’s opening, framing Anthem as a hedge against a prolonged, multi-front conflict. “When you look at our adversaries, you see thousands of hardened targets beyond the range of current capabilities,” he said. “Anthem was built to credibly hold those targets at risk in a prolonged conflict. If our stockpiles run thin, so does our deterrence.”
In an interview with Reuters, Kaufman contrasted Anthem’s intended production model with that of the legacy defense primes, saying comparable weapons from the largest contractors are “being built in small quantities at really high prices. And so we set out to change that.”
Abby Denburg, Covenant’s president and chief growth officer, told CNBC that the company sees itself filling a specific hole in the current U.S. arsenal, positioned between inexpensive, short-range drones and costly long-range munitions. “There is a gap in the middle of that for affordable mass and strategic range, and that’s the gap that Anthem was filling,” Denburg said.
A Shortage Forged By War
Covenant’s unveiling comes as the U.S. war in Iran, known as Operation Epic Fury and launched on February 28, 2026, has stretched into its seventh month and placed unusual strain on American munitions stocks. Kaufman noted that the U.S. fired more than 1,000 Tomahawk missiles in just the first five weeks of the conflict, a pace that analysts say vastly outstrips the industrial base’s normal output.
Independent estimates have placed the pre-war U.S. Tomahawk inventory at roughly 3,100 missiles, with cumulative wartime expenditures estimated above 1,000 by some accounts, even as the Navy’s peacetime production rate has historically run to only a few dozen missiles per year. The Center for Strategic and International Studies has estimated the maximum theoretical Tomahawk production capacity across contractors at roughly 2,330 missiles annually, far above the actual procurement rate.
Other munitions have been similarly strained. CSIS estimated in late July that the war had pushed Patriot interceptor stockpiles, once above 2,300, down to roughly 750 to 830, while THAAD interceptor stocks fell to approximately 250 from a pre-war level near 450. CNN has reported that senior military commanders have described the Pentagon’s overall munitions posture as “dangerously low.”
Pentagon’s Race To Rebuild Stockpiles
The Pentagon and Congress have moved on multiple fronts to accelerate munitions production since the war began. The Navy requested an additional $3 billion earlier this year to replenish its Tomahawk inventory, a request equivalent to roughly a twelvefold increase over the prior year’s procurement of 58 missiles. Separately, the Pentagon has since awarded Raytheon a multiyear, roughly $22.9 billion contract intended to lift annual Tomahawk output from about 60 missiles to more than 1,000.
President Donald Trump has said he directed defense manufacturers to “quadruple production” of what he called “exquisite class” weapons, a category that has been reported to include Patriot interceptors, THAAD systems and Tomahawks. Lockheed Martin has separately reached a framework agreement with the Defense Department aimed at quadrupling production capacity for its Precision Strike Missile.
Silicon Valley’s Deepening Role In Defense
Covenant was founded in 2024 by Kaufman, an American-Israeli entrepreneur who previously worked at a Thiel-linked foundation before relocating to Israel to help build the company’s overseas operations. It has raised more than $250 million across three funding rounds led by Andreessen Horowitz, Thiel’s Founders Fund, Lux Capital, Joe Lonsdale’s 8VC, Tel Aviv-based Aleph and Lightspeed Venture Partners, a fundraising haul that has reportedly valued the company at more than $1 billion. The company now employs more than 200 people across its U.S., German and Israeli operations.
The announcement adds to a broader pattern of Silicon Valley financiers expanding their footprint in Washington’s defense and policy apparatus. Thiel, who backed Trump’s 2016 campaign and supported now-Vice President JD Vance’s 2022 Senate run, has seen his political influence grow alongside Trump’s second term. Marc Andreessen was named to the Pentagon’s Defense Policy Board this summer, alongside Thiel Capital’s Blake Masters, and Andreessen has since launched a multibillion-dollar fund dedicated to U.S. aerospace and defense investment.
Denburg told CNBC the shift reflects a changing appetite in Washington for new entrants into a market historically dominated by a handful of established contractors. “What we’re seeing now is an understanding that new market entrants can play a critical role in the defense ecosystem, and we’re seeing that in this administration,” she said.
Expanding Beyond U.S. Borders
Covenant’s ambitions extend beyond American shores. Production of Anthem for European customers is expected to begin next year at the company’s Saxony facility near Leipzig, as Germany and other European governments accelerate their own defense-industrial buildups in response to the continued threat from Russia. Some media reports have put Anthem’s range at roughly 1,500 kilometers, though Covenant has not confirmed that figure. The company has said German retired Lieutenant General Andreas Marlow, formerly deputy inspector of the German army and a past leader of the European Union’s training mission for Ukrainian forces, serves as an adviser.
What Comes Next
Alongside Wednesday’s announcement, Covenant disclosed two agreements with the Defense Department: one to accelerate the Army’s test-and-qualification process for Anthem, and a second with the Navy to adapt the system for maritime use. Company officials said the Dallas plant, along with the coming German and Israeli sites, is designed to give the Pentagon and allied militaries a lower-cost option for restocking arsenals depleted by sustained combat operations, though it remains to be seen how quickly Covenant can scale toward its stated production targets once serial manufacturing begins in 2027.