06:42 AM EDT, 10/06/2025 (MT Newswires) -- (Updates with Anduril's response in the fifth paragraph.)

A US Army battlefield communications system being developed by tech firms Anduril and Palantir ( PLTR ) has been labeled a "very high risk" due to serious security vulnerabilities, Reuters reported Friday, citing an internal Army memo.

The report said the $100 million prototype, part of a broader modernization push, allows users access to sensitive data without proper clearance or activity tracking. The memo warned that adversaries could potentially gain undetectable, persistent access to the system, according to Reuters.

It also flagged third-party apps included in the system that haven't undergone Army security assessments, one of which was found to have 25 high-severity code flaws, while others contain hundreds more awaiting review, Reuters reported.

"As Army's Chief Information Officer Mr. Leo Garciga stated publicly, the security review process during the experimental phase of NGC2 functioned as designed, with findings 'mitigated immediately' prior to field integration with the first division-level event, which proceeded successfully without delay," a Palantir ( PLTR ) spokesperson said in a statement e-mailed to MT Newswires. "No vulnerabilities were found in the Palantir ( PLTR ) platform."

"The recent report reflects an outdated snapshot, not the current state of the program," Shannon Prior, vice president of communications at Anduril, said.

Palantir ( PLTR ) shares were up over 2% in recent premarket activity Monday.

(Market Chatter news is derived from conversations with market professionals globally. This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed.)

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