In my case the problem was incompatibility between Android Gradle Plugin and Hilt library. After upgrading Hilt to the latest version, I can also use the latest AGP.
[EDIT]
It seems that recent release of Android Gradle Plugin has fixed the issue and
AGP version 7.0.0-beta05
works with Hilt version 2.37
.
Link to related Github issue
In my case AGP 7.0.0
builded successfully with Hilt 2.37
If you are using Hilt, upgrade it to v2.38.1 . Some problems with AGP 7 has been fixed in this release
See here : https://github.com/google/dagger/releases
For me, I was used
Gradle
classpath "com.android.tools.build:gradle:7.0.3"
classpath "org.jetbrains.kotlin:kotlin-gradle-plugin:1.5.31"
Hilt
Projet level gradle
classpath "com.google.dagger:hilt-android-gradle-plugin:2.39.1"
App level gradle
implementation "com.google.dagger:hilt-android:2.39.1"
kapt "com.google.dagger:hilt-compiler:2.39.1"
androidTestImplementation "com.google.dagger:hilt-android-testing:2.39.1"
kaptAndroidTest "com.google.dagger:hilt-android-compiler:2.39.1"
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