Anduril, a defence contractor, plans to spend $3.7bn constructing a shipyard near Baltimore to manufacture components for the US Navy's Virginia-class submarines. Alongside this investment, the Navy has granted Anduril a contract valued at up to $2.9bn, with payouts contingent on meeting production targets. Combined, the arrangement represents $6.6bn in funding for submarine manufacturing capacity.

President Donald Trump unveiled the initiative, dubbed Arsenal-2, at Sparrows Point in Maryland. "Today we're officially launching the construction of the largest new shipyard in the United States," Trump said.

What Arsenal-2 will build

The facility will occupy 187 acres at Tradepoint Atlantic in Baltimore County, with Anduril planning over 2 million square feet of manufacturing space. The company projects the venture will generate 3,100 direct positions and support more than 11,000 indirect jobs. Production is slated to commence in 2030.

Arsenal-2 will fabricate intricate components and large subassemblies destined for submarines, which will then be forwarded to General Dynamics Electric Boat and Huntington Ingalls Industries' Newport News Shipbuilding for final assembly. Anduril's proprietary ArsenalOS software will manage the yard's manufacturing operations.

Before the Maryland facility becomes operational, Anduril is establishing a 160,000-square-foot production site in Orange County, California, to manufacture submarine parts including torpedo tubes. The state of Maryland is providing incentives equivalent to up to 13% of the private investment.

"Right here in Sparrows Point, you'll build the next generation of American submarines, including autonomous subs," Trump stated during the announcement. Anduril president Chris Brose clarified to journalists that the primary objective centres on Virginia-class components rather than emerging drone systems. "This is about putting more food on the table and being able to meet the requirements that our country has to produce more submarines," Brose said at a press briefing.

The submarine gap

The Pentagon has set a target of delivering two Virginia-class submarines annually. Current output has plateaued between 1.1 and 1.2 vessels per year. A Government Accountability Office report from July attributed the shortfall to delays in material procurement and insufficient skilled labour availability. Adm. Daryl Caudle, the chief of naval operations, has indicated expectations to reach the two-per-year production rate by 2032.

Luckey and the Pentagon

The contract announcement arrived shortly after the Pentagon appointed Anduril co-founder Palmer Luckey to Project Meridian, an initiative examining future military technologies. The proximity of these events prompted scrutiny regarding the expanding influence of defence technology firms in Washington policy circles. Trump acknowledged Luckey by name during the event, referring to him as a "friend."

Emil Michael, the Pentagon's chief technology officer, dismissed conflict-of-interest concerns. "There's really nothing to see here," Michael told CNBC. Marc Andreessen, whose venture capital firm has invested in Anduril, joined the Pentagon's policy board during the summer. Anduril completed a $5bn funding round in May.

Source: The Next Web