Anduril wins $6.6B Navy deal to build submarine components in Baltimore
Anduril will invest $3.7 billion to build a shipyard near Baltimore to manufacture Virginia-class submarine components and sections, with the Navy contributing up to $2.9 billion for production. The deal aims to boost U.S. submarine output to match China's shipbuilding pace.
What happened
The Trump administration announced a $6.6 billion effort to accelerate Virginia-class submarine production, with Anduril at the center. Anduril will construct a 2-million-square-foot shipyard at Sparrows Point, near Baltimore, called Arsenal-2. The company will invest $3.7 billion of its own capital to build the facility and workforce; the Navy will pay up to $2.9 billion for the components and sections that result.
The Navy has struggled to meet its goal of producing two Virginia-class attack submarines per year, currently delivering about 1.3 annually and not expected to reach two per year until 2032. Anduril will work under General Dynamics Electric Boat and Newport News Shipbuilding, initially making torpedo tubes—described as a current bottleneck—and eventually larger modules and sections. The company will apply software, automation and digital manufacturing to simplify complex shipbuilding tasks.
Arsenal-2 is expected to add roughly 9 million labor hours annually, a 15% boost to submarine production capacity. The facility should create 3,100 direct jobs and 11,000 indirect jobs nationwide. Anduril has already begun torpedo tube production in California and expects the Baltimore facility to begin operations around 2030, though some component production is starting now.
President Trump visited the site to formally announce the initiative. The deal comes days after War Secretary Pete Hegseth tapped Anduril founder Palmer Luckey to help lead Project Meridian, a 120-day study of future U.S. military technology needs.
Background
Virginia-class attack submarines are the Navy's workhorse vessels for undersea warfare and intelligence gathering. The U.S. submarine industrial base has long struggled with production bottlenecks and high complexity, making it difficult to scale output. China has vastly larger shipbuilding capacity. The Navy also faces pressure to transfer Virginia-class submarines to Australia under the AUKUS security pact, adding to demand. Anduril, founded in 2017 by Palmer Luckey and others, is a defense-technology company valued at $61 billion as of May 2026. The company recently won a $3.7 billion Army contract for a command platform and announced a $3.7 billion submarine component factory project in Baltimore earlier in 2026.
What to watch next
Anduril must pass certification and safety standards required for nuclear submarine construction before moving from individual components to larger sections. The company plans to begin operations at Arsenal-2 around 2030. Watch for updates on whether the facility meets its labor-hour targets and production timelines, and whether other defense contractors adopt similar digital manufacturing approaches.
Sources
- Original report: Anduril se adjudica un contrato de 6.6B con la Marina para impulsar la producción de submarinos de la clase « Virginia (Fox News, Oct 6, 2026) Mainstream media
- New York Post: Trump to announce $6.6B US investment with Anduril for Baltimore sub facility Other outlet
- Defense News: Anduril, US Navy invest $6.6 billion to boost submarine parts production Defense media
- Breaking Defense: Anduril launches new shipyard to manufacture components for Virginia-class subs Defense media
Written by Anduril News with AI assistance from the original report and other coverage, in plain English. It can contain mistakes; check the original for anything important. How we write these.
