Anduril Industries, a defence technology company better known for autonomous aircraft, weapons and unmanned maritime systems, is moving into the supply chain of one of the Navy's largest and most complex shipbuilding programmes. On Tuesday the company and the White House announced Arsenal-2, a shipyard at Sparrows Point in Baltimore County, Maryland, that will make parts for the Navy's Virginia-class attack submarines.
The investment comes to $6.6 billion: $3.7 billion of private capital from Anduril and up to $2.9 billion from the Navy, Breaking Defense reported. By this publication's arithmetic, Anduril is putting up about 56 per cent of the total. The Navy contract ties payments to demonstrated production results, according to Anduril, as gCaptain also reported.
"This contract structure ensures that Anduril, not the taxpayer, takes on the majority of the execution risk, aligning incentives to ensure on-time, high-quality submarine production," Anduril said in its release.
Parts, not submarines
Anduril stressed that it will not build complete submarines. General Dynamics Electric Boat and HII's Newport News Shipbuilding build the Virginia class jointly, and they will continue to do the final construction and assembly. Arsenal-2 is meant to supply them with "complex components and large scale assemblies", in the company's words.
The company plans to begin with basic modules, such as torpedo tubes, and later move into more complex work, including full sections of the vessels such as the bow, Breaking Defense reported. Before the Maryland yard opens, Anduril will start submarine component work at a new 160,000-square-foot facility in Orange County, California, which it said gives it a two-year head start on manufacturing methods and quality systems.
The Maryland site is planned at more than 2 million square feet, with high-bay assembly halls, fabrication areas and a 1,200-foot graving dock, according to gCaptain. Initial operations are expected in 2030. Permitting is to begin immediately.
"We need to grow the maritime industrial base, the submarine industrial base, so that we can produce more submarines. So the goal here for Anduril is to contribute to that," said Chris Brose, Anduril's president and chief strategy officer. "This is not about taking food off the plate of anybody. This is about putting more food on the table and being able to meet the requirements that our country has to produce more submarines."
Newport News Shipbuilding sounded content with that. "We welcome Anduril as a future subcomponent partner in the important work of accelerating submarine deliveries to the fleet," said Kari Wilkinson, its president.
The gap it is meant to close
The Navy wants two Virginia-class submarines a year. Shipbuilders were producing them at a rate of one a year as of June 2025, according to the Government Accountability Office's annual assessment of weapons programmes, released on 2 July.
"Late material deliveries from suppliers and limited availability of experienced workers due to competition in the labor market drive these trends," the GAO report said.
The Congressional Research Service has put the production rate at roughly 1.1 to 1.4 boats a year in recent years, gCaptain reported. The Navy's goal after two a year is about 2.33, to meet its own fleet requirements and its commitments to Australia under the AUKUS agreement. Adm. Daryl Caudle, the Chief of Naval Operations, told the House Appropriations Committee in May that he expects industry to deliver two Virginia-class submarines a year by around 2032, Breaking Defense reported.
A senior administration official told reporters that Arsenal-2 would add roughly 9 million hours a year to the submarine industrial base, which the official said translates to a 15 per cent increase for Virginia-class production. If both figures hold, the programme's current capacity is about 60 million production hours a year, by this publication's arithmetic. Officials have identified torpedo tubes as one of the existing production bottlenecks, gCaptain reported, and the official said having them earlier would let submarines already under construction move faster.
Who else is paying
The State of Maryland and Baltimore County have committed to match up to 13 per cent of Anduril's anticipated private investment through existing incentive programmes and new appropriations, which the Maryland General Assembly and the Baltimore County Council will have to approve, according to the governor's office. The state expects the project to create more than 3,100 new permanent jobs.
"With this facility, thousands of Marylanders will have new pathways to work, wages, and wealth through advanced training and high-skilled maritime manufacturing jobs," said Gov. Wes Moore.
Sparrows Point was the home of Bethlehem Steel's steelmaking and shipbuilding operations and is now the Tradepoint Atlantic logistics and industrial complex, a 3,300-acre site near the Port of Baltimore, CBS Baltimore reported. President Donald Trump spoke there on Tuesday.
The timing is the limit. A yard that opens in 2030 does nothing for the boats that are late now, and new capacity in naval yards is slow to arrive: the number of drydocks large enough to lift a big ship out of the water has barely changed in decades. It arrives in the years when the Navy will be trying to hold a higher build rate while also preparing to transfer submarines to Australia.
Arsenal-2 was announced on Tuesday 6 October 2026 in Anduril's news release, by the White House and in a release from the office of Gov. Wes Moore; the investment figures, the payment terms, the 2030 start, the 1,200-foot graving dock, the Orange County facility and Anduril's quoted statement are from Anduril's release. The remarks of Chris Brose, Kari Wilkinson and the senior administration official, Adm. Daryl Caudle's testimony, the plan for torpedo tubes and bow sections and President Trump's appearance are as reported by Breaking Defense on 6 October 2026. The Congressional Research Service production range, the 2.33-a-year goal and the torpedo-tube bottleneck are as reported by gCaptain on 7 October 2026. The state and county incentive of up to 13 per cent, the job estimate and Gov. Moore's remarks are from the governor's office release of 6 October 2026; the size of Tradepoint Atlantic is as reported by CBS Baltimore the same day. That CBS report said production would focus on autonomous submarines; the state's and Anduril's releases both describe Virginia-class submarine components, which is what this article reports. The production rate as of June 2025 and the quoted findings are from the Government Accountability Office's weapon systems annual assessment of 2 July 2026. The shares of the $6.6 billion and the implied size of the current programme are this publication's arithmetic. The analysis is our own.
Topics businessdefenceshipbuildingindustrial policy
