Anduril and Navy announce $6.6 billion investment in Baltimore submarine facility

Anduril Industries and the U.S. Navy announce a $6.6 billion joint initiative to expand the American submarine industrial base. Anduril will invest $3.7 billion of private capital to build Arsenal-2, a high-tech shipyard at Sparrows Point in Baltimore County, Maryland, to manufacture critical components for Virginia-class submarines. Backed by a $2.9 billion performance-based Navy contract, the project aims to address severe production delays and is projected to create over 3,100 permanent jobs.

Arsenal-2 Baltimore shipyard investment

• ▪Anduril said the Arsenal-2 facility in Baltimore County, Maryland will manufacture critical components, including torpedo tubes, for the United States Navy's Virginia-class fast attack submarines
• ▪Anduril Industries announced a $3.7 billion private capital investment on October 6, 2026 to build a new shipyard called Arsenal-2 at Sparrows Point in Baltimore County, Maryland
• ▪The state of Maryland and Baltimore County committed to match up to 13% of Anduril Industries' investment, totaling approximately $481 million, subject to local legislative approval

Virginia-class submarine production capacity

• ▪The two primary contractors for the Virginia-class submarine program, General Dynamics Electric Boat and Huntington Ingalls Industries, are producing 1.2 to 1.3 submarines annually, short of the two-boat goal
• ▪The United States Navy's Virginia-class submarine program has faced production delays averaging 30 months and cost overruns exceeding $17 billion
• ▪Chris Brose said Anduril Industries is standing up a separate facility in California to prototype and produce torpedo tubes faster than the Arsenal-2 facility in Baltimore, which is targeted to open by 2030

Performance-based contract structure

• ▪Under the $2.9 billion Navy contract to build Arsenal-2, Anduril Industries will assume the majority of the execution risk rather than the American taxpayer
• ▪The United States Navy awarded Anduril Industries a contract valued at up to $2.9 billion, with payments tied directly to demonstrated production outcomes

Job creation projections

• ▪Anduril said the Arsenal-2 project at Sparrows Point in Baltimore County is expected to create over 3,100 new permanent jobs and support more than 14,000 total jobs
• ▪Anduril said the Arsenal-2 shipyard is projected to drive upwards of $2 billion in annual economic output, including an estimated $312 million in annual wages

Trump administration defense policy

• ▪President Donald Trump stated that American taxpayers will receive a 40% stake in the new Anduril Industries Arsenal-2 shipyard, though he did not specify the ownership mechanism
• ▪President Donald Trump traveled to the future site of the Arsenal-2 facility on October 6, 2026 to announce the Anduril-Navy submarine deal alongside Navy and administration officials

Debatable claims

• ▪The US Navy should rely on defense startups to build submarines
• ▪Taking equity stakes in defense firms is an appropriate role for the US government
• ▪Maryland's $481 million subsidy for Anduril's shipyard is justified by its projected economic benefits
• ▪Anduril's software-defined manufacturing approach is sufficient to resolve submarine production delays