Anduril, Navy Invest $6.6 Billion in Maryland Submarine Parts Shipyard

Defense technology company Anduril is investing $3.7 billion in a new 187-acre manufacturing site called Arsenal-2 at Sparrows Point, Maryland, with the U.S. Navy awarding a contract worth up to $2.9 billion.

President Donald Trump announced the $6.6 billion effort on Tuesday, stating American taxpayers will receive an approximate 40% stake in a new Anduril subsidiary created to operate Arsenal-2. The facility will build large sections and key parts, such as torpedo tubes, for Virginia-class submarines, which will then be sent to General Dynamics Electric Boat and HII Newport News Shipbuilding for final assembly.

The Arsenal-2 project is expected to begin initial operations in 2030, creating 3,100 permanent jobs and supporting more than 14,000 total jobs. Maryland officials describe it as the state’s largest single private investment and largest job-creation project in over a decade, projected to generate more than $2 billion in annual economic output and about $312 million in annual wages.

The initiative aims to address a persistent submarine-production bottleneck, as the U.S. currently builds about 1.3 Virginia-class submarines per year, falling short of its goal of two. The U.S. is working to rebuild its shipbuilding industry, which has declined for decades, while China has expanded its capacity. China's shipbuilding capacity is estimated at more than 200 times that of the U.S. by gross tonnage, and it launched more nuclear-powered submarines than the U.S. between 2021 and 2025. The contract award followed the appointment of Anduril co-founder Palmer Luckey to a Pentagon weapons advisory group.