Anduril wins $2.9bn Navy submarine parts deal, plans $3.7bn Maryland shipyard

California-based Anduril said the production plant, dubbed Arsenal-2, will manufacture torpedo tubes and other submarine components. The company will receive a $2.9bn Navy contract for the work.

US President Donald Trump was set to unveil the project and announce a major naval shipyard expansion in Baltimore, Maryland, on Tuesday afternoon.

The contract marks a significant shift for Anduril, founded in 2017 by Palmer Luckey and best known for military drones, autonomous systems and software. Valued at nearly $117bn, the company has expanded into uncrewed underwater vehicles, ocean vessels and command-and-control software designed to connect military sensors, weapons and other systems.

News of the shipyard comes alongside Project Meridian, a newly disclosed Pentagon initiative in which Luckey and technology billionaire Elon Musk will lead a 120-day study on the future of warfare, including autonomous, AI-powered and maritime capabilities. The initiative was announced at Defense Secretary Pete Hegseth's State of the Force address last week in Virginia.

The Maryland investment is the latest in a series of steps by the Pentagon to accelerate naval shipbuilding and weapons production, spurred by the war on Iran and other regional conflicts that continue to threaten global oil traffic while highlighting the critical role of maritime power.

Analysis

Why This Matters

The deal pushes a technology startup into the heart of traditional naval shipbuilding, an industry long controlled by a handful of established contractors.
It is part of a broader Pentagon effort to speed up weapons and submarine production at a time of regional conflict and concern over stockpiles.
Project Meridian, pairing Luckey with Elon Musk, signals growing emphasis on autonomous and AI-powered warfare in US military planning.

Background

Anduril was founded in 2017 and built its reputation on drones, autonomous systems and military software before expanding into maritime and undersea systems. With Arsenal-2, it moves into physical shipbuilding infrastructure for the Navy's Virginia-class submarine program. The Pentagon has been pressing for faster weapons production, and the project sits within a 120-day study aimed at identifying technology needed for next-generation battlefield supremacy.

Key Perspectives

Anduril: The contract supports its expansion from software and drones into large-scale manufacturing, and deepens its relationship with the Navy. The Pentagon: The deal adds a new production facility for submarine components as it seeks to accelerate naval shipbuilding. Skeptics and critics: Whether a startup can meet the scale and reliability demands of submarine manufacturing remains an open question, as does the influence of Musk and Luckey over future military planning.

What to Watch

The timeline for Arsenal-2's development and when production of submarine parts begins.
The findings of Project Meridian's 120-day study and any new programs it generates.
Any further expansion of Anduril's shipbuilding ambitions, given its reported $117bn valuation.