Anduril Industries will spend $3.7 billion to build Arsenal-2, a 2-million-square-foot shipyard at Tradepoint Atlantic in Sparrows Point, Baltimore County, Maryland. The Navy has awarded the company a contract worth up to $2.9 billion for submarine components, including torpedo tubes and doors, with payments tied to production. President Trump announced the project on October 6 at the site, a former Bethlehem Steel complex, with first operations planned for 2030 and 3,100 direct jobs promised.
This is Anduril’s second Arsenal. The first, outside Columbus, Ohio, was set to start building FURY combat drones in March, about four months ahead of its July 2026 target.
Trump told the crowd that Sparrows Point would build autonomous submarines. Anduril’s own announcement, published the same day, describes a yard for Virginia-class components and does not say it will build uncrewed vessels.
Arsenal-2 Starts With Torpedo Tubes For Virginia-Class Boats
Arsenal-2 will build Virginia-class components and large assemblies for final assembly at General Dynamics Electric Boat in Groton, Connecticut, and Huntington Ingalls Industries’ Newport News Shipbuilding in Virginia, Anduril’s announcement says. Anduril president Chris Brose said the company starts with torpedo tubes.
From there Anduril moves to more complicated modules and potentially full ship sections such as bows and sterns, Brose told reporters, Fox45 reported. He also said Anduril wants to hire workers without college degrees and use software to break submarine work into tasks they can learn.
The Navy contract pays on output. Payments are “tied directly to demonstrated production outcomes,” and Anduril says that leaves it carrying most of the execution risk. An industry official told reporters the federal money pays for what Anduril produces, not for the shipyard Anduril is financing. The administration is looking mainly to fiscal 2028 and later budgets to fund the contract, according to Fox45.
The work starts before the yard exists. Anduril is opening a 160,000-square-foot plant in Orange County, California, to prototype torpedo tubes and qualify its production for SUBSAFE, the Navy’s submarine safety certification program. That gives it a two-year head start on Baltimore, the same playbook it ran in Ohio.
Anduril’s Drone Subs Come Out Of Sydney And Rhode Island
Anduril already builds uncrewed submarines at two other sites. Its factory in Sydney, Australia, makes the Ghost Shark and the Dive-XL. A 150,000-square-foot plant at Quonset Point, Rhode Island, opened in late 2025 to build the smaller Dive-LD, according to Defense Daily.
Anduril plans a second Quonset Point line for the Dive-XL, which the Navy and the Defense Innovation Unit picked in March for an extra-large autonomous undersea vehicle program. Trump’s line, as Reuters reported it, put “autonomous subs, torpedo tubes, and critical components” in Sparrows Point. Anduril’s release lists Sydney and Quonset Point as separate sites in its production network.
Nothing in Anduril’s release rules out drone subs at Arsenal-2 later, and I read its “reconfigurable production lines” as leaving room for them. But the contract, the timeline and every component Anduril named are for crewed attack submarines. Anduril also has competition for Navy drone sub money, including a Philadelphia startup building Ghostfin attack drones in a former marble showroom.
Anduril Says The Navy Needs Up To Three Virginia Subs A Year, Gets One
Anduril says the Navy needs two to three Virginia-class submarines a year and gets barely one, and its chart puts today’s rate at 1.2 to 1.4 boats. Chief of Naval Operations Adm. Daryl Caudle said in May the two-a-year build rate won’t arrive until the 2030s, USNI News reported.
Meeting the Navy’s fleet goals and the AUKUS commitment to Australia takes more suppliers working in parallel, Anduril argues, and Arsenal-2 sits between the two builders. By Anduril’s count it is about 300 miles south of Groton and 200 miles north of Newport News.
Anduril founder Palmer Luckey called it “America’s largest shipyard since WWII.” The company’s own posts use a narrower claim, the biggest investment in a new American shipyard since World War II, and the boats will still be finished in Groton and Newport News.
Trump’s 40% Taxpayer Stake Isn’t In Anduril’s Or Maryland’s Releases
Trump also told the crowd that American taxpayers will receive a 40% stake in the new shipyard, and he did not say how. Anduril’s release and its Arsenal-2 page don’t mention government ownership, and neither does the Maryland Department of Commerce announcement, all checked October 6.
Reuters reported the visit was part of a pre-election tour ahead of November’s midterms, in which Trump has been announcing or claiming credit for private investments and government spending.
Maryland and Baltimore County have committed to match up to 13% of Anduril’s investment through existing programs and new appropriations, some of which still need approval from the Maryland General Assembly and the Baltimore County Council. Fox45 put the full 13% at about $481 million, a figure state officials have not committed to. The state puts total support at more than 14,000 jobs and $2 billion a year in economic output, and Anduril’s Arsenal-2 page puts the 3,100 direct jobs at 2034.
Governor Wes Moore praised the deal in the state’s release but skipped the event. His spokesman said Moore was blocked from speaking, and the White House said he boycotted it, the Associated Press reported.
DroneXL’s Take
Arsenal-2 is a good bet, and its contract is the best part. The Navy pays on demonstrated production, and Anduril says it carries most of the execution risk. I’d like to see every drone and defense contract written that way, including the ones DroneXL covers every week.
The president described a different project, though. Anduril’s release and Arsenal-2 page support neither the autonomous subs nor the 40% stake, and the stake is the one that matters. Luckey is also co-directing the Pentagon’s Project Meridian future-warfare study, which DroneXL reported last week. Nothing I’ve seen ties Meridian to this contract, and that’s why the terms belong on paper. Until the Navy or Anduril publishes them, I’m treating the 40% figure as a campaign line.
Sources: Anduril Industries, Maryland Department of Commerce, Reuters, Associated Press, Fox45 Baltimore, Defense Daily, Naval News, USNI News, Anduril Industries on X, Palmer Luckey on X.
DroneXL uses automated tools to support research and source retrieval. All reporting and editorial perspectives are by Haye Kesteloo. Read our editorial standards.
