Anduril secured a significant contract worth up to $2.9 billion from the U.S. Navy to enhance submarine production, specifically focusing on the Virginia-class submarines. The announcement closely followed the appointment of Anduril co-founder Palmer Luckey to the Pentagon’s Project Meridian, a future weapons development task force. The deal includes an extensive $3.7 billion investment by Anduril to develop a large shipyard facility near Baltimore, Maryland, which will create around 3,100 jobs and is expected to begin operations in 2030.

The new 2 million-square-foot shipyard at Sparrows Point will produce components of the Virginia-class submarines, with specialized parts such as torpedo tubes to be manufactured at a smaller facility in Orange County, California. Anduril’s leadership envisions this move as a step towards becoming a key and expanding player in the shipbuilding supply chain, aiming to eventually handle significant portions of submarine production. Chris Brose, Anduril’s President and Chief Strategy Officer, emphasized the goal of scaling up production capabilities to meet the country’s defense needs.

The contract and Luckey’s Pentagon role have sparked discussion around the increasing influence of defense technology firms in government projects. Project Meridian includes prominent figures such as former House Speaker Newt Gingrich and SpaceX CEO Elon Musk, both of whom, alongside Anduril, actively work with the Department of Defense. Pentagon officials, including Chief Technology Officer Emil Michael, have downplayed concerns of conflict of interest, highlighting the diverse expertise within the group as vital for preparing the military for future challenges.

This development aligns with broader efforts under the current administration, led by former President Donald Trump, to intensify U.S. military capabilities and industrial capacity, particularly in shipbuilding. Trump publicly praised Luckey during the contract announcement, spotlighting autonomous drones and submarines as strategic priorities. Anduril’s entry into traditional shipbuilding marks a significant shift for the company, which has been primarily known for autonomous systems, demonstrating its ambitions to expand its role within the defense manufacturing sector.