Anduril commits $3.7B to submarine yard with $2.9B Navy contract

Anduril will spend $3.7 billion of its own capital on a Maryland yard for Virginia-class submarine components, while the Navy has awarded it an up-to-$2.9 billion production contract. Reuters reported that the project was unveiled Tuesday at Sparrows Point near Baltimore. The $6.6 billion headline total combines planned company spending with the contract ceiling; it isn't an investment into Anduril.

Anduril sells autonomous systems, drones and software to the United States military and its allies. Arsenal-2 pulls that business into the industrial chain behind a crewed nuclear submarine: Anduril will supply parts while General Dynamics Electric Boat and Huntington Ingalls Industries’ Newport News yard remain the final builders.

Production is supposed to begin with torpedo tubes; Reuters said the contract also covers doors. Anduril’s longer-term ambition is to make modules and hull sections, but an industry official told USNI News that it doesn't plan to assemble entire submarines. A California facility has started building torpedo-tube prototypes before the Maryland operation is expected to begin production in 2030.

The roughly 2 million-square-foot Maryland facility is what Anduril calls a software-defined shipyard. In practice, software will track work through the factory, automate suitable steps and preserve detailed records of precision welding. Those records are intended to provide the traceability required for safety-critical submarine parts.

The payment design is the financial tension. Navy payments are contingent on demonstrated production outcomes, while Anduril must commit its own capital to the buildout; the company says that leaves it carrying most of the execution risk. Arsenal-2 is expected to employ 3,100 people, but the contract’s $2.9 billion ceiling isn't cash received today.