Anduril Industries announced a major expansion into naval manufacturing with Arsenal-2, a new software-defined shipyard in Baltimore County, Maryland. The defense technology company will invest US$3.7 billion in private capital to build the facility, which will produce critical components for the Virginia-class submarine program. President Donald J. Trump joined the announcement, framing the project as a significant step toward increasing American submarine production capacity.
Contract Structure and Public Participation
The U.S. Navy has awarded Anduril a contract worth up to US$2.9 billion, with payments tied directly to demonstrated production outcomes. This contract structure ensures that Anduril, not the taxpayer, takes on the majority of execution risk, aligning incentives for on-time, high-quality submarine production. Combined with the private investment, the project totals US$6.6 billion, and President Trump said taxpayers would receive a 40% stake in the shipyard, according to Bloomberg.
Site Selection and Economic Impact
Arsenal-2 will be built at Tradepoint Atlantic in Baltimore County, the former home of Bethlehem Steel's Sparrows Point complex. The project will create 3,100 direct jobs and support more than 11,000 indirect jobs once fully operational. Annual economic output is estimated at US$2 billion, including about US$312 million in wages each year, with initial operations expected to come online in 2030.
Shipyard Design and Software Platform
The facility will cover more than 2 million square feet, roughly the size of 40 football fields, on a 187-acre site. Its layout is optimized to reduce distances between fabrication, assembly, testing, and integration areas, helping to eliminate staging bottlenecks. A 1,200-foot graving dock, high-bay assembly halls, and reconfigurable production lines will support large-scale component movement and rapid shifts as Navy requirements evolve.
ArsenalOS and Workforce Development
ArsenalOS, Anduril's industrial software platform, will serve as the digital backbone for the yard by connecting fabrication workflows, material movement, inspection protocols, and documentation in one system. Digital work instructions, embedded quality controls, and modern sensing will support skilled trades including welders, pipefitters, electricians, and shipfitters. The company said the platform will help new workers train faster while preserving the technical rigor required for submarine construction.
Orange County Facility and Broader Network
Anduril is already standing up manufacturing capabilities at a new 160,000-square-foot facility in Orange County, California, to validate methods and quality systems before Arsenal-2 opens. That site will support prototyping and production of Virginia-class test assets and critical maritime components, including torpedo tubes. The company uses a similar approach at Arsenal-1 in Ohio, part of a distributed network spanning more than 15 production sites across the United States and allied nations.
Supporting the Virginia-Class Program
Nuclear-powered Virginia-class attack submarines are built by General Dynamics Electric Boat and Huntington Ingalls Industries under one of the most complex manufacturing enterprises in the country. Arsenal-2 will build complex components and large-scale assemblies for delivery to those primary builders, allowing more submarine construction to happen in parallel. This added source of work is intended to help close the gap between current output and Navy requirements, including AUKUS commitments.
Anduril, founded by Palmer Luckey, was valued at US$61 billion in its most recent funding round and reported US$2.2 billion in 2025 revenue. The company expects to double that revenue this year as it joins SpaceX and Palantir in taking on more defense contracts. Arsenal-2 reflects a broader shift in which technology firms use private capital and software-driven production to strengthen America's naval industrial base.