Anduril pledges $3.7 billion to expand U.S. attack submarine production
Anduril Industries disclosed on October 7, 2026 that it will commit $3.7 billion to develop a new shipyard—dubbed Arsenal‑2—at Sparrows Point, Maryland, to produce additional attack submarines for the United States Navy.
The investment is aimed at expanding the nation’s submarine‑building pipeline, which has struggled to keep pace with demand. According to defense analysts, the facility is projected to increase overall Navy submarine production capacity by about 15 percent, adding roughly 9 million production hours each year.
Arsenal‑2 will initially focus on fabricating precision torpedo tubes and impulse tanks before moving to more complex modules and potentially hull sections. The site will also host Anduril’s ArsenalOS software platform, a digital operating system that tracks parts, inspections and assembly steps, and uses automation to improve consistency across the build process.
The shipyard is designed to span more than 187 acres and house a 1,200‑foot graving dock, high‑bay assembly halls and reconfigurable production lines. Anduril plans to begin component production at a separate 160,000‑square‑foot facility in Orange County, California, before Arsenal‑2 opens, with full operations expected in 2030.
Economic impact estimates call for 3,100 direct jobs and over 11,000 indirect jobs, generating roughly $2 billion in annual output and about $312 million in wages. The arrangement will give American taxpayers a roughly 40 percent stake in a new Anduril subsidiary that will run the shipyard.
The move follows a broader decline in U.S. shipbuilding capacity. Seventeen private shipyards have closed or exited defense work over the past five decades, leaving only about 25 yards capable of constructing medium‑ to large‑size vessels. In contrast, China’s commercial shipbuilding capacity exceeds that of the United States by a factor of more than 200, and it has begun to outpace the U.S. in producing nuclear‑powered submarines.
Anduril’s foray into naval manufacturing builds on its expanding portfolio, which already includes autonomous surface vessels, AI‑enabled combat aircraft and advanced weapons systems. By leveraging its software expertise and new production facilities, the company hopes to help the United States close the gap between current Virginia‑class output and Navy requirements, while also strengthening the industrial base required for AUKUS security commitments.
The next milestone will be the start of component fabrication at the California facility, followed by the commissioning of the Maryland shipyard’s graving dock later in the decade.