A submarine model at the Sparrows Point shipyard in Maryland, where Silicon Valley defense startup Anduril Industries plans to build advanced components for US Navy submarines. [UPI]
A submarine model at the Sparrows Point shipyard in Maryland, where Silicon Valley defense startup Anduril Industries plans to build advanced components for US Navy submarines. [UPI]

Silicon Valley defense startup Anduril Industries announced Tuesday that it will build a shipyard to manufacture advanced submarine components for the US Navy.

Anduril plans to construct the "Arsenal-2" facility at Sparrows Point in Baltimore, Maryland, spanning 186,000 square meters. The company will invest $3.7 billion of its own funds and receive an additional $2.9 billion from the Navy.

Arsenal-2 is expected to begin producing components for Virginia-class nuclear-powered attack submarines around 2030.

President Donald Trump visited the Sparrows Point site Tuesday to campaign for midterm election candidates. "This is where we're going to build next-generation American submarines, including autonomous submarines, torpedo tubes and the key components of the quietest, most advanced Virginia-class attack submarines," he said.

The Financial Times reported that the announcement comes as the Trump administration pushes to reform its defense procurement system — reducing reliance on legacy contractors and cultivating next-generation defense technology companies with AI capabilities. The paper added that the move reflects a sense of urgency in Washington over the risk of falling behind China's formidable naval shipbuilding capacity.

The Virginia-class submarine program, led by major defense contractors General Dynamics and Huntington Ingalls Industries, had aimed to build more than two submarines per year. A shortage of skilled workers and a parts bottleneck caused by a small number of monopoly suppliers have kept output to just one vessel annually. In response to the slower-than-expected pace, the United States is developing a plan that would allow companies investing in domestic shipbuilding to construct one naval vessel in the country where their headquarters are located.

Anduril President Christian Brose told reporters Tuesday that the Trump administration and the Navy recognize the urgent need for new production capacity. "The maritime industrial base, and specifically the submarine manufacturing base, must be expanded," he said.

Sparrows Point is being positioned as a showcase for physical AI in manufacturing automation, running on Anduril's own software. While traditional shipyards rely on hardware such as cranes and welding equipment to determine production capacity, the facility will use data and software to control design, processes and logistics.

Brose said the company intends to "completely reimagine" how work is done by bringing in software and digital tools drawn from innovations in commercial aerospace and other civilian industries.

The Financial Times said the project marks Anduril's expansion into the maritime defense sector.

Anduril had previously announced plans to build next-generation autonomous surface vessels with HD Hyundai Heavy Industries as part of efforts to counter China. Since last year, it has also been producing the autonomous underwater vehicle "Ghost Shark" in Sydney, Australia. The company is also playing a central role in President Trump's Golden Dome missile defense initiative.

Defense Secretary Pete Hegseth last week appointed Anduril co-founder Palmer Luckey, SpaceX CEO Elon Musk and former House Speaker Newt Gingrich to a task force reviewing future warfare, technology and defense procurement for the United States.


kate01@heraldcorp.com