Anduril and US Navy Invest 6.6 Billion to Expand Submarine Manufacturing

On October 6, 2026, Anduril Industries revealed a total investment of $6.6 billion together with the U.S. Navy for the enhancement of the submarine production sector of America and boost the manufacturing capacities of the Virginia-class submarine program. The partnership entails a private investment of $3.7 billion from Anduril and Navy’s potential contract of as much as $2.9 billion, with payments based on proved production results. The fund will allow Anduril to build a new shipyard called Arsenal-2 in Tradepoint Atlantic, Baltimore County, Maryland.

The newly built Arsenal-2 will produce complicated components and assemblies for the models of Virginia submarines and deliver them for further assembly at General Dynamics Electric Boat and Newport News Shipbuilding owned by Huntington Ingalls Industries. The set up additional production facilities intends to allow manufacturing of submarines in parallel which in turn should increase the manufacturing volumes overall.

The new yard will occupy more than 2 million square feet of a 187-acre site and comprise high-bay assembly halls, fabrication zones, changeable production lines and connections to transport, railway and marine transport. Anduril will implement its ArsenalOS industrial software platform for management of fabrication, assembly, materials transportation, inspection and documentation activities in the new yard.

Additionally, Anduril is constructing a manufacturing plant of 160,000 square feet in Orange County, California, with the aim of producing key components for Virginia-class submarines and developing production and quality procedures in advance of Arsenal-2's operations. The California facility will give a kick start to the establishment of production processes, workforce skills and functions, as well as qualification procedures such as making torpedo tubes and other marine products.

There are prospects for creating 3,100 direct jobs and adding another 11,000 jobs indirectly for Arsenal-2, which will bring approximately $2 billion of economic benefits arising from $312 million in wages only. This project is part of the large-scale initiative focusing on enhancing suppliers, infrastructure, labor force, and production capacities essential for the needs of the fleets of the U.S. Navy and obligations under AUKUS.

Effects on Defense Manufacturing Industry

The Arsenal-2 investment enhances the capacity of the U.S. defense manufacturing industry with the establishment of a new production facility for essential submarine components and major assemblies. The increase of the number of production facilities engaged in the Virginia-class program may alleviate production bottlenecks and augment the capacity to meet the Navy’s submarine needs. Moreover, the implementation of software-defined production and advanced manufacturing indicates that U.S. defense manufacturing pays more attention to digitally integrated production.

It is likely that the project will lead to further investments into the U.S. defense supply chain. More skilled laborers, specialized suppliers, manufacturing equipment, quality assurance systems, and marine infrastructure are expected to be demanded with the development of the new facility and the expansion of the distributed production network by Anduril. According to the officials from Maryland, the new project will create around 14,000 jobs and boost the economy significantly.

Impact on Defense Technology and Automation

The introduction of Arsenal-2 gives an indication of how deeply software and automation have been integrated in production activities in large-scale defense manufacturing. Known as ArsenalOS, the software installed at the facility will serve as the digital backbone for the entire production process, linking all processes of production, logistics, inspection and documentation. Real-time visibility of production process together with digital work instructions will ensure consistent manufacturing processes and provide assistance to the qualified workers engaged in manufacturing.

The Anduril-Navy investment amounting to $6.6 billion can be thus seen as a major step forward toward creating new manufacturing facilities in submarine manufacturing. The combination of private investments, government purchase, software-definition systems and advanced manufacturing makes the project a very ambitious undertaking.