US firm gets $2.9bn sub deal after boss joins war study with Musk

SaveSharefacebookxwhatsapp-strokecopylinkUS navy officers stand guard aboard Virginia-class fast attack submarine USS Minnesota (SSN-783), docked in Australia in 2025 [File: Colin Murty/Getty Images]By AFP and ReutersPublished On 6 Oct 20266 Oct 2026Defence technology firm Anduril said it will invest $3.7bn to develop a new shipyard in the US state of Maryland and will build critical components for the United States Navy’s Virginia-class submarines, as Washington seeks to bolster its maritime defence capabilities.California-based Anduril Industries confirmed on Tuesday it would invest in the submarine production plant, dubbed Arsenal-2, and will receive a $2.9bn US navy contract to manufacture submarine parts.Recommended Stories list of 3 itemslist 1 of 3US delivers F-16V fighter jets to Taiwan as island eyes threat from Chinalist 2 of 3New aircraft carrier, 10,000 US troops: Is the Iran war about to escalate?list 3 of 3US pulls bombers from UK base: Is Iran manoeuvring Trump’s war plans?end of listUS President Donald Trump was set to unveil the project and announce a massive naval shipyard expansion in Baltimore, Maryland, on Tuesday afternoon.Anduril is a defence technology firm whose co-founder, Palmer Luckey, is heading a new Defense Department project alongside technology billionaire and former top Trump adviser Elon Musk. Luckey and Musk were tapped by the Pentagon to lead Project Meridian, a newly-disclosed initiative focused on the future of warfare, including autonomous, AI-powered and maritime military capabilities.Valued at nearly $117bn, Anduril specialises in uncrewed underwater vehicles and ocean vessels – or naval drones – designed for the US military and its allies.The initiative was announced at Defense Secretary Pete Hegseth’s State of the Force address last week in Virginia, part of a 120-day study aimed at identifying new technology needed for next-generation US battlefield supremacy.The investment is the latest in a series of broader steps by the Pentagon to accelerate naval shipbuilding and weapons production, spurred by the war on Iran and other regional conflicts that continue to threaten global oil traffic while highlighting the critical role of maritime power.Anduril, founded in 2017 by Luckey, is best known for its military autonomous systems, drones ‌‌and software.The startup has, however, expanded beyond drones into maritime and undersea systems, as well as command-and-control software designed to connect military ‌‌sensors, ‌‌weapons and other systems.The Maryland facility will manufacture torpedo tubes and larger hull components for the US navy’s upgraded Virginia-class fast attack submarines, which the navy is renovating to carry up to 40 Tomahawk missiles each.While nuclear-powered, the warships are not part of the US’s strategic nuclear deterrent system.The facility is expected to generate 3,100 jobs while supporting over 11,000 indirect roles.The navy currently operates 26 Virginia-class fast-attack boats, with two more slated for delivery in 2027. According to reports released by the Department of Defense and navy officials, American shipyards have been struggling to meet the Pentagon’s target production rate of two new boats per year due to persistent supply chain disruptions and labour shortages.Official disclosures confirm the delivery rate has stalled at just 1.1 to 1.2 submarines annually.Speaking to reporters on Tuesday, Anduril President Chris Brose said the “main focus” of the new yard was prioritising component manufacturing for the Virginia-class submarines rather than developing any new drone platforms.“It’s really the government buying the results of what we’re able to produce from the facility ⁠⁠that we’ve invested in,” he said.