SPARROWS POINT, Md. — President Donald Trump on Tuesday announced a nearly $7 billion deal with a defense firm founded by one of his most prominent political supporters to expedite submarine shipbuilding, an unexpected arrangement that thrusts a largely autonomous-weapons company into a more traditional defense manufacturing role.
During an address at the industrial hub in Sparrows Point in Maryland, Trump said the new project with Anduril Industries will transform the Baltimore-area port site into “one of the most significant shipyards” in the world.
“Right here in Sparrows Point, you’ll build the next generation of American submarines, including autonomous subs, torpedo tubes, and critical components for our cutting-edge Virginia-class attack submarines — the greatest and quietest ever built,” Trump said.
The deal is backed by a $3.7 billion investment from Anduril coupled with a $2.9 billion U.S. Navy contract, Trump added. He also said that U.S. taxpayers “will receive a 40 percent stake in the new shipyard,” without providing specifics of the potential equity arrangement.
Anduril was founded by the prominent Trump supporter and billionaire Palmer Luckey. It holds billions in Defense Department contracts to provide AI software services to the military, and Luckey was named alongside Elon Musk last week as a key member of a Pentagon project tasked with planning for the future of warfighting.
Trump’s announcement serves as potential boon to Maryland’s economy and could bring thousands of jobs to the Baltimore area. Wes Moore, the state’s Democratic governor and a prominent critic of the Trump administration, said he was slated to speak at the event but the administration blocked him from speaking.
The Sparrows Point project, called Arsenal-2, marks a departure for Anduril, a weapons technology company known for making autonomous drones and unmanned sea vehicles. The manufacturing initiative places it in a more traditional defense contracting role, creating components for manned Virginia-class nuclear submarines, which have faced significant production delays for years. They are crucial component to the U.S. military’s strategy for competing against China in the Indo-Pacific region.
“It is unusual,” said Stacie Pettyjohn, director of the defense program at the Center for a New American Security, a bipartisan national security think tank. It will be interesting to see if Anduril, which is known for making simple weapons quickly, can work on large nuclear submarines, the “most complicated ones that exist,” she added.
The Pentagon has been plagued with delays in building nuclear submarines for years. Coronavirus-induced employment shortages, maintenance backlogs and supply chain issues have left domestic submarine shipbuilders delivering roughly 1.1 new Virginia-class nuclear submarines a year, less than the military’s annual goal of two, according to a Congressional Research Service report from January.
The U.S. has also agreed to provide Australia — through the trilateral AUKUS partnership that also includes the United Kingdom — with several Virginia-class nuclear submarines, increasing its supply requirements.
The Sparrows Point project is aimed at reducing the backlog, and it has the potential to transform an industrial peninsula outside Baltimore, whose economic fortunes were crippled with the financial collapse of Bethlehem Steel two decades ago.
Sparrows Point was once a home to a thriving blue-collar manufacturing hub anchored by Bethlehem Steel, which was one of the world’s largest shipbuilders and also had a steel mill at the site. At its peak in the middle of the last century, it employed roughly 30,000 people.
Now, the site hosts logistics and fulfillment centers for Amazon, Under Armour and Home Depot, and it recently served as a cleanup hub after the Francis Scott Key Bridge collapse. Roughly 14,000 people work at the Tradepoint Atlantic site. (Amazon Executive Chairman Jeff Bezos owns The Washington Post.)
As manufacturing jobs moved overseas, the Baltimore region endured the same erosion that hollowed out manufacturing towns across the country, and the steel mill eventually shuttered in 2012, taking thousands of union jobs with it.
In 2014, a group of investors purchased the site for redevelopment and renamed it Tradepoint Atlantic.
If projections that the Andruil project will support 14,000 jobs are correct, it would create a workforce roughly similar to the steel mill at its peak.
The Andruil project will take over the lease previously held by U.S. Wind, which planned to fabricate ocean turbines at Sparrows Point until the Trump administration shut down development of offshore wind projects.
Moore, the governor, said in a call to reporters that the state and Baltimore County could provide up to 13 percent of the project’s $3.7 billion in private investment in matching funds, and that the project could create 3,100 permanent jobs.
“This massive new project will deliver the largest private investment, drive billions of dollars in economic activity, and create the most jobs in Maryland in history,” he said in a statement.
Anduril will enter into a long-term lease with Tradepoint Atlantic, according to Chris Brose, Anduril’s president and chief strategy officer, and will transform 2 million square feet of the port area into a defense production hub. It will initially make smaller submarine components such as torpedo tubes but will ultimately produce hulls and sterns once the shipyard is fully built out, he added.
In a call to reporters, Brose acknowledged that Anduril’s entry into traditional shipbuilding was a “slightly different direction” for the company. He said its officials were initially “skeptical” about the idea when the U.S. Navy approached them with it but felt compelled to help solve the U.S. shipbuilding crisis.
Anduril, founded in 2017, has become a darling of the U.S. defense industry. It creates autonomous drones, AI-enabled software and autonomous sea vehicles. In March, it was valued at $60 billion. Luckey, who said in 2024 on X that his “big league support for Donald Trump is no secret,” has also become a prominent GOP donor, giving roughly $5.9 million to Republican candidates since 2017, according to an August analysis by the Guardian.
The company has expanded its manufacturing footprint in recent years. Its Arsenal-1 production facility outside Columbus, Ohio, is largely dedicated to its semiautonomous aircraft, called Fury.
Some of the company’s sea weapons have recently run into issues. An older version of the company’s Dive-LD sea drone was captured last month by Iran’s Islamic Revolutionary Guard Corps, and raised concerns from engineering experts that Tehran would be able to reverse-engineer the technology to better defeat U.S. sea drones.
Pettyjohn, with the Center for a New American Security, said Anduril will face a learning curve making parts for nuclear attack submarines. The size of those ships are “orders of magnitude” larger than the unmanned sea vessels the company currently makes, and the manned submarine’s nuclear capabilities add far larger complexities in manufacturing.
“It’s a bit of a risky approach,” she said.
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