Anduril Industries, the Palmer Luckey-founded defence technology firm valued at nearly $117 billion, has secured a $2.9 billion US Navy contract to manufacture torpedo tubes and hull components for Virginia-class fast-attack submarines. The company will invest $3.7 billion of its own capital to build a new shipyard facility in Baltimore, Maryland, dubbed Arsenal-2. President Donald Trump was set to personally unveil the project on Tuesday afternoon. The timing is difficult to ignore. Just days earlier, Defense Secretary Pete Hegseth announced that Luckey, alongside Elon Musk, would co-lead Project Meridian — a newly-disclosed Pentagon initiative studying the future of warfare, including autonomous, AI-powered, and maritime military capabilities. The 120-day study, announced at Hegseth's State of the Force address in Virginia, is explicitly designed to identify what new technology the US military needs for next-generation battlefield supremacy. Anduril specialises in precisely those technologies: uncrewed underwater vehicles, naval drones, autonomous systems, and command-and-control software connecting military sensors and weapons. The contract addresses a genuine industrial bottleneck. American shipyards have been delivering Virginia-class submarines at a rate of just 1.1 to 1.2 per year against a Pentagon target of two. The navy currently operates 26 of these fast-attack boats — nuclear-powered but not part of the strategic nuclear deterrent — with each being upgraded to carry up to 40 Tomahawk missiles. Persistent supply chain disruptions and labour shortages have made the production gap a national security concern, one sharpened by the war on Iran and its effects on global oil traffic and maritime power projection. Anduril's entry into submarine component manufacturing represents a significant expansion from its roots in drones and software. Founded in 2017, the company has grown from autonomous border surveillance systems to maritime and undersea platforms and integrated command-and-control software. The Maryland facility is expected to generate 3,100 direct jobs and support over 11,000 indirect roles. Anduril President Chris Brose emphasised that the facility's "main focus" is Virginia-class component manufacturing, not new drone platforms — the government is "buying the results of what we're able to produce." The structural question is whether this represents healthy industrial capacity expansion or a new form of defence-tech capture. Luckey simultaneously advises the Pentagon on what technologies the military needs and runs the company best positioned to supply them. The traditional defence primes — Huntington Ingalls, General Dynamics — have struggled with the submarine production backlog for years. Bringing in a well-capitalised tech disruptor could genuinely accelerate output. But the co-location of advisory and commercial roles is the kind of arrangement that, in any other procurement context, would trigger conflict-of-interest scrutiny. The $3.7 billion private investment is notable — Anduril is putting up more capital than the contract is worth, a signal of confidence in long-term defence spending growth and a bet that Arsenal-2 becomes a permanent fixture of the naval industrial base. This is not a one-off contract but a structural repositioning: a Silicon Valley-born startup embedding itself into the hardest, heaviest layer of American defence manufacturing. What the next two decades look like depends on whether this pattern — tech founders advising on requirements, then fulfilling them — becomes the template for US defence procurement. If the submarines get built faster, the arrangement works on its own terms. If the advisory role becomes a pipeline for contracts, the US gets a new kind of military-industrial concentration, this time dressed in hoodies instead of suits.
