Anduril won an up to $2.9 billion contract with the U.S. Navy on Tuesday to boost submarine production, days after CEO Palmer Luckey was named to a Pentagon future weapons task force.
The company is also investing $3.7 billion to scale a new shipyard at Sparrows Point, outside Baltimore, Maryland, slated to start operations in 2030 and create about 3,100 jobs.
Anduril said the more than 2 million-square-foot facility, dubbed Arsenal-2, will build components for the Virginia-class submarine. Some components, including torpedo tubes, will be manufactured at a 160,000-square-foot facility in Orange County, California.
"This is about putting more food on the table and being able to meet the requirements that our country has to produce more submarines," said Anduril President and Chief Strategy Officer Chris Brose in a press briefing.
The deal comes days after the Department of Defense tapped Anduril co-founder Luckey to join a new initiative called Project Meridian to identify and develop capabilities for future U.S. conflicts, raising questions over defense tech's growing sway in Washington as the companies compete for government contracts.
Former House Speaker Newt Gingrich and SpaceX CEO Elon Musk are also part of the project. Both SpaceX and Anduril are actively working with the U.S. government.
Defense tech companies and their leaders have seen their influence grow in Washington in recent months as President Donald Trump seeks to bolster U.S. military capabilities, including shipbuilding.
Marc Andreessen, whose venture firm Andreessen Horowitz pours billions into defense tech firms, including Anduril, was named to the Pentagon's defense policy board this summer, alongside Thiel Capital's Blake Masters.
The massive Virginia-class submarines are built by General Dynamics Electric Boat and Huntington Ingalls Industries. This summer, General Dynamics won a $76.6 billion Navy award to build submarines.