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Anduril won an up to $2.9 billion contract with the U.S. Navy on Tuesday to boost submarine production, days after co-founder 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 2 million-square-foot facility will build components for the Virginia-class submarine. Some parts, 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. President Donald Trump thanked Luckey by name in comments Tuesday afternoon to mark the investment, calling him a "friend" and "very brilliant guy." The deal comes days after the Department of Defense tapped 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. Department of Defense Chief Technology Officer Emil Michael addressed Luckey's involvement with the Pentagon in comments to CNBC on Tuesday, dismissing any concerns about a potential conflict of interest. "There's really nothing to see here," he said. Michael said the collection of academics, former military and industry leaders in Project Meridian is "exactly the right kind of mix that you want" to prepare for any future conflict. Defense tech companies and their leaders have seen their influence grow in Washington in recent months as 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. Anduril is widely known for building autonomous drones and crafts. Over the summer, the Wall Street Journal reported that the company was reportedly in talks to build drone boats on the site. Brose said the facility will focus on the Virginia-class submarine program, illustrating a push into conventional shipbuilding by the growing defense contractor. "Our goal here is to be a critical, and hopefully, over time, much larger and growing part of the supply chain for our lead shipbuilders," He said. "And over time, we hope that'll grow up to very large sections of the ship." Trump made several references to autonomous submarines and drones during his remarks. The massive Virginia-class vessels 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. "This is an opportunity to really reimagine how a shipyard is built and how this work is done, and that's just not something that our current industrial base has the luxury of doing," Brose said. CORRECTION: This headline has been updated to reflect that co-founder Palmer Luckey was named to the Pentagon's Project Meridian. An earlier version misstated his title.
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