Responsible Statecraft has reported:

President Donald Trump travelled to Baltimore this week to announce a $7 billion deal with defence technology company Anduril to build autonomous submarines and components for the U.S. Navy’s Virginia-class attack submarines. Once fully implemented, the plan is expected to revive the Sparrows Point area, where a Bethlehem Steel mill and shipyard once employed nearly 30,000 people.

The announcement has drawn mixed reactions, including concern about Anduril’s move into traditional defence contracts. Founded in 2017, the company has concentrated on autonomous drones and sea vehicles, as well as artificial intelligence software to operate them. General Dynamics and Huntington Ingalls Industries currently build American submarines.

Anduril founder Palmer Luckey’s recent appointment to a Pentagon study has also raised questions. He is co-leading the study on AI-powered weapons and the future of warfare with Elon Musk and Newt Gingrich. Anduril has so far specialized in small drones, leaving open how it will manage work on components such as torpedo tubes for crewed vessels and, eventually, the expansion needed to build hull sections.

The company faces a steep learning curve as it takes on more conventional defence work. It will also contend with workforce constraints already affecting the shipbuilding industry. The Government Accountability Office reported last year that the shipbuilding industrial base needs 174,000 new workers over the next decade to meet the Navy’s requirements. Anduril’s expansion will add to that demand.

Those concerns come amid years of difficulty in U.S. shipbuilding and what the source describes as ineffective defence policies. The Navy has struggled with nearly every effort this century to develop a major new shipbuilding program. The Zumwalt-class destroyer, Littoral Combat Ship and Constellation-class program are described as complete failures.

The aircraft carrier USS Ford entered active service years late and billions of dollars over budget. Sailors aboard the ship have also been unable to rely on its toilets to flush. These examples form part of a broader record of problems facing Navy construction and operations.

Politicians and Navy officials have for years criticized the condition of the submarine industrial base. Calls to invest more and raise submarine output regularly feature in defence budget debates. In 2015, Navy leaders considered increasing annual attack submarine production from two boats to three. Congress added $250 million in 2018 to strengthen the submarine industrial base, and by 2024, $3.3 billion in investments deemed “critical” had been made for the same purpose.

Despite that funding, attack submarine production has fallen from two boats annually in 2015 to 1.3 in 2026. The lower rate comes as demand is rising. Under the AUKUS agreement between the United States, the United Kingdom and Australia, Australia is to receive three Virginia-class submarines in the coming years.

Concerns about crony capitalism and possible conflicts of interest related to Anduril’s Baltimore deal have also been raised. The source argues those concerns coexist with the worsening submarine construction problem, despite billions of dollars invested to address it. It also says some coverage has treated the agreement as though it were the first instance of a politician directing a defence contract to a campaign donor.

The deal’s principal economic beneficiary is a state that voted for Kamala Harris by nearly 30 percentage points in 2024, the source notes. It presents the agreement as a possible way to meet future U.S. security needs, while acknowledging that an ideal world would not require submarines and that national security decisions should prioritize military effectiveness.