US President Donald Trump and Defence Secretary Pete Hegseth on 7 October 2026 officially launched the Arsenal-2 shipyard project at Sparrows Point, Maryland — a $6.6 billion public-private investment that the administration describes as the largest new shipyard built in the United States since World War II. The facility will expand production of nuclear submarine components and autonomous underwater vessels, marking a significant escalation in American defence-industrial ambition.

How the $6.6 Billion Is Structured

Defence technology company Anduril Industries is committing $3.7 billion to build and operate the facility, while the US Navy is contributing up to $2.9 billion under an agreement tied to production outcomes rather than upfront allocation. The arrangement represents an unusual move by Anduril — a firm best known for autonomous systems — into the heavy industrial base supporting nuclear-powered submarines.

'In a tremendous victory for our country and for the city of Baltimore, Anduril is investing $3.7 billion dollars in a state-of-the-art shipyard that will be known forever as Arsenal-2,' Trump said at the launch ceremony.

What Arsenal-2 Will Produce

According to the administration and Anduril, the facility will initially manufacture components for Virginia-class nuclear-powered attack submarines — a programme where the Navy has long sought to expand its industrial base and accelerate output. Over time, Arsenal-2 is also expected to produce autonomous underwater vessels, reflecting the Pentagon's growing reliance on unmanned maritime systems.

'Today, we're officially launching the construction of the largest new shipyard in the United States,' Trump said. 'Since World War II, there's been nothing like what we're doing today.'

Jobs and Economic Impact

The administration said the project would directly create more than 3,100 jobs in Maryland and support an additional 11,000 jobs across the country through the wider supply chain. Sparrows Point — the chosen site — carries a long history of American industrial production, lending the launch symbolic weight alongside its economic significance.

'This massive project will create over 3,100 new jobs right here in Maryland and will support an additional 11,000 jobs across the nation,' Trump said.

Pentagon's Broader Defence Push

Defence Secretary Hegseth framed Arsenal-2 as a centrepiece of the administration's drive to rebuild US military-industrial capacity. 'In order to make America great again, you need to make your Navy great again,' he said. 'You need to make shipbuilding great again, our manufacturing great again, our defense industrial base strong and robust again.'

Hegseth added that from the outset of the Trump administration, the Pentagon had been directed to prioritise 'speed, scale and urgency' in weapons production. This comes amid intensifying competition with China, which has dramatically expanded its own naval shipbuilding capacity over the past decade and now operates the world's largest navy by vessel count. Analysts have repeatedly flagged the US submarine industrial base as a strategic vulnerability, making the Arsenal-2 announcement directly relevant to Indo-Pacific security calculations — including for AUKUS partners Australia and the United Kingdom, who are awaiting Virginia-class submarine deliveries under that trilateral pact.

What Comes Next

Trump told attendees to return in two years to see the transformation. 'When you come back in two years, you're not going to believe what you see,' he said, projecting that the site would 'roar with the sound of high-tech manufacturing, building ships and submarines.' Construction timelines and milestone-linked disbursement schedules have not yet been publicly detailed, and the project's ultimate delivery speed will be closely watched by both AUKUS partners and congressional defence committees.