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President Donald Trump announced the U.S. government will take a 40% stake in the new shipyard being built in Baltimore to boost submarine production, adding a major government ownership component to the $6.6 billion project.
“The ultimate proof of our commitment to ensuring the shipyard’s enduring success: American taxpayers will receive a 40 percent stake in the new shipyard,” Trump said during remarks in Sparrows Point on Tuesday. “We get 40 percent.”
Anduril has said the stake will be in a new subsidiary created to operate the Arsenal-2 shipyard, rather than in the defense tech company itself. Further details about what rights come with the government’s 40% interest, what the government is providing in exchange and how it could ultimately generate a return have not yet been publicly released.
Fox News Digital has reached out to Anduril and the White House for details.
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The size of the stake stands out even as the Trump administration has increasingly taken direct government interests in companies and projects it considers critical to national security. The administration has struck equity arrangements involving chipmaker Intel, rare earths producer MP Materials and other strategic industries.
The arrangement is part of a broader $6.6 billion effort to expand production of Virginia-class attack submarines as the U.S. struggles to keep pace with China’s vast shipbuilding capacities and the Navy falls behind on its production goal.
Anduril is committing $3.7 billion of its own capital to build the facility and manufacturing capacity, while the Navy could spend up to $2.9 billion purchasing what it produces.
The project is aimed at closing a persistent U.S. submarine production shortfall as China rapidly expands its naval and shipbuilding capacity. American shipyards are delivering roughly 1.3 Virginia-class attack submarines a year, short of the Navy’s goal of two, which it does not expect to reach until around 2032. Once fully operational, Arsenal-2 is expected to add about 9 million labor hours annually to the submarine industrial base, increasing Virginia-class production capacity by roughly 15%, an administration official told reporters on a call before Trump’s remarks.
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An industry official on the call emphasized that Anduril would finance the new production capacity itself while the government paid for the resulting output.
“I wouldn’t say that the government’s paying us back. We feel the government [is] buying the results of what we’re able to produce,” the industry official said.
The 40% government stake was not disclosed on the call, which included questions from reporters about how the project would be financed.
The submarine crunch is part of a broader shipbuilding gap with China, whose vast commercial maritime industry also supports its rapidly expanding navy. China now accounts for more than half of global commercial shipbuilding output, while the U.S. accounts for only a fraction of 1%, giving Beijing an enormous industrial base that can also support military ship construction.
Anduril plans to begin with critical components including torpedo tubes, which a senior administration official described as a current “gating component” slowing Virginia-class production. The company eventually plans to manufacture larger modules and sections of submarines at Arsenal-2.
The more than 2 million-square-foot facility is expected to create 3,100 direct jobs and roughly 11,000 indirect jobs nationwide, with operations slated to begin around 2030.
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