President Donald Trump traveled to Baltimore this week to announce a $7 billion deal with the defense tech firm Anduril to build autonomous submarines as well as components for the Navy’s Virginia-class attack submarines. When fully implemented, the plan is expected to revitalize the Sparrows Point area of the city that once employed nearly 30,000 people at a steel mill and shipyard run by Bethlehem Steel.

The announcement has been met with mixed reactions. A major point of concern seems to be Anduril’s expansion into traditional defense contracts. The company was established in 2017 and has focused on building autonomous drones and sea vehicles and developing AI-enabled software to operate them. American submarines are currently built by General Dynamics and Huntington Ingalls Industries.

The announcement has raised some eyebrows considering Anduril’s founder Palmer Lucky’s recent appointment as a co-lead, along with Elon Musk and Newt Gingrich, on a Pentagon study about AI-powered weapons and the future of warfare. It remains to be seen how Anduril, a company that has so far specialized in small drones will fare building components like torpedo tubes for crewed vessels, to say nothing of scaling up to eventually build hull sections. The company will undoubtedly face a steep learning curve as it expands into more traditional defense contracts.

One of the biggest challenges the company will face will be the same workforce issues plaguing its existing counterparts. The Government Accountability Office reported last year that the shipbuilding industrial base needs 174,000 new workers in the next decade to keep pace with the Navy’s needs. Anduril’s expansion will only add to those workforce demands.

But such concerns should be tempered a bit considering the current state of American shipbuilding and years of ineffective defense policies.

The U.S. Navy has floundered in nearly every effort to develop a major new shipbuilding program in this century. The Zumwalt-class destroyer , Littoral Combat Ship, and the Constellation-class program are all complete failures. The USS Ford entered active service years behind schedule and billions over budget and now the sailors serving aboard the aircraft carrier can’t even rely on the ship’s toilets to flush .

Politicians and Navy officials have decried the woeful state of the submarine industrial base for years. Calls for greater investment to increase the production rate of submarines have become a regular feature of defense budget debates. In 2015, Navy leaders discussed the possibility of expanding attack submarine production from two to three boats each year. Members of Congress added $250 million to strengthen the submarine industrial base in 2018. By 2024, $3.3 billion in “critical” investments were made for the same purpose.

For all of those investments, the production rate for attack submarines has gone from two per year in 2015 to 1.3 in 2026 . Falling submarine production rates are particularly problematic at the moment because demand is increasing. The AUKUS deal between the U.S., United Kingdom, and Australia would see the latter country receive three Virginia-class submarines in the coming years.

Concerns about crony capitalism and potential conflicts of interest when it comes to Anduril’s Baltimore deal are real, but so is the fact that, despite investing billions of dollars to improve the submarine construction problem, it has only gotten worse. To judge from some of the breathless coverage of the deal, a casual reader would think this is the first time a politician has ever steered a defense contract to a campaign donor. In this particular case, it should be noted that the Trump administration inked a deal where the principal economic beneficiary is a state that voted for Kamala Harris by nearly 30 points in 2024.

In an ideal world, the American people would not need things like a submarine. In a better world, national security policymakers would make every decision with military effectiveness as their primary concern. But in the real world of 2026, this plan might just be the best option to meet America’s future security needs.