Anduril, the AI drone maker, said on Tuesday that it will invest $3.7 billion to develop a new shipyard in Maryland to build critical components for the U.S. Navy’s Virginia-class submarines, Reuters reported yesterday. Following Anduril’s announcement, the Navy awarded Anduril a contract worth up to $2.9 billion to manufacture submarine components, with payments tied directly to production outcomes and the company assuming most of the execution risk, the company said. The new plant is to be built in Baltimore.

Anduril’s founder is Palmer Luckey who, like Alex Karp of Palantir, is a protégé of post-humanist billionaire Peter Thiel. Just last week, Hegseth named Luckey, along with Elon Musk and Conservative Revolutionary Newt Gingrich, to his future of warfare study. The fact that Musk and Luckey run companies with billions in Pentagon contracts is setting off alarm bells about conflicts of interest. “They all want to sell stuff,” Richard Painter, a professor of corporate law at the University of Minnesota, told NPR. “So if we go into it understanding that [Musk]—like all the other contractors, he wants to make a lot of money selling AI to the Defense Department. Whatever he proposes, but it’s not like he’s doing it as a neutral public service.”