Australia, the UK, and the U.S. are joining forces to build nuclear-powered submarines and integrate AI into military tech. From the Australia-U.S. strategic alliance to $368 billion in investments and shipyard bottlenecks — here’s how AUKUS is reshaping the balance of power and why it’s rattling China.
AUKUS aims to develop nuclear submarines and embed AI in military command systems. This push is driven by the U.S. and its allies’ need to maximize influence in the Indo-Pacific, spurred by China’s rapid military growth. Former NNSA deputy administrator F. Rose called Australia’s pursuit of nuclear subs a strategic game-changer against China. The reasoning is straightforward: any potential conflict would likely center on air and naval operations, and Australia’s subs would make a major impact.
Australia plans to acquire up to eight nuclear subs, a major win for U.S. naval influence. Unsurprisingly, China isn’t thrilled. Its attempts to raise concerns through the IAEA and invoke the Nuclear Non-Proliferation Treaty have fallen flat.
AUKUS faces practical hurdles: Australia’s limited infrastructure, the program’s steep cost, and U.S. shipyard constraints. Australia has zero experience operating nuclear subs and only one research reactor. Still, its navy is already sending sailors to the U.S. Navy’s Nuclear Power School in Charleston, with 12 officers now serving on Virginia-class subs.
The projected cost of AUKUS ranges from $268 to $368 billion, covering U.S. Virginia-class sub purchases, construction of SSN-AUKUS subs in Australia, and major naval infrastructure investments. Despite the eye-watering price tag, Australia’s successive governments remain committed to the U.S. partnership.
One unresolved issue is U.S. shipyard capacity. The U.S. Navy currently builds just 1.2 subs annually but needs a steady 2.3 to meet AUKUS commitments. Australia is injecting funds to modernize U.S. shipyards, and as a stopgap, the U.S. will deliver three Virginia-class subs by 2030.
U.S. Defense Secretary P. Hagstrom views China as the primary threat, and Australia’s role as an ally offers strategic leverage. Its investment in U.S. industry aligns perfectly with Trump’s “America First” policy: countering China while boosting jobs.
This feels like a Cold War-style standoff. The U.S. aim is clear: bolster its military edge, curb China’s Indo-Pacific influence, and strengthen its own and allies’ defense industries. China, in turn, is forced to respond.