US Navy Bets $448 Million on Palantir ShipOS to Solve Shipbuilding Crisis

In a decisive move to fix its chronic production delays, the U.S. Navy has awarded a massive $448 million contract to data analytics giant Palantir Technologies. The deal, announced Tuesday by Navy Secretary John Phelan and Palantir CEO Alex Karp, aims to deploy a new AI-powered operating system called "ShipOS" to modernize the nation's struggling maritime industrial base.

The partnership represents one of the most significant aggressive steps yet to digitize American shipyards, which have been plagued by labor shortages, supply chain fractures, and multi-year delays on critical platforms like the Virginia-class submarine.

"ShipOS": A Digital Nervous System for Shipyards
The initiative centers on deploying Palantir’s Foundry and Artificial Intelligence Platform (AIP) to create a single, unified view of the shipbuilding process. Instead of replacing existing legacy systems, ShipOS will sit on top of them, aggregating data from thousands of disconnected sources to find bottlenecks in real-time.


"For decades, Americans have watched billions of their tax dollars poured into a maritime industrial base plagued by bureaucracy, delays, and chronic shortfalls," Secretary Phelan stated. "ShipOS is not just new software; it is a new way of doing business."

Key Pilot Results: Before the full rollout, the Navy tested the system with two major contractors, yielding startling efficiency gains:

General Dynamics Electric Boat: Reduced the time required for submarine schedule planning from 160 manual hours to less than 10 minutes.

Portsmouth Naval Shipyard: Cut the time needed for material reviews from weeks to under one hour.

Targeting the Submarine Crisis First
The initial phase of the $448 million investment will focus exclusively on the Submarine Industrial Base—the network of shipyards and suppliers responsible for the Navy's nuclear-powered attack submarines. This sector is currently the Navy's highest priority, as production rates have fallen dangerously below the "2.33 subs per year" target needed to counter China's growing fleet.


Over 100 suppliers and two major prime shipbuilders will be integrated into the system immediately. "ShipOS arms the welders, engineers, and logisticians inside America's marine industrial base with the software they deserve," said Alex Karp, CEO of Palantir.


A "Warfighter" Approach to Manufacturing
The contract signals a broader shift in Pentagon strategy: treating industrial manufacturing with the same "kill chain" urgency as combat operations. By using AI to predict part shortages or labor gaps months in advance, the Navy hopes to prevent the "stop-and-start" work patterns that drive up costs.

If the submarine phase is successful, the Navy plans to expand ShipOS to surface ship programs (such as destroyers and frigates) systematically through 2026.

"This is about doing business smarter," Phelan added. "We are turning America's technological edge into maritime industrial dominance."