WASHINGTON — The Navy and tech firm Palantir have announced an initial $448 million contract that will see the tech company proliferate its artificial intelligence tools throughout several public and private shipyards, as well as individual suppliers, with the hope of boosting nuclear submarine production.
The announcement came on Tuesday night in downtown Washington, DC, where Navy Secretary John Phelan was attending an industry day for the service’s new Rapid Capabilities Office, which he established earlier this year, as Breaking Defense first reported.
Towards the end of the event, he took the stage with Palantir chief Alex Karp to jointly announce the new initiative, dubbed ShipOS or Shipbuilding Operating System, which Phelan characterized as “the most ambitious integration of artificial intelligence into naval construction, maintenance and repair and history.”
“We’re deploying an AI-powered shipbuilding operating system across the maritime industrial base. Every shipbuilder who partners with us will have AI-powered tools that optimize their work in real time,” he said. “Every supplier in the network will be connected through intelligent logistics. Every program manager will have unprecedented visibility into schedule, cost and risk.”
Karp compared the effort to the Pentagon’s broad artificial intelligence and machine learning effort Project Maven.
“We’re bringing that same technology to manufacturing, and we’re absorbing the risk along with you,” the Palantir chief told the crowd.
The move also comes amid a Pentagon-wide push to lean into AI-enabled technology. The ShipOS announcement came the same day Secretary of Defense Pete Hegseth announced a new generative AI platform, GenAI.mil, that would make the emerging tech officially available to all servicemembers.
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Officials from both the Navy and Palantir said that ShipOS would be proliferated through three of the public shipyards and some private shipyards. When asked which shipyards would receive the technology, a Navy spokesman told Breaking Defense, “The Navy intends to start with ShipOS at our nuclear shipyards and our nuclear repair yards.”
Jason Potter, who is currently the Navy’s acting acquisition executive, told reporters on the sidelines of the event that “this is about submarines, improving production, first and foremost, and that’s what we’re targeting.”
Palantir is “in the shipyards … understanding what data we have, and it’s in all different forms and all different systems, and identifying what is driving performance,” he added.
Officials stressed that — unlike some historical Pentagon contracts — Palantir’s payouts from the Pentagon would be heavily contingent upon the tools delivering objective results, such as reducing the time it takes to deliver a particular valve from 12 to 10 months.
“The goal here is at the end of the two years … the product and the tools that Palantir has developed need to be appealing enough to the companies to continue to pay for them,” said Potter.
Mike Gallagher, the former GOP congressman from Wisconsin that now leads Palantir’s defense efforts, said the initial contract lasts two years and aims to expand into 100 suppliers.
“We have to prove the value,” he added. “And then at the end of the two-year program, the companies, if we push ourselves, will take on the sustainment costs.”
A Navy statement following the announcement said the service had already conducted a pilot program at General Dynamics Electric Boat, during which the service claimed reduced submarine schedule planning from “160 manual hours to under 10 minutes.”
“The initial investment will focus on Submarine Industrial Base shipbuilders, shipyards, and critical suppliers. The expansion beyond the Submarine Industrial Base will be systematic and informed by lessons learned, with the Navy validating approaches and developing proven implementation strategies that can be adapted for surface ship programs,” according to the Navy statement.
Updated 12/10/2025 at 10:47 am ET with comment from a Navy spokesman.