Palantir signs $448 Million Navy contract to improve submarine production

Palantir Technologies (PLTR) secured a $448 million agreement as the U.S. Navy launches ShipOS, a new initiative that applies the company’s AI and data systems to submarine production. The contract brings Palantir’s Foundry and Artificial Intelligence Platform to selected shipyards and suppliers.

The Navy is seeking to resolve persistent delays and cost overruns in the Virginia- and Columbia-class programs. Secretary of the Navy John Phelan said the service aims to accelerate an industry facing labor shortages and supplier setbacks. He said broader use of AI and autonomy tools is intended to improve schedules, strengthen capacity, and reduce expenses.

Palantir Chief Executive Alex Karp described the scale of the work involved in submarine construction. He said a single submarine requires 10 million labor hours and contributions from 2,000 specialized businesses. He said software is essential for tracking components and removing bottlenecks, adding that early use of the tools has already addressed a key backlog.

Two major shipbuilders and three public shipyards will be the first to adopt the software. Phelan said the system could later support aircraft carriers, the wider fleet, and fighter aircraft programs.

The Navy believes the Palantir effort could meaningfully reduce the projected delay affecting the lead Columbia-class submarine, currently estimated to push delivery to March 2029. The deal uses a “shared risk” structure. Phelan said performance will determine contractor returns. Karp said the model requires Palantir to assume risk and ties payment to results, adding that it departs from traditional federal contracting practices.

Companies active in the submarine sector include Kraken Robotics, which has cooperative research and development agreements with the Navy for advanced sonar technology. Huntington Ingalls Industries owns Newport News Shipbuilding, and General Dynamics operates Electric Boat, builder of the Virginia- and Columbia-class nuclear submarines.

Palantir is also broadening its work with the Navy in areas such as fleet readiness, logistics, and maintenance across submarine and surface operations.