The U.S. Navy is turning to AI to turbocharge its shipbuilding capabilities.
Secretary of the Navy John Phelan announced a $448 million strategic investment in a shipbuilding operating system (Ship OS) developed by data integration software provider Palantir. The contract will run through the end of 2027.
The AI-powered Ship OS is built to help streamline shipbuilding production, reduce costs and enhance the Navy’s ability to build ships faster and more efficiently as the service addresses years-long woes over shipbuilding delays.
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Along with the accelerated production, Palantir said Ship OS could coordinate data, logic, models and recommended decisions across two private shipbuilders, three public shipyards and 100 suppliers. Palantir did not identify the companies.
“This investment provides the resources our shipbuilders, shipyards, and suppliers need to modernize their operations and succeed in meeting our nation’s defense requirements,” Phelan said. “By enabling industry to adopt AI and autonomy tools at scale, we’re helping the shipbuilding industry improve schedules, increase capacity, and reduce costs. This is about doing business smarter and building the industrial capability our Navy and nation require.”
The initiative will aggregate data from enterprise resource planning (ERP) systems, legacy databases and operational sources to identify bottlenecks and support proactive risk mitigation. In providing a data-driven approach to production management, the Navy aims to leverage Ship OS to make faster and more informed decisions.
During the pilot deployments of the operating system, the Navy reported improved efficiency, accuracy and output.
At submarine builder General Dynamics Electric Boat, submarine schedule planning was reduced from 160 manual hours to under 10 minutes, while Portsmouth Naval Shipyard cut material review times from weeks to under one hour.
“Ship OS helps build on time and under budget so American taxpayers get more out of every shipbuilding dollar,” Palantir said in a post on LinkedIn.
During a U.S. Navy-sponsored event in Washington, Palantir CEO Alex Karp told reporters that software is necessary to track parts status and correct bottlenecks.
“What keeps these subs from being built is every time they have to wait for a product they have to delay the whole enterprise” Karp said. “Already, that problem’s gone” under Palantir’s proposal, he noted.
The partnership comes as the Trump administration aims to bolster shipbuilding efforts and close a major gap with China, which accounts for 34.8 percent of ships built worldwide according to Clarksons. Data cited by the U.S. Trade Representative from BRS Shipbrokers, the U.S. built just five commercial ships in 2022. China built 1,794 that year.
In recent years, the U.S. has fallen behind its contemporaries for various reasons, with both the Navy and corporate officials blaming problems with shipbuilding programs on labor shortages and production delays by subcontractors. Over the summer, a government watchdog said that the Department of Transportation hasn’t established the goals required to properly assess the performance of four financial aid programs designed to encourage shipbuilding.
The Palantir partnership could help the shipbuilding effort where Washington’s effort thus far have fallen flat. Bills like the SHIPS for America Act introduced in Congress over the past year have failed to gain traction, and the Office of Shipbuilding that was expected under the Trump administration has been quietly shelved under the Office of Management and Budget with no apparent progress.
Any attempt at a shipbuilding renaissance appears to be with the help of foreign allies.
As part of the countries’ new trade deal, South Korea recently pledged $150 billion to help the U.S. attempt to restore its shipbuilding capabilities. Shipbuilders like Hanwha Group, HD Hyundai and Samsung Heavy Industries are all part of that deal, with each company supporting U.S. Navy shipbuilding via direct and indirect partnerships.
As the U.S. fortifies its shipbuilding capabilities, global ocean carriers continue to order more vessels to beef up cargo-carrying capacity.
According to container shipping research firm Alphaliner, the global container ship order book is currently the largest it has ever been with more than 1,000 newbuildings and over 10 million 20-foot equivalent units (TEUs) of capacity on order.
This represents 31.1 percent of the global fleet in terms of TEU slot capacity.
Cosco Shipping is forking over $7 billion to China State Shipbuilding to build out 87 new vessels, expanding on the company’s already swollen order book. Alphaliner reports the group already has 82 container ships on order, amassing a total capacity of 1.1 million TEUs on order.
On Friday, Hapag-Lloyd unveiled it signed a more than $500 million contract with the Chinese shipyard CIMC Raffles for the construction of eight new container ships. The ordered units will each have a capacity of 4,500 TEUs and are scheduled for delivery in 2028 and 2029.
