Navy Strikes Deal With Palantir for AI Overhaul of Submarine

The U.S. Navy has awarded Palantir Technologies [PLTR +0.19% A a contract valued at hundreds of millions of dollars to manage the supply chain of its nuclear submarine fleet in the hope of reducing maintenance downtime.

The deal marks an expansion of the companys work with the U.S. military in a sector that is a high priority for the Trump administration.

The contract will initially focus on submarines and could expand to other types of vessels, including aircraft carriers and jet fighters, Navy Secretary John Phelan said Tuesday.

Palantirs software is designed to give the Navy more visibility into its supply chain, by replacing workers needed to manually track parts using spreadsheets, and better predict when parts are needed, according to the Navy and the company.

Palantir Chief Executive Alex Karp said manually tracking parts takes roughly 20,000 man-hours.

It gives us more predictive analytics to understand when were going to potentially have problems in the supply chain, he said. Rather than hearing about a problem that day that will stop us, we will know 60, 90, 120, 180 days in advance that weve got it

Palantir believes there are not just months, but years to be saved with the rapid and widespread adoption of its software, said Mike Gallagher, a former congressman who is now a Palantir executive.

The deal, valued at $448 million, is being paid for with money from President Trumps signature spending bill, passed in July, said Jason Potter, the acting assistant secretary of the Navy for research, development and acquisition.

The aim is to speed up production of new submarines and labor-intensive overhauls of existing vessels.

The entire overhaul process is designed to take 18 months, but parts shortages often cause delays, according to Mark Montgomery, a retired Navy admiral who is senior director of the Center on

Cyber and Technology Innovation at the Foundation for Defense of Democracies.

Making sure parts are available where and when theyre needed historically... has been a challenge,Montgomery said.

The Navy says the program with Palantir will provide a comprehensive view of the supply chains and production capacity of shipbuilders in a bid to end unnecessary delays and cost overruns that have plagued shipbuilding.

The contract marks a significant expansion with the Navy for Palantir, which has contracts with the service going back at least a decade. Its more

lucrative business sits elsewhere in the Defense Department, particularly with the Army.

The deal with the Navy builds on a focus Palantir Chief Technology Officer Shyam Sankar has often spoken about-Palantirs role in revitalizing U.S. manufacturing, including the countrys struggling shipbuilding sector, by helping companies untangle complicated supply-chain problems.

China has 232 times more shipbuilding capacity than the United States, whose industry has consolidated to the point where we have to choose between building submarines for our allies or for ourselves, Sankar wrote last year.

Rebooting Americas shipbuilding is also a key priority for the Trump administration. An April executive order calls for the expansion of

shipbuilding through investment and other incentives.

Since President Trump has returned to office, Palantir has landed new government contracts

valued at roughly $2 billion, according to federal contracting data. Its run has extended since 2019, with the Defense Department the largest singleagency driving its government revenue growth.

Palantirs project with the Navy, called Ship OS, will initially include two major shipbuilders, three public shipyards and more than 100 suppliers, the Navy said.

The Navy repairs its submarines exclusively at government-owned shipyards. Submarines are overhauled every six to eight years, said Bryan Clark, a Navy expert who is a senior fellow at the Hudson Institute.