Palantir Technologies is becoming a deeper partner to the US military as the Navy launches ShipOS, a $448 million effort to use the company’s AI and data tools to improve submarine production, according to a new report from Bloomberg.

The deal will provide Palantir’s Foundry and Artificial Intelligence Platform across select shipyards and suppliers.

The Navy wants to fix chronic delays and overruns affecting its Virginia- and Columbia-class programs. Secretary of the Navy John Phelan said the goal is to speed up an industry that has struggled with labor issues and subcontractor delays: “By enabling industry to adopt AI and autonomy tools at scale, we’re helping the shipbuilding industry improve schedules, increase capacity, and reduce costs.”

Palantir CEO Alex Karp emphasized the scale of the challenge, saying, “It takes 10 million man hours to build a submarine. There are 2,000 businesses involved. Every single one of these components is specialized.” He added that tracking parts through software is vital because “that’s exactly why you need software” to remove bottlenecks, arguing that “already that problem’s gone.”

Bloomberg writes that two major shipbuilders and three public shipyards will receive the software first, and Phelan said the same system could later support carriers, the fleet, and even fighter jets.

The Navy expects the Palantir approach could “significantly” reduce the Columbia-class delay, currently projected to push delivery to March 2029. The contract uses a new “shared risk” model. Phelan said, “If they perform well…they’re going to do well and they should.” Karp responded, “You’re forcing us to absorb risk,” adding, “We get paid as we perform…This is not your typical ‘you get paid after everything fails’ kind of contract…We want to change contracting across the US government to ‘you get paid when it works.’”

Among names worth watching in the submarine space are Kraken Robotics, which has signed cooperative R&D agreements with the U.S. Navy for next-generation sonar systems, Huntington Ingalls Industries, the parent of Newport News Shipbuilding, and General Dynamics, which owns Electric Boat, builder of the Virginia- and Columbia-class nuclear submarines.

Palantir, meanwhile, is expanding its work with the U.S. Navy, using AI and data management platforms to support fleet readiness, logistics, and complex maintenance programs across submarine and surface operations.