Palantir and the US Navy have signed a two-year deal to test whether its Foundry operational software can streamline the nation’s shipbuilding efforts and steer the Secretary of the Navy’s top budget priority into port.

The $448 million contract will bring Palantir’s technology to work on shipbuilders, shipyards, and critical suppliers, said US Secretary of the Navy John Phelan and Palantir CEO Alex Karp during a presentation Tuesday evening in Washington, D.C. The company is calling this particular program "ShipOS."

“Every ship builder who partners with us will have AI power tools that optimize their work in real time. Every supplier in the network will be connected through intelligent logistics,” Phelan said on stage according to U.S. Naval Institute News. “Every program manager will have unprecedented visibility into schedule, cost and risk. We’re not just building ships faster. We’re rebuilding American maritime industrial capacity for the AI age.”

Phelan listed strengthening US shipbuilding and the Maritime Industrial Base as the top priority of his $292.2 billion budget request for 2026, which called for 19 new battle force ships. The budget also invests $2.5 billion just for submarine builders to increase their "health and supply chain enterprise."

Palantir’s software will initially be deployed across two major shipbuilders, three shipyards, and 100 suppliers, all of which are part of the Maritime Industrial Base (MIB), a Navy program established in 2024 to revitalize US shipbuilding and repair. Palantir previously announced a deal with MIB to use its Warp Speed manufacturing software in July.

That early work resulted in leaps in efficiency, according to a press release. At General Dynamics Electric Boat – which designs, builds, repairs and modernizes nuclear submarines for the U.S. Navy – submarine schedule planning was reduced from 160 manual hours to under 10 minutes. Portsmouth Naval Shipyard cut material review times from weeks to under one hour.

In order to win more business, Palantir must deliver “measurable cost savings over time, improved schedules, reduced delays, and increased production efficiency, with productivity gains offsetting the initial investment while establishing a more capable and resilient industrial base,” according to the announcement.

Palantir’s head of defense Mike Gallagher told reporters at Tuesday’s event that it was now up to the software company to deliver the operational gains it has promised, according to Breaking Defense.

“We have to prove the value,” he said. “And then at the end of the two-year program, the companies, if we push ourselves, will take on the sustainment costs.”

Once its running, Foundry will aggregate data from enterprise resource planning systems, legacy databases, and operational sources to identify bottlenecks, streamline engineering workflows, and support proactive risk mitigation, the announcement stated.

“This is another watershed deal for Palantir on the Foundry platform,” Wedbush Securities analyst Dan Ives told El Reg. “Big step forward. We believe Palantir will be able to do this at scale.” ®