Palantir (PLTR) Stock: Company Wins $448 Million Navy Contract for Submarine Fleet AI System

TLDR

• Palantir Technologies secures $448 million Navy contract to modernize submarine fleet supply chain management
• AI-powered Ship OS platform replaces manual tracking, cutting a 200-hour process down to 12 seconds
• System provides 60-180 days advance notice of supply chain issues versus same-day alerts
• Contract funded by Trump administration spending bill and could expand to carriers and aircraft
• Program already turned 1,850 production days into 75 days for one supplier

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Palantir Technologies landed a $448 million contract with the U.S. Navy to transform how the military manages its nuclear submarine fleet supply chains. Navy Secretary John Phelan announced the deal on Tuesday.

The contract funds come from President Trump’s spending bill passed in July. The program, called Ship OS, initially targets submarines but may expand to aircraft carriers and fighter jets later.

Palantir’s AI software replaces manual spreadsheet tracking that currently requires about 20,000 man-hours. The platform gives the Navy predictive analytics to spot supply chain problems months before they happen.

Palantir Technologies Inc., PLTR

CEO Alex Karp said the system will alert the Navy 60 to 180 days in advance about potential issues. That’s a major improvement over finding out the same day a problem stops work.

Cutting Maintenance Time and Costs

Submarine overhauls typically take 18 months but often run longer due to parts shortages. The Navy repairs submarines exclusively at government-owned shipyards every six to eight years.

Bryan Clark, a Navy expert at the Hudson Institute, said the public shipyards struggle with management efficiency. Submarines often sit idle waiting for materials and workers to arrive at the right time.

The Ship OS program connects two major shipbuilders, three public shipyards, and over 100 suppliers. This creates a unified view of the entire supply chain and production capacity.

Former congressman Mike Gallagher, now Palantir’s head of defense, shared early results. The system turned 1,850 production days into just 75 days for one supplier. Another supplier saw a 200-hour process shrink to 12 seconds while quality improved 50 percent.

A third supplier eliminated 2,500 planning days using the platform. Gallagher said Palantir believes years can be saved through widespread adoption of the technology.

Expanding Defense Business

This contract extends Palantir’s Navy relationship that goes back at least a decade. However, the company’s biggest Defense Department revenue comes from Army contracts.

Since Trump returned to office, Palantir secured roughly $2 billion in new government contracts. The Defense Department remains the largest driver of the company’s government revenue growth.

The deal supports the Trump administration’s push to revitalize American shipbuilding. An April executive order directed expansion of the shipbuilding industry through investment and incentives.

Palantir CTO Shyam Sankar previously highlighted China’s shipbuilding capacity as 232 times larger than America’s. He argued U.S. industry consolidation forces choices between building submarines for allies or domestic use.

Navy officials said the investment provides resources for shipbuilders, shipyards, and suppliers to modernize operations. The program aims to improve schedules, increase capacity, and reduce costs across the shipbuilding sector.

The contract marks a major expansion of Palantir’s work with the Navy. Acting Assistant Secretary Jason Potter confirmed the funding comes from the signature Trump spending legislation passed earlier this year.

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