The U.S. Navy awarded a $448 million contract in December 2025 to implement an AI-powered Shipbuilding Operating System (Ship OS) designed to accelerate production across its shipyards. Led by the Navy's Maritime Industrial Base (MIB) Program in partnership with Naval Sea Systems Command (NAVSEA), the initiative will first target the submarine industrial base before expanding to other shipbuilding platforms. Ship OS consolidates data from enterprise resource planning systems, legacy databases, and operational sources to streamline production management, address bottlenecks, and support proactive risk mitigation. This move highlights the broader trend toward modular automation and digital resilience across industries.
Background
The Navy's investment in Ship OS is part of a wider effort to modernize its maritime industrial base amid shrinking manufacturing capacity and increasing geopolitical tensions. Over recent decades, the submarine industrial base has lost approximately two-thirds of its capacity, necessitating substantial upgrades. The MIB Program has directed billions in supplemental funding-including $2.449 billion for private sector support-to strengthen infrastructure, supplier networks, and workforce capabilities.
Recent investments have strongly emphasized modular automation, predictive analytics, and additive manufacturing (AM). The Navy has partnered with Lincoln Electric and General Dynamics Electric Boat to integrate AM cells for building essential submarine components. Around $200 million in MIB investments has also supported supplier expansion, module fabrication, and deployment of digital tools across shipyards.
Details
At pilot sites, Ship OS yielded significant efficiency improvements. For instance, at General Dynamics Electric Boat, submarine schedule planning was reduced from 160 manual hours to under 10 minutes. At Portsmouth Naval Shipyard, material review times decreased from weeks to under an hour. Navy Secretary John Phelan noted that these efficiencies are essential for meeting production timelines as rival nations employ AI-powered shipyards to surpass the U.S. industrial base.
Additive manufacturing has also enhanced productivity and supply chain resilience. The Lincoln Electric-GDEB AM initiative aims to support the Navy's target of producing one Columbia-class ballistic missile submarine and two Virginia-class attack submarines annually by 2028. Additive manufacturing and robotics remain integral to modular automation strategies, enabling broader supplier participation and mitigating single-vendor risks.
Additionally, the Navy has expanded outsourced fabrication to shipyards in Mobile, Pascagoula, and Philadelphia, advancing distributed production architectures. These efforts include the development of new modular facilities and supplier onboarding, focusing on standardized interfaces and interoperability to support widespread modular automation.
Outlook
The Navy plans to deploy Ship OS across surface shipyards after its validation in the submarine sector, with the goal of standardizing digital infrastructure throughout the industry. Additive manufacturing adoption is also set to expand, promising reduced lead times and greater supply chain flexibility. These advances provide actionable strategies for civilian manufacturers aiming for improved automation, cybersecurity, and workforce development amid a volatile global landscape.
While civilian sectors may not match the defense industry's investment levels, the Navy's approach to modular automation-incorporating ROI evaluation, edge-enabled infrastructure, cybersecurity measures, and workforce upskilling-offers lessons with relevance across industries. Civilian manufacturers can leverage these strategies to enhance productivity while maintaining resilience and supply chain diversity.
