HII (NYSE: HII), America's largest military shipbuilding company, has announced long-term performance-based production agreements with GrayMatter Robotics and Path Robotics, both members of its High-Yield Production Robotics (HYPR) team. The agreements are designed to accelerate the development and deployment of advanced physical AI automation across U.S. Navy shipbuilding programs, including aircraft carriers, submarines, destroyers, amphibious ships, future frigates, and unmanned surface vessels. The initiative comes as the Navy and its industrial partners confront persistent capacity constraints, skilled labor shortages, and rising demand across concurrent programs — including the Columbia-class ballistic missile submarine, Virginia-class attack submarine, and surface combatant construction lines at HII's Ingalls and Newport News shipyards.

"We are committed to making generational investments to develop new shipbuilding capability and to expand capacity," said Eric Chewning, executive vice president of maritime systems and corporate strategy at HII. "Together, we are defining a new approach to robotics in shipbuilding: automation that can adapt to extreme levels of complexity, mix, and size. This collaboration represents a strategic investment in the future of American shipbuilding — strengthening industrial base resilience, expanding distributed shipbuilding capacity, feeding critical materials to our shipyards and workforce, and unlocking new production efficiencies essential to delivering the Navy's growing fleet."

Under the agreements, HII intends to award up to $900 million in total shipbuilding work to Path Robotics and GrayMatter Robotics over seven years, contingent on the two companies meeting clearly defined technology and manufacturing readiness, and performance milestones outlined in the agreements. This sustained demand signal enables both companies to make significant long-term investments in robotics, autonomous systems, facilities, and workforce required to deliver Navy-grade production at scale. The scale of the commitment reflects a broader Department of Defense push to modernize the defense industrial base and adopt commercial-derived automation technologies to address production bottlenecks.

"For years, we've believed physical AI could fundamentally change manufacturing," said Andy Lonsberry, CEO and co-founder of Path Robotics. "HYPR is a powerful validation of our vision — that physical AI can scale shipbuilding capacity in one of the world's most demanding production environments. Together with HII, we're proud to be building the shipyard of the future, unlocking distributed shipbuilding, and establishing a blueprint for strengthening America's maritime industrial base."

"This agreement represents an important milestone in bringing Factory SuperIntelligence to America's leading shipbuilding company," said Ariyan Kabir, CEO and co-founder of GrayMatter Robotics. "By combining Physical AI with autonomous production systems, we're helping create manufacturing that learns, adapts, and improves over time, making complex shipbuilding faster, more resilient, and more scalable. Together with HII and Path Robotics, we're laying the foundation for the next generation of American industrial capability and helping ensure that the United States can build critical assets at the speed and scale our national security demands."

The performance-based production agreements form part of a broader set of strategic agreements that constitute the HYPR Program, which includes collaboration and joint development frameworks establishing governance, program execution, and long-term operational alignment among the companies. The companies expect the collaborative effort to push the boundaries of automation never before seen in shipbuilding — an industry that has historically relied on extensive manual labor for fabrication, welding, and structural assembly.

The agreements are structured in two stages: a Navy-grade development stage and a delivery stage. During the development stage, both companies will partner with HII to develop, validate, and qualify high-precision production techniques for autonomous welding, grinding, blasting, painting, assembly, inspection, and other fabrication processes, then integrate them into an autonomous production line. The agreements establish a rigorous testing, qualification, and oversight process to ensure that every technology meets the stringent standards of U.S. Navy shipbuilding.

In the delivery stage, HII will begin sourcing shipbuilding work from both companies through the new line, contingent upon favorable cost, schedule, and quality performance. The delivery stage is designed to augment HII's current distributed shipbuilding strategy, starting with small steel structures and growing to include units and modules.

In 2026, HII plans to outsource more than 2.5 million hours of shipbuilding work, a 30% increase from 2025, while expanding its structural assembly network of assembly partner companies, enabling more work to be completed outside the shipyards before final assembly. Key milestones to watch include the progression of both robotics partners through the Navy-grade development stage, the initial transition of small steel structure production to the autonomous line, and the first qualified production techniques emerging from the HYPR Program.

Source: HII