America's largest military shipbuilder HII (NYSE: HII) said Wednesday it has signed long-term, performance-based production agreements with Path Robotics and GrayMatter Robotics worth up to $900 million across seven years, embedding physical AI into a full slate of U.S. Navy shipbuilding programs including aircraft carriers, submarines, destroyers, amphibious ships, future frigates and unmanned surface vessels.
Physical AI Enters The Shipyard
Announced August 6 in Arlington, Virginia, the deal falls under HII's High-Yield Production Robotics (HYPR) initiative and rewards the two startups only as they hit engineering, manufacturing readiness and quality milestones. Path Robotics brings its Obsidian welding foundation model and its new quadruped-mounted Rove mobile welder, while GrayMatter Robotics contributes its Factory SuperIntelligence platform for autonomous surface preparation, coating and inspection.
Two Stages, Navy-Grade Qualification
HII structured the agreements in two phases. First, a development phase where Path Robotics and GrayMatter Robotics will jointly validate high-precision autonomous welding, grinding, blasting, painting, assembly and inspection processes, then integrate them into an autonomous production line. Delivery follows only after independent qualification against Navy manufacturing standards. HII said it will start with small steel structures and grow into units and modules, feeding its distributed shipbuilding network.
Answering A Workforce Shortfall
HII plans to outsource more than 2.5 million hours of shipbuilding work in 2026, a 30% increase from 2025. Executive vice president Eric Chewning framed HYPR as a generational capacity bet and a response to the shortage of skilled welders slowing U.S. warship deliveries. Path Robotics CEO Andy Lonsberry called the deal validation that physical AI can scale in one of the world's most demanding production environments, and GrayMatter Robotics CEO Ariyan Kabir said the arrangement brings Factory SuperIntelligence to America's leading shipbuilder.
The three companies previously joined forces on the HYPR framework earlier in 2026 at the Navy League's Sea-Air-Space exhibition. HII's push follows a broader wave of physical AI investment inside U.S. defense manufacturing, including Mercury Systems' Palantir Foundry rollout and GrayMatter's earlier defense-finishing certification.
Reporting based on coverage from HII, GlobeNewswire, WorkBoat and Ohio Tech News.