GrayMatter Robotics and Path Robotics will provide physical AI for U.S. Navy shipbuilding programs through a $900 million deal announced Thursday with Virginia-based military shipbuilder HII. Under the agreements, HII intends to award up to $900 million in total shipbuilding work to Path and GrayMatter across seven years, contingent on the companies meeting technology and manufacturing readiness targets. The announcement follows a February plan to explore integrating Path's physical AI for welding into shipbuilding operations. The group will accelerate development and deployment of advanced physical AI automation across programs including aircraft carriers, submarines, destroyers, amphibious ships, future frigates, and unmanned surface vessels. The deal supports HII’s distributed shipbuilding strategy: 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. The performance-based production agreements are part of the High-Yield Production Robotics (HYPR) program, including collaboration and joint development frameworks. GrayMatter CEO Ariyan Kabir called the agreement "an important milestone in bringing Factory SuperIntelligence to America's leading shipbuilding company," adding that combining Physical AI with autonomous production systems helps create manufacturing that learns, adapts, and improves over time.