HD Hyundai has teamed up with Palantir Technologies, a US software company, to develop uncrewed surface vessels by 2026, the Korean shipbuilding conglomerate said Sunday.

Officials from HD Hyundai and Palantir signed a memorandum of understanding at the US side’s office in Washington, DC, on Thursday. The two sides plan to develop reconnaissance USVs by 2026 and expand their portfolio to combat USVs later on.

In doing so, Avikus, an autonomous navigation solutions developer that was launched as an in-house venture of HD Hyundai in 2020, will put together its autonomous navigation software with Palantir’s artificial intelligence-based mission autonomy technology.

HD Hyundai Heavy Industries, the world’s biggest shipbuilder, will integrate cutting-edge equipment that will be loaded onto USVs with the software systems and take charge of developing high-performance hulls.

Palantir is considered one of the leading AI players in the US defense sector as it has clients in the US Department of Defense, Navy and Army. The company has also worked with Lockheed Martin to modernize the US Navy’s integrated battle system.

“The USV market is a new blue ocean that is controlled by state-of-the-art technologies,” said Joo Won-ho, head of HD Hyundai Heavy Industries' special ship business unit.

“The two companies will pioneer this sector based on their achievements and the trust they have built.”

As the existing USVs have limitations in operating under extreme conditions such as high waves and carrying out missions on par with crewed vessels, the two companies said they will look to develop distinguished models by combining their autonomous navigation technology and defense AI.

USVs are regarded as a required battle force as they can replace crewed vessels to scout dangerous areas, search for sea mines and remove them, and conduct combat missions. According to Allied Market Research’s report, the global USV market reached $920 million in 2022 and is expected to hit $2.7 billion by 2032 with a compound annual growth rate of 11.5 percent.

HD Hyundai and Palantir said they plan to optimize their USV models to cope with market demands from the US and Korea in the future.

“We are thrilled to partner with HD Hyundai as the world’s leading shipbuilder, and to build on the work we are already doing deploying AI in Korean shipyards,” said Ryan Taylor, chief revenue officer and chief legal officer at Palantir.

“By bringing AI capabilities to the future of naval warfare, we are continuing to build a defense ecosystem that will cement the competitive advantage of the United States and its Allies.”