The United States Navy has invested in robots for more than a decade. However, what began with a few drone helicopters flying off the decks of Navy warships has recently morphed into a much bigger drone project.
One day soon, as much as 26% of the U.S. battle fleet could be run by robots: Medium Unmanned Surface Vehicles (MUSVs), Large Unmanned Surface Vehicles (LUSVs), and Extra-Large Unmanned Undersea Vehicles (you guessed it -- XLUUVs).
Now it's time for defense investors to begin figuring out who will benefit from this trend.
Image source: Getty Images.
This is no small project
According to a Congressional Research Service (CRS) report published last month, the Navy's proposed 2022 budget alone includes a request for $434 million to be spent on drone warship R&D.
As CRS describes the plan, America's future Navy will comprise three broad classes of ships: large, manned surface warships such as aircraft carriers, cruisers, and destroyers; smaller manned warships such as frigates and corvettes; and unmanned vessels that can sail independent of any kind of "mothership" -- the aforementioned MUSVs, LUSVs, and XLUUVs.
Size is relative. Applied to manned vessels, "large" extends all the way up to Ford-class aircraft carriers stretching three football fields in length and displacing 100,000 tons in the water. Large unmanned vessels, in contrast, might be as short as 200 feet long -- about the size of a corvette warship. But just because they're smaller doesn't mean unmanned vessels won't pack a punch. By saving space that would otherwise be needed for crew quarters, mess halls, and so on, the Navy expects to be able to pack its LUSVs full of "anti-ship and land-attack missiles," similar to a larger manned vessel.
Smaller MUSVs, as little as 45 feet in length, would be used primarily for surveillance, extending a battle group's radar coverage and bolstering its missile defenses. XLUUVs would be used for deploying anti-ship mines.
A brave new world for the Navy
The Navy envisions these robot warships making up a sizable percentage of the future fleet. As CRS points out, a June 2021 "long-range Navy shipbuilding document" described a future battle fleet structure comprising 321 to 372 manned ships, 59 to 89 unmanned LUSVs and MUSVs, and 24 to 76 XLUUVs -- anywhere from 404 to 537 ships in total.
Taken at the midpoint, that works out to a Navy comprising 346 manned warships and 124 unmanned vessels -- 470 total, of which about one in four will be robots.
The robots are coming, but who will build them?
Who will build all these robotic warships?
CRS identifies Boeing as the primary builder of XLUUVs, although major military shipbuilder Huntington Ingalls is also in this hunt. Leidos was the first big defense contractor to build an MUSV -- the Sea Hunter drone. Two years ago, the Navy tapped larger L3Harris to build as many as eight more, beginning with Sea Hunter's sister ship, the Seahawk.
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Key Data Points
L3Harris also appears to have taken the lead in converting four commercial vessels outfitted with autonomy software into the first class of Ghost Fleet Overlord LUSVs for the Navy. Other contractors bidding on LUSV work include publicly traded Huntington Ingalls, Austal, Lockheed Martin, and privately held Bollinger Shipyards.
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Key Data Points
And how much will they cost?
The prospect of several of these companies winning contracts to build as many as 165 new robot warships (and quite a few more manned vessels) implies a lot of new revenue for the Navy's favorite military shipbuilders.
How much money could we be talking about? CRS observes that acquiring the ships themselves will be "no more expensive than the current fleet architecture for generating a given amount of naval capability." Adding to the attraction, robotic warships don't carry crews who must be fed, housed -- and paid.
In an October 2020 report prepared for the Navy by the Hudson Institute, wherein a proposed fleet similar in size to the one described above (581 total ships, of which 139 would be drones) was outlined, the consulting firm estimated that growing the Navy to such strength would require spending about $24 billion annually over the next 30 years.
To put that into context, the current combined annual revenue of General Dynamics and Huntington Ingalls -- not America's only but by far America's two biggest military shipbuilders -- adds up to less than $19 billion, according to data from S&P Global Market Intelligence.
Granted, adding the revenues of other military shipbuilders -- Austal, Lockheed, Bollinger, and so on -- would raise this total a bit. Still, it would appear that by growing the Navy's shipbuilding budget less than 26% and shifting a great deal of spending toward the purchase of unmanned warships, there's the potential to nearly double the size of America's standing Navy from fewer than 300 warships to somewhere between 500 and 600 vessels.
Honestly, after crunching the numbers, this goal looks not only attainable but also actually quite affordable.
