Supercavitation, in a nutshell, involves surrounding an object with a bubble of gas, so it can pass through the water with very little friction. In the case of GHOST, the objects in question are its two submerged buoyant tubular foils. Although the company isn't clear on how the process works, presumably the foils would have to be designed in such a way that when GHOST's gas turbines thrust it forward, water is deflected outward at the front of each foil, creating an envelope that closes behind it.
While there's presently no word on whether or not GHOST has any takers, JMS claims to be already working with a large international defense company on a 150-foot version of the craft, and on creating an unmanned underwater vehicle that utilizes its super-cavitating technology.
Source : http://www.gizmag.com