Defense- & Dual-Use Technologies Edition

The boys are not alright: geopolitical instability, cyberwarfare, domestic terrorism, and new threat technologies

Defense and dual-use texhnologies

Jan 03, 2025

Good morning, Happy New Year, and Welcome Back!

Countries across the globe seem to be struggling with internal politics. Political and at times physical standoffs have emerged in South Korea and Georgia. Foreign meddling has plagued Georgia, Romania, and now Germany. Let’s not get in to Eastern Europe, either. Europe has lost its supply of gas as Ukraine has turned off the spigot from Russia, as a pre-war deal expired.

Closer to home, there’s lots of misinformation swirling about an awful terrorist attack in New Orleans involving a radicalized Army vet and an as yet very confusing suicide that saw an active duty service member shoot himself before his Tesla cybertruck exploded.

China hacked the U.S. Treasury resulting in significant theft of documents. President-Elect Trump wants to see increased cyberattack capabilities allowing better, more punitive responses to such hacks. We think this is not to be missed and highlights the growing importance of cyber in warfare. Understanding thresholds where cyberattacks merit physical retaliation is a critical area of study for future wars.

Speaking of China, they’ve unveiled several new military systems including a tailless delta wing jet (likely a medium range bomber), a new AEW&C aircraft, and—perhaps most importantly—an alleged military-capable 5G base station that can operate in any terrain and at speed while connecting 10,000 robots.

China’s ‘junior partner’ in the axis of autocracy, Russia, continues to operate its shadow fleet of oil and gas tankers, while also continuing to sabotage key infrastructure in the Baltic Sea and around Europe. One of these tankers dragged its anchor for around 100km, damaging a power cable and several data cables. There’s a clear need to enhance our subsurface and seabed monitoring and defensive systems.

Alright, enough yapping, let’s dig in to the news!

News Headlines:

Army veteran turned Islamic State devotee implicated in New Orleans terrorist attack that left 15 dead and at least 30 hurt (AP)
Active duty Army Special Force master sergeant identified as driver in Tesla cybertruck blast at Trump hotel in Vegas (RT)
Putin: 'Everything will be fine' despite Russia's growing challenges (NYT)
South Korea court issues warrants to detain impeached President Yoon and search his office, leading to standoff before police call off arrest attempt (BBC)
Georgian presidential standoff intensifies as new, disputed president approves repressive laws against protestors; incumbent refuses to step down (GT)
Germany's president dissolves parliament, sets national election for February 23 (AP)
German government accuses Elon Musk of trying to influence its election; Musk continues vocal support of far-right Alternative für Deutschland (AfD) party (RT)
Russia, Ukraine conduct large prisoner swap (AP)
Ukraine halts transit of Russian gas to Europe after prewar deal expired (AP)
North Korea's Kim vows the toughest anti-U.S. policy before Trump takes office (AP)

Defense & Dual-Use Technologies

DoD’s Office of Strategic Capital accepting loan applications as it looks to lend up to $948M (DS)
U.S. Global Investors create Aerospace & Defense ETF, WAR (ETFT)
Air Force aligns cyber center to CIO (DS)
Army unit in Poland the first to field upgraded multiple launch rocket system (MT)
Congressional report: Navy has bought 94 Arleigh Burke class destroyers, wants to buy two more of the most advanced version in 2025 (CRS)
Incoming Trump administration wants less gov’t involvement in cyberdefense, wants more cyber attack capabilities (DO)

Threat Tech

Key elements of Iran's 'axis of resistance' appear weakened: Congressional report (CRS)
Finnish investigators find an anchor drag mark on the Baltic seabed after suspicious cable damage, implicating Russian 'shadow fleet' (AP)
U.S. Treasury says Chinese hackers stole documents in 'major incident' (RT)
China claims first ‘military-proof’ mobile 5G base station capable of connecting 10,000 data exchange points in any terrain (SCMP)
Chinese war games system sees surprise U.S. attack on PLA carrier group in South China Sea (SCMP)
Chinese warships, aircraft deploy in strength to Scarborough Shoal (USNI)
China increases sanctions on seven companies over aid to Taiwan (AP)
Images emerge of China's new Y-20 airborne early warning jet (TWZ)
China’s new tailless military aircraft likely a medium-range bomber (ASF)
Azerbaijani anger toward Russia grows after shooting down of passenger plane (RFE)
Russia commissions fifth Yasen nuclear attack sub (USNI)
North Korea's new warship appears to be designed for vertical launch system, phased array radar (TWZ)

Foreign Defense Tech

Estonia Frankenburg Technologies’ anti-drone mini missile to be tested in Ukraine (DN)
Israel creates hub to hasten military AI, autonomy research (DN)

Defense Industry

Defense industry could see big shakeup under Trump (BD)
Army to sole-source deal for hypervelocity projectiles, drone-killing artillery cannon to BAE (DS)
Bane & Company comes out bullish on defense sector (B&C)
Austria to buy 12x M-346 jets from Leonardo for training, defense roles (DN)

Autonomous Systems

U.S. considers potential rules to restrict or bar Chinese drones, citing national security concerns (RT)
Drone show mishaps in Florida, South Carolina ground New Year’s events across the country (CNN)

Deal Flow:

Funds

Number of U.S. VC firms falls as tier-1 VCs dominate (FT)
U.S. investors in China venture funds race to comply with new tech rules (FT)

VC

Jeff Bezos and Bill Gates-backed AI-enabled mining startup KoBold Metals raised a $537M Series C led Durable Capital Partners and T. Rowe Price at a $2.96B valuation amid race for critical resources (TC)
Deterrence, a startup building tech to automate the production process of energetics, raised a $10.1M seed round led by Riot Ventures (FSME)

PE / M&A

Defense industry set for deal surge as companies look to expand in AI and space (FT)
Italy agrees to sell Piaggio Aerospace to Turkish drone maker Baykar (RT)
Chinese electronics manufacturer Wingtech plans to sell its product integration business to focus on semiconductors (SCMP)
Avion Solutions acquires laser tech and advanced weapons testing experts Tennessee Valley Research Group, expanding expertise in defense tech (PRN)

Opportunities

OSC is now accepting $10-$150M loan applications for companies building across a range of defense technologies including quantum technologies, optical communications, spacecraft, mesh networks, cybersecurity, and more (FR)
DARPA is preparing to launch a new quantum sensing program (SAM)