Weekly News Update: Dec 8, 2023
2 - 8 Dec 2023
Good morning,
President Biden’s son, Hunter, has been indicted on nine new tax charges over evading $1.4M in taxes. The President has stated that he’s only running for reelection because Trump is running. Retired SCOTUS Justice Sandra Day O’Connor passed away last week. O’Connor was the first woman to serve on the Supreme Court, having been appointed by President Ronald Reagan in 1981.
Senator Tommy Tuberville (R-AL) has finally released his stranglehold on military confirmations, allowing 430+ nominations to be confirmed. But, fights in congress aren’t over and threaten global security and our military modernization.
The big topic this week in military circles has been about revitalizing the defense industrial base, with differing theories floating around about how to recreate a capacity closer to our economic mobilization prior to and during World War II than our capacity after the Cold War. Unfortunately, many of these theories likely will also require Congress to materialize.
Venezuela’s Maduro apparently slept through the 1990-1991 Gulf War, as he threatens to annex Guyana’s oil-rich Esequibo (looks like we need to add a new section in the newsletter on South America).
Big movements in Defense Tech this week include large funding rounds for Air Space Intelligence, Cambium, X-Energy; the acquisition of ESG Elektroniksystem by Hensoldt; and Harpoon Ventures raising a $125M fund for Defense Tech investments.
Most importantly, the Army and Navy football teams face each other tomorrow in Boston for the 124th time. West Point will crush Navy and win the Commander-in-Chief’s Trophy, having already upset the Air Force Academy and giving the Falcons their only loss of the season. In a public demonstration of support for the Army team, Boston has banned goats in advance of the game.
Let’s dive in to these and other issues surrounding aerospace and defense technology. I strongly suggest reading this one in your browser as it’s a long one.
Weekly News Round Up
Military
U.S. Defense modernization and innovation
Sen. Tuberville finally drops hold on 430+ military promotions (MT)
Military modernization process gets an overhaul, new top-down focus (ASF)
Military grounds entire fleet of Osprey aircraft after fatal crash (MT)
DIU continues to ramp up role in military innovation (C4)
Deputy Undersecretary Radha Plumb talks stockpiles, industrial base (DN)
Pentagon approves first Rapid Defense Experimentation Reserve projects (C4)
Panel: Replicator offers use case for defense budget process reform (C4)
Defense Secretary Austin calls out advocates of isolationism (MT)
Defense officials put tech at center of AUKUS summit (DN)
Secretary of the Air Force: Congressional logjam could set CCA loyal wingman back a year (BD)
Secretary of the Navy seeks to reinvigorate U.S. shipping to strengthen fleet (DN)
Senator Kelly to introduce legislation to strengthen shipping (DN)
Unified network promises Army rapid connectivity, cybersecurity (C4)
Army prepares for new high-altitude spy program coming 2025 (DN)
Asst. Secretary of the Army: Army drones have good chance for Replicator (DS)
Navy eyes quantum tech to simulate warfighting problems (DS)
Europe, Russia, the Arctic, NATO, and the war in Ukraine
U.S. charges four Russians with war crimes in Ukraine (WSJ)
U.S. deliveries of VAMPIRE counter-drone systems to Ukraine continue (TD)
Senate GOPers put Ukraine aid in peril, walk out of heated hearing (DN)
Sweden, U.S. sign bilateral defense cooperation agreement (ASF)
Russia wages cyberwar against British democracy (C4)
Russia to grow military by 15% or 170,000 troops (CNN)
Russia rejects ‘significant proposal’ to trade for WSJ’s Gershkovich, Whelan, US says (WSJ)
China, Korea, and Asia
China is increasingly reliant on the military element of national power (DN)
U.S. Army Pacific commander: China is looking for ‘soft targets’ (DO)
China says its fighters harassed U.S. Navy patrol plane over Taiwan Strait (RT)
China claims U.S. Navy ship ‘intruded’ in South China Sea (NT)
Assistant Secretary of Defense and DIU push for partners in the Pacific to ramp up drone use (DO)
U.S., Australia consider joint hypersonic experiments in 2024 (DN)
China’s exports snap half-year slide (WSJ)
Wall Street puts a ‘sell’ on its China holding (WSJ)
Middle East and Africa
USS Mason shoots down another air drone in the Red Sea (NT)
Houthis rise in prominence among Iran’s ‘axis of resistance’ (DN)
Attacks on U.S. troops in Iraq, Syria resume (MT)
U.S., Allies mull naval task force to protect Red Sea shipping (MT)
Petraeus touts his style of counterinsurgency for Gaza—because it’s worked so well in Iraq, Afghanistan, and elsewhere (AT)
Putin visits U.A.E., Saudi Arabia to discuss Israel-Hamas conflict, energy, and trade (FP)
Israel to back its technology industry through war, agency heads says (BBG)
Military drone attack kills 85 in Nigerian village (VOA)
U.S. Defense Industry News
Top 100 defense contractors’ revenues shrank in 2022, despite global rush to rearm (AP)
Experts warn new disruptive approaches needed to rebuild U.S. advantage (ASF)
Commercial tankers provide in-air refuel to Air Force fighter jets in a first (ASF)
6K Additive wins $23.4M from the DoD to upcycle scrap metal (DoD)
Anduril unveils Road Runner, a reusable anti-air drone (TD)
Boeing Defense sees progress in putting astronauts on Starliner (CNBC)
CACI’s Mastadon backpack jammer passes early Army testing (C4)
Duke Energy disconnects industrial batteries from Camp Lejeune over security concerns (RT)
Global Foxcom wins Navy contract to supply military-grade GPS repeater (TDP)
Army official: Lockheed jammer for Strykers, AMPVs on ‘good path’ (C4)
Lockheed brings suit against Howmet over F-35 titanium pricing (AvW)
Israel places order with Oshkosh for more tactical vehicles (DN)
Pratt & Whitney to remain sole source for F-35 jet engine upgrade (NHR)
Army picks Shift5 to cyber-harden HIMARS fleet (C4)
Skanska USA wins $146.8M for new Marine Operations Center in Newport (PBN)
The U.S. State Department has approved the following foreign military sales:
$175 Million of arms and equipment to Ukraine (DoS)
Foreign Defense Industry News
NATO picks first flock of startups for pitches in push for fresh tech (DN)
Israeli firm Rafael taps Elta Systems boss as new chief executive (DN)
Latvia buys IRIS-T medium-range air defense systems from Germany’s Diehl Defence for $650M (DN)
Poland’s outgoing defense chief drops $2.6B on S. Korean Hanwha howitzers (DN)
Russia receives 3x new submarines: state media (DN)
Space
The Air Force wants to use space rockets to resupply forces globally (C4)
X-37’s next—and 7th—launch could be its final (ASF)
Review calls for cutting red tape, empowering acquisition chief (BD)
DARPA picks 14 vendors for lunar economy-building study (BD)
Space Command HQ delayed another six months in defense policy bill (C4)
South Korea launches first spy satellite since North Korea’s launch (C4)
Nuclear Power & Weapons
Concerns grow over U.S. ability to maintain nuclear edge (DO)
Nuclear’s share of world power output at multi-decade low (RT)
U.S. envoy Kerry launches international nuclear fusion plan at COP28 (RT)
Ukraine warns of nuclear risks as Zelensky prepares to dig in (BBG)
AI, Energy, Robotics, and other Tech
NYT list of ‘who’s who’ in AI under fire for having zero women (BI)
Google opens access to Gemini, racing to catch up to OpenAI (BBG)
Open AI director who clashed with Sam Altman shares her side (WSJ)
Ex-OpenAI director Reid Hoffman says we still don’t ‘fully know’ why board forced out Altman (CNBC)
AMD CEO debuts Nvidia chip rival, gives eye-popping forecast (BBG)
Meta and Microsoft say they will buy AMD’s new AI chip as an alternative to Nvidia’s (CNBC)
EU races for deal on world’s first major AI rules (BBG)
Meta’s AI chief doesn’t think AI super intelligence is coming anytime soon, and is skeptical on quantum computing (CNBC)
Elon Musk’s artificial intelligence company xAI is seeking to raise $1B from equity investors (BBG)
OpenAI rival Mistral is in the final stages of raising $487M in an investing round led by a16z, with participation from Nvidia, Salesforce, and others (BBG)
A&D-Focused Finance
Harpoon Ventures announced the close of a new $125M fund for defense tech and dual-use startups. (BBG)
Elon Musks’ SpaceX may sell $500M-$750M worth of insider shares in a tender offer that values the company at $175B or more (BBG)
Virgin Galactic shares plunge after Branson rules out further investment (CNBC)
TechMet, a leading critical minerals investment company, received a $50M equity investment from the DFC (BW)
Aerospace startup Air Space Intelligence raised a $34M Series B led by a16z (FN)
Air Methods, a PE-backed helicopter ambulance business, received bankruptcy court approval for its restructuring plan to cut $1.7B worth of debt (WSJ)
X-energy, a developer of small modular nuclear reactors and fuel tech, raised a $235M Series C led by Ares Management and Kam Ghaffarian (FN)
Cambium, a startup building materials for defense and performance fields, raised a $19M Series A led by 8VC (PRN)
Pragmatic, a silicon-free chip producer, raised a $228.5M Series D led by Catalyst and UK Infrastructure Bank (EU)
A federal judge considering the DOJ’s bid to block JetBlue Airways' proposed $3.8B acquisition of Spirit Airlines raised the possibility letting the deal proceed if JetBlue divests more assets as the antitrust trial wrapped up (RT)
Alaska-Hawaiian $1.9B merger faces a Justice Department that has been skeptical of airline deals (CNBC)
German defense contractor Hensoldt acquired defense systems integrator ESG Elektroniksystem in a $728M deal (RT)
Important Reads
Doctrine Man’s Steve Leonard discusses the need to “wake the sleeping giant” of America’s Defense Industrial Base.
It’s almost as if Steve, DepUnderSec Plumb and others read Building Our Defense’s commentary on the DIB earlier this week.
A16z asked 40+ partners across their firm to preview one big idea that they believed would drive innovation in 2024, check out their list.
TechCrunch discussed whether or not Austin, Texas is losing its luster as a startup and investing hub. Maybe it’s time for Army Futures Command to relocate.
Lighter Side
Keep building!
Andrew