Weekly News Update: Feb 2, 2024
27 Jan - 2 Feb 2024
Good morning,
It’s Groundhog Day again already (didn’t we just do that last week?). Punxsutawney Phil has predicted an early spring. Let’s hope he’s right.
Ukraine has sunk a Russian guided-missile corvette, the Ivanovets, using sea-based drones as the war seems to move closer and closer to ‘home’ for the Russian people. The US foiled a Chinese attempt at hacking critical infrastructure systems and has issued strong warnings about about Chinese espionage and cyberattacks. Iranian-backed militias killed three American servicemembers in a drone attack targeting a camp in Jordan, now they’re saying “oops, we didn’t really mean to, please don’t hurt us.”
The Defense Primes want to push their risk on to the government, and are turning their back on fixed-price contracts. This will open up an opportunity for defense tech startups. Boeing’s challenges continue, with the company seeing continued losses in its defense business—although those losses are shrinking. Its share price rose 5% on that cheery news. I guess its shipping aircraft without all the screws and bolts was already baked into the price beforehand.
Elon Musk’s Neuralink has implanted a device in its first human patient. The government wants to control Musk’s starships for critical missions. Two startups pledge a space-based solar power demonstration in 2027, while rumors swirl that Sierra Space is eyeing an IPO.
Finally, Bessemer Venture Partners has decided to wade into the defense tech sector, and they’ve released their roadmap.
Let’s dive in to these and other issues surrounding aerospace and defense technology.
Weekly News Round Up
Military
U.S. Defense modernization and innovation
Missile defense interceptor competition enters critical design phase (C4)
Air Force’s electric aircraft test ends with simulated casualty evac (MT)
Marines to field squad-level loitering munitions by 2027 (DO)
Navy taps data, microgrids to modernize and innovate against climate change (DS)
Defense Tech Opportunities
The Defense Innovation Unit is seeking production-ready, inexpensive, maritime expeditionary (PRIME) small, unmanned surface vehicle (sUSV) and collaborative intercept capabilities (DIU)
The Army is requesting ideas on how to procure an interceptor capability to defend against missiles, drones, and rockets (SAM)
The Air Force Research Lab is conducting market research about future cybsercure inter-networking capabilities (SAM)
Europe, Russia, the Arctic, NATO, and the war in Ukraine
Ukraine sinks Russian warship with sea drone (AP)
EU leaders pass 50Bn euro aid package for Ukraine (BBC)
Russian Duma approves confiscating assets of people who discredit army (AP)
Director of Central Intelligence issues warning over not supporting Ukraine (FA)
For Europe and NATO, a Russian invasion is no longer unthinkable (NYT)
Serbia considers reinstating a military draft as tensions simmer (AP)
Turkey’s Erdogan signs off on Sweden’s NATO membership (RT)
China, Korea, and Asia
DoD calls out Chinese companies allegedly helping Beijing’s military in US (RT)
Top officials warn US Congress of China’s hacking powers (Ax)
US disabled Chinese hacking network targeting critical infrastructure (RT)
Pentagon to conduct Tech Readiness Experiment in Australia (BD)
Taiwan launches military drills following election and China threats (AP)
Middle East and Africa
US military shoots down Iranian drones, Houthi missiles, over Gulf of Aden (TH)
Enemy drone strike kills three US soldiers in Jordan, evidence points towards Iranian-backed Kataib Hezbollah in Iraq (AP)
Biden pledges response, saying he’s decided on actions (AP)
Kataib Hezbollah asks to pause hostilities with US (MT)
Iraq and US begin formal talks to end coalition mission fighting Islamic State (AP)
Breakaway Somaliland leader says deal with Ethiopia will allow a naval base (AP)
U.S. Defense Industry News
Dual-Use defense tech: one size doesn’t fit all and could put companies out of business (SIG)
US weapons exports up 50% YoY amid rising tensions with Russia, China (Pol)
Boeing defense business narrows losses as company battles MAX crisis (BD)
Boeing expects to deliver first Grey Wolf helicopter to Air Force this year (DN)
Luke Savoie takes over as Elbit Systems of America CEO (DN)
General Atomics demos 3D printed air launched effects vehicle (C4)
Navy awards HII $913M for aircraft carrier overhaul (USNI)
Lockheed CEO: no more ‘must-win’ fixed price contracts; Defense Primes are saying ‘no’ to the Pentagon (WSJ)
Northrop Grumman’s orbital refueling port selected for military satellites (SN)
RTX’s CHIMERA microwave weapon passes critical test (DO)
Kratos, Aerojet, Corvid win $877M for Space Force sounding rocket program (SN)
The DoD has confirmed a previously approved sale of 12 Bell Textron AH-1Z Viper attack helicopters to Nigeria for nearly $1Bn (TDP)
The State Department has approved the following transactions:
Foreign Defense Industry News
Italy orders four SAMP/T new-generation air defense systems from Eurosam (DN)
Korean Air begins producing reconnaissance drone for South’s military (DN)
Rheinmetall Italia touts Ukraine deployment of Skynex air defense gun (DN)
Saab, MBDA to join forces for Swedish-French anti-tank capabilities (DN)
Slovakia fills its artillery shell stocks with $132M order from ZVS Holdings (DN)
Mideast defense firms fine-tune unmanned surface vessels (DN)
Space
Space Force to up spaceport fees for launch companies, this summer (C4)
New Army space plan anticipates ‘operator’-level space capabilities (DO)
White House official calls for investment in satellite servicing market (DN)
NASA panel worries Artemis program is too ambitious, risky (CNBC)
Startups call for streamlined US regulations for emerging space capabilities (SN)
China’s secretive spaceplane raises orbit, yet to deploy satellites (SN)
Sierra Space unveils fully integrated Dream Chaser spaceplane (SFN)
Orbital Composites and Virtus Solis announce space-based solar power power demonstration for 2027 (SN)
SpaceX: DoD has requested taking over starship for individual missions (AW)
Nuclear Power & Weapons
New-wave reactor tech could kick-start a nuclear renaissance (CNN)
National Nuclear Security Administration isn’t tracking construction costs (FdT)
White House considers offering Holtec International $1.5B to restart a closed Michigan nuclear power plant (BBG)
IAEA: Iran slows production of enriched Uranium (NYT)
AI, Robotics, & other Frontier Tech
DoD kicks off inaugural AI risk exercise (TDP)
AI companies to start safety test reports under Defense Production Act (C4)
Expect ‘AI versus AI’ conflict soon, Pentagon cyber leader says (DO)
Elon Musk’s Neuralink implants brain tech in human patient for the first time (CNBC)
Taylor Swift deep fakes push tech companies, lawmakers to find fixes (BBG)
Nvidia CEO says nations seeking own AI systems will raise demand (BBG)
Intel delays $20B Ohio project, citing slow chip market (WSJ)
A&D-Focused Finance
Boeing shares rose ~5% after narrowing its losses at the end of the year and reporting higher-than-expected revenue; the manufacturer did not provide guidance for 2024 (CNBC)
Irish aircraft leasing company SMBC Aviation Capital and Canadian pension fund manager CDPQ will create a $1.5B aircraft financing and leasing firm (RT)
Aerospace PE firm AE Industrial Partners purchased 22M square foot property for aerospace center (AL)
Swedish hybrid-electric airplane producer Heart Aerospace raised a $107M Series B led by United Airlines, Sagitta Ventures, and EQT (EU)
Transmutex, a Swiss nuclear engineering company, raised a ~$22M Series A extension led by Union Square Ventures and Steel Atlas (FN)
KKR raised $6.4B for a fund focused on infrastructure and energy related investments in the Asia-Pacific region (RT)
Important Reads
Retired Army Major General John Ferrari articulates why he thinks the Pentagon has been on the wrong track for decades.
Gerard Barron describes the role of deep sea polymetallic nodules in national security.
Christine Michienzi expresses skepticism around implementing the Pentagon’s industry base strategy.
Bessemer Venture Partners outline their roadmap for their move into the Defense Tech space.
Lighter Side
Keep building!
Andrew