Weekly News Update: Mar 8, 2024
2 - 8 Mar 2024
Good morning,
Happy Friday everyone. The world continues to see increased danger and risk as a global conflicts spike to the highest level in 30 years. This risk is fueled by many countries seeking to rearm. China has announced a 7.2% increase to its military budget, and the US budget request nears $1 trillion! Rhetoric between these two superpowers continue to sour, as well, as China warns of ‘disastrous’ conflict with the US and congress mulls banning TikTok.
In the Red Sea, the Houthis have succeeded in three key events: sinking a commercial ship, killing 3 crew on a ship, and cutting undersea communications cables. Iran’s Quds Force leader, Ghanni, seems to be doubling down on Soleimani’s strategy of arming and training proxies to carry out destabilizing attacks.
Autonomy remains front of mind for the defense industry, which continues to see accelerating benefits from the increased spending. European allies seek to crank up spending even more, really feeling the existential threat to their security that Russia and China have presented. Unfortunately, they haven’t not taken notes from the US experience and subsequent risks from the consolidation of the defense industrial base, as large firms like BAE, Thales, and Indra continue to try to gobble up smaller ones to seize larger market share.
Finally, things continue to look positive in terms of investments into Defense Tech and dual-use startups. The Pentagon’s Office of Strategic Capital released its FY24 Investment Strategy, and several large PE/VC firms have raised considerable sums to invest in companies.
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
Defense budget nears $1 Trillion, faces headwinds (DN)
Commission recommends overhaul of DoD planning, budgeting processes (DoD)
Lawmakers press Army aviation leadership on FARA cancelation (BD)
Overmatch network now installed on three carrier strike groups (DN)
Report: soldiers need abundant, cheap drones for training to adapt tactics (S&S)
Army to stand up cross functional team for ‘deep sensing’ (DN)
Army needs more industry input before pivot to ‘radio as a service’ (DN)
Laser-equipped strykers arrive in Middle East for operational tests (BD)
Carmaker model may yield cheaper drone wingmen: Air Force Research Lab (C4)
Defense Tech Opportunities
Army, Marine Corps ping industry for more counter-drone tech (DS)
NASA has released an update to their FY24 Phase I SBIR (SAM)
DARPA will host a proposer’s day for its Additive Manufacturing for MicrosystEms program (SAM)
The Navy has issued a BAA for technologies related to undersea security (SAM)
Europe, Russia, the Arctic, NATO, and the war in Ukraine
Sweden officially joins NATO (AP)
Ukraine employs unmanned sea drones packed with explosives (AP)
Russian missile nearly hits leaders from Ukraine, Greece (TH)
Security leak reveals plan to provide German Taurus missiles to Ukraine (WP)
UK to Germany: Taurus missiles won’t escalate war (Pol)
Poland provides security guarantee to Lithuania over Russian tensions (DN)
French defense companies to build military equipment in Ukraine (RT)
China, Korea, and Asia
US House committee unanimously passes bill that could ban TikTok or force Chinese parent ByteDance to divest (RT)
China unveils new military budget with 7.2% increase (DN)
China intensifies push to ‘Delete America’ from its technology (WSJ)
Chinese investors are exiting China investments in sign of low confidence (RT)
Maldives signs military pact with China, pushes out India (NYT)
Air Force deploys operational ARRW hypersonic missile to Guam (ASF)
N. Korea threatens military actions over S. Korea-US drills (AP)
Japan could join AUKUS (NI)
Middle East and Africa
Houthi missile attack kills 3 in Yemen rebels’ first fatal assault on shipping (AP)
Ship previously struck by Houthi missile sinks, the first vessel lost in conflict (AP)
Iranian proxy attacks against US in Iraq, Syria drop off as Red Sea heats up (Pol)
Biden outlines military plans to build port in Gaza for aid (MT)
U.S. Defense Industry News
Army awards Palantir $178M to build next-gen targeting system, ‘TITAN’ (DN)
Boeing gets $439M contract for U.S. military communications satellite (SN)
Marines select GDLS, Textron to build cannon version of recon vehicle (MCT)
USAF Logs First Flight of General Atomics’ Autonomous XQ-67 Drone (ASF)
Air Force approves Leidos to scale C2IMERA software to more locations (DS)
Planet Labs gets U.S. Navy contract for maritime surveillance in the Pacific (SN)
Logos Technology wins $19.4M to supply shot-spotting sensors in Africa (DN)
Silynxcom Unveils Dual-Use Headset for Military Dogs (TDP)
Space Force awards $15.2M to Terran Orbital for satellites (BW)
Foreign Defense Industry News
UK military’s 10-year plan isn’t affordable, committee finds (DN)
EU proposes $1.6Bn plan to boost defense industry (DN)
Europe ignores lessons of US Defense Industry consolidation, Indra hopes to lead consolidation in Spain (DN)
UK drone test squadron fails to register a single test since 2020: Procurement minister (BD)
French defense ministry picks startups to develop quantum computers for $545M (DN)
Indra, Edge to form radar alliance amid string of cross-border deals (C4)
Poland signs $2.5B air defense battle system deal, plans new fleet of light recon vehicles (BD)
Qatari shipbuilder joins forces with L3Harris, debuts Suhail USV (BD)
Saab wins $1Bn Polish for Carl-Gustaf recoilless rifles (DN)
Turkey makes changes to planned TF-2000 air defense ship (DN)
Space
India plans to spend $3Bn on space in next few years (DN)
Inaugural Red Skies exercise boosts orbital warfare readiness (MT)
UK space chief flags moon mining as next conflict ‘gray zone’ (DN)
Satellite connectivity backups put to use over Red Sea (SN)
Space Force agencies pile on to find ‘alternate PNT’ capabilities (BD)
NASA is recruiting astronauts in most competitive job ever (BBG)
Nuclear Power & Weapons
The risk of nuclear conflict is rising (NYT)
Disaster looms at Europe’s largest nuclear plant (TA)
IAEA director heads to Moscow to discuss nuclear concerns in Ukraine (AP)
US seeks to boost nuclear power after decades of inertia (NYT)
Nuclear Proliferation Surfaces Again as India Intercepts Pakistan-bound Dual Use Items (TD)
AI, Robotics, & other Frontier Tech
The Pentagon is funding new chip designs for the AI era (DO)
Air Force General: drones, robotics pose threat to nuclear security (C4)
Musk sued OpenAI for pursuing profits (AP)
OpenAI reveals Musk emails urging firm to ‘start being less open’ (CNBC)
Google engineer charged with stealing AI secrets while working for Chinese groups (FT)
AMD hits US roadblock in China AI chip sales (BBG)
BadGPTs are on the rise (WSJ)
Robot ships: Huge remote controlled vessels are setting sail (BBC)
A&D-Focused Finance
Defense Unicorns, a software startup providing open source software and AI capabilities for National Security systems, raised a $35M Series A led by Sapphire Ventures and Ansa Capital (BW)
Kurs Orbital, a startup building satellite servicing tech, raised a $4M seed round led by OTB Ventures (TC)
VC a16z is weeks away from closing on up to $7B for multiple funds, with 10% allocation for its ‘American Dynamism’ practice (AX)
Investment firm Capitol Meridian Partners raised $1.2B to invest in US government contractors, aerospace and defense companies (BBG)
1948 Ventures is enabling investors to support Israeli dual-use startups (RM)
Fincantieri in talks to buy Leonardo’s torpedo business, source says (DN)
Shareholders agree to plan to take Astra private for $0.50 per share (AT)
JetBlue Airways and Spirit Airlines canceled their $3.8 merger due to antitrust hurdles (RT)
Analysts: Boeing purchase of Spirit AeroSystems could strengthen defense business (DN)
Airline Air Baltic is pursuing plans for an IPO after recording its first profit since 2018 (BBG)
Brazilian airline Azul is working with Citigroup and Guggenheim Partners to explore a potential offer for troubled competitor Gol Linhas Aereas Inteligentes, which is undergoing a Chapter 11 restructuring in the US (BBG)
Abu Dhabi sovereign wealth fund ADQ is considering a listing for Etihad Airways as soon as this year (BBG)
Important Reads
The Pentagon’s Office of Strategic Capital has released its FY24 investment strategy.
Dan Murphy questions whether we are overestimating China’s power.
Financial Times graphed charts that explain why European stock markets are in crisis.
The Verge published its take on why Elon’s case against OpenAI is “hilariously bad.”
Franklin Ventures’ Partner James Cross reveals what it takes to succeed in DefenseTech.
Lighter Side
Keep building!
Andrew