Weekly News Update: May 24, 2024

18 - 24 May 2024

Good morning,

As Replicator is (finally) getting off the ground, Congress is pushing the Army to build a specific branch to oversee robotics. The Army is pushing back—and I agree with the Army. Uncrewed systems are a tool, with which every service member needs to be familiar and know how to use—like a machine gun or radio. Consolidating the use under a branch will actually lead to long term unpreparedness for the force.

Russia is gaining ground ver slowly in its spring offensive in Ukraine. The United Kingdom’s intelligence service suggests that China is providing lethal aid to Russia for the war. China is retaliating to heightened tensions with the west with its own sanctions and restrictions. It has also run a large exercise encircling Taiwan to demonstrate its ability to ‘seize power’ quickly, less than a week after Taiwan’s new westward-looking president assumes office.

There’s been a fair amount of activity in M&A, reverse mergers, and VC funding.

Let’s dive in to these and other issues surrounding aerospace and defense technology.

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Weekly News Round Up

Military

U.S. Defense modernization and innovation

• US House advances $884Bn National Defense Authorization Act for 2025 (DN)

• Deputy Secretary of Defense establishes due diligence policy for small business awards (DoD)

• Replicator drones already being delivered, Pentagon says (DN)

• Pentagon prepares to issue new classification rules for Replicator (DS)

• The Air Force is clueless about its maintenance issues in 2023 (AFT)

• Army pushes back on Congressional plan for a drone branch (TP)

• Army unveils ‘more efficient and less costly’ digital engineering strategy (BD)

• Marines reorganize program office to accelerate tech creation (DN)

Defense Tech Opportunities

• DAU is seeking generative AI/ML tech that can enhance complex acquisition planning and decision-making for acquisition professionals (SAM)

• DIU has issued a commercial solutions offering seeking quantum sensing solutions to improve precision navigation and timing (DIU)

• DARPA will sponsor a proposer’s day for its program studying the quantification of generative AI models to ensure reliability (SAM)

• DARPA is seeking novel undersea technologies for its ‘SCORPIONFISH’ program (SAM)

Europe, Russia, the Arctic, NATO, and the war in Ukraine

• US Secretary of State urges President to lift restriction on how Ukraine uses US-made weapons (NYT)

• Russia is waging a shadow war on the West that needs a collective response, Estonian leader says (AP)

• Russia has miraculously survived its disastrous war in Ukraine and somehow rebuilt its industrial base (DN)

• Russian forces may have seized first Estonian ground robot in Ukraine (DN)

China, Korea, and Asia

• China's military holds ‘punishment’ drills around Taiwan (AX)

• China takes measures against 12 U.S. military-linked firms (RT)

• China sanctions Boeing, General Atomics, General Dynamics for Taiwan arms sales (AP)

• Taiwan’s new President Lai in his inauguration speech urges China to stop its military intimidation (AP)

• Pentagon asks Congress for Indo-Pacific Security Assistance Initiative (DN)

• The world's top chipmakers can flip a 'kill switch' should China invade Taiwan, Bloomberg reports (BBG)

Middle East and Africa

• US, Gulf states meet for first security forum since war in Gaza (DN)

• Houthi rebels claim shooting down second US drone in past week (MT)

• Iran’s hardline president, foreign minister die in helicopter crash (WP)

• US expected to designate Kenya as major non-NATO ally, source says (RT)

U.S. Defense Industry News

• Congress directs the Pentagon to explore deep-sea mining (WSJ)

• Aurora Flight Sciences moves into next design phase for DARPA vertical takeoff X-plane (DN)

• Colt’s Manufacturing awarded $57 million contract for Army weapons (S&S)

• Poland spends $1 billion on US-made surveillance aerostats (DN)

• Starfish Space landed a $37.5M contract with the US Space Systems Command for its on-orbit servicing vehicle (SN)

• Teledyne FLIR’s ‘new’ Rogue 1 loitering munition has been under SOCOM contract for two years (BD)

Foreign Defense Industry News

• Nordic governments explore joint loans to fund defense buildup (DN)

• European Defence Fund continues space situational awareness funding with $109M contract to Leonardo-led consortium (SIR)

• France turns to AI for signals analysis in underwater acoustics war (DN)

• Israel ordered $760M in ammunition from Elbit Systems in 2023 (BD)

• Slovakia, Poland near deal for short-range air defense weapons (DN)

• Saab teases future fighter concepts, awaits direction from Sweden (BD)

• Sweden plans $7 billion more military support for Ukraine to 2026 (RT)

• Airbus teams up with Turkey’s Titra to modify ALPIN drone for naval missions (DN)

• UAE buys patrol vessels from Edge Group, Fincantieri joint venture (DN)

Space

• UN Security Council rejects Russia-backed resolution on banning weapons in space (AP)

• Space Force to hold annual Tactically Responsive Space demos (C4)

• DOD: Russia’s use of Starlink will be a ‘continuous problem’ in Ukraine (DO)

• Space Force to demonstrate satellite maneuvering, servicing in 2026 mission (C4)

Nuclear Power & Weapons

• House defense bill includes amendment assessing impact of publicizing Russia’s nuclear space weapon (TH)

AI, Robotics, & other Frontier Tech

• Navy looks to Army for more data analytics capability, looks to release new strategy in summer (DO)

• CYBERCOM, DARPA agree to speed up advanced cyberwarfare research (DO)

• Samsung fired its co-CEO / head of semiconductor (WSJ)

• Microsoft promotes new tools for making AI software (FT)

• Scarlett Johansson accused OpenAI of ripping off her voice (CNBC)

A&D-Focused Finance

• Peter Thiel-founded Valar Ventures raised a $300 million fund, half the size of its last one (TC)

• Jonathan Lacoste, the solo GP of Space VC, an Austin-based micro-fund that invests in frontier tech, just closed a $20 million Fund II (TC)

• Boeing cashflow worse than it previously thought (WSJ)

• Nokia expands defense portfolio with acquisition of Fenix Group, maker of Banshee and Talon MANET radios (BD).

• Amid influence of Starlink, Thales buys Israeli antenna producer Get SAT (BD)

• Firefly Aerospace investors are considering a sale at a ~$1.5B valuation (BBG) 

• Chemicals giant and maker of Kevlar, DuPont will split into three listed companies (BBG)

• Techstars CEO Maëlle Gavet will depart (TC)

• SpaceX mulling tender offer at $200 bln valuation (RT)

• Helsing is closing in on a reported €370M ($401M) Series C raise, led by General Catalyst, and valuing the European defense company at $4Bn (TEU)

• Aerodome, a DFR tech company, raised a $21.5M Series A led by CRV (FN)

• Autonomous drone startup Neros raised $10.9M seed round from Sequoia Capital (RT) 

• Overland AI, an autonomous ground vehicle tech for the defense sector, raised a $10M seed round led by Point72 Ventures (FN)

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Important Reads

• MD One Ventures and Beauhurst have released their report on the state of the UK’s DefenseTech sector in 2024

• James Marks discusses the urgent need to increase manufacturing of nitrocellulose and other ammunition components.

• Christine Michienzi outlines the impact to the industrial base that the DOD must consider in acquisition decisions.

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Lighter Side

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Keep building!

Andrew