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[This newsletter is in test mode until January] NEWS In drone news, Helsing unveiled its AI-enabled HX-2 drone. The launch took place at the Honourable Artillery Company in London with UK Defence Secretary John Healey in attendance. Helsing are the latest to join the ranks of drone manufacturers offering a version of AI terminal guidance. Anduril launched its own variant, the Bolt-M, about a month ago. Many smaller companies are developing similar technologies. The problem they look to solve is that of jamming, which has become pervasive on the battlefield. A remotely piloted attack drone will lose connection if it enters a jamming field surrounding its target. AI enables a drone to navigate the final distance on its own, after its operator selects a target. For now, that is only possible a few hundred metres out. However, once AI improves to the point where drones can navigate on their own, jamming will become mostly ineffectual. It seems we are not far away from a world where fully autonomous drones roam the skies over a battlefield, pursued by fully autonomous counter-drone systems. They won’t be the only weapon of war, but it will be impossible to fight and win a modern war without huge numbers of drones. Most sovereign nations will need to develop sophisticated drone technologies, with secure supply chains, and at low cost. China has an immediate advantage here, as companies such as DJI already dominate the low-budget commercial drone market. It has a second advantage as the world’s largest producer of lithium-ion batteries. In fact, China drove the improvements in batteries which first enabled the drone revolution. With thousands of drones being deployed on a daily basis in Ukraine, cost is a critical factor. Countries that can rapidly produce affordable, high-performance drones will hold a decisive edge in modern conflicts, reshaping the balance of power on the battlefield. LINK In underwater news, two subsea data cables in the Baltic were damaged in less than 24 hours two weeks ago. Nordic governments now suspect a Chinese freighter of deliberately dragging its anchor along the seabed, and the Germany defence minister has said that he presumes deliberate sabotage. Unrelated: Meta plans to spend $10bn building a global subsea cable. In recent newsletters I have written about companies like Vatn Systems and BAE which are developing autonomous underwater capabilities. While some of that capability is clearly meant for clandestine underwater missions, in the future we may see UUVs (Uncrewed Undersea Vessels) like BAE’s Herne deployed to protect subsea assets. If NATO’s Assistant Secretary General for Innovation, James Appathurai, is right, Russia has a well-funded program to map out the West’s undersea cables and energy pipelines, using research ships with small submarines. I expect companies developing technology in this sector to have interested government customers. Perhaps they will also sell to enterprise customers like Meta. LINK, META In space news, the FCC (Federal Communications Commission) approved a plan for Starlink to provide mobile data service in the 1900-2000MHz range, to T-Mobile USA subscribers in mobile data dead zones. This sounds exciting but can only work outdoors and with good line-of-sight, since the satellites are at least 10x further away than a mobile mast would be. So it can only support text messages to begin with (the laws of physics are the constraining factors here, given how small a mobile phone antenna is). While Starlink plans to have over 3,000 satellites supporting this in 2025 and has applied for another 22,000, there are more mobile masts than that in a typical big city. Delivering a lot of bandwidth to one person anywhere on earth is a different problem to delivering a lot of bandwidth to millions of people in a few square miles. Don’t expect to see Starlink overtake mobile providers just yet. LINK In policy news, the UK’s Defence Secretary released a Statement of Intent for its new defence industrial strategy, prioritising UK-based defence firms. That he did this standing next to the CEO of Helsing, a Berlin-headquartered defencetech startup, sends a few messages. Helsing is headquartered in Germany but plans to invest £350m into production in the UK. So, you don’t have to be UK-based but manufacturing in the UK is key. And this is also about growth. Helsing is a developer of AI-enabled defencetech. So, this isn’t about buying bombs and bullets (although we also need those), it’s about equipping our armed forces with cutting edge technology. Helsing is a startup. So, part of this initiative might be to broaden the base of suppliers to the UK MOD to include startups. This could be a market tailwind for early-stage dual-use companies. The question is, will it be met with changes to the procurement system to enable faster acquisition from non-prime companies? LINK FUNDRAISING Yurts, a California-based company which develops AI-powered platforms that assist large enterprises and government agencies in securely deploying and managing large language models, raised a $40m Series B. LINK SatVu, a UK-baseed company which develops satellites equipped with high-resolution thermal imaging technology, raised a $12.7 million round, with participation from Molten, Lockheed Martin and others. LINK
JOBS Thank you for reading this newsletter, I appreciate your feedback.
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