This Week in Dual-Use
NEWS
OpenAI launches open-source model
I wrote last week that OpenAI does not have an open-source model. At the time of writing, that turned out to be wrong. OpenAI had in fact just launched a set of open-source models for the first time since 2019, as well as launching GPT5.
OpenAI was supposed to be open-source but stopped making its models public on the basis that it was too dangerous to do so. But then Meta, Deepseek and a wave of Chinese companies released open-source models, ignoring the rules of the game that OpenAI had tried to lay down.
The battle for AI supremacy continues to play out between China and the US. The US government, seeing that Chinese open-source models are gaining adoption, has recently encouraged the development of American open-source models.
Sam Altman, like Elon Musk before him, finds himself in the unenviable position of having created a geopolitically strategic technology. He must find the right balance between pleasing the Whitehouse, defeating China and creating value for shareholders.
New Chinese stealth jet breaks cover
I wrote recently about how China is leading the world in defence tech. It has been developing its own version of a 6th generation fighter jet, dubbed the J-36, which will rival America’s F-47. Now it looks like the PLA is test flyinganother tailless fighter jet, although it’s not clear if this is a crewed version or a wingman drone.
China also conducted its first ever catapult launches from its new carrier Fujian, making it one of three countries (alongside France and the US) with the technological proficiency to do that.
The Trump administration wants to wind down the war in Ukraine so that it can focus on the threat posed by China. Considering the pace and scale of Chinese defence innovation; that is somewhat understandable. In Europe we tend to worry more about Russia; that is equally understandable.
This conundrum is at the heart of the recent divergence between American and European interests. But I don’t see that divergence lasting forever. China wants to replace the US as the world’s policeman - that is a problem that Europe can’t ignore.
US introduces Shahed replica
The US has introduced a budget-friendly combat drone that directly competes with Iran’s Shahed-136, aiming to bolster accessible airpower in contested regions. Its design is almost an exact replica of the Shahed.
The Iranian Shahed drones are in fact replicas themselves, tracing their ancestry to 1980s Germany. Aircraft manufacturer Dornier created the DAR(Die Drohne Antiradar), a radar-hunting drone. The Shahed is strikingly similar to the DAR, even down to the vehicle launch mechanism. And of course Russia has its own Shahed replica, the Geran-2, which it licenses from Iran.
The complaint from the front line in Ukraine has always been that American UAVs are too expensive. But now the US has decided to join the Shahed party, embracing the logic of adversary emulation to saturate the airspace with affordable platforms. It will be interesting to see if this technology makes its way to Ukraine. Or perhaps the Ukrainians will develop their own Shahed replica.
FUNDRAISING
Orbital Operations, an American developer of hydrogen-fueled spacecraft designed to transport cargo and refuel satellites in orbit, raised an $8.8m seed round led by Initialized Capital.
Jeh Aerospace, an American company specialising in aerospace and defense manufacturing, driven by software-defined manufacturing technology, raised an $11m Series A led by Elevation Capital.
Ostra Security, an American provider of outsourced cybersecurity operations for businesses, using human-led teams and specialized software to limit attacks, raised a $2.6m Series A extension co-led by General Catalyst and Rally Ventures.
EON Space Labs, an Indian company developing new Earth Observation (EO) imaging payloads for satellites, drones, and ground systems, raised$1.2m in pre-series A funding led by MGF Kavachh.
Firefly Aerospace, an American builder of rockets, spacecraft, and lunar landers, raised $868m in an IPO on the Nasdaq.
OpenAI is in fact targeting a $500bn valuation, which would make it the most valuable private company in the world.
Point72, an asset manager led by billionaire Steve Cohen, is launchinga $400m ‘Deterrence’ fund, investing in defence tech startups.