Applied expands Defense Advisory Board
Expanded Defense Advisory Board, drone swarms, I/ITSEC, and more
The Nexus Newsletter
Welcome back to The Nexus Newsletter. We hope you had a restful and relaxing Thanksgiving weekend with family and friends. Every day, we are thankful for the commitment and sacrifice from our warfighters that keeps us safe at home.
Read this week’s newsletter to learn about the latest high-profile additions to our National Security and Defense Advisory Board, the future of swarms and drone warfare, I/ITSEC, and our takes on the latest news from the nexus of autonomy and national security.
Expanding Applied’s National Security & Defense Advisory Board
As we continue to grow our work in the defense space, we have expanded our National Security and Defense Advisory Board to ensure that we continue to meet and exceed the complex and evolving needs of our customers and partners in the national security sector.
We are thrilled to announce three new additions to our National Security and Defense Advisory Board: Mr. James “Hondo” Geurts, Mr. Stephen Rodriguez, and Mr. Preston Dunlap.
Here’s what they had to say about joining our board:
“I am thrilled to join Applied Intuition’s National Security and Defense Advisory Board. Applied Intuition has developed a reputation in the national security community as a leading innovator in the autonomy industry. Serving alongside my fellow board members and the team at Applied Intuition gives me another great opportunity to serve our nation’s warfighters by helping them get the very best technologies with which to carry out their duties.” - Mr. James “Hondo” Geurts, Former ASN (RD&A)
“Applied offers U.S. Government policymakers the chance to realize their visions of autonomy. It is not the hardware systems but the underlying software data layer that will bring that about. I’m proud to know and support the Applied team in enabling this vision and American national security in turn.” - Mr. Stephen Rodriguez, Managing Partner of One Defense
“As one of the principal drivers and architects of developing and delivering secure autonomy at the world’s largest organization – the Department of Defense – I know first-hand the challenges, power, and potential of autonomous systems... and the operational advantages they afford on the battlefield to those who harness them. It’s an honor to join the Applied Intuition National Security and Defense Advisory Board as Applied is uniquely positioned to enable the Department of Defense to put its foot on the gas pedal and scale autonomous innovation across all domains.” - Mr. Preston Dunlap, Former CTO of the U.S. Air Force
Hondo, Stephen, and Preston join an existing group of prominent national security and U.S. Department of Defense leaders with first-hand experience taking on America’s most urgent national security challenges. Here’s what the existing members had to say:
“Congratulations to Hondo, Preston, and Stephen for joining Applied’s National Security and Defense Advisory Board. I look forward to working with these patriots and the excellent team at Applied Intuition as we work to get critical autonomous technologies in the hands of our nation’s warfighters." - General Raymond A. “Tony” Thomas III (U.S. Army, Ret.)
“After only one year in the national security space, Applied Intuition has emerged as one of the most credible and influential voices in validating and verifying AI for defense technology. The Applied Intuition team has the vision, expertise, and technology to help the Department of Defense field the sophisticated capabilities it requires to win on tomorrow’s battlefields. I am honored to serve on this incredible team.” - General Stephen W. “Seve” Wilson (U.S. Air Force, Ret.)
“I joined Applied Intuition’s National Security and Defense Advisory Board because I felt its years of experience in Silicon Valley helping automotive companies get autonomous vehicles to market could also benefit our nation’s defense institutions. After just one year in the defense market, Applied has exceeded my expectations. I look forward to working with Applied Intuition’s new advisory board members as we work to get critical technologies to the warfighter.” - Dr. Bruce D. Jette
The Tiny and Nightmarishly Efficient Future of Drone Warfare
Key quote: Intelligence officials say that Russia has sent 400 Iranian-made attack drones since August. Although that’s a small number relative to the thousands of missiles bombarding the country, intercepting drones flying in bunches can be more difficult. Drones also cost less to manufacture and can be sent in ever-increasing numbers. By early November, Ukraine was already in danger of running out of air-defense missiles to combat them.
Speaking in mid-November, Ukrainian Vice Prime Minister Mykhailo Fedorov said, “In the last two weeks, we have been convinced once again the wars of the future will be about maximum drones and minimal humans.” [...]
When you consider that a drone swarm consisting of many thousands of off-the-shelf drones would cost less than, say, one F-35 fighter or a ballistic missile, you have a weapon that would give rogue states or terrorist groups the means to launch devastating attacks or assassinations anywhere in the world. Since the Korean War, American forces have controlled the skies wherever they have gone into battle. No other nation had the means to compete with it; the cost, the technology, the experience, and the level of training required are beyond the reach of even the most affluent nation-states. Drone swarms could end that domination. An aircraft carrier? A commercial airliner? The White House? The president? Sitting ducks. [...]
Once the technology is within reach, someone, somewhere will build it, and once built, it will follow the rule of Chekhov’s gun—if it appears, it will be used. AI weapons have already been deployed—the Israeli Harpy drone, for instance, which loiters in the air over a contested space and is programmed to acquire and destroy targets. And although the destructive power of the atom bomb has so far prevented its use in all-out war, a drone swarm will be used once developed, because it is not a cataclysmic weapon. It is, as Robinson notes, a useful one. Although the explosive punch of small, cheap drones is insignificant compared with that of conventional bombs and missiles, they can be much more accurate. One would be enough to kill a person. Precisely targeted, even a small number could destroy crucial parts of a modern warship’s defenses. The damage done to, say, an aircraft carrier by a drone swarm might not sink it, but could strip away its sensors and weapons, making it a fat target for larger munitions. [...]
One of these countermeasures, or one as yet unforeseen, will work, and drone swarms are not likely to wipe out America’s arsenal. They will, however, fundamentally alter the way we fight.
Our take: The Telegraph. Barbed Wire. Submarines. Aircraft Carriers. Enigma. Close Air Support. The Improvised Explosive Device. Drones. Like their technological predecessors, once fielded en masse, drone swarms (on the ground, in the air, on the sea, and under the sea) will fundamentally alter the way we fight - and the threats we must be prepared to defend against. There is a feeling of inevitability about this evolution. The nation that wins the race will seize the initiative in Great Power Competition or on the battlefield.
News we’re reading
Autonomous systems are gaining momentum in the national security space. Below, we’ve pulled key quotes from recent articles of interest, plus brief commentary from Applied Intuition’s government team:
RAND Corporation | The Age of Uncrewed Surface Vessels
Key quote: A new age of naval warfare has been inaugurated in the Black Sea, defined by an emerging weapon. Ukraine has employed explosive uncrewed surface vessels (USVs) as formidable weapons against Russian fleets and even infrastructure. Like prior transformative weapons such as torpedoes and anti-ship missiles, USVs could have a large impact on future naval tactics, equipment, and even the design of fleets. [...]
The age of explosive USVs is just beginning. Navies that can effectively use these systems could have a great advantage over their adversaries. A classic cycle of measures and counter-countermeasures will likely begin. For example, fleets may use sensor-studded UAVs to detect and target explosive USVs at appreciable ranges, even as the USVs become increasingly stealthy and numerous. UAVs could distribute propeller-entangling fibers in the paths of incoming USVs, until USVs are designed that can overcome them.
Our take: The Ukrainians have hobbled the Black Sea Fleet and prevented Russian naval supremacy without what analysts would describe as a traditional naval force of their own - a feat that most analysts would have found unfathomable this time last year. Ukraine’s groundbreaking use of USVs to attack Russian fleets and infrastructure represents a major paradigm shift in naval warfare. UASs - including low cost, attritable “suicide” drones - have transformed modern combat, and we expect USVs and UUVs to have a similar impact over the long term. As joint operational concepts continue to be tested in live conflict in Ukraine, we will continue to keep a close eye on how unmanned and autonomous systems are employed in concert across domains.
Trae Stephens (Founders Fund) | The Business of War is the Business of Deterrence
Key quote: The path to reducing the amount of money that we, as taxpayers, are spending on defense flows through the right people working on the right things with the right incentives. There is no industry better prepared to do that for the defense sector than the tech industry. Defense needs the type of Moore’s-Law-like innovation curve that we’ve seen across core technologies like semi-conductors, display tech transformation, optical systems, developer APIs, and battery science. The amortization of the research & development costs for these technologies across a variety of enterprise and consumer use cases not only allows for significant cost reduction over time, but also meaningfully decreases cycle time from one technology paradigm into the next. And it enables the type of compounding advances in technology that the department of defense needs to maintain its technological advantage over Xi’s China and Putin’s Russia.
Our take: Commercial technology companies - and, in particular, a particular set of mission-driven software companies - are developing the capabilities that will determine who wins in a high end fight with a near-peer adversary. Increasingly, such companies are disrupting the traditional defense ecosystem by delivering transformative capabilities to the warfighter at speed and, in doing so, are bringing concepts of iterative experimentation and development to the Department in a way that will both improve outcomes and reduce costs.
Inside Defense | Bipartisan letter urges appropriators to boost DIU's budget
Key quote: Two lawmakers are calling on appropriators to pump more money into the Defense Innovation Unit's fiscal year 2023 budget, lamenting the "chronically under-resourced" state of the outfit that aims to leverage commercial technologies for military use.
Sent to leaders of the House and Senate defense appropriations panels this week, the letter -- from Rep. Mike Gallagher (R-WI) and Sen. Jon Ossoff (D-GA) -- makes the case for a $39 million total increase to DIU, a sum that would represent a nearly 44% funding jump for the small-budget unit.
Most of the requested boost -- $22 million -- would go toward supporting core programming for the unit, which the Nov. 14 letter states “will enable DIU to fulfill its mission of facilitating the rapid adoption of commercial technology to meet critical national security needs.”
Our take: We are huge proponents of DIU and are ardent believers in its ability to accelerate the delivery of commercial technologies to DOD programs and warfighters. We are excited to work with DIU to deliver our end-to-end autonomy development and test toolchain to the Army’s Robotic Combat Vehicle (RCV) program and can attest to their commitment to bringing innovative capabilities developed by the commercial sector to the Department of Defense.
Tech Crunch | The US must harness the power of Silicon Valley to spur military innovation
Key quote: For the first two decades after World War II, Silicon Valley was really “defense valley.” It built chips and systems for the DoD and intelligence community. Innovation in Silicon Valley started post-World War II with funding to Stanford University from the Office of Naval Research and then follow-on contracts from all the services to build advanced microwave and electronic systems. [...]
Today, Silicon Valley sits at ground zero of a technology ecosystem that dwarfs the DoD, its prime contractors and federal labs. This ecosystem thrives on the toughest problems, moves with speed and urgency and, when incentivized, can bring capital and people at an enormous scale to solve these problems.
But the DoD is reluctant to acknowledge that this is a resource to tap at scale and speed. And because it hasn’t fully acknowledged it, it hasn’t considered what would be possible if you could marshal those resources.
And because it hasn’t imagined it, it hasn’t thought about what types of incentives could move the more than $300 billion per year in VC investments (versus $112 billion for DoD’s Research, Development, Test and Evaluation (RDT&E) Program or $132 billion in procurement) into areas that support dual-use activities with the potential to bolster our national security.
Our take: Rebuilding the historic partnership between the DOD and Silicon Valley is critical to harnessing the full force of private investment and innovation, and delivering essential next-generation capabilities to our warfighters. As venture capital firms increase their investments in defense technology companies, the imperative for DOD to rebuild their relationship with Silicon Valley only grows. However, at Applied we also recognize that future conflicts and competitions will be won or lost by the traditional defense contractor base’s ability to also increase its investment, take development risks, and get back to the culture of innovation from which it was birthed. It might not be the popular opinion, or what you would expect to hear from a venture-capital backed small business, but it is reality, and we have seen this truth play out in the current conflict in Ukraine.
Pitchbook | VCs go outside their comfort zone with bets on defense tech
Key quote: This year has seen $7 billion invested in VC-backed US aerospace and defense companies through Oct. 13, according to PitchBook data. That puts the sector on track to surpass last year's record deal value of $7.6 billion.
VCs' growing appetite for those deals stands in contrast to their slowing pace of investment in most other sectors as the market slogs through a broad-based downturn.
The war in Ukraine is just one of the latest factors that put the spotlight on technologies that can protect critical national infrastructure and help deter attacks.
In addition, companies focused on defense and security are considered recession-proof. With the global economy drifting toward a possible recession, future revenues of SaaS-focused startups are under pressure as many corporate customers cut back their software spending.
Our take: We’re thrilled to see that the pace of VC investments in defense technology companies is increasing. Dual-use and mission-driven defense tech companies are the ones developing the capabilities needed to deter or, if needed, prevail in a future high-end fight.
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