The Autonomous Artillery Revolution: Reshaping Modern Firepower

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May 2, 2025

Helsing_Resilience_Factory-1021 — HX-2 and Resilience Factories have been designed with high throughput and scale from the outset. Photo: Helsing

From the battlefields of Ukraine to the contested waters of the Red Sea and the skies over the Middle East, a profound shift is underway in modern warfare. The era of air power being solely the domain of expensive, crewed aircraft is rapidly giving way to the age of massed, low-cost, and increasingly autonomous aerial systems. One-way attack Unmanned Aerial Vehicles (OWA-UAVs), often dubbed “kamikaze drones,” and sophisticated loitering munitions are proliferating at an unprecedented rate, fundamentally altering tactical realities and strategic calculations for nations big and small.

This transformation isn’t merely about new hardware; it’s driven by disruptive factors. Perhaps the most significant is the “democratization” of air power. Systems like Iran’s Shahed series, estimated to cost around $20,000 per unit, or the even cheaper First-Person View (FPV) drones adapted from commercial components (costing as little as $500), dramatically lower the barrier to entry for projecting force. State actors like Russia leverage thousands of Shaheds against Ukrainian infrastructures, while non-state groups like the Houthis use similar Iranian-supplied systems to disrupt global shipping in the Red Sea. This accessibility empowers a wider range of actors, complicating global security.

Closely linked is the brutal economic logic of attrition these systems impose. Defenders face unsustainable cost-exchange ratios, often forced to expend multi-million-dollar interceptor missiles to counter threats costing a tiny fraction of that amount. Russia’s Shahed campaign, despite high interception rates (often 80-90%), remains cost-effective for Moscow because the sheer volume saturates defenses, and the cost per target struck is far lower than conventional missiles. Similarly, tactical systems like FPV drones or Russia’s Lancet loitering munition (around $35,000) can destroy or disable tanks, artillery, and air defense systems worth millions, fundamentally shifting the economics of battlefield losses.

A full-size view of the Cummings Aerospace Hellhound S3 D printed jet-powered drone. (Image taken from ‘The Merge’ podcast video, https://themerge.co/p/hellhound)

The psychological dimension is also potent. The constant threat from above, amplified by the ubiquitous sharing of drone strike footage online, exerts significant pressure on troop morale and shapes public perception of the conflict. Soldiers face the unnerving reality that a cheap, remotely piloted weapon could target them individually at any moment.

Fueling this revolution is a technological engine built on three key pillars: Additive Manufacturing (AM), Artificial Intelligence (AI), and Modular Open Systems Architecture (MOSA).

AM, or 3D printing, enables the rapid prototyping and production of complex, lightweight drone components. Companies like Firestorm Labs are pioneering expeditionary manufacturing, using containerized 3D printing cells to produce and repair drones directly near the front lines, drastically shortening logistics chains. Others, like Cummings Aerospace, leverage AM to iterate designs rapidly and cost-effectively to produce high-speed loitering munitions.

AI is transforming drones from remotely piloted tools into increasingly autonomous systems. AI algorithms enhance navigation (especially in GPS-denied environments), enable automated target recognition (ATR) that speeds up the kill chain, allow for autonomous decision-making during terminal attack phases, and increase resilience against electronic warfare. Critically, AI is the key enabler for drone swarms – large numbers of drones coordinating autonomously to overwhelm defenses or perform complex tasks.

MOSA provides the architectural flexibility needed for this rapid evolution. By using standardized interfaces, manufacturers can easily swap components – sensors, warheads, communication systems, AI processors – allowing for rapid upgrades, mission customization, and easier integration across different platforms and forces.

This technological convergence is spawning a new generation of weapon systems. In the United States, startups like Anduril are developing families of autonomous systems, including the air-launched Altius drone and the modular Barracuda cruise missile, designed for “hyperscale production,” leveraging their Lattice AI software. Firestorm focuses on mission-adaptable UAS like Tempest, built via their expeditionary, scalable 3D printing xCells. Cummings Aerospace offers the high-speed, 3D-printed Hellhound loitering munition. Established players like AeroVironment continue to supply systems like the Switchblade loitering munition used extensively by Ukraine.

Europe is also rapidly innovating.

501st Marine Infantry member holding a FPV drone. Image: Ukraine Ministry of Defence.

The Franco-German KNDS is developing loitering munitions like the jet-powered LARINAE and the MATARIS family, leveraging its munitions expertise. German AI defense company Helsing is mass-producing its AI-driven HX-2 strike drone, heavily supplied to Ukraine, from dedicated “Resilience Factories.” Competitor Stark Defence, also German, offers the Virtus VTOL loitering munition, incorporating AI and lessons from Ukraine.

Since 2022, Ukraine has implemented rapid scaling of drone production for 2.5–5 million units annually, a trend that demonstrates the effectiveness of distributed manufacturing in modern warfare. This model contrasts with centralized approaches like Anduril’s hyperscale facilities or Helsing’s sovereign factories but shares key resilience principles. Over 150 manufacturers, ranging from state-owned enterprises to volunteer-led workshops, operate across Ukraine.

This “chaotic arsenal” of producers reduces vulnerability to Russian strikes and enables rapid iteration. Monthly production surged from 20,000 drones in early 2024 to 200,000 by January 2025, with plans to exceed 2.5 million drones in 2025 (including 5 million FPV drones annually if funded). Competition among manufacturers drives advancements like fiber-optic control systems (immune to jamming), AI-guided drones, and hybrid missile-drone systems like the Palianytsia with 3,000 km range.

Israel, a long-standing pioneer, continues to advance its capabilities. Israel Aerospace Industries (IAI) produces the combat-proven Harop loitering munition known for its long endurance and range. Rafael Advanced Defense Systems offers the tactical Spike FireFly loitering munition and is partnering with General Atomics to produce the Bullseye cruise missile (derived from its Ice Breaker) for the US market, emphasizing affordability and scale. The Viper 300 and 750, produced by Spear UAVs, are also designed for rapid manufacturing and operations in swarms in scale to achieve battlefield dominance rapidly. Xtend Defense is offering its line of Scorpio 500 and 1000 multirotor drones, leveraging FPV operation via wireless and fiber optics, leveraging its XOS, an open drone operating system to control drones in a ‘human-assisted’ autonomous mission. Israel is also heavily investing in counter-drone capabilities, including directed energy weapons like Iron Beam.

SCORPIO 500 and SCORPIO 1000 are combat-proven loitering munition systems, designed for both indoor and outdoor missions. Powered by XOS, XTEND’s unified, AI-driven operating system, these drones integrate seamlessly with C2 and ATAK environments. Photo: Xtend Defense

The rise of cheap, smart, and numerous aerial weapons signifies an irreversible shift. It demands urgent adaptation from Western militaries, requiring faster acquisition cycles, transformed industrial bases capable of affordable mass production, and doctrinal evolution. Countering these threats necessitates layered, cost-effective defenses, moving beyond expensive interceptors towards solutions like directed energy, advanced electronic warfare, and interceptor drones. Simultaneously, managing the proliferation of these technologies to state and non-state actors requires robust international controls and vigilance. The future battlefield is increasingly defined not just by the sophistication of individual platforms, but by the ability to deploy intelligent systems at scale – a reality reshaping conflict before our eyes.

Rebuilding U.S. Theatre Strike

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May 2, 2025

The United States navigates a new era of strategic competition in the shifting sands of global power dynamics. The landscape changed dramatically following the nation’s withdrawal from the Intermediate-Range Nuclear Forces (INF) Treaty in 2019, a pact with long-defined missile constraints between the US and Russia. This post-INF world, coupled with the rise of sophisticated Anti-Access/Area Denial (A2/AD) strategies employed by peer competitors like China and Russia, has spurred a concerted American effort to revitalize its theater strike capabilities. The goal is clear: develop and field a new generation of conventional missiles capable of ensuring deterrence and projecting power across vast distances, particularly in the critical Indo-Pacific region.

Army Multi-Domain Effects

The U.S. Army stands at the forefront of this push with its Long-Range Precision Fires (LRPF) initiative, a cornerstone of its broader Multi-Domain Operations (MDO) concept designed to counter and dismantle adversary A2/AD networks. Recognizing the need for speed, the Army adopted a rapid fielding approach with the Typhon system, officially known as the Mid-Range Capability (MRC) or Strategic Mid-Range Fires (SMRF). Instead of designing a weapon from scratch, Typhon cleverly adapts proven U.S. Navy missiles – the versatile SM-6 and the long-range Tomahawk Land Attack Cruise Missile (TLAM) – for ground launch. Housed within a mobile battery consisting of four launchers, a command center, and support vehicles, Typhon fills a crucial gap, offering strike ranges between the Army’s shorter-range Precision Strike Missile (PrSM) and its developmental Long-Range Hypersonic Weapon (LRHW).

The strategic significance of Typhon was dramatically underscored in April 2024, when a battery was deployed over 8,000 miles via a C-17 aircraft from Joint Base Lewis-McChord (JBLM) in Washington state to Northern Luzon in the Philippines for Exercise Salaknib 24. This marked the system’s first operational overseas deployment, aimed at enhancing Philippine maritime defense and interoperability with its allies. The move, however, immediately drew sharp criticism from China and Russia, who labeled it a destabilizing provocation fueling a regional arms race. Despite the political fallout, the deployment signaled a tangible US commitment to presence and deterrence in the contested Indo-Pacific. The Army is activating more Typhon batteries, with plans for future deployments, including one to Germany in Fiscal Year 2026.

In January 2025, the U.S. military moved its Typhon launchers – which can fire multipurpose missiles up to thousands of kilometers – from Laoag airfield in the Philippines to another location on the island of Luzon. The photo shows US personnel unloading a trailer-based launcher associated with the Typhon weapon system from a C-17A transport plane in the Philippines on April 7, 2024. Photo: US Army

While Typhon offers a near-term solution, the Army is also pursuing longer-range capabilities through the Precision Strike Missile (PrSM) program. Designed as the successor to the aging Army Tactical Missile System (ATACMS), the baseline PrSM Increment 1, now entering service, already pushes beyond the old 500 km INF limit. Fired from existing HIMARS and MLRS launchers, PrSM offers double the missile capacity per launch pod compared to ATACMS. Future increments promise even greater reach and versatility: Increment 2 adds an anti-ship seeker; Increment 4 aims for ranges exceeding 1,000 km; and Increment 5 pushes further into MRBM territory. This incremental approach allows the Army to enhance its capabilities while leveraging existing infrastructure steadily. Congressional interest is also high, with recent proposals earmarking significant funding to accelerate MRBM development, potentially including entirely new designs beyond the PrSM family, which may offer greater performance at the cost of requiring new launchers.

PrSM launched from a HIMARS launcher. Photo: US Army

At the cutting edge of the Army’s LRPF portfolio is the Long-Range Hypersonic Weapon (LRHW), officially christened “Dark Eagle” in April 2025. This system uses the Common Hypersonic Glide Body (CHGB), a joint development with the Navy, which is launched by a ground-based booster. Traveling at speeds greater than Mach 5 and possessing significant maneuverability over its roughly 2,775 km range, Dark Eagle is designed to penetrate the most sophisticated defenses to strike high-value, time-sensitive targets. The name itself reflects its intended role: “Dark,” signifying its ability to “disintegrate adversary capabilities,” and “Eagle,” representing its speed, stealth, and precision. Despite successful flight tests in 2024 and early 2025, the program faced earlier integration challenges, pushing its initial fielding to the end of Fiscal Year 2025.

A recent launch of a hypersonic missile developed for the Army Dark Eagle and Navy Covventional Prompt Strike (CPS) capability. The missile was launched using a ‘cold launch’ system testing a critical aspect relevant to launching the missiles from the ship launch containers. DOD photo

After 14 months of modifications and repairs, the USS Zumwalt was relaunched at Ingalls Shipyard on December 6, 2024. Photo: HII

Naval Conventional Prompt Strike

The Navy, meanwhile, is pursuing its hypersonic ambitions through the Conventional Prompt Strike (CPS) program, which shares the C-HGB payload with the Army’s Dark Eagle. The Navy’s vision involves deploying this capability from the sea. The three Zumwalt-class destroyers are undergoing significant modifications, replacing their costly and ammunition-starved 155mm Advanced Gun Systems with four large-diameter tubes, each capable of holding three CPS missiles, for a total of 12 per ship. USS Zumwalt (DDG-1000) completed its tube installation in late 2024, with sea testing anticipated around 2027-2028. The long-term plan, however, focuses on integrating CPS into future Block V Virginia-class attack submarines equipped with the Virginia Payload Module (VPM), providing a stealthy, submerged launch capability, with an initial operational capability targeted for around FY2028 or FY2029.

B-52H bomber carrying two AGM-18A Air Launched Hypersonic missiles. Photo: Air Force/Lockheed Martin

Air Forces’ Hypersonic Attack Cruise Missile

The Air Force is also in the hypersonic race, though its path has seen adjustments. After canceling the AGM-183A Air-Launched Rapid Response Weapon (ARRW) boost-glide program due to testing difficulties, the service is now prioritizing the Hypersonic Attack Cruise Missile (HACM). HACM is an air-breathing system using scramjet technology, aiming for operational capability around 2027 to provide air-launched standoff strikes against defended targets. Looking further ahead, the Air Force is exploring reusable hypersonic platforms for future intelligence, surveillance, and reconnaissance (ISR) and strike missions.

These diverse Army, Navy, and Air Force programs are not developing in isolation. They are designed to integrate into broader US military concepts, such as MDO, and are executed by specialized units, like the Army’s Multi-Domain Task Forces (MDTFs). These MDTFs, equipped with systems like Typhon and Dark Eagle, are intended to provide theater commanders with integrated capabilities across domains. New Theater Fires Commands are also planned to coordinate these long-range assets effectively.

While pursuing these offensive capabilities, the US is acutely aware of the need for defense against similar threats. Significant investment is flowing into the development of countermeasures, particularly a layered space-based sensor network featuring the Hypersonic and Ballistic Tracking Space Sensor (HBTSS) to provide early warning and tracking data, as well as dedicated interceptors like the Glide Phase Interceptor (GPI), designed to engage maneuvering hypersonic threats.

In essence, the United States is undertaking a comprehensive, multi-service effort to adapt its long-range strike and missile defense posture. By blending the rapid fielding of modified existing systems with the ambitious development of next-generation hypersonic weapons, the US seeks to maintain a credible deterrent and ensure its forces can operate effectively in the increasingly complex and contested security environment of the 21st century.

India Strengthens Naval Aviation with Rafale M Procurement

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May 2, 2025

India has finalized a significant Inter-Governmental Agreement (IGA) with France, signed on April 28, 2025, to acquire 26 Rafale Marine (Rafale M) fighter jets for the Indian Navy. This deal, valued at approximately €7 Billion ($7.5 Billion or ₹63,000-₹64,000 Crore), marks the first export order for the naval Rafale and aims to modernize India’s carrier aviation capabilities, particularly aboard the indigenous aircraft carrier INS Vikrant. The procurement strengthens the Indo-French strategic partnership, especially concerning security in the Indian Ocean Region amidst China’s growing naval presence.

The agreement covers 22 single-seat Rafale M fighters for carrier deployment and four twin-seat Rafale DH variants for land-based training, as a carrier-capable twin-seat version was not developed. The comprehensive package includes advanced weaponry like Meteor, SCALP, and Exocet missiles, simulators, training, spares, and five years of Performance-Based Logistics (PBL). Deliveries are set to begin around mid-2028 and conclude by 2030-2031. The deal also bundles upgrades for the Indian Air Force’s (IAF) existing Rafale fleet, including buddy-refueling pods for 10 jets, indicating a coordinated approach.

Carrier Integration Challenges

The Rafale M is the carrier variant of Dassault’s versatile 4.5 generation fighter, featuring modifications for naval operations like a reinforced undercarriage, arrestor hook, and a “jump strut” nosewheel. Crucially, trials in January 2022 at INS Hansa, Goa, confirmed its ability to operate from the Short Take-Off But Arrested Recovery (STOBAR) ski-jump configuration used on India’s carriers, INS Vikrant and INS Vikramaditya. Significant commonality (around 80%) with the IAF’s Rafales offers logistical and training advantages over its competitor, the Boeing F/A-18 Super Hornet.

Despite its capabilities, the Rafale M presents a significant integration challenge due to its physical dimensions and lack of folding wings in its current configuration. The aircraft’s wingspan of 10.9 meters exceeds the width of the aircraft elevators on both INS Vikrant (approximately 10 meters) and INS Vikramaditya (approximately 9.9 meters). These elevators, critical for moving aircraft between the hangar bay and the flight deck, were designed primarily for the smaller, folding-wing MiG-29K (which folds to 7.8 meters).

This size mismatch poses considerable operational constraints. Moving the Rafale M onto the elevators requires complex maneuvers, potentially slowing the mission preparation time and cycle time for launching and recovering aircraft. This could significantly impact the operational tempo during high-intensity flight operations, a critical factor in carrier combat effectiveness.

Several potential remedies or workarounds are reportedly being considered, though none are without challenges:

Tilting the Aircraft: This option involves using specialized jigs to tilt the Rafale diagonally on the elevator.
Removing Wingtip Rails: Detaching the missile launcher rails from the wingtips before moving the aircraft onto the elevator.
India-Specific Modifications: Dassault is expected to showcase an India-specific Rafale M within 18 months of the deal. If feasible, these changes could feature foldable wingtips.
Revising procedures and Deployments: Restricting Rafale M to flight deck operation, assigning the Rafale M exclusively to the second Indigenous Aircraft Carrier (IAC-2), which will have larger elevators.

The F/A-18 Super Hornet, with its folding wings (reducing span to 9.32 meters), would have fit the elevators more easily. Despite this known constraint, the selection of the Rafale M underscores the weight given to other factors like IAF commonality but highlights a significant operational challenge the Navy must manage. This reinforces the long-term importance of the indigenously designed Twin Engine Deck-Based Fighter (TEDBF), which will feature folding wings tailored for Indian carriers.

Strategic Rationale and Self-Reliance

The Rafale M procurement addresses the urgent need to replace the Indian Navy’s unreliable MiG-29K fleet, which has suffered from poor serviceability. It is an essential ‘interim’ capability bridge until the Indigenous TEDBF becomes operational, expected around 2031-2032. The Rafale M significantly enhances the Navy’s power projection with its advanced sensors, electronic warfare suite, and potent weapons loadout, crucial for countering China’s increasing naval activities in the region.

To align with India’s ‘Aatmanirbhar Bharat’ (Self-Reliant India) initiative, the deal includes Transfer of Technology (ToT) for integrating Indigenous weapons like Astra missiles and NASM-MR onto the Rafale M. Furthermore, it mandates establishing local production facilities for Rafale fuselage sections and Maintenance, Repair, and Overhaul (MRO) capabilities for engines, sensors, and weapons within India, fostering domestic industrial capacity.

The acquisition of 26 Rafale M jets represents a major capability upgrade for the Indian Navy, replacing aging aircraft and providing a potent, modern fighter for its carriers. While serving as a stopgap pending the indigenous TEDBF, the Rafale M brings advanced technology and weaponry. However, the significant challenge posed by its non-folding wings and elevator incompatibility requires effective workarounds to avoid hindering carrier operational tempo. Despite this, the deal enhances India’s maritime deterrence in the IOR, boosts self-reliance through technology transfer and local MRO, and deepens the strategic partnership with France.

DefenseTech Weekly Brief – April 21-27, 2025

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Apr 27, 2025

LTAMDS-1021 — LTAMDS radar. Photo: Raytheon

This edition of the DefenseTech Brief covers the week of April 21-27, 2025, a period marked by significant developments across multiple defense technology domains. Key highlights include the US Army’s critical decision to move the LTAMDS radar into production, bolstering Patriot air defenses, alongside a major funding proposal for the ambitious “Golden Dome” homeland missile defense initiative. The underwater realm saw continued focus on seabed infrastructure security and advancements in uncrewed systems. Counter-UAS activity remained intense with new partnerships, technologies, and international deals, including the notable effectiveness of systems like the Iranian Project 358 missile. European land forces modernization featured updates on major programs like Challenger 3, Leopard 2A8, Leclerc XLR, Ajax, and the successful CV-90, while future tank development showed signs of fragmentation. Other notable events included major defense spending announcements, hypersonic program contracts, and space domain activities. This brief provides summaries, assessments, and investor insights for each key area.

Air & Missile Defense Developments

Key developments included the US Army approving Low-Rate Initial Production (LRIP) for Raytheon’s LTAMDS radar, a critical Patriot system upgrade now attracting significant international interest. LTAMDS technology is also enhancing NASAMS via the GhostEye MR radar. Concurrently, Congressional Republicans proposed $27 billion initial funding for the ambitious “Golden Dome” homeland missile defense initiative, expanding US policy scope significantly beyond previous rogue-state focus. This initiative, stemming from EO 14186, aims to counter diverse threats including hypersonics, involving major contractors like SpaceX and Lockheed Martin. Debates intensified over balancing costly active interceptors ($406M for 12 SM-3s) against passive defenses like hardened aircraft shelters (HAS), given rising airbase vulnerability to missiles and drones and constrained military construction budgets. Other updates included USAF orders for Lockheed Martin’s TPY-4 radars, exploration of low-cost C-UAS interceptors, and accelerated development of advanced Precision Strike Missile (PrSM) variants.

Assessment: The AMD landscape shows a dual focus: pursuing high-end, technologically advanced systems (LTAMDS, Golden Dome) to counter sophisticated peer threats, while simultaneously grappling with the proliferation of low-cost threats (drones) and the economic unsustainability of current countermeasures. The Golden Dome initiative represents a major, potentially destabilizing policy shift with significant technical and fiscal hurdles. Airbase vulnerability highlights a critical tension between investing in expensive interceptors versus affordable passive defenses like HAS, with current funding potentially misaligned with operational realities.

Investor Insights: Significant opportunities exist for prime contractors like Raytheon [NYSE: RTX] (LTAMDS, GhostEye MR, potentially Coyote C-UAS) and Lockheed Martin [NYSE:LMT] (THAAD, TPY-4, F-35 upgrades). The Golden Dome initiative, despite uncertainties, signals massive long-term investment potential, particularly in space-based sensors and interceptors, attracting interest from established players and newer entrants like SpaceX, Palantir [NASDAQ: PLTR], and Anduril. The C-UAS market remains hot, with demand for cost-effective interceptors. Investment in base hardening and military construction, though currently constrained, represents a potential growth area driven by clear operational needs.

Underwater Warfare & Seabed Security

Focus intensified on seabed security following infrastructure sabotage incidents (Nord Stream, Balticconnector), establishing the seabed as a distinct operational domain vulnerable to hybrid warfare tactics. Nations (France, EU) are developing specific doctrines and strategies. Uncrewed Underwater Vehicles (UUVs) are central to future capabilities (CUI protection, ASW, MCM, ISR), with R&D focused on autonomy, interoperability, data exploitation, and multi-platform deployment. Industry players like BAE Systems (XLAUV) and HII (Lionfish SUUV) showcased progress. Key naval platform news included Italy receiving its 9th FREMM frigate (Spartaco Schergat) in a new enhanced ASW/GP hybrid configuration, Russia announcing serial production readiness for the Arctic-focused Husky-10 hovercraft, and Denmark planning a major 25-vessel naval expansion.

Assessment: The seabed is now a recognized critical infrastructure battleground, demanding new technologies and doctrines. UUV/AUV advancements are key, but the underwater environment poses persistent challenges (pressure, communication, power). Mastering autonomy is crucial for future dominance, but UUV proliferation creates significant asymmetric threat risks. Naval investments reflect these trends, with a continued focus on advanced ASW platforms (FREMM) and specialized regional capabilities (Husky-10).

Investor Insights: The UUV/AUV market shows strong growth potential, driven by defense needs for seabed monitoring, ASW, and MCM. Companies specializing in underwater autonomy, sensors, power systems, and data analytics are well-positioned (e.g., BAE Systems [LON: BAES], HII [NYSE: HII], Thales [EPA: TCFP], Leonardo [BIT: LDO]). Investment in seabed infrastructure protection technologies and services is likely to increase. Major naval shipbuilding programs (FREMM, Danish expansion) offer opportunities for large shipbuilders (Fincantieri [BIT:FCT]) and their supply chains. Arctic-specific platforms (Husky-10) represent a niche but growing market.

Counter-Unmanned Aircraft Systems (C-UAS)

The C-UAS sector saw intense activity. The USAF issued RFIs for EW and sensor (radar/camera) capabilities. NATO tested a prototype sensor against GNSS threats. AI integration was prominent, with partnerships formed between MSI Defense/OVES Enterprise and Sentrycs/Xtend, and development efforts by ELT Group. The US Army conducted M-LIDS training. DZYNE Technologies launched a new Dronebuster variant for Europe. Raytheon signed a term sheet for potential Coyote C-UAS co-production in the UAE. Domestically, Florida considered legislation against drone misuse, and the DSCA added the “DRAKE” C-UAS system to FMS lists. New systems like the Hellhound, developed by Cummings Aerospace, offer modular payloads (ISR, EW, kinetic) and potential swarming capabilities. A hypersonic variant is also planned. Meanwhile, the Iranian-supplied Project 358 (Saqr-1) loitering surface-to-air missile has proven effective, used by Houthis and Hezbollah to down numerous high-value drones, including over 20 US MQ-9 Reapers over Yemen, and three Israeli Hermes 900s over Lebanon, highlighting the growing threat from sophisticated, lower-cost SAMs.

Assessment: The C-UAS field is highly dynamic, driven by urgent operational needs demonstrated in conflicts like Ukraine. Key technology trends include heavy reliance on AI/ML for detection/classification, sophisticated EW solutions for jamming/spoofing/neutralization, and exploration of diverse effectors (kinetic, directed energy, cyber). The emergence of modular systems like Hellhound and the proven effectiveness of systems like the Iranian 358 missile underscore the rapid evolution of both C-UAS solutions and the threats they face. International cooperation and localized production are increasing. Establishing effective legal and regulatory frameworks remains an ongoing challenge.

Investor Insights: The C-UAS market continues its rapid expansion, offering opportunities across the kill chain (detect, track, identify, defeat). Companies strong in AI/ML (e.g., Palantir [NASDAQ: PLTR], Anduril via partnerships), EW (e.g., ELT Group), sensor fusion, and specialized interceptors (e.g., Raytheon’s – [NYSE:RTX] Coyote) are likely beneficiaries. Handheld and mobile systems (e.g., DZYNE, M-LIDS platforms) are in demand. Modular systems like Hellhound offer potential. The success of systems like the 358 missile highlights the market for capable, potentially lower-cost interceptors. International partnerships and FMS deals indicate a growing global market.

IV. European Land Systems Modernization

Modernization efforts focus on both upgrading existing platforms and developing next-generation capabilities. The UK’s Challenger 3 program is converting 148 Challenger 2s, with 4 prototypes delivered and 4 in build; trials are ongoing, focusing on the new Rheinmetall 120mm smoothbore gun and enhanced ammunition, aiming for IOC in 2027 and FOC by 2030. The program faces criticism for the limited number of tanks being upgraded and past delays. Germany’s Leopard 2A8 is seeing wider interest, with the Netherlands acquiring 46 tanks to form a new battalion based in Germany. Germany is also in talks with the Czech Republic, Lithuania, and Sweden for joint procurement under a framework agreement potentially covering over 100 tanks. The 2A8 features Trophy APS and other survivability/digital upgrades.

France’s Leclerc XLR upgrade continues, with 200 tanks ordered (34 delivered by end of 2024). The upgrade integrates the tank into the SCORPION network and adds protection, but the key PASEO digital sights with AI won’t arrive until 2028. The UK’s Ajax program reached the 100th vehicle milestone, though FOC remains delayed until 2028-2029 due to past noise/vibration issues. The CV-90 IFV saw continued success: Denmark ordered 115 new vehicles, joint procurement of hundreds of vehicles by the Nordic countries, and an MLU for the existing fleet, while the Netherlands invested €400M+ for production destined for Ukraine, including partial manufacturing in the Netherlands. Future European tank development fragmented further with the launch of the EDF-funded FMBTech project (Thales coordinating 26 partners) running parallel to the MARTE project (KNDS/Rheinmetall coordinating 47 partners) underway for the second year.

Assessment: European land modernization shows divergence. Upgrades to existing MBTs (Challenger 3, Leclerc XLR) and procurement of the latest Leopard 2 variant (2A8) are progressing, enhancing capabilities and NATO interoperability. Proven IFV platforms like the CV-90 thrive, benefiting from upgrades, new orders, and innovative multinational production models supporting Ukraine. However, ambitious next-generation programs face hurdles. Ajax’s recovery is slow, highlighting program management challenges. The fragmentation of the future European tank efforts (MGCS, MARTE, launch of FMBTech) suggests a lack of strategic cohesion, potentially delaying a common European capability despite EDF R&D funding.

Investor Insights: BAE Systems Hägglunds [art of BAE Systems, LON: BAES] benefits significantly from CV-90’s success (new orders, upgrades, Ukraine support). The Dutch production model for Ukraine could signal new collaborative industrial approaches. General Dynamics UK [part of General Dynamics, NYSE: GD] sees incremental progress on Ajax, but program risks remain. KNDS (including former KMW) and Rheinmetall [FWB: RHM] are central to Leopard 2A8 production and upgrades, as well as the Challenger 3 program (via RBSL) and the uncertain future tank landscape (MGCS, MARTE, potential German-led project). KNDS France leads the Leclerc XLR upgrade. Thales [EPA: TCFP] coordinates the FMBTech R&D project.

V. Other Significant DefenseTech News

Rocket Lab secured major contracts supporting US/UK hypersonic programs. Space activities included concerns over a Russian satellite event, a German-American intel satellite partnership (OHB/Lockheed Martin), SpaceX’s continued involvement (Golden Dome, launches), and Germany planning a Starlink alternative. Significant defense spending increases were announced by Spain ($12B plan) and Estonia (to 5.4% GDP), alongside continued large aid packages for Ukraine from Norway ($7.8B) and Spain (€1B). Major industry moves included Boeing selling digital aviation assets ($10.55B) 1 and facing challenges with fixed-price contracts, Lockheed Martin integrating NGAD tech into the F-35, Italy ordering AeroVironment JUMP 20 UAS ($46.6M), Gecko Robotics/L3Harris partnering on maintenance drones, Netherlands selecting Oshkosh JLTV, and Otokar forming a JV in Romania for Cobra II production.

Assessment: The broader defense sector shows high activity driven by geopolitical tensions. Hypersonics and space remain key investment areas, with increasing reliance on commercial partners and growing concerns about space weaponization. European defense spending is rising significantly, driven by NATO targets and the war in Ukraine. Major industry players are making strategic portfolio adjustments (Boeing divestment, Lockheed F-35 enhancement) while securing numerous international contracts, reflecting a dynamic global market.

Investor Insights: Hypersonics R&D offers opportunities for specialized firms like Rocket Lab [NASDAQ: RKLB]. The space domain sees investment in ISR (OHB/Lockheed) [FWB: OHB] and constellations (SpaceX), but also faces geopolitical risks. Increased European defense budgets benefit many suppliers across land, sea, and air domains. UAS procurement continues strongly (AeroVironment [NASDAQ: AVAV]). Strategic moves by primes like Boeing [NYSE: BA] and Lockheed Martin [NYSE: LMT] signal portfolio optimization. Maintenance/sustainment tech (Gecko/L3Harris) [NYSE: LHX] and tactical vehicles (Oshkosh [NYSE: OSK], Otokar [part of Koç Holding, IST: KCHOL]) remain active markets.

Analyst Outlook

The week highlighted a drive for high-end systems (LTAMDS, Golden Dome) alongside struggles to counter low-cost threats cost-effectively, stressing the active vs. passive defense debate. The seabed emerged as a critical, contested domain requiring new UUV/AUV tech and doctrines, with autonomy mastery being key but proliferation a risk. C-UAS remains hyper-dynamic, driven by AI/EW innovation and urgent demand, but facing increasingly capable threats like the Iranian 358 missile. European land systems show mixed progress: upgrades and procurements of current-generation MBTs (Challenger 3, Leopard 2A8, Leclerc XLR) advance alongside successful IFV programs like CV-90, while Ajax recovers slowly and future tank programs fragment despite EDF funding. Overall activity is high, fueled by geopolitical tensions, leading to budget hikes, rapid tech development, and strong industry response, though strategic challenges in resource allocation and collaboration persist.

Assessment: Key tensions persist between investing in exquisite platforms versus affordable mass/resilience. Mastering new domains (seabed, C-UAS) requires balancing technological advancement with managing proliferation and counter-capability risks. European defense collaboration shows promise in specific areas (Ukraine support via CV-90) but struggles at the strategic level (MGCS). The defense industrial base responds dynamically but faces challenges in scaling production and aligning investments with evolving threats and economic realities.

Investor Insights: Continued growth is expected in AMD, UUV/AUV, C-UAS, and space domains. Balancing investments between high-end systems and cost-effective solutions presents opportunities for innovative companies. Autonomy and AI are critical enabling technologies across domains. European budget increases offer broad opportunities, but program fragmentation (e.g., future tanks) creates uncertainty for specific long-term projects. Companies demonstrating agile production, strong supply chains, and effective international partnerships will likely outperform. Key MBT players include KNDS, Rheinmetall [FWB: RHM], and BAE Systems via RBSL [LON: BAES].

DefenseTech Market Brief – Q1 2025

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Apr 25, 2025

B-21-Raider — In April 2022 Northrop Grumman's announced it had to absorb $477 million due to manufacturing and material changes incurred on the B-21 Raider program which is a fixed-cost contract. However, these changes will eventually benefit the company in the future, enabling a faster production rate and accelerated deliveries if the Air Force requires such acceleration and fleet growth. Photo: US Air Force

The first quarter of 2025 showcased the continued strength and strategic depth of the U.S. defense technology sector. Leading defense contractors posted resilient results supported by deep order backlogs, strong demand for next-generation platforms, and continued geopolitical uncertainty. At the same time, inflationary pressures, tariffs, and supply chain challenges highlighted vulnerabilities in global sourcing and fixed-price contracting. Check Part II of the Q1 market review published on May18, 2025

Sustained Demand and Record Backlogs

The top-tier U.S. defense companies reported combined quarterly revenues exceeding $68 billion, led by NOC ($41.0), RTX ($20.3B), and Lockheed Martin ($17.96B). Notably, defense-focused backlogs reached new heights, totaling over half a trillion US dollars in orders: Lockheed Martin at $173 billion, GD with $102 billion spread across three of its four operating businesses, Northrop Grumman at $91.5 billion, and Raytheon (part of RTX) at $61 billion. These multi-year pipelines signal enduring global demand for advanced air, sea, and space capabilities.

Lockheed Martin maintained its position as the sector’s cornerstone, delivering solid revenue growth driven by continued F-35 deliveries and sales of missile systems. The company unveiled its “fifth-generation plus” upgrade roadmap for the F-35, aiming to integrate up to 80% of sixth-generation capabilities—such as enhanced stealth and AI-driven sensor fusion—at half of the cost expected with sixth-generation platforms.
Meanwhile, General Dynamics posted a 13.9% revenue increase, fuelled by the strength of its Gulfstream jet division and new orders for Virginia-class submarine components. GE Aerospace and RTX saw double-digit growth in aerospace engines and defense electronics, respectively, driven by demand linked to NATO modernization and the Ukraine conflict.

Modernization Milestones and New-Gen Programs

The quarter marked several key milestones in U.S. force modernization:
• Northrop Grumman’s B-21 Raider program advanced despite a $477 million production loss. The stealth bomber, now scoped to produce 145 units (up from 100), is central to the U.S. long-range strike strategy. While the company had to absorb this loss due to the fixed-cost contract, these changes will eventually benefit the company in the future, enabling a faster production rate and accelerated deliveries if the Air Force requires them.
• Boeing’s F-47 NGAD fighter program secured its first U.S. Air Force contract, signaling a major leap into sixth-generation combat aviation and the autonomous air combat ecosystem. Yet, this win has not been included in Q1 earnings results.
• GE Aerospace progressed on its XA102 adaptive cycle engine, which is destined for the NGAD future fighter jet. The company also secured a $5 billion F110 contract, bolstering its role in future propulsion technologies for fighters and rotorcraft.

Tariffs and Supply Chain Disruptions Challenge Margins

Despite healthy earnings and expanding backlogs, defense firms grapple with cost pressures. U.S. tariffs on metals and high-tech components have created significant headwinds, with RTX projecting an $850 million impact in 2025, GE Aerospace estimating $500 million, and Boeing absorbing $150 million.

To offset these pressures, companies are pursuing trade zone exemptions, renegotiating contracts, and sometimes shifting their supply chains domestically or to tariff-exempt regions. Still, the combination of tariffs and fixed-price contract risk—as highlighted by Boeing’s margin squeeze on the B-21—may limit earnings upside in the near term.

Sector Outlook: Resilience with Caution

The defense technology sector enters the remainder of 2025 on a strong footing, supported by:
• Robust backlogs that extend over multiple years
• Next-generation programs (B-21, F-47, new engines) entering low-rate or full-scale production, Sentinel ICBM, Golden Dome on the horizon.
• Geopolitical tensions that sustain elevated defense procurement rates globally, despite political tensions.

However, several factors will influence sector momentum:
1. Execution discipline on high-profile programs like the F-35 Lot 22, submarine builds, and space systems
DoD procurement trends, including increased use of Indefinite Delivery/Indefinite Quantity (IDIQ) contracts and accelerated purchasing authorities such as Other Transaction Authority (OTA)

2. International market recalibration, particularly as European partners pursue industrial sovereignty in defense systems

Investor Perspective

Defense primes such as Lockheed Martin (NYSE: LMT), RTX (NYSE: RTX), Northrop Grumman (NYSE: NOC), and General Dynamics (NYSE: GD) remain well positioned for long-term growth. Valuation upside hinges on improved margin performance and successful delivery of next-gen platforms.

Short-term risks include exposure to tariff volatility, labor disruptions (e.g., at General Dynamics Electric Boat), supply chain disruptions (such as raw materials and component availability), and certification delays, notably in engine programs and commercial defense crossovers.

Conclusion

Q1 2025 affirmed that the defense tech sector remains a cornerstone of strategic and economic resilience. As the industry pivots toward sixth-generation capabilities, autonomous systems, and space-based defense architectures, sustained government investment and agile supply chain adaptation will determine its trajectory.

For stakeholders—governments, investors, and allied defense firms—the message is clear: the modernization wave is accelerating, but navigating fiscal and geopolitical turbulence will require both innovation and operational discipline.

DefenseTech Weekly Brief | April 14-21, 2025

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Apr 21, 2025

This week’s DefenseTech Brief captures a defense landscape in flux—driven by urgent needs for missile defense, advanced autonomy, and sovereign production capabilities. Across domains and continents, governments and industries are accelerating the integration of AI, expanding unmanned capabilities, and realigning production strategies to adapt to geopolitical tension and supply chain fragility. From space-based missile defense to AI-driven battlefield systems, each development signals a growing emphasis on speed, integration, and industrial resilience—core pillars shaping the future of global defense.

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Golden Dome Missile Defense Initiative

Summary: Initiated by a Presidential executive order, the “Golden Dome for America” aims to create a comprehensive, multi-layered missile defense shield against ballistic, hypersonic, and cruise missiles. Heavily reliant on space-based assets, the concept involves satellite constellations for detecting and tracking missile targets (“custody layer”) and using various interceptors, potentially including space-based interceptors, as the “attack layer,” echoing concepts from SDI. A SpaceX-led consortium, including Palantir and Anduril, is reportedly a frontrunner for the custody layer, proposing hundreds of satellites that can be rapidly deployed to orbit, potentially offered as a leased service. More traditional defense contractors, such as Lockheed Martin, Northrop Grumman, Boeing, and RTX, are also expected to be major players. Lockheed Martin is promoting its combat-proven systems and emphasizing the need for reliability. Costs are estimated in the hundreds of billions, with initial capabilities targeted for 2026. (Read the full report)

Assessment: Golden Dome signifies a major potential shift in U.S. strategic defense posture toward space-based layers. The initiative faces substantial technical hurdles and strategic debates regarding cost-effectiveness and geopolitical stability. The competitive landscape features both established primes emphasizing mission-tested integration and newer players pushing potentially disruptive models. Success depends on the ability to integrate diverse technologies and partners under a tight timeline, with continuity across political administrations.

Investor Takeaway: This initiative presents a massive, long-term investment opportunity in space systems, sensors, interceptors, command & control, and software/AI. Key beneficiaries include companies in satellite manufacturing (SpaceX), interceptor systems (Lockheed Martin [NYSE: LMT], L3Harris [NYSE: LHX], Boeing [NYSE:BA] and RTX [NYSE: RTX]), AI and data fusion (Palantir [NYSE: PLTR]), and advanced command and control networks. Investment risks include high R&D costs, feasibility of space-based interception, political changes, and novel acquisition models (e.g., leased defense services).

Rocket Systems – Meeting Surging Demand

Summary: The demand for multiple-launch rocket systems (MLRS) is surging, driven by recent conflicts. Lockheed Martin has doubled HIMARS production. Poland is partnering with South Korea’s Hanwha Aerospace to locally produce guided rockets for the Chunmoo system (HOMAR-K). This represents a trend of balancing immediate capability needs with long-term sovereign manufacturing. However, the proliferation of different MLRS systems within NATO raises concerns about interoperability. South Korea’s rise as a global arms exporter is also notable. (Read the article)

Assessment: The Ukraine conflict is a significant driver of global artillery procurement strategies. Countries seek rapid fielding of capabilities while ensuring future industrial autonomy. The success of South Korean firms like Hanwha Aerospace marks a shift in global arms markets. Elbit Systems [NASDAQ/TASE: ESLT], Diehl Defense, Roketsan, and Avibras are also active in this field. Interoperability among NATO systems will be crucial, especially as diverse systems proliferate. Parallel trends, including local production by non-state actors, further underscore the strategic value of sovereign MLRS production.

Investor Takeaway: The MLRS market is expanding rapidly. Investors should watch Lockheed Martin (NYSE: LMT), Hanwha Aerospace (KRX: 012450), Elbit Systems [NASDAQ/TASE: ESLT], and suppliers of subsystems and launch platforms. Countries that prioritize local production (e.g., Poland) offer opportunities for industrial partnerships and technology transfer. Watch for competition from firms in Turkey, Israel, Brazil, and others seeking to enter or expand in the MLRS segment. Risks include challenges with standardization and market fragmentation within alliances.

Loitering Munitions: Enhancing Precision Strike

Summary: Loitering munitions are advancing rapidly, with new systems emphasizing autonomy, extended range, and AI. India is developing a Multi-Barrel Loitering Munition (MBLM) system with a 500 km range, based on artillery rocket launchers like the Pinaka. Germany’s STARK tested its OWE-V (Virtus) VTOL LM in Ukraine, featuring AI support, EW resilience, and GNSS-free navigation. Other developments include Helsing’s swarming-capable AI drones and AV’s DIU-backed one-way attack drone. (Read the article)

Assessment: Loitering munitions are evolving into hybrid precision strike tools, merging features of artillery, drones, and cruise missiles. AI and EW resilience are becoming baseline requirements. Battlefield testing, especially in Ukraine, is accelerating innovation and adoption. India’s approach highlights cost-effective capability expansion by leveraging existing platforms and infrastructure.

Investor Takeaway: The LM segment is dynamic, presenting opportunities across hardware, software, and platform integration. Key players include AeroVironment [NASDAQ: AVAV], ELBIT SYSTEMS [NASDAQ/TASE: ESLT], IAI, Uvision Air, Andurill, AEVEX, Xtend Defense, STARK, HELSING, and other emerging AI/drone firms. Technologies in AI-guided navigation, electronic warfare (EW) countermeasures, and multi-launch systems are promising. Real-world combat performance is increasingly important for credibility and adoption.

Mission Control, AI & Autonomy

Summary: AI and autonomy integration is advancing across ground and air systems. Overland AI introduced its autonomous UGV (Ultra) for logistics. General Dynamics Land Systems is collaborating with Palantir, Applied Intuition, and others on AI for next-generation platforms. The U.S. Army is using Duality AI’s simulation for developing the AI-based anti-drone system AiTDR for the XM30. In Australia, BAE Systems secured a deal for the Vehicle Management System on Boeing’s Ghost Bat MQ-28. (read the article)

Assessment: Software and AI are central to defining next-generation military platforms. Defense primes are increasingly partnering with tech firms to integrate advanced AI and simulation into their development cycles. Simulation-first development is accelerating timelines while reducing risk.

Investor Takeaway: Investment is growing in defense-focused AI firms, simulation platforms, and developers of autonomous systems. Notable participants include Overland AI, Applied Intuition, Palantir [NYSE: PLTR], Duality AI, Boeing [NYSE: BA], and BAE Systems [LSE: BA]. The emerging Collaborative Combat Aircraft (CCA) market offers long-term potential.

NATO Modernizes Battle Command with AI

Summary: NATO rapidly procured Palantir’s Maven Smart System (MSS NATO), an AI-enabled warfighting platform that uses LLMs and ML to fuse data for improved planning, targeting, and decision-making. The platform reflects lessons from the U.S. Project Maven but is a separate NATO system. The six-month acquisition cycle highlights urgency. (Read the article)

Assessment: NATO’s adoption of MSS NATO demonstrates an organizational shift toward digital and AI-enabled operations. The platform enhances intelligence fusion and decision speed. It also underscores reliance on U.S. technologies, creating tension with European efforts for digital sovereignty.

Investor Takeaway: Palantir [NYSE: PLTR] continues to benefit from demand for battlefield AI integration. Companies developing LLM-based decision tools, sensor fusion systems, and battle management software are well-positioned. Open architecture encourages ecosystem development and third-party integration within NATO-aligned firms.

Fighter Aircraft Market Update

Summary: Colombia selected Saab’s Gripen to replace its Kfirs, despite potential ITAR-related complications. Saab also proposed the Gripen E/F to Peru.
Indonesia may join Türkiye’s KAAN 5th-gen program. The UAE is exploring South Korea’s KF-21 and FA-50 platforms. (Read the full report)

Assessment: Nations are pursuing varied strategies—balancing 5th-gen ambitions with cost-effective 4.5-gen platforms. ITAR compliance and offset demands significantly influence procurement. Türkiye and South Korea are becoming credible competitors in fighter exports, challenging traditional suppliers.

Investor Takeaway: The fighter market remains robust. Key players include Saab [STO: SAAB-B], Korea Aerospace Industries (KAI) [KRX: 047810], Turkish Aerospace (private), and Lockheed Martin [NYSE: LMT]. Brazil’s Gripen program may strengthen Saab’s position in Latin America and Portugal. Monitor geopolitical and regulatory risks such as ITAR.

Autonomy Takes to the Seas

Summary: The UMS sector is accelerating. Saronic acquired shipbuilder Gulf Craft to build USVs domestically. France’s Exail reported 519% growth in Q1, driven by European naval demand. Anduril and Ultra Maritime announced an ASW-focused subsea sensing system. The U.S. Navy received its first production-rate Mine Countermeasures (MCM) Unmanned Surface Vessel (USV) from Bollinger Shipyards. (Read the full report)

Assessment: Maritime autonomy is transitioning from experimentation to deployment. Unmanned Maritime Systems (UMS) are now essential for mine countermeasures, intelligence, surveillance, and reconnaissance (ISR), and anti-submarine warfare (ASW). Sensor fusion, acoustic systems, and undersea autonomy are critical technology drivers.

Investor Takeaway: The UMS market is expanding rapidly. Key companies include Anduril (private), Exail Technologies (EPA: EXA), Ultra Maritime (subsidiary of Cobham), and BAE Systems [LSE: BA]. Enabling tech providers like Kraken Robotics [TSXV: PNG] and Coda Octopus [NASDAQ: CODA] also offer potential. Watch for vertical integration and sensor partnerships.

Other Industry & Operational Updates

Key Developments and Geopolitical Impacts

Summary: An explosion at a Northrop Grumman solid rocket facility in Utah could affect solid rocket motor (SRM) production, but, according to the company’s assessment, will not impact strategic programs like the Sentinel ICBM.

Norway pledged nearly $1 billion in aid for the training of a new Ukraine’s brigade.

Hyundai Heavy Industries offered to build Aegis destroyers for the U.S. Navy, citing U.S. shipyard bottlenecks.

Assessment: Critical infrastructure incidents (Northrop) highlight vulnerability in defense supply chains. Growing allied contributions (Norway) and foreign industry offers (HHI) show evolving global defense collaboration and supply flexibility.

Investor Takeaway: Industrial resilience is vital. Disruptions may shift opportunities toward other suppliers. Current Arleigh Burke Aegis destroyers are being built by Huntington Ingalls Inc. [NYSE: HII] in Pascagoula, Mississippi, and Bath Iron Works [NYSE:GD] in Bath, Maine. Relevant companies include Northrop Grumman [NYSE: NOC], Hyundai Heavy Industries [KRX: 329180], and BWX Technologies [NYSE: BWXT]. Increased focus on allied naval construction may shift long-term investments in shipbuilding and propulsion systems.

Investor Watchlist:

Autonomy Takes to the Seas

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This article is part of our weekly DefenseTech Brief.

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Apr 18, 2025

Investment and activity in unmanned maritime systems (UMS), encompassing Unmanned Surface Vessels (USVs) and Unmanned Underwater Vehicles (UUVs), continue to accelerate, driven by naval requirements for missions like Mine Countermeasures (MCM), Anti-Submarine Warfare (ASW), and Intelligence, Surveillance, and Reconnaissance (ISR).

Saronic Expand Manufacturing Capabilities

A significant indicator of the sector’s growth and industrial maneuvering is the acquisition by autonomous vessel startup Saronic of Louisiana-based shipbuilder Gulf Craft. This deal provides Saronic with nearly 100 acres of shipbuilding facilities. Saronic has pledged a $250 million investment to modernize the shipyard, specifically for the production of unmanned systems, aiming for an annual capacity of up to 50 USVs and creating up to 500 jobs. The immediate focus is on establishing the capacity to develop, test, and produce larger Autonomous Surface Vessels (ASVs), including the company’s first Medium Unmanned Surface Vessel (MUSV) model. This strategic move towards vertical integration signals Saronic’s ambition to secure dedicated, scalable production capabilities needed to compete for major naval programs and meet broader defense and commercial demand.

Bollinger Delivers the First MCM USV

Crucially, the transition from development to operational deployment is underway. Bollinger Shipyards delivered the first three full-rate production Mine Countermeasures Unmanned Surface Vehicles (MCM USVs) to the U.S. Navy. This marks a significant milestone, representing the first unmanned surface vessels produced at scale under an official Navy program of record. The delivery signals a concrete shift in the Navy’s mine warfare strategy, moving away from legacy manned platforms like the MCM-1 Avenger-class ships and MH-53E Sea Dragon helicopters towards autonomous systems. The MCM USVs are designed to perform minesweeping, minehunting, and mine neutralization tasks, reducing risks to personnel while offering greater operational resilience, endurance, and adaptability for operations in high-threat maritime environments. These modular vessels can be deployed from various platforms and integrated into broader network-centric naval operations.

DIU Solicits Proposals for Combat Autonomous Maritime Platform (CAMP)

Further indicating the drive for advanced UMS capabilities, the Defense Innovation Unit (DIU) has an open solicitation for the Combat Autonomous Maritime Platform (CAMP). This initiative seeks commercially available, demonstration-ready uncrewed systems capable of deploying large payloads (up to 21ft long) over extended ranges exceeding 1000nm and operating at depths greater than 200m. Key focus areas include payload emplacement, ISR, bathymetric surveys, communications across the air/water interface, and autonomous operation in GPS-denied environments. Desired attributes emphasize modularity, open architecture for integrating third-party payloads and control systems (including pathways for UMAA compliance), transportability, and minimal surface presence. Responses are due by May 1, 2025.

Exail Growth Order Intakes by reported a dramatic 519%

Established players are also experiencing strong growth. Exail Technologies, the French high-tech group specializing in UUVs and navigation equipment, reported a dramatic 519% surge in order intake during the first quarter of 2025, reaching €487 million ($554.3 million). This growth was primarily attributed to increased defense spending by European governments. A major contract for drone systems, valued at several hundred million euros and placed by an unspecified “leading Navy,” was a key driver. Exail’s order backlog reached €1.1 billion ($1.25 billion) by the end of Q1, with the defense sector accounting for 75% of total orders. Group sales increased by 18%, supported by its core navigation and maritime robotics business. Exail confirmed its outlook for double-digit revenue growth in 2025, reflecting the buoyant market for maritime autonomy solutions.

Andurill Joins Ultra Maritime To Establish a Seabed Sentry

Collaborations are also shaping the development of advanced capabilities. Anduril Industries and Ultra Maritime announced an exclusive partnership to develop a novel autonomous subsea sensing capability focused on ASW. The initiative combines Ultra Maritime’s Sea Spear deployable acoustic arrays and AI-enabled acoustic processing technology with Anduril’s UUV platforms (Dive XL), modular undersea payload systems (Seabed Sentry), and Lattice command and control framework. The operational concept involves an Anduril Dive XL UUV autonomously deploying the Seabed Sentry system, which hosts the Sea Spear array as a payload. Sea Spear will perform sonar processing using AI at the tactical edge, with data relayed in near real-time via acoustic communications integrated into the Lattice network. The partners plan end-to-end in-water testing in 2025, aiming to provide a rapidly deployable, potentially low-cost, distributed ASW capability to counter increasingly quiet submarine threats.

Summary

The Bollinger delivery and Saronic’s shipyard investment clearly indicate the unmanned maritime sector is maturing beyond R&D into series production and fielding, particularly for well-defined mission sets like MCM. The focus on MCM and ASW, along with DIU’s push for long-range, large-payload platforms, highlights these traditionally dangerous and resource-intensive tasks as key drivers for adopting autonomy, leveraging the inherent advantages of unmanned systems in persistence, payload capacity, and risk reduction. The contrasting strategies observed – Saronic’s vertical integration versus the Anduril/Ultra collaboration – reflect a dynamic industrial landscape where companies are exploring different models (building in-house capacity vs. partnering for specialized expertise) to deliver complex integrated systems and capture market share in this rapidly growing field.

Advanced Fighter Market Update

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This article is part of our weekly DefenseTech Brief.

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Apr 18, 2025

While major powers like the USA, Europe, and China push forward with 6th-generation fighter concepts, significant global interest and procurement activity remain focused on advanced 4th-, 4.5-, and 5th-generation platforms. Nations balance sophisticated capability requirements against acquisition costs, operational sustainment, and industrial participation goals. Recent developments show notable competition, particularly in Latin America and the Indo-Pacific, involving both established platforms and emerging contenders.

Indonesia – Joining the Turkish KAAN Program?

Indonesia is exploring participation in Türkiye’s fifth-generation fighter program, known as KAAN (formerly TF-X). During a visit to Ankara, Indonesian President Joko Widodo, also known as Prabowo Subianto, expressed formal interest in joining the program, reflecting Indonesia’s goals to modernize its diverse and aging air fleet and diversify its international defense partnerships beyond traditional suppliers. The KAAN, developed by Turkish Aerospace Industries (TAI) with technical support from BAE Systems, features advanced stealth characteristics, supercruise capability (Mach 1.8), integrated AI, and significant payload capacity. Following its maiden flight in February 2024 and a second test flight in May 2024, TAI targets initial operational deliveries to the Turkish Air Force between 2028 and 2029. Indonesia’s interest represents a significant potential export opportunity for Türkiye’s ambitious program, although financial and technical integration challenges remain.

Table 1: Recent Fighter Jet Negotiations/Selections (as of April 2025)

Country	Aircraft Considered/Selected	Status	Potential Quantity	Notes
Indonesia	KAAN (Türkiye)	Expressed Interest / Partnership Talks	Unspecified	Seeking 5th-gen capability, diversifying partners
Peru	Gripen E/F (Sweden), F-16V (US), Rafale F4 (France)	Shortlisted / Swedish G2G Proposed	Up to 12 (initial), 24 (total)	Replacing MiG-29/Mirage 2000; Swedish proposal includes Air Defense systems
Colombia	Gripen E/F (Sweden)	Selected (LoI Signed)	Unspecified (Est. 15-24 total)	Replacing Kfirs; potential US engine veto concern (denied by Saab); offsets included
Portugal	Gripen C/D/E (Sweden), F-35A (US), Rafale (France), Typhoon (Europe)	Reconsidering F-35 / Gripen Talks Ongoing	Unspecified	Replacing F-16s; exploring European options due to US policy concerns
Philippines	F-16 (US), KF-21 (South Korea)	F-16 Sale Approved / KF-21 Shortlisted & Offered	20 (F-16), ~10 (KF-21 initial offer)	MRF Project ongoing; F-16 approved via $5.6B package; KAI offered 10 KF-21 Block 1 for ~$1.1B budget
Uzbekistan	JF-17 Blk III (China/Pak), J-10C (China), J-35 (China)	Reportedly Considering / Sale Authorized (Unconfirmed)	Unspecified	Replacing Su-27/MiG-29; seeking cost-effective options; pilot training reported
Azerbaijan	JF-17C Blk III (China/Pak)	Acquired / Deliveries Started (Sep 2024)	Unspecified (Est. ~30)	Replacing MiG-29/Su-25; $1.6B deal reported; advanced capabilities
UAE	KF-21 (South Korea), FA-50 (South Korea)	Interest / Site Visit / LoI Signed (Cooperation)	Unspecified	Exploring next-gen options; KAI promoting KF-21 potential; LoI for comprehensive cooperation signed
Egypt	J-10C (China), J-35/FC-31 (China)	Reportedly Considered / Sale Denied (Mar 2025)	Unspecified	Seeking diversification; reports of deal denied by China

Summary

The diverse activities in the fighter market illustrate distinct procurement strategies. While some nations pursue cutting-edge 5th-generation capabilities, potentially through partnerships on developmental programs like KAAN, a significant market exists for advanced 4.5-generation aircraft, such as the Gripen, F-16V, and Rafale. In this segment, factors such as acquisition and operating costs, sustainment, industrial offsets, and technology transfer often weigh heavily in decision-making, areas where the Gripen appears competitive. The potential influence of US ITAR regulations on the Colombian Gripen sale, due to its US-sourced engine, highlights how component dependencies can create geopolitical leverage points, potentially impacting procurement outcomes irrespective of the technical or financial merits of competing offers. Furthermore, the interest shown in Türkiye’s KAAN and South Korea’s KF-21 signals a growing willingness by nations to consider advanced platforms from emerging aerospace powers, potentially challenging the long-held dominance of established manufacturers. China’s success with the JF-17 in Azerbaijan and potential inroads in Uzbekistan demonstrate its increasing competitiveness, offering modern capabilities often at lower costs and with fewer political restrictions, particularly appealing to nations seeking alternatives to traditional suppliers.

NATO AI Modernization: Palantir’s Maven Smart System Acquisition

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Apr 18, 2025

This article is part of our weekly DefenseTech Brief.
NATO has taken a significant step in modernizing its warfighting capabilities by rapidly acquiring an AI-enabled platform from Palantir Technologies. On March 25, 2025, the NATO Communications and Information Agency (NCIA) finalized the procurement of the Palantir Maven Smart System NATO (MSS NATO) for employment within NATO’s Allied Command Operations (ACO), headquartered at SHAPE.

The procurement process was notably swift, completed in just six months from the initial outlining of the requirement to the final agreement – one of the fastest acquisitions in NATO’s history. Deployment within ACO is expected to commence within 30 days of the contract signing.

MSS NATO is designed as an AI-enabled warfighting platform intended to provide a common, data-enabled capability across the Alliance. Its core purpose is to empower commanders and warfighters by leveraging AI applications, including large language models (LLMs), generative AI, and machine learning, to enhance critical military functions. Key areas of improvement targeted by the system include intelligence fusion, targeting processes, battlespace awareness, operational planning, and accelerating decision-making cycles. The system aims to achieve this by integrating and processing structured and unstructured data from multiple sources, both classified and open, into a unified, searchable platform, thereby breaking down traditional data silos that hinder multinational operations. While leveraging concepts from the US military’s Project Maven, MSS NATO is positioned as a distinct NATO capability. Its open architecture is designed to allow for the integration of additional AI models, simulation tools, and potentially third-party applications developed across the Alliance.

The acquisition carries significant strategic implications. The remarkable speed of the procurement process signals NATO’s recognition of an urgent need to integrate operational AI capabilities and demonstrates institutional agility in adopting disruptive technologies rapidly, likely influenced by the current security environment and the pace of technological advancements. The system’s focus on fusing data from disparate sources suggests that NATO views effective data integration as the foundational layer necessary for successfully implementing more advanced AI-driven functionalities at the operational command level. However, the selection of a US technology company, Palantir, for such a central, Alliance-wide system highlights the ongoing tension between the need to leverage readily available, cutting-edge technology (often originating from the US) for immediate capability enhancement and the longer-term European aspiration for greater strategic autonomy and reduced technological dependence on non-European suppliers for critical defense systems. This decision highlights the complex trade-offs the Alliance faces in its modernization efforts.

Loitering Munition Developments: Enhancing Precision Strike

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This article is part of our weekly DefenseTech Brief.

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Apr 18, 2025

Loitering munitions (LMs), which provide relatively low-cost precision strike capabilities with surveillance potential, continue to proliferate. Development efforts focus on increasing range, autonomy, and resilience.

AeroShul to Develop Multi-Barrel Loitering Munition

The Indian Army is leveraging domestic innovation, partnering with Gurugram-based startup AeroShul Technologies Pvt Ltd to develop a Multi-Barrel Loitering Munition (MBLM) system. This project, under the Defence Minister’s ADITI 2.0 initiative and the Innovations for Defence Excellence (iDEX) scheme, aims to convert existing artillery rocket systems, including the Pinaka Multiple Launch Rocket System (MLRS), into long-range precision strike platforms. The requirement specifies extending the range up to 500 kilometers, utilizing satellite-based command, control, and communication. The MBLM system will feature UAVs capable of loitering, surveillance, combat strikes, and post-strike damage assessment. Key features include salvo-launching, swarming capabilities, and onboard Artificial Intelligence (AI) applications. The inclusion of a minimum purchase quantity in the contract signals the Army’s firm intent to procure the system upon successful development, highlighting a strategy to enhance existing assets cost-effectively while integrating modern AI-driven capabilities.

STARK introduces the Virtus OWE-V

In Europe, German startup STARK announced that its “One Way Effector – Vertical” (OWE-V), also marketed as Virtus, has successfully demonstrated operational readiness during tests in Ukraine and is currently undergoing military qualification. This marks the company’s first public statement on the system’s capabilities demonstrated in a relevant operational environment. The OWE-V is a vertically launching and landing (VTOL) system weighing approximately 30 kg, designed to engage targets up to 100 km away. Its AI-supported control system enables real-time reaction to changing conditions and effectiveness in electronically contested environments, a critical factor given the prevalence of electronic warfare (EW) in conflicts like Ukraine.

The system boasts a 60-minute flight time, a 5 kg modular payload, cruise speed of 120 km/h (up to 250 km/h in terminal dive), and an operational altitude of 2 km. Key AI-supported functions include GNSS-free navigation (claiming 1m accuracy), object recognition, tracking, and automatic target approach, coupled with a hardened data link. The VTOL capability allows operation without launch infrastructure and enables the use of inert versions for cost-effective training. STARK has established a production facility in Bavaria and mentioned a broader portfolio including the “Minerva” mission system for controlling multiple unmanned systems.

US Army Explores One Way Attack UAS under Project Artemis

In the United States, the Defense Innovation Unit (DIU) is advancing its Project Artemis, selecting four companies—Swan, Dragoon, Aerovironment, and Auterion—to prototype long-range, one-way unmanned platforms. Notably, Swan and Auterion are US software firms partnering with Ukrainian UAS companies. The project aims to evaluate these platforms, which use loitering munitions, in operationally relevant Electronic Warfare (EW) and Global Navigation Satellite System (GNSS)- denied environments. Key requirements include ground launch, affordability, a range of 50 to over 300 km, rapid deployment, low-altitude navigation, payload flexibility, rapid upgradability, and robust operation in contested electromagnetic environments. This initiative aims to deliver low-cost, adaptable LMs suitable for mass deployment, with a focus on speed to the warfighter.

Integrating Intelligence into Unmanned Systems

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Apr 18, 2025

This article is part of our weekly DefenseTech Brief.
The integration of artificial intelligence (AI) and autonomous capabilities into military platforms and software continues at a rapid pace, aiming to enhance operational effectiveness, reduce personnel workload, and enable novel concepts of operation across different domains.

In ground systems, Overland AI, initially known for its OverDrive autonomy software stack utilized in various military unmanned ground vehicles (UGVs) like the Textron Ripsaw and General Dynamics S-MET, is now producing its own UGV, the “Ultra”. Designed for logistical support roles such as supply transport, communications enhancement, and drone launching, several Ultra units are reportedly already undergoing military testing. This move signifies the maturation of specialized autonomy software providers, who may potentially expand into integrated hardware solutions, meeting the growing demand for versatile autonomous ground support platforms in the military.

Major platform integrators are also deepening their focus on software and AI through strategic partnerships. General Dynamics Land Systems (GDLS) announced several new collaborations to bolster its combat capabilities. These include partnerships with Applied Intuition for expertise in autonomy and software-defined vehicles, Palantir Technologies for data fusion and user experience, GD Mission Systems and GD Information Technology (GDIT) for AI, cybersecurity, digital engineering, and quantum technology, and Strategic Technology Consulting (STC) for advanced Model Based Systems Engineering (MBSE). This reflects a strategic approach by GDLS to leverage specialized expertise from across the industry, highlighting the centrality of software, AI, data fusion, and digital engineering in developing future ground combat systems and fostering an ecosystem for innovation.

The US Army is embracing advanced simulation for integrating complex AI systems. To incorporate an AI-powered anti-drone capability, the AI Target Detection and Recognition system (AiTDR), into the future XM30 combat vehicle (a replacement for the Bradley), the Army is using Duality AI’s Falcon digital simulation platform. This “digital-first” strategy uses Falcon’s digital twin technology to generate high-quality synthetic data across diverse simulated operational conditions, including varying speeds, weather, drone types, and terrain. This data is used to train and refine the AiTDR’s AI models before physical hardware integration, aiming to improve system development efficiency and reduce the gap between test results and real-world performance. The project involves phased development, iteratively optimizing the AI algorithms and simulation methodologies within the Falcon environment. This approach is expected to shorten development timelines, reduce costs, and allow for robust pre-deployment testing and validation of the C-UAS system, a critical capability for future armored vehicles.

In the air domain, long-term partnerships are solidifying for key autonomous programs. BAE Systems Australia and Boeing Defence Australia signed a 10-year Head Agreement concerning the MQ-28 Ghost Bat Collaborative Combat Aircraft (CCA). Under this agreement, BAE Systems will continue delivering its sovereign Vehicle Management System (VMS) software, which enables the MQ-28’s autonomous flight. BAE also provides elements of the Ground Control Station and the Independent Flight Termination System. This long-term commitment strengthens the strategic partnership established in 2017 and ensures ongoing development and support for the critical flight control systems of Australia’s pioneering uncrewed teaming aircraft program.

These developments collectively signal that software, AI, and autonomy are becoming increasingly core components that define the capabilities of modern military platforms. The emphasis on partnerships suggests that major primes are adopting an ecosystem model, collaborating with specialized tech firms to access cutting-edge capabilities, rather than relying solely on in-house development. Concurrently, the use of advanced simulation and digital engineering tools represents a methodological shift toward more agile, software-centric design, integration, and testing processes, aiming to accelerate the deployment of complex AI-enabled systems.

Rocket Systems & Production Dynamics: Meeting Surging Demand

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This article is part of our weekly DefenseTech Brief.

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Apr 18, 2025

This article is part of our weekly DefenseTech Brief.
The critical role of long-range precision fires, particularly Multiple Launch Rocket Systems (MLRS), demonstrated in recent conflicts, continues to drive significant activity in production and international cooperation. Global demand for proven systems is surging, prompting manufacturers to increase output and nations to bolster sovereign capabilities through procurement and industrial partnerships.

Reflecting this demand, Lockheed Martin confirmed it produced 96 M142 High Mobility Artillery Rocket System (HIMARS) units over the past year, effectively doubling its previous annual production rate. This ramp-up, directly influenced by the system’s combat effectiveness observed in Ukraine and elsewhere, allows the company not only to meet growing global orders but also to accelerate deliveries for existing contracts and offer more favorable schedules for new agreements. This development underscores the responsiveness of the US defense industrial base to urgent global requirements and solidifies HIMARS’ position as a central element in modern artillery doctrine.

Simultaneously, nations are pursuing long-term strategies to enhance domestic defense manufacturing. Poland finalized a significant contract with South Korea’s Hanwha Aerospace to establish local production of guided missiles for its K239 Chunmoo MLRS variant, designated HOMAR-K. The agreement, involving Hanwha and WB Electronics (a subsidiary of Poland’s WB Group), specifically covers the 80-kilometer-range CGR-80 guided missile. WB Group anticipates producing the first Polish-made long-range precision missiles within three years, aligning with previous statements targeting local manufacturing commencement by 2029. This contract builds upon a series of substantial procurements by Poland from Hanwha, including initial agreements for 290 Chunmoo systems in 2022, a follow-on contract for 218 systems later that year, and an April 2024 deal for 72 additional launchers along with both CGR-80 and longer-range 290km CTM-290 missiles.

The move towards local missile production signifies a deeper level of industrial cooperation and a major step in Poland’s strategy to enhance sovereign defense capabilities amid regional security concerns. Hanwha Aerospace leadership emphasized a commitment to full localization, aiming to guarantee local capability and readiness. This progression positions Poland to become a significant hub within NATO’s missile defense architecture, supported by indigenous production capacity.

These parallel developments reveal a broader trend in artillery modernization. Nations appear to be adopting a dual-track approach: acquiring readily available, combat-proven systems like HIMARS to meet immediate operational needs, while concurrently investing in long-term sovereign production capabilities. Poland’s engagement with South Korea exemplifies this, securing immediate access to advanced MLRS technology while building the industrial base for future self-sufficiency and potentially diversifying its supplier base beyond traditional Western sources. This diversification, however, introduces complexities. The proliferation of different advanced MLRS systems within NATO (e.g., US HIMARS, Polish HOMAR-K, Israeli European PULS, and French FLP-T) requires focused efforts to ensure interoperability in command, control, and logistics, maintaining cohesive alliance capabilities. Hanwha’s success in Poland also highlights South Korea’s growing stature as a major global defense exporter, offering technologically advanced systems often coupled with attractive technology transfer and industrial cooperation agreements, challenging established market players.

Moving Forward With Golden Dome for America Missile Defense Initiative

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