Defense Business Brief: Betting big on Australian AI; Q3 earnings; Lockheed’s tanker exit; and more…

By admin On Oct 24, 2023

Happy earnings call week! Five major defense companies will report their quarterly earnings this week. These calls are about more than revenue made—or lost. Defense One will look at how global threats and conflicts—from Israel to Ukraine and the Indo-Pacific—affect priorities, new initiatives, spending, and long-term projections. Here’s the schedule:

Tuesday: Raytheon Technologies
Wednesday: General Dynamics and Boeing
Thursday: Northrop Grumman
Friday: L3Harris Technologies

Tech companies bet on AI in Australia

American tech giant Microsoft is expanding its AI and cloud computing offerings in Australia, and plans to spend more than $3 billion to boost the country’s cybersecurity, training, and infrastructure over the next two years.

Microsoft promises that the cash infusion—which amounts to 5 billion Australian dollars—would nearly triple its computing footprint in the country, which could lead to “significant economic and productivity opportunities presented by the latest AI technology,” according to a statement. For example, generative AI like ChatGPT could yield A$115 billion by 2030 if adopted quickly, Reuters reported.

Australian Prime Minister Anthony Albanese said the investment would most benefit workers: “This is a major investment in the skills and workers of the future,” he said in a statement. “We need to provide the skills to enable Australians to succeed in the jobs of the future.”

And Microsoft isn’t the only one making moves down under. U.S. defense tech company Shield AI signed a multi-year deal with Australian software vendor Sentient Vision for situational awareness capabilities.

“The supply contract is a multi-year, multi-units’ agreement, with first deliveries planned for 2024,” Sentient’s CEO Mark Palmer announced Monday during an event in Washington, D.C., with Shield AI’s Brett Darcey, who leads product and programs.

The companies announced the collaboration in August. It’s meant to integrate Sentient’s visual detection and ranging, or ViDAR, technology onto Shield AI’s next-generation unmanned aircraft, V-BAT, to help classify, track, and react to targets.

The announcements come as Australian interest groups push for more regulation of the technology. The country already has a voluntary ethical AI framework with eight key principles, including privacy and security.

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Northrop Grumman and Airbus are teaming up to develop military satellite communications for the United Kingdom. The companies signed a memorandum of understanding to support the UK’s SKYNET military satellite communications program to make sure users “are always connected and able to process the increasing amount of data collected.” Airbus’s defense and space business will take the lead in the agreement, with Northrop Grumman as a partner.

Lockheed out of KC-135 recapitalization competition

Lockheed Martin will not compete to build the next batch of tanker aircraft for the Air Force, clearing the way for Boeing to sell more KC-46s to the service. Lockheed originally teamed up with Airbus to offer the LMXT, a new version of Airbus’ A330-based tanker. The LMXT team now will transition to focus on the Air Force’s future next-gen tanker, or NGAS, according to a company spokesperson. Airbus—without Lockheed—could still bid on the competition to build at least 75 more tankers for the service.

York wins more than half a billion to build SDA satellites

York Space Systems won a $615 million contract to build 62 satellites for the Pentagon’s low Earth orbit constellation, Space Development Agency Director Derek Tournear announced at the MilSat Symposium on Thursday. The satellites will be part of SDA’s Tranche 2 Transport Layer’s “Alpha variant,” of which SDA expects to buy 100. The $615 million figure assumes the company earns an “on-time delivery incentive built into the agreement,” an agency spokesperson told Defense One. SDA will put out an official release once all the Tranche 2 Transport Layer Alpha awards are finalized, the spokesperson said.

Philippines buys three C-130s

The Philippines’s defense department will buy three C-130J-30 Super Hercules tactical airlifters in a new deal with Lockheed. The planes are an extended version of the C-130J. The Philippine air force currently operates a “mixed fleet of legacy C-130s to support critical humanitarian, military, and natural disaster relief missions throughout the Indo-Pacific region,” Lockheed said. The new airlifters will be delivered in 2026.

Northrop Grumman seals EW deal

The airplane maker inked an agreement with Korean aerospace manufacturer LIG Nex1 for electronic warfare and targeting systems. The deal will add to Northrop’s existing work with the Republic of Korea, like the integrated viper electronic warfare system for the F-16.

Spy agency publishes zero trust guidelines

The National Security Agency recently published cybersecurity recommendations the Pentagon, federal agencies, and contractors can use to better protect their devices and networks. “Traditional security defenses have been shown to be insufficient to address the current threat environment” said Alan Laing, NSA’s expert on vulnerability analysis, in a release that accompanied the report. “Government organizations and critical system owners need to enhance management of their device inventories to improve detection of sophisticated threats.”

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