BLACKWATER USA | DAILY BRIEF

Posted by BW Actual on May 22nd 2023

BLACKWATER USA | DAILY BRIEF

Ukraine

  • Ukraine is slowly acknowledging Russia's claim to have captured Bakhmut and now Kyiv says it's preparing to assault the defending invaders with artillery.
  • Russia will probably have to send reinforcements to Bakhmut if it plans to defend its prize, but there's not much there to defend - Pres. Zelensky said Bakhmut is "just ground and a lot of dead Russians" - so those reinforcements may be more useful on the front lines of the forthcoming counteroffensive.
China
  • Chinese state media called this weekend's G7 summit an "anti-China workshop" after taking offense to parts of the summit's joint communique that criticized China's "economic coercion" and human rights abuses.
Afghanistan
  • The Taliban said one of its U.S.-made UH-60 Black Hawk helicopters crashed after colliding with a power line, killing two pilots.
  • That's at least the second Taliban-controlled Black Hawk to crash out of commission: another one went down in September. Analysts think the U.S. left up to 33 UH-60s in Afghanistan when it withdrew in 2021, although it's not clear how many were operable or repairable. Certainly 31 or fewer now.
Sudan
  • After weeks of seemingly futile talks in Saudi Arabia, Sudan's warring generals have agreed to a seven-day ceasefire that begins today. This agreement is stronger than their previous pact to protect civilians: they've now pledged not to occupy new areas or attack critical infrastructure for the next week.
Other News
  • The NYT printed a great article on the nimble defense tech startups that are proving their ideas out in Ukraine and hoping to sell those novel solutions to a stagnant Pentagon. See below.
Start-Ups Bring Silicon Valley Ethos to a Lumbering Military-Industrial Complex (NYT)
Small, fast-moving U.S. tech firms are using the war in Ukraine to demonstrate a new generation of military systems but face the challenge of selling them to a risk-averse Defense Department.

Capella Space, a San Francisco-based start-up, is building a fleet of small, inexpensive satellites that can track enemy troops as they move at night, or under cloud cover that traditional optical satellites cannot see through.

Fortem Technologies, a small aerospace company in Utah, wants to supply the Pentagon with a new type of unmanned aircraft that can disable enemy drones.

HawkEye 360, a Virginia-based firm, has used private equity funds to launch its own satellites that use radio waves emitted by communications equipment and other electronic devices to detect the presence of enemy troop concentrations.

Each of these systems is getting real-world testing in the war in Ukraine, earning praise from top government officials there and validating investors who have been pouring money into the field.

But they are facing a stiff challenge on another field of battle: the Pentagon’s slow-moving, risk-averse military procurement bureaucracy.

When it comes to drones, satellites, artificial intelligence and other fields, start-up companies frequently offer the Pentagon cheaper, faster and more flexible options than the weapons systems produced by the handful of giant contractors the Pentagon normally relies on.

But while the military has provided small grants and short-term contracts to many start-ups, those agreements often expire too quickly and are not large enough for young companies to meet their payrolls — or grow as rapidly as their venture capital investors expect. Several have been forced to lay people off, delaying progress on new technologies and war-fighting tools.

As the United States seeks to maintain its national security advantage over China, Russia and other rivals, Pentagon leaders are only now beginning to figure out how to bring a Silicon Valley ethos to the lumbering military-industrial complex.

“This kind of change doesn’t always move as smoothly or as quickly as I’d like,” Defense Secretary Lloyd J. Austin III conceded during a speech in December before a crowd in Simi Valley, Calif., that included executives from many start-up technology companies.

Current and former senior Pentagon officials acknowledged in interviews that the Defense Department still often requires years of planning and congressional funding decisions before it will buy products from start-ups in quantities sufficient to keep their businesses going.

“We sometimes have too much bureaucracy — too many checkers, checking the checkers,” Deborah Lee James, the former secretary of the Air Force, said last month.

Industry executives refer to their situation as the “Valley of Death,” where the slow pace of government contracting can lead them to bleed out their funding while they await decisions. One San Francisco-based start-up, Primer Technologies, makes an artificial intelligence tool that analyzed thousands of hours of unencrypted Russian radio communications to help find targets, but has struggled to stay afloat as it has waited for major defense contracts.

“Small companies can’t just sit there twiddling their thumbs for two or three years until our contract gets in place,” Heidi Shyu, the under secretary of defense for research and engineering, said late last year at the Reagan National Defense Forum.

Pentagon officials in charge of buying have also been trained to avoid risk, after decades of scandals associated with overpriced toilet seats, ships that do not work and corruption. That culture is not a good match for technology companies that thrive on innovation, speed and constantly upgrading their products.

“The buyers at the Pentagon, they’re trained often to say ‘no’ — to stay within the rule book,” said Payam Banazadeh, the founder and chief executive of Capella Space.

The war in Ukraine is still largely being fought with 20th-century weapons, like rifles, artillery and howitzers.

William A. LaPlante, the under secretary of defense for acquisition and sustainment, has mocked some of the claims about how important American technology has been in Ukraine, telling military contractors last year that “whatever your favorite gadget is, it’s hard-core production of really serious weaponry and that’s what matters.”

He added that the fighting against Russia in Ukraine was not being done by “Silicon Valley right now, even though they’re going to try to take credit for it.”

But in an interview, he said he agrees commercial technology has changed the battlefield in important ways, particularly the commercial satellite tools that have given Ukraine much greater surveillance capacity.

“The tech is really important,” he said.

For the Pentagon, the task of picking from among emerging companies is complicated by the tendency of certain start-ups to exaggerate the capacity of their technologies and the differing approaches companies take to addressing a military need.

“We recommend picking winners, backing them meaningfully and see what they can deliver,” Whitney McNamara, a former Pentagon science adviser, said in describing a new report for The Atlantic Council examining ways to accelerate war-fighting technology acquisitions.

From the early months of the war, SpaceX’s Starlink, the Elon Musk-founded satellite internet service, had played a critical role for frontline Ukrainian troops. But small drones and a denser collection of satellites are also helping to provide the capacity for pervasive surveillance, allowing Ukraine to identify and track threats and targets constantly.

A new generation of cheaper and more precise attack drones carrying bombs can loiter in the air autonomously until they find their targets. Artificial intelligence-backed computer systems can fuse this collected data and other feeds to make targeting decisions, faster than any human.

The Ukrainians have also innovated a great deal themselves, impressing Pentagon officials as they have converted commercial drones, for example, into mini bombers.

Taken together, said Thomas X. Hammes, who studies war-fighting history at the Pentagon-backed National Defense University, the developments represent a “genuine military revolution,” and one that is happening much more quickly than the shift from infantry that traveled by foot in World War I to the motorized and mechanized armies of World War II.

“Today’s rate of change does not allow the United States and its allies and partners the luxury of two decades to transition,” said Mr. Hammes, a 30-year veteran of the Marines. “You are beginning to see a willingness to accept this is happening all the way up to the three- and four-star general level. They understand it has to happen. The question is, how do you make it happen?”

A Test Bed in Ukraine
Backed up with beating drums and patriotic music, a montage of video clips show off in rapid succession a series of successful intercepts by a new type of war-fighting tool: an unmanned vehicle that lifts off when an enemy drone is detected, tracks the incoming weapon and, using a Spider-Man-like net, disables it.

Manufactured by Fortem, the Utah-based start-up, it earned the nickname of the “Shahed Hunter,” referring to the Iranian-made attack drones that the unmanned Fortem aircraft were intercepting.

It is just one of at least 30 new products identified by The New York Times manufactured by mostly small tech start-ups in the United States that have been used on the front lines in Ukraine or by allies helping the Ukrainians.

This American-based technology is arriving in Ukraine through a variety of arrangements. They include donations by the companies, direct acquisition by the Ukrainian government or groups that support it, or purchases by the United States government, which then sends it to Ukraine.

The most conventional of these devices are commercial satellites that deliver traditional photographic images of Russian war-fighting equipment and troops, from companies like Maxar Technologies, BlackSky and Planet Labs, which have succeeded in winning billions of dollars in government contracts.

The United States government has had advanced satellites in space for years, with capabilities that still exceed what the commercial companies can offer. But starting about five years ago, private-sector players like Capella started to launch smaller, cheaper and faster-to-build units, offering more frequent coverage of the world than even the U.S. government can provide.

“This is really the first major war in which commercially available satellite imagery may play a significant role in providing open source information about troop movements, military buildups in neighboring countries, flows of refugees and more,” Ukraine’s minister for innovation, Mykhailo Fedorov, wrote in March 2022 at the outset of the war, accurately predicting the vital role this commercial data has since played.

Closer to the ground, small drones manufactured by a growing list of United States-based companies — including AeroVironment, Skydio, Shield AI, Teal Drones, BRINC and Anduril Industries — are helping provide Ukraine so-called persistent surveillance needed to identify and track targets and refugee movement, as well as other threats, according to information provided by the companies, the Pentagon or the Ukrainian government.

The U.S. government has had its own much larger attack drones used widely in Iraq and Afghanistan, with names like Predator and Reaper, both of which are made by California-based General Atomics, costing as much as $57 million apiece. But the new-generation drones are much smaller, cheaper and easier to build, and could give the military new battlefield options.

Wahid Nawabi, the chief executive at California-based AeroVironment, which makes the Switchblade 300 and 600 attack drones, both of which have been used in Ukraine, said the military is moving toward using swarms of small drones in attacks, with perhaps 50 or even several hundred of them descending on targets at the same time. The company has sold about 5,000 of these attack drones to the Pentagon over the last decade — but it is awaiting much larger orders, as Mr. Nawabi said he could manufacture as many as 16,000 a year.

“An enemy can maybe even defeat 10 percent to 20 percent of those assets coming at it,” Mr. Nawabi said. “But they can’t defeat half-plus. And that is why a swarm can be effective.”

Other American-based military technology companies, including Dedrone of Virginia and SkySafe of California, have sent products to Ukraine that allow the government there to track incoming enemy drones, or in Dedrone’s case, to use a rifle-like device that sends targeted radio pulses to jam the enemy drone, disabling it before it can hit its target.

Perhaps the most revolutionary use of American technology in Ukraine has been the application of software that uses artificial intelligence, made by Palantir, to help with targeting efforts. The company’s chief executive, Alex Karp, traveled to Ukraine last year to meet with President Volodymyr Zelensky.

“If you go into battle with old school technology,” Mr. Karp said this year at an event to discuss artificial intelligence tools in warfare, “and you have an adversary that knows how to install and implement digitalized targeting in A.I., you obviously are at a massive disadvantage.”

Some experts say that artificial intelligence, which has been used in Ukraine to help sift through the massive loads of data being accumulated from surveillance, will ultimately prove as disruptive to the nature of war-fighting as nuclear weapons.

“A.I. is able to make millions of decisions, even before the human knows there is a decision to make,” said Will Roper, who served as the top Air Force procurement official until 2021 and still serves as an adviser to the Pentagon. “It’s kind of like being at the starting block of a new era of warfare.”

A Business Holding Pattern
For Primer, the small artificial-intelligence firm based in downtown San Francisco, it was a breakthrough moment.

Not long after the war in Ukraine started, its engineers, working with Western allies, tapped into a tidal wave of intercepted Russian radio communications. It used advanced software to clean up the crackly sound, automatically translated the conversations, and most importantly, isolated moments when Russian soldiers in Ukraine were discussing weapons systems, locations and other tactically important information.

This same work would have taken hundreds of intelligence analysts to identify the few relevant clues in the mass of radio traffic. Now it was happening in a matter of minutes.

The findings were quickly matched up with other so-called open source intelligence streams, like geolocation data pulled from social media accounts, giving updates on the location of troops or equipment, that could be matched with surveillance video from drones or images from satellites.

“It’s getting situational awareness,” said Sean Gourley, the founder of Primer.

Yet at the same time, the Pentagon was still deciding when to move ahead with major purchases of its technology. The company was burning through its cash reserves too quickly, so Mr. Gourley laid off engineers and other staff members.

“These engineers are great at creating solutions to solve these problems, which is what matters,” Mr. Gourley said. “But there is the uncertainty: When is this contract going to close? It’s very, very hard to justify that spend.”

Mr. Gourley said he decided instead to invest more money in a government relations push, hiring a former top aide to the Senate Armed Services Committee to help the company promote its business in Washington.

“The big defense companies, they don’t really kind of invest in the tech,” he said. “They just invest in how to navigate this bureaucracy. That kind of sucks, but that’s how you’ve got to play this game.”

In interviews, nearly a dozen top executives of technology-oriented companies shared stories of stalled efforts or frustration.

Capella Space has about 200 employees and has raised about $250 million in venture capital funds. It has used part of that money to launch 10 of its small satellites.

The Pentagon has notified Capella that it will continue to purchase services as part of a demonstration project, but it will not likely be ready to give it a full “program of record” contract until 2025, Mr. Banazadeh, the company’s chief executive, said.

“They don’t get promoted by taking risk,” Mr. Banazadeh said of the contracting officers. “So now you have to go through this arcane process of three years of budget planning while the war fighter is screaming and yelling and saying, ‘I really want this stuff.’”

While waiting for a decision by the Pentagon, the company recently moved to lay off some employees.

Mr. Roper, the former Air Force procurement boss, said another problem is the Defense Department’s historical insistence on creating its own solutions to problems instead of buying new technologies from commercial firms. He noted that artificial intelligence, for example, still has not been integrated into Air Force flight operations beyond some basic experiments.

“The Pentagon is still in an ‘invention only’ mode that goes all the way back to the Cold War when it now needs to be in a collaboration mode to accelerate private industry,” Mr. Roper said. “And it is failing at that.”

There are some success stories.

The Defense Innovation Unit created a program that evaluated various surveillance drones coming onto the market and set up a contracting tool that allows Pentagon agencies to buy them directly, without a multiyear acquisition process. Mr. Austin, the defense secretary, recently announced that the Defense Innovation Unit will report directly to him, supervised by a new recruit from Apple.

Skydio, one of the companies approved through the program, is now selling a drone that uses artificial intelligence that allows it to be flown remotely while avoiding crashes even if it is being operated by a novice pilot. The A.I.-enhanced drone can fly indoors in very tight spaces, allowing it to look inside a building, for example, before troops might be sent in.

But for each success, there are many other tech start-ups struggling to pay bills as they wait for the Pentagon to make a purchase decision.

“We’re absolutely trying to tackle a lot of these acquisition pain points,” said Ms. Shyu, the Pentagon’s under secretary for research and engineering and chief technology officer. “I’m working on bridging the Valley of Death.”