Un­der at­tack

The mil­i­tary tech start-ups that threaten the gi­ant de­fence com­pa­nies

The Daily Telegraph - Business - - Front Page -

The name HMS En­ter­prise is a proud one in the Royal Navy. Four­teen war­ships have borne it. The 12th HMS En­ter­prise served through­out World War Two, in the Bat­tle of the At­lantic, the Nor­way cam­paign, the Bat­tle of Bis­cay and at D-Day.

The 13th was in ser­vice when the TV se­ries Star Trek be­came pop­u­lar. To this day, the idea of a ship named En­ter­prise sug­gests fu­tur­is­tic high tech­nol­ogy. That’s ironic, be­cause quite re­cently a jour­nal­ist vis­it­ing to­day’s HMS En­ter­prise was amazed to find that her De­fence In­for­ma­tion In­fra­struc­ture equip­ment, used to han­dle se­cret in­for­ma­tion, in­cluded com­put­ers run­ning Mi­crosoft Win­dows 2000 soft­ware.

This, sadly, was by no means un­usual. All Bri­tish mil­i­tary IT tends to be many years be­hind the civil­ian state of the art. No­body knows this bet­ter than Rear Ad­mi­ral Alex Bur­ton. In 2017, he was Com­man­der UK Mar­itime Forces, Bri­tain’s top seago­ing ad­mi­ral. “To­day we are once again fac­ing state-level ad­ver­saries, Rus­sia and China,” he told The Daily Tele­graph. “Our forces can­not pos­si­bly match these ad­ver­saries in terms of quan­tity. We must achieve su­pe­ri­or­ity by greater qual­ity.”

The ob­vi­ous route to qual­ity is spend­ing more money, but this isn’t an op­tion. The on­go­ing five-yearly de­fence and se­cu­rity re­view is more likely to de­liver bud­get cuts than in­creases.

Ac­cord­ing to Bur­ton, a more re­al­is­tic an­swer is bet­ter soft­ware, de­liv­ered much faster. This, in his view, means look­ing be­yond the Min­istry of De­fence’s usual IT and cy­ber ven­dors, es­tab­lished de­fence primes like BAE, Air­bus or Thales.

Bur­ton joined Re­bel­lion De­fence, a soft­ware start-up. The com­pany aims to solve de­fence and se­cu­rity prob­lems us­ing ar­ti­fi­cial in­tel­li­gence.

AI could po­ten­tially pick out en­emy sub­marines from sonar pic­tures and spot hos­tile drone swarms in radar or ther­mal im­agery. It could cope with the floods of data from mod­ern plat­forms and sen­sors quickly and af­ford­ably. Oliver Lewis, Re­bel­lion co-founder, ar­gues that it’s un­rea­son­able to ex­pect nor­mal de­fence com­pa­nies to de­liver this sort of tech­nol­ogy. “In fair­ness, most of the ma­jor de­fence primes did start out do­ing some­thing ex­tremely well,” he says. “They typ­i­cally be­gan in aero­space. But nowa­days, they also do ship­build­ing, ar­moured ve­hi­cles, lo­gis­tics, com­mu­ni­ca­tions, com­mand and con­trol; they try to do ev­ery­thing, and many things they don’t do very well. We only do one thing: soft­ware.”

An­other crit­i­cism of nor­mal de­fence pro­cure­ment is that the Pen­tagon or MoD are usu­ally ex­pected to bear the costs and risks of de­vel­op­ing new equip­ment. This is not only ex­pen­sive, it means that get­ting a new project un­der way can take a very long time.

The new wave of ven­ture-backed start-ups ar­gue they can short-cir­cuit this process. “Our su­per­power, be­ing backed by ‘pa­tient cap­i­tal’, is that devel­op­ment costs and risks are borne en­tirely by us,” says Lewis.

One suc­cess­ful ex­am­ple is the Preda­tor armed drone, orig­i­nally de­vel­oped in the US at maker Gen­eral Atomics’ ex­pense.

An­other com­pany aim­ing to take this route is An­duril In­dus­tries, the lat­est ven­ture from 27-year-old Palmer Luckey. His vir­tual re­al­ity com­pany Ocu­lus was bought by Face­book in 2014 for $3bn (£2.3bn). Brian Schimpf, An­duril co-founder, came from Palan­tir Tech­nolo­gies. Palan­tir’s data-trawl­ing soft­ware is used by US in­tel­li­gence agen­cies, the fi­nan­cial in­dus­try and the NHS Covid-track­ing project, among oth­ers. Both An­duril and Palan­tir have sub­stan­tial back­ing from tech bil­lion­aire Peter Thiel.

“At An­duril, we take bets our­selves on what de­fence users will need,” says Paul Holling­shead, EMEA chief. “We take it to maybe 80pc done and then work with the user and it­er­ate rapidly.”

An­duril’s core of­fer­ing is an AI soft­ware suite called Lat­tice, but the com­pany is also very will­ing to make hard­ware which works with Lat­tice. An­duril pro­duces so­lar-pow­ered scan­ner tow­ers used to de­tect il­le­gal im­mi­grants on the Mex­i­can bor­der and an in­ter­cep­tor drone called Anvil.

The com­pany has also worked with Bri­tain’s Royal Marine Com­man­dos, among oth­ers, on its man-por­ta­ble Ghost spy-drone. Ghost, again thanks to Lat­tice, flies it­self and finds things out with­out re­quir­ing con­stant su­per­vi­sion from the troops us­ing it.

“It’s a soft­ware-led ap­proach, though,” says Holling­shead. “Our hard­ware is largely put to­gether from off-the-shelf com­po­nents for the pur­pose of feed­ing Lat­tice.”

Both An­duril and Re­bel­lion openly aim to bring the meth­ods of Sil­i­con Val­ley into the de­fence world. They see soft­ware as the real prod­uct, not just some­thing that makes a piece of hard­ware work.

Both want to sell their soft­ware the way Big Tech likes to sell it: as a ser­vice where the cus­tomer pays a reg­u­lar subscripti­on to use an evolv­ing tech­nol­ogy that re­mains owned by the con­trac­tor. “It’s the only way for de­fence to get and sus­tain the qual­i­ta­tive ad­van­tage that’s needed,” ar­gues Bur­ton. “We re­tain the in­tel­lec­tual prop­erty. Unashamedl­y.”

“It is a cul­tural jour­ney for de­fence cus­tomers,” ad­mits Re­bel­lion’s Lewis. “One that will take years. But if we’re ever go­ing to solve this fas­ci­nat­ing prob­lem, where armed forces peo­ple usu­ally have more ad­vanced tech­nol­ogy at home than at work, it’s nec­es­sary.”

The big ven­ture in­vestors of the tech world ob­vi­ously think the con­cept has merit. An­duril closed a C se­ries fund­ing round in July which val­ued it at $1.9bn. Re­bel­lion isn’t dis­clos­ing num­bers, but its “pa­tient” back­ers have deep pock­ets too.

Other start-ups are also look­ing to bring ad­vanced civil­ian tech­nolo­gies into the de­fence/se­cu­rity mar­ket: Bri­tish ex­am­ples in­clude Ox­ford Quan­tum Com­put­ers, Ut­ter­berry and bi­o­log­i­cally in­spired de­sign group An­i­mal Dy­nam­ics.

But it re­mains to be seen whether any­thing will change. The Bri­tish MoD alone, far smaller than the Pen­tagon, has al­ready com­mit­ted £2bn of funds to its new Tem­pest su­per-fighter project, which ex­pects soon to em­ploy 2,500 peo­ple and may de­liver hard­ware at some point in the 2030s. It shows ev­ery sign of be­ing an­other in­ter­minable pro­cure­ment dis­as­ter like the Typhoon be­fore it and the Tor­nado be­fore that.

These num­bers, com­pared to those of An­duril and Re­bel­lion with their com­bined to­tal of fewer than 400 em­ploy­ees, to serve both the US and UK, prob­a­bly give a good in­di­ca­tion of just how far the MoD has yet to go on its cul­tural jour­ney.

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