Saturday, 30 November 2024

Up-and-coming companies race to develop drone defenses that militaries and multinational corporations may now need

A Ukrainian Volunteer Army member hurls a surveillance drone into the air.
There's a growing market for defenses to the drones that are rapidly evolving in conflicts like Ukraine.
  • Rapid advances have turned drones into aerial spies and flying bombs.
  • They pose increasing risks to governments, companies, and public utilities.
  • Defense companies like MARSS and Dedrone sell systems designed to defeat drones.

Attack drones are evolving so rapidly in the cauldrons of combat in the Middle East and Ukraine that militaries and even law enforcement agencies see a pressing need for defenses.

Companies are rushing to meet these needs even as unmanned aerial vehicles continue to change rapidly to exploit vulnerabilities.

"That's essentially been what we've been trying to do over the last decade — play catch up — and the UAV threats have always been able to stay one step ahead of the counter-[unmanned aerial systems] systems as we're developing them," said Jamey D. Jacob, a mechanical engineer who is director of Oklahoma State University's Unmanned Systems Research Institute.

This demand for defenses is a booming area where start-ups and newer companies compete with the largest defense contractors to build the sensors and weapons to defeat drones and the AI-assisted networks that integrate them into a clear picture for a human operator.

The typical ways to counter drones can be broken into four steps: detect, track, identify, and mitigate threats. Sensors like radars and cameras are essential to the first three tasks. The final step to stop the threat can be accomplished via frequency jamming and electronic warfare (soft-kill) or by physically damaging it (hard-kill).

One company specializing in creating the battlefield awareness systems to spot and defeat drones is MARSS, a global defense technology company.

An illustrated render shows a MARSS drone flying toward a base.
An illustration shows sensors detecting a hostile drone flying toward a defended base.

MARSS' technology is designed to detect, analyze, and annotate the heaps of data collected by its integrated systems and present it in a way "that the drone operator could understand it extremely easily," said Josh Harman, Vice President of Business Development at MARSS Group.

"What was happening when the drone threat started to continually evolve and get more complicated, you had to turn drone sensor solutions into a layered defense solution," he added.

The defense tech company focuses on developing counter-drone platforms that detect threats for civilian, government, and military clientele.

Earlier this year, MARSS showcased its AI-driven NiDAR counter-drone system at the Red Sands military drills in Saudi Arabia, jointly run by Saudi armed forces and the US Army Combat Capabilities Development Command.

"Over the course of the Red Sands exercise, MARSS demonstrated multi-sensor integration on a single UI that was mature and devastatingly effective against the various air threats — reducing the decision cycle of 'detect to defeat' to a matter of seconds," Harman told UASWeekly at the time.

the remains of a destroyed UAV during a military exercise in Saudi Arabia
A destroyed UAV was downed by MARSS C-UAS software and systems integration during the Red Sands military exercise.

'Golden age of aviation'

Drone defenses are difficult and iterative simply because they are counters to technology that's leaping ahead.

The flexibility and cost-effectiveness of UAVs has ushered in a "new golden age of aviation where you can come up with really neat ideas that you weren't able to develop a decade ago," said Jacob, the UAV expert at OSU.

"What we see in the drone industry is really flipping this conventional aircraft design cycle on its head, which is really what allows new companies to compete because they could be much more nimble and don't have to have the big development budgets that are necessary for the development of full-scale manned aircraft," Jacob told Business Insider in an interview.

The drone makers and pilots are devising ways to dominate the battlefield while drone defenders try to figure out how to neutralize them in a game of spy-vs-spy that has implications far beyond the battlefield. Drone defenses range from radiofrequency detectors to jammers and guns. MARSS sees an opportunity to network them together into an integrated, operator-controlled network.

"Most companies in the market were building specific sensors, whether it be radars, radio frequency, directed energy, kinetic energy, kinetic guns, missiles, or whatever it may be," said MARSS's Harman. "Essentially, you had a lot of different systems out there working independently, not in sync, and you had a low success rate across not only all the US services but also the international services as well."

Another defense company has developed its drone shields from combat use in Ukraine.

An infographic shows Dedrone's portable counter-drone system, DeDroneTactile.
An infographic shows Dedrone's portable counter-drone system, DedroneTactile.

Virginia-based drone company Dedrone by Axon has integrated artificial intelligence and machine learning solutions into its open-architecture counter-drone platforms.

"When you think about our use across the world — both on the public safety side, but especially on the national security side — by virtue of being in situ, not only does our AI-ML machine get smarter every day, but we are also able to benefit and improve our system at that same pace that the drones are evolving in the conflict zones," said Mary-Lou Smulders, CMO and head of government affairs at Dedrone.

Dedrone allows a buyer, such as an airport authority or electrical power plant, to set up a network of sensors and jammers and have AI guide the user to quickly identify and respond to threats it detects.

MARSS also says its counter-drone networks are enhanced by supervised machine learning and AI skillset to alert the user sooner.

"It's a big, big deal when you can extend the range on detection, you give the operator a lot more time to act accordingly and to lower any mistakes," Harman said. "When you can eliminate a large portion of all the false positives, you allow the operators to focus on what they need to focus on."

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Black Friday clothing deals: Special Saturday edition featuring 43 discounts

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An original side-by-side graphic of a person wearing a Naadam beanie and a Madewell bag with a Black Friday Deal badge.
Black Friday may be over, but these fashion sales are still going strong.

As style editors, we're vigilant about any changes in the quality of the clothing we test. But beyond that, we also closely monitor which brands are subtly up-charging or expanding their clearance section. Even though Black Friday is technically in the past, we've scouted out the best deals still going strong, including some of our favorite styles at their best prices of the year.

Overall, most apparel brands are continuing their sales through the holiday weekend. First, Everlane's Black Friday sale is still running, meaning nearly everything is up to 50% off. Then, Madewell is going strong with 50% off (again, nearly) everything. It's a symphony for stylish people who like their elevated basics at a discount.

So, let's get to it: here are the best Black Friday deals still kicking on clothes, shoes, bags, and other accessories for building a complete winter wardrobe.

The best Black Friday shoe deals

When you shop for shoes from department stores like Nordstrom or Zappos, you'll find a daily rotation of new styles leading up to Black Friday. We've also scouted comfortable walking shoes, cozy clogs, and a discount on some of the best flats we've tested. If you see your size and favorite color are still in stock, don't hesitate.

The best Black Friday handbag deals

For all the purse girls who aim to save whatever money fits in their handbag, Black Friday is a prime opportunity to find rare Black Friday Coach deals. A more affordable alternative among our favorite purse brands is JW Pei, now marked down to the same degree we saw on Prime Day.

Over at Madewell, there's 40% off leather crossbody bags when you use the code "MADEBETTER." Check our guide to the best Madewell Black Friday deals to keep up with how the discounts evolve throughout the week.

Our favorite cashmere on sale, plus the top knitwear deals

As our resident cashmere enthusiast (everyone else on the team is allergic) I've tested a lot of sweaters, from entry-level to luxury grade. Still, the brand that impressed me the most for its price point is Naadam. The Naadam Black Friday sale currently has supremely soft knits for 40% off, but this could go up to 50% off once Black Friday is officially on.

Another hot spot for cashmere, Jenni Kayne's Black Friday event now has 25% off everything, from her coveted preppy-chic apparel to an array of elegant West Coast-inspired furniture. I tried the Cropped Cocoon Cardigan myself, and it really does feel "cloud-soft."

Black Friday sales on jeans, work pants, and comfortable bottoms

Wide-leg jeans are the pants of the moment. You'll see them styled with sneakers, flats, or loafers — without fail, they look cool. Our top overall choice we tested is The OG Baggy Jean, which is 50% off during Everlane's Black Friday sale. For premium stretchy work pants, see our guide to the best Spanx Black Friday deals.

The best Black Friday coat and jacket deals

Between parkas and puffers from brands like The North Face, your going-out look needs something with a longline silhouette that complements what's underneath and keeps out the cold. For this, we're scouting heavyweight wool blends from Cole Haan, Kenneth Cole, and the like from Saks Off Fifth, where you can take an extra 50% off outerwear with the code "HOLIDAY."

Black Friday Pajama deals

The holidays are the perfect time to cozy up in a great pair of pajamas. We test pajamas year-round and have done lots of research into brands that are endlessly cozy and actually keep their coziness in the wash. We have a big roundup of all the best Black Friday pajama deals, but here are some of our favorites.

Shopping for more discounts today? Check out our roundup of all of the best Black Friday deals.

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Friday, 29 November 2024

Baby boomer homeowners got rich from skyrocketing house prices. Now they can't find retirement housing.

Couple looking out for a house.
  • Baby boomer homeowners have benefited from skyrocketing housing prices amid a home shortage.
  • But now they're facing a shortage of accessible homes to retire in.
  • Many older adults are now stuck in homes they're increasingly struggling to live in and pay for.

Baby boomers have been the big winners in the US housing market, but as the generation retires, its members are facing a new challenge in finding accessible housing.

It's a problem they had a hand in making.

Homeowners in the generation — now between 59 and 78 years old —have seen their home equity surge, particularly over the past decade, as a growing home shortage across the US has pushed home prices sky-high.

But as the generation approaches 80, boomers are beginning to suffer from their own housing woes: a severe shortage of accessible and affordable retirement homes. Compounding the housing issue are the rising costs of healthcare and elder care.

With mortgage rates and housing costs high and inventory scarce, many older people are staying put. Nearly 80% of home-owning baby boomers recently surveyed by Redfin said they're planning to age in their current home. And as of 2022, empty-nest boomers owned twice as many homes with three or more bedrooms as millennials with kids. While some boomers simply don't want to downsize or move, others can't afford it or don't have any feasible options.

"Is it aging in place or is it stuck in place?" said Jennifer Molinsky, the director of Harvard University's Housing an Aging Society Program. "There's a lot of people in the middle, homeowners included, who are stuck."

Molinsky authored a report last year finding that the US didn't have anywhere near enough housing and care services for boomers as they age.

Homeowners who oppose new and denser housing in their neighborhoods are a major reason so many American communities are short on homes. Those who oppose building are disproportionately older homeowners. While boomers didn't create many of these not-in-my-backyard laws that restrict housing construction, in many cases, they've protected such regulations, dominating the attendance at community board meetings and fighting housing projects.

Boomers are struggling to find accessible, affordable homes amid rising costs

As people age, they tend to need more accessible homes with fewer stairs and wider hallways. As they stop driving, many also want to live in more walkable or transit-friendly places to access amenities and combat isolation.

But restrictive land-use laws, including those prohibiting apartment buildings in areas with single-family homes, have made accessible housing options harder to find in many of the communities boomers have called home for decades. Less than 4% of US homes have the three essential factors necessary for those with limited mobility: a single floor, wide hallways and doorways, and no steps to get in, the Harvard report found.

"There's just such a diversity of households that we're not really serving with the traditional single-family house," Molinsky said.

Many older homeowners — particularly the growing number who still have mortgages — are struggling with rising insurance premiums. Nationally, home-insurance premiums rose by an average of 21% from May 2022 to May 2023, Policygenius, an insurance marketplace, found. Insurance companies are increasingly dropping customers and pulling out of entire regions, particularly those hardest hit by climate-related disasters.

The Harvard report noted that places retirees had flocked to in recent decades like South Florida and Arizona also face some of the most severe climate-related impacts, including regular flooding, fires, and extreme heat.

A record number of homeowners 65 and older are cost-burdened, meaning they spend more than 30% of their income on housing and utilities, the report found. This is particularly difficult for those on fixed incomes. As a result, older people are increasingly facing homelessness. Single adults 50 or older are now estimated to account for about half of the US homeless population, up from about 10% three decades ago.

Not all boomers have benefited from the spike in housing prices and home equity. Wealth among boomers is very unevenly distributed, including when it comes to housing. Older renters and homeowners of color tend to have much higher housing costs. Molinsky's report found older Black homeowners had less than half the home equity of older white homeowners.

Molinsky said the shortage of homes appropriate for aging would hurt lower- and middle-income boomers and boomers of color the hardest.

"All of these things become much more pressing over the next few years when baby boomers turn 80," Molinsky said. "There's really no time to waste."

Are you struggling to downsize or find a suitable home to retire in? Are you otherwise affected by the cost of retirement housing? Reach out to this reporter at erelman@businessinsider.com.

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'Senna' depicts Ayrton Senna's relationships with his ex-wife and girlfriend. Here's what the show gets right about his personal life.

Ayrton Senna sitting in his car during practice at the 1989 Hungarian Grand Prix.
Ayrton Senna during a practice session at the 1989 Hungarian Grand Prix.
  • Netflix's drama series "Senna" follows the Formula 1 driver's career and 1994 death.
  • The show touches on his relationship with his ex-wife, Lilian de Vasconcelos Souza, and girlfriend, Adriane Galisteu.
  • Senna didn't have any kids, but he was dating Galisteu at the time of his death.

Netflix's new limited series "Senna" gives the Hollywood treatment to late Formula 1 star Ayrton Senna's professional career and personal life.

The six-episode scripted series, starring Gabriel Leone as the titular character, retells many of the most well-known parts of Senna's racing career, from his beginning in karting to his eventual success in Formula 1 as a three-time world champion. It also touches on the Brazilian driver's death at 34 years old at the 1994 San Marino Grand Prix after he crashed into a concrete wall.

"Senna" also delves into the driver's romantic relationships. Senna never had kids, but he had three serious relationships throughout his life: Lilian de Vasconcelos Souza, his first wife; Xuxa Meneghel, a Brazilian TV host; and Adriane Galisteu, a Brazilian actor, TV host, and model, who was also his girlfriend at the time of his death.

Here's what to know about his relationships with de Vasconcelos Souza and Galisteu.

Senna was briefly married to Lilian de Vasconcelos Souza, his childhood friend

Alice Wegmann as Lilian and Gabriel Leone as Ayrton in "Senna."
Alice Wegmann as Lilian and Gabriel Leone as Ayrton in "Senna."

In the Netflix series, Senna and his girlfriend Lilian (Alice Wegmann) move from Brazil to Norfolk, England, so he can compete in Formula Ford, typically an entry-level race for Formula 1 drivers.

As Senna progresses as a driver, she struggles to adapt to living in England. When Senna breaks his promise and pursues racing beyond the year he agreed to, he and Lilian divorce.

Their relationship played out similarly in real life.

According to Tom Rubython's 2004 biography "The Life of Senna," Lilian de Vasconcelos Souza (alternatively spelled Liliane Vasconcelos Souza) was from a "wealthy Brazilian family."

She and Senna were childhood friends who married in February 1981 in São Paulo shortly before moving to England.

As depicted in the Netflix drama, de Vasconcelos Souza didn't have a life of her own in the UK. She mainly attended Senna's races and supported his career.

When Senna decided to drive in England for the 1982 season, de Vasconcelos Souza told him their marriage would end. The pair quietly divorced, and she stayed out of the spotlight.

Ayrton Senna at the Japanese Grand Prix in 1989.
Ayrton Senna at the Japanese Grand Prix in 1989.

In a 2010 interview with Brazilian news site G1, de Vasconcellos Souza, who was then working as a designer, reflected on her relationship with Senna and her omission from Asif Kapadia's documentary "Senna: No Fear, No Limits, No Equal."

She said it was "a very well-made film," but she was "bothered" that she wasn't included in it given her relationship with Senna. De Vasconcellos Souza also said she always knew she "was his second passion" after racing.

Additionally, De Vasconcellos Souza told G1 that she and Senna's different views of having kids in the future caused their split.

She said she became unintentionally pregnant with Senna's child, and he told her the plan would be for her to raise the baby in Brazil while he stayed in Europe to continue his racing career. De Vasconcellos Souza said she miscarried three days later.

"At that moment, something was cut off inside me because his goal was to enter Formula 1, and mine was to have a husband that I loved and to start a family," she said.

After her divorce from Senna, she remarried and had a son in 1984. De Vasconcellos Souza was in her third marriage when she heard about Senna's death on TV. She didn't attend Senna's wake or funeral but stopped by the cemetery where he was buried. She also visited his mom, Neyde Senna, and stopped by his São Paulo home.

Senna was in a relationship with Brazilian model and actor Adriane Galisteu at the time of his death

Ayrton Senna and Adriane Galisteu on vacation in February 1994.
Ayrton Senna and Adriane Galisteu on vacation in February 1994.

The final two episodes of "Senna" depict Senna's relationship with Galisteu. In the show, they properly meet when Senna celebrates his Brazilian Grand Prix victory at a club.

In the last episode, she calls Senna, scared and concerned, after hearing about Simtek driver Roland Ratzenberger's fatal crash on the Imola track during qualifying. When Senna dies from a crash into a concrete wall the next day during the race, she's seen watching the tragedy unfold on TV.

In real life, Galisteu and Senna dated from 1993 until his death at the San Marino Grand Prix in Italy.

Galisteu met Senna when she worked as a hospitality hostess for the oil company Shell at the 1993 Brazilian Grand Prix. Although they crossed paths in the hospitality suite during the race weekend, they didn't have their first interaction until Senna's Brazilian GP celebration at Limelight Club.

During their relationship, they traveled the world together, visiting Monaco, Hungary, and other destinations where the F1 races occurred.

According to Rubython's biography, Senna planned to stay in Portugal with Galisteu for five months during the European race season in 1994 and not return to Brazil during that time, which was customary for him. This caused a rift between them and Senna's family, who felt Galisteu wasn't good enough for him.

Adriane Galisteu at Ayrton Senna's funeral in Brazil in May 1994.
Adriane Galisteu at Ayrton Senna's funeral in Brazil in May 1994.

Galisteu saw Senna for the last time on April 3, 1994, weeks before his death. She was taking an English language course in Brazil in preparation for spending time in Europe and living with Senna.

Per the biography, Galisteu said that Senna told her he had plans to marry her someday, switch from Williams to Ferrari, and conclude his career with the Italian team.

Galisteu watched the San Marino GP from a TV in Senna's Portugal home. She was among the mourners at Senna's funeral in Brazil in May 1994.

After Senna's death, Galisteu married Brazilian businessman Roberto Justus from 1998 to 1999. She's been married to Alexandre Iódice since 2010, and they have a son named Vittorio.

Galisteu still models and is active on Instagram, where she posts pictures of her photoshoots, her family, and tributes to Senna.

All episodes of "Senna" are streaming on Netflix.

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Thursday, 28 November 2024

Nvidia workforce data explains its meteoric rise

NVIDIA photo collage
Nvidia's workforce has increased more than 20-fold in the last twenty years.
  • Nvidia's workforce has grown nearly 20-fold since 2003.
  • The company's stock price surge and low turnover have enriched many long-term employees.
  • Nvidia's median salary now surpasses Microsoft's and other Silicon Valley peers.

Nvidia was largely unknown just a few years ago.

In 2022, google searches for Jensen Huang, the company's charismatic CEO, were almost nonexistent. And Nvidia employees were not nearly the source of fascination and interest they are today.

Nvidia recruiters are now swamped at conferences, and platforms like Reddit and Blind are full of eager posters wondering how to land a job or at least get an interview at the company, which has around 30,000 employees.

They want to know how many Nvidians are millionaires — likely quite a few.

The skyrocketing stock price has made that the case, but so has the longevity of its employees. Twenty-year-plus tenures are not uncommon, and even now when AI talent has never been more prized, staff turnover has been falling in recent years. In January, the company reported a turnover rate of 2.7%. Tech industry turnover below 20% is notable, an HR firm told Business Insider earlier this year.

The data behind the evolution of Nvidia's workforce tells the story of the company's meteoric rise just as well, if not better than the revenue or stock price. Until the early 2000s, the chip design company, which was founded in 1993, was relatively under the radar. Here is Nvidia's story in four charts.

Nvidia's workforce has grown nearly 20-fold since 2003

Beyond Nvidia's historic rise in market value, the company has a lot to offer employees. It maintains a permissive remote work policy even as tech giants like Amazon mandate a return to the office. It has also built an appropriately futuristic new Santa Clara, California, headquarters which robotics leader Rev Lebaredian described to Business Insider as so tech-infused it is a "type of robot."

But the culture isn't for everyone.

Public feedback, for example, is a very intentional part of the workplace culture. Huang famously has dozens of direct reports and eschews one-on-one meetings, preferring to call out mistakes in public rather than saving harsh feedback for private conversation, so that everyone can learn.

Nvidia has become one of the best-paying firms in Silicon Valley

Four years ago, Nvidians' median salary wasn't at the top of the market. In 2019, Microsoft's median employee salary was nearly $20,000 higher than an Nvidia worker. But as of January 2024, Nvidia's median salary (excluding the CEO) surpassed Microsoft and has left other tech giants in the dust.

Yet, this chart only reports on base compensation.

Years of stock-based compensation and "special Jensen grants," along with four-digit growth in the stock price within the last decade, have led to wealthy employees and, at times, internal tension surrounding rich Nvidia employees not pulling their weight.

Certainly, not all Nvidians are millionaires and the compensation the company is required to report to shareholders every Spring isn't quite the full picture. Still, Huang has repeatedly said that despite Nvidia's AI dominance, he wakes up worrying about staying on top.

Nvidia's revenue per employee has recovered after years of investment

Divide the company's revenue by its employee headcount and its financial strategy shows through.

Beginning in 2006, long before using graphics processing units to run AI models was commonplace, Nvidia invested in building a programming software layer called compute unified device architecture (CUDA).

Nvidia's GPUs are capable of immense computing capacity at nearly unprecedented speed because they perform calculations simultaneously rather than one at a time. Instructing these powerful chips required a new software paradigm.

CUDA is that paradigm and building it took years and cost Nvidia dearly. In hindsight, the benefit of this investment period is undeniable. CUDA is the main element that keeps AI builders from easily or willingly switching to competing hardware like AMD's MI325 and Amazon's Trainium chips.

It's not a literal translation of every employee's contribution, but looking at the revenue-to-headcount ratio can show trends in efficiency, investment, and return.

Nvidia's revenue-to-headcount ratio showed a downward trend from 2003 until 2014, and then steady upward progress until the AI boom in 2023. During that year, this ratio doubled.

CUDA is likely not the only factor affecting this data point, but it may help explain why investors questioned CUDA expenditures for years — and why they no longer do.

But the company isn't as far ahead in other areas.

Nvidia has less than one in five women employees — but it has pay parity

Despite the dizzying progress of Nvidia's technological achievements, gender representation in the company's workforce and the semiconductor industry as a whole has remained relatively unchanged in the last decade. As of January 2024, Nvidia's global workforce was 19.7% female.

Nvidia's stats are in line with the industry totals for female representation, but ahead of the pack when it comes to women in technical and management positions.

According to a 2023 Accenture analysis, the median representation of women in the semiconductor industry is between 20% and 29%, up from between 20% and 25% in 2022. Over half of the companies in the sample reported less than 10% representation of women in technical director roles and less than 5% in technical executive leadership roles.

In January Nvidia reported that women at the company make 99.5% of what men make in terms of baseline compensation. For the last two years, the turnover rate for women at the company has been slightly lower than that for men.

Nvidia declined to comment on this dynamic when BI reported on it in September.

Do you work at Nvidia? Have a tip or an insight to share? Contact Emma at ecosgrove@businessinsider.com or use the secure messaging app Signal: 443-333-9088

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Wednesday, 27 November 2024

In an F-35 funding fight, Musk will need to win over a skeptical Congress and Trump

A US F-35 in flight.
A US F-35 in flight.
  • Elon Musk sharply criticized the F-35 stealth jet and its builder, Lockheed Martin.
  • Musk could target the expensive program as part of his efforts to cut federal spending under Trump.
  • Congress has historically valued the stealth fighter flown by three military branches despite its problems.

Just weeks after President-elect Donald Trump tasked Elon Musk with cutting government spending, the SpaceX CEO criticized the Pentagon's most expensive weapons program: the F-35.

Musk called the jet's design "shit" and derided the "idiots" making the fifth-generation stealth fighter, which is widely considered a cornerstone of US airpower. His comments suggest he could be eyeing the $2 trillion F-35 program, and possibly other fighter jets, for potential spending cuts.

To do so would be an uphill battle. He would likely need to first convince Trump, who has for years repeatedly celebrated the F-35 for its high-end stealth capabilities. Then he would need to gain support within the Pentagon and Congress, which controls its funding.

Elon Musk
Elon Musk has been tasked to find ways to cut federal spending.

DOGE could target defense spending and the extremely expensive F-35

Trump has tapped Musk to head the new Department of Government Efficiency, or DOGE, charged with targeting government waste. Defense spending is a big potential target for the initiative.

It is the largest discretionary spending category in the federal budget, with the Pentagon's fiscal year 2024 budget of $824.3 billion. And the Department of Defense recently failed its seventh audit in a row.

The F-35 has had many problems. It suffered setbacks in development, and it continues to face cost overruns and readiness issues, with availability declining even as the program costs rise. Earlier this year, a government watchdog report found that the program will cost over $2 trillion over its lifetime.

In posts on X this week, Musk sharply criticized both the stealth fighter jet and, indirectly, its manufacturer: US defense giant Lockheed Martin. He said drones can now replicate the effect of crewed aircraft on the battlefield.

He also wrote that the F-35 fighter's design "was broken at the requirements level because it was required to be too many things to too many people. This made it an expensive & complex jack of all trades, master of none. Success was never in the set of possible outcomes."

An F-35 Lightning II streaks across the sky while doing maneuvers to the Eglin Air Force Base runway.
The F-35 is the Pentagon's most expensive weapons program.

Some defense analysts say the combat-proven aircraft is still a vital capability in America's arsenal — one that can't just be replaced by drones.

The multirole fighter jet is flown by the Navy, Air Force, and Marine Corps, with three different versions for operating off traditional runways, big-deck amphibious assault ships, and aircraft carriers. It was designed to execute air combat, ground attack, and other missions. The plane first took flight nearly 20 years ago and is expected to serve until 2088.

In response to Musk's comments, a Lockheed Martin spokesperson said the F-35 is "the most advanced, survivable, and connected fighter aircraft in the world, a vital deterrent and the cornerstone of joint all-domain operations." They added that Lockheed looks forward "to a strong working relationship with President Trump, his team, and also with the new Congress to strengthen our national defense."

A Pentagon spokesperson declined to comment on Musk's criticisms of the F-35 when asked about them at a Tuesday media briefing.

Photo of F-35
The F-35 is a combat-proven aircraft whose sophisticated design has come with challenges.

Any proposed cuts to the F-35 program could face opposition in Congress from lawmakers who have historically supported it for the spending it brings to many districts in the form of factory jobs. In fact, the House's defense spending bill for the 2025 fiscal year called for more F-35s than what the Pentagon initially requested.

The Trump transition team did not respond to a request for information on whether it plans to reduce or end the F-35 program.

How Musk could save money on the F-35 program

Michael Bohnert, a licensed engineer at the RAND Corporation, told BI the F-35 fighter is "cost-competitive" with global alternatives.

Bohnert said taking away the pilot wouldn't really change costs, and it would require multiple drones to begin to recreate the capabilities of an F-35. The ultimate costs of those platforms could end up being more expensive and, ultimately, still less capable.

A better way to save money, he said, would be to improve the cost efficiency of munitions and automate maintenance.

An F-35B is parked on the top deck of an aircraft carrier.
The F-35 delivers a range of capabilities that would be tough to replicate using uncrewed aircraft.

"Augmenting F-35s with unmanned systems would be valuable, but unmanned systems are no replacement," he said. Canceling the fighter altogether "would be one of the biggest gifts imaginable for America's enemies," he said.

Stacy Pettyjohn, director of the Defense Program at the Center for a New American Security, told BI that the US can't replace crewed aircraft with drones in the near term anyway. The technology isn't advanced enough yet.

She said that the Pentagon has not yet fielded fully lethal autonomous weapons "that are sophisticated and can make sense of their environments, decide what to do, and act fully on their own."

"Almost all of the drones that exist today are remotely piloted or at most semi-autonomous," she said. "Developing the autonomy responsibly and then deciding that we have trust in it to send it on extremely consequential missions that is the long pole in the tent."

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Tuesday, 26 November 2024

Elon Musk says human-piloted fighter jets like the F-35 are obsolete. Drone tech can't yet fill the gap.

An F-35C Lightning II prepares for takeoff on the Nimitz-class aircraft carrier USS George Washington (CVN 73).
The F-35 is the US military's most advanced fifth-generation fighter, but some tech leaders like Elon Musk argue that drones are making jets like this obsolete.
  • Elon Musk criticized the F-35 and called crewed fighters obsolete in the drone era.
  • Musk's comments align with tech leaders advocating for drones over traditional military assets.
  • Drones can't yet replace crewed aircraft. Even if they could, a mix of both might be better.

Drones are changing war in ways we never thought possible, but are we to the point where uncrewed systems can replace top-dollar weapons like the F-35 stealth fighter?

Prominent tech industry figures are saying yes. But former warfighters and analysts say we aren't there yet, and replacement might not be the right call regardless.

Tesla CEO Elon Musk has taken aim at the Pentagon's prize fifth-generation stealth jet, the F-35 Lightning II Joint Strike Fighter. In a series of social media posts on X, he called it idiotic to continue building them and criticized the design. Pointing to Ukraine, he also said human-piloted jets are "obsolete" and "inefficient" and will "just get pilots killed" as drones and counter-air threats become more prolific.

In the Ukraine war, drones are surveilling and striking enemy vehicles and troop positions. But they are not a substitute for crewed jets, which Kyiv has long sought in greater numbers even as pilots face a tough air-defense environment.

Musk's comments follow similar remarks by former Google CEO Eric Schmidt, who called tanks "useless" last month while urging the Army to "give them away" and "buy a drone instead." Musk went a bit further, speculating about ways adversaries could defeat the F-35's stealth.

Musk's criticism comes as he prepares to target wasteful government spending as part of Trump's Department of Government Efficiency initiative. The F-35 Joint Strike Fighter is the Pentagon's most expensive weapon system program, with the lifetime costs expected to top $2 trillion, and Musk has previously suggested the F-35, troubled by setbacks throughout its development, isn't the best fit for the military.

Four years ago, the SpaceX founder said a remotely controlled uncrewed fighter would be a better alternative to the F-35 and argued the future is autonomous drone warfare.

This week, he said that "manned fighter jets are obsolete in the age of drones."

Ukrainian drones
In the Ukraine war, drones have been a priority for combatants, but Ukraine still seeks Western fighter aircraft.

Drones are game-changers

Small, cheap drones are transforming land warfare by providing new options for tactical reconnaissance, targeting solutions, and threatening maneuver. For situations where air and sea combat over vast areas might be more prevalent, like a war in the US military's priority Indo-Pacific theater, these drones are too slow with inadequate payloads and range to be sufficient.

The US also needs fast, low-observable, and maneuverable platforms that can carry advanced sensors and stand-off weaponry across great distances through potentially contested airspace.

"That's just not something that small UAVs can do," said Justin Bronk, a Royal United Services Institute airpower analyst.

Providing the full range of capabilities for this theater means larger, more sophisticated platforms with a higher price tag. Existing remotely controlled systems only meet some of the demands, some can cost as much as an F-35, and they are vulnerable to intensifying electronic warfare and surface-to-air threats.

The US military is actively developing new semi-autonomous and artificial intelligence-driven aircraft, from pilotless F-16s to collaborative combat aircraft where a pilot directs the tasks, and there are great possibilities in this space but also limitations as the technology isn't yet mature.

"If I develop an aircraft that does not require a human in the cockpit, I could develop one that could pull 15 Gs, 20 Gs because you're no longer worried about the physiology of the human," Guy Snodgrass, a retired naval aviator and former senior defense official, said.

Without a human pilot, "you could then strip out the cockpit, you could strip out the oxygen generation, you could strip out a lot of the life support systems," potentially freeing up space for sensors, weapons, and more, the former TOPGUN instructor said, arguing that "there are definitely advantages."

But without crewed fighter aircraft, particularly the high-end systems like the F-35, the US risks being "stuck with a huge capability gap for a significant period of time because the drone technology and the ability to not only produce it but then to incorporate it in the military and actually employ it in a tactically relevant or strategically relevant sense isn't there yet," he said.

A US Air Force F-35 fighter jet flies on its side with a jet stream behind it against a cloudy blue sky.
Some former pilots and warfighting analysts say the US military should combine drones and crewed fighter aircraft.

Mixing the crewed fighters with uncrewed aircraft

In response to Musk's comments on X about their fighter this week, a spokesperson for Lockheed Martin told BI that the F-35 Joint Strike Fighter is "the most advanced, survivable, and connected fighter aircraft in the world, a vital deterrent and the cornerstone of joint all-domain operations," a reference to the jet's role as a combat quarterback.

The fifth-gen stealth jet is not only a US military aircraft. It is used by nations around the world, with more planning to establish F-35 fleets. That's because the F-35 isn't just a fighter jet. It's also a bomber, electronic warfare plane, surveillance tool, battle management platform, and key communications node.

An uncrewed aircraft can't yet match that capability. "That technology is simply not there," said Mark Gunzinger, a retired US Air Force pilot and the director of Future Concepts and Capability Assessments at the Mitchell Institute for Aerospace Studies.

If one day drones have all those capabilities, there are still advantages to keeping human pilots flying combat missions. Combat is unpredictable and requires making decisions in uncertain situations. Autonomous systems might be less prepared to look past the data, like a false radar return, to make the smart call.

Machines are more rigid. "The flexibility that human pilots give you to use the machine and the systems that it has in relatively unforeseen circumstances or across a very wide variety of mission types and circumstances is something that's very difficult to replicate in an automatic system," Bronk said.

For the US military, wargaming scenarios have shown that the better solution is not one or the other, crewed or uncrewed.

"We need both," Gunzinger said. "And the greatest impact on warfighting, the biggest leap ahead in warfighting capabilities and capacity, is in figuring out how to combine what they both bring to the fight in the most effective way. That's the secret sauce."

Much like the US isn't solely dependent on a single energy source, US national security isn't dependent on a single capability. In this situation, uncrewed systems enhance crewed systems and vice versa. The US military is still figuring out what comes next, but the F-35 is an imperfect but important bridge to that future of airpower, whether it's crewed, uncrewed, or some mix of both.

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Monday, 25 November 2024

4 investment strategies that will outperform the stock market in 2025, according to Goldman Sachs

Market bull money stocks
  • Interest rate cuts and stable GDP growth boost market optimism for 2025.
  • But AI-driven stock market gains may not sustain, with S&P 500 returns possibly muted.
  • Goldman Sachs advises diversifying investments, focusing on value stocks and foreign markets.

On the surface, 2025 is looking good for markets. Interest rate cuts are progressing steadily, US GDP growth looks stable at 2.8% for the third quarter, and President-elect Donald Trump's promised corporate tax cuts have injected a dose of additional optimism.

But there's a slight catch: the stock market's overly bullish bet on AI has stocks looking rich and overly concentrated. A small group of mega-cap names has pushed the S&P 500 up by 26% this year. That said, major indexes will have much to live up to following their solid year, and it's not likely they can post stellar returns on a relative basis. An earlier note from Goldman Sachs projected that the S&P 500 could have muted returns at 3% annually for the next decade.

Investor bullishness was driven by hype and hyper sales growth, both difficult to maintain long term. While some of those gains are riding on solid footing following strong profit growth, half of 2024's global equity returns was a result of valuation expansion, especially for US stocks, which are at record highs relative to the previous two decades, according to a November note from Goldman Sachs. Positive sentiment around softening inflation and interest rate cuts also helped.

The chart below demonstrates the portion of returns based on price-to-earnings estimates, earnings per share, and dividends, indicating that valuation expansion was a bigger contributing factor.

Chart for equity returns based on EPS, P/E, and dividends.

However, history tells us that it's not likely such a strong run will last. Over the past 40 years, only 3% of firms could grow sales at a rate of 20% over 10 years, read the note led by Peter Oppenheimer. It means that betting on the broader market and momentum is probably not the best strategy next year.

Instead, the investment bank suggests seeking alpha, a short way of saying returns above the broad market. The way through is by focusing on four key areas that include opportunities from a broadening out of the stock market, hunting for value, adding foreign stocks, and considering companies engaged in mergers and acquisitions.

Four areas to consider

As interest rates rose at the fastest pace in four decades, companies that relied on debt or had weaker balance sheets fell behind their larger counterparts that had stronger balance sheets to rely on. But as the rate cuts from this cycle take effect, smaller companies will have a chance to catch up.

Below is a chart from Goldman Sachs that shows how the major indexes, which rely on some of the largest global firms, performed against the broader market since the first Fed hike in March 2022.

Equity performance during rate hikes.

The note recommends rotating as rates create a more favorable environment for smaller cap companies by shifting away from the S&P 500 and toward the equal-weight S&P 500, which tracks the same companies but holds a fixed equal weight across the names. Another option is the S&P 400, which tracks US midsize companies.

If you're bullish on AI, Goldman suggests considering what it refers to as "phase three" of the trade, which encompasses companies that could see revenue growth from using the technology for this, such as increased productivity. The investment banks expect that capital expenditure for AI will increase next year.

Finally, consider growth stocks that aren't pegged to technology, such as Eli Lilly, Honeywell International, Vertex Pharmaceuticals, and Chipotle, among others.

But growth overall is still expensive, the note read. Therefore, investors should top off their exposure by adding value stocks, seeking out firms with higher yields and increasing shareholder returns through solid dividends. Key sectors for this play include US materials and utilities.

Geographic diversification is another area where alpha could be found. Consider foreign markets, specifically Japan. Goldman Sachs is overweight on Japanese equities due to its positive outlook driven by EPS growth rather than multiple expansion, a trend expected to continue due to a weak yen.

As for other parts of the world, while they may not be as attractive, some opportunities could be found within specific companies. For Europe, companies not reliant on exports, such as telecommunications and real-estate firms, or those where half their revenues are earned within the US market but are cheaper than their American counterparts, are a good bet.

Finally, capital markets activity is expected to see an uptick. That said, Goldman suggests looking for names involved in mergers and acquisitions.

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Elon Musk said the F-35's makers are 'idiots' for still building manned jets as drone tech rises

An F-35 flies in the sky and Elon Musk is dressed in a suit and tie in separate photos.
Elon Musk is criticizing the F-35, tweeting that it has a "shit design."
  • Elon Musk criticized the F-35 program on Sunday.
  • Musk's comments come as he prepares to advise Trump on government efficiency in 2025.
  • The GAO expects the F-35 program to cost about $2 trillion over its entire lifespan.

Elon Musk, who's set to start advising President-elect Donald Trump on government efficiency in 2025, criticized the Pentagon's F-35 program in two brief social media posts on Sunday.

The billionaire reposted a video montage of coordinated drone swarms on X, writing: "Meanwhile, some idiots are still building manned fighter jets like the F-35."

He added a "trash can" emoji to his post. When another X user defended the F-35's capabilities, Musk responded that the prized jet is a "shit design."

It's unclear if Musk intends to use his new position to impact any plans or costs for the F-35, the Pentagon's most expensive fighter program to date.

But he mentioned Defense Department spending in a column in The Wall Street Journal that criticized federal government budgets.

"The Pentagon recently failed its seventh consecutive audit, suggesting that the agency's leadership has little idea how its annual budget of more than $800 billion is spent," Musk wrote in the column with Vivek Ramaswamy, who is to lead Trump's new Department of Government Efficiency with him.

Musk and Ramaswamy wrote that the intention of their department is to eliminate the "sheer magnitude of waste, fraud, and abuse that nearly all taxpayers wish to end."

As for the F-35, costs for the Lockheed Martin-developed stealth jet have hit about $485 billion, after a 10% bump this year due to what the Pentagon said was a need to improve its engine cooling.

Around 1,000 of the planes have been delivered to the US military and its allies, out of a total of over 3,000 aircraft planned for production over the F-35 program's lifetime.

The jet's operational lifespan is estimated to last until 2088, and the Government Accountability Office thus expects the F-35 program to cost over $2 trillion to produce and sustain.

Musk, the Pentagon, and Lockheed Martin did not respond to requests for comment sent outside regular business hours by Business Insider.

Musk has said before that the US should consider remote-piloted alternatives to manned jets, both to keep up with the rise in drone warfare but also to help Air Force procurement stay competitive.

"The competitor should be a drone fighter plane that's remote controlled by a human, but with its maneuvers augmented by autonomy. The F-35 would have no chance against it," Musk tweeted in February 2020.

In response to Musk's tweets, a Lockheed Martin spokesperson told Fortune that the F-35 is "the most advanced, survivable, and connected fighter aircraft in the world, a vital deterrent and the cornerstone of joint all-domain operations.

"As we did in his first term, we look forward to a strong working relationship with President Trump, his team, and also with the new Congress to strengthen our national defense," they added.

A Pentagon spokesperson also told the outlet: "We have combat-capable aircraft in operation today and they perform exceptionally well against the threat for which they were designed. Pilots continually emphasize that this is the fighter they want to take to war if called upon."

"In the next 10 years, there will be 700 F-35s in Europe and only 60 of these will belong to the US," they also said.

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Sunday, 24 November 2024

TSMC's Phoenix chip factories likely won't erase the US's reliance on Taiwan

UMC wafer factory in Tainan Science Park.
Some US businesses could rely on TSMC chips made in Taiwan for the foreseeable future.
  • TSMC's Phoenix chip factories likely won't eliminate US dependence on tech from Taiwan.
  • Experts told BI that TSMC's most advanced chips will likely continue to be produced in Taiwan.
  • Taiwan's central role in a crucial global industry could help it secure support from the US.

Some US businesses are likely to continue depending on TSMC chips made in Taiwan for the foreseeable future, even as the company builds factories in Arizona.

On November 15, the Biden administration announced that the Commerce Department had awarded TSMC — the world's leading chipmaker — with up to $6.6 billion in funding to aid the construction of three chip factories in Phoenix. The first factory is expected to begin full production levels in early 2025.

In a press release, the Biden administration said the announcement was "among the most critical milestones yet" in the implementation of the CHIPS Act. Supporters of the law hope it will create US jobs, secure supply chains, and make the US less reliant on advanced chips from Taiwan — which faces the possible threat of a Chinese invasion. TSMC produces an estimated 90% of the world's advanced chips, which power everything from iPhones to cars.

While TSMC's Phoenix factories are expected to boost semiconductor chip production in the US, the company isn't making its most advanced chips stateside, industry experts told Business Insider.

Jeff Koch, an analyst at the semiconductor research and consulting firm SemiAnalysis, told BI that chips made in TSMC's US factories are expected to be one to two levels behind the company's more advanced Taiwan-made chips. For example, chips produced using 4 nanometer (nm) technology are expected to be made in the first Phoenix factory, while TSMC's Taiwan factories are already producing chips using 3nm technology. The smaller the nanometer number, the more transistors manufacturers can fit on a chip, making it more powerful and energy-efficient.

While 3nm chips are expected to be produced in TSMC's second Arizona factory — which is slated to begin full production in 2028 — Koch said this would likely come after the production of 2nm chips begins in Taiwan, which is estimated to happen next year, according to TSMC.

Stephen Ezell, the vice president for global innovation policy at the Information Technology and Innovation Foundation, told BI that by the time TSMC's Phoenix factory starts making 2nm chips, he'd expect the company to be producing even more advanced chips in Taiwan.

"The United States will be dependent on chips from Taiwan for a long time to come," he said. "Even if the CHIPS Act is wildly successful, it'll barely get the US back to 17% to 20% of global chip production." The US currently produces about 10% of the world's chips.

The Department of Commerce told BI that as TSMC's Arizona fabs become operational, it expects to see the production of TSMC's most advanced chips transition into the US over the coming years.

TSMC declined to comment on whether the company's most advanced chips will continue to be produced in Taiwan.

Keeping TSMC's most advanced chips in Taiwan gives the island leverage

Companies that prefer to use the most cutting-edge technology — like Nvidia, Apple, Qualcomm, and AMD — will likely continue to source chips from Taiwan, said Chris Miller, a nonresident senior fellow at the American Enterprise Institute who focuses on semiconductors.

"I think TSMC's plants in Arizona are significant, but given current policies and investment trends, the US will be using large volumes of chips made in Taiwan for many years into the future," added Miller, who is the author of "Chip War: The Fight for the World's Most Critical Technology,"

TSMC's most advanced chips are made first in Taiwan, in part, because that is where the company conducts its research and development — which makes it easier to roll out more sophisticated technologies. Additionally, keeping that level of production in Taiwan could help the island retain its essential role in the chipmaking industry, which is crucial to the global economy, Koch said.

He added that this dynamic could make the US more likely to provide Taiwan with military support if China invaded.

"It's very unlikely that the Taiwanese government would allow TSMC to build its most advanced fabs in the US without a few years' lag," he said, adding, "This is Taiwan's most valuable strategic capability. Without it, extracting a US security guarantee or support from the Trump administration goes from hard to impossible."

William Alan Reinsch, a senior advisor at the Center for Strategic and International Studies, a national security think tank, told BI the Biden administration's goal was to boost domestic chip production — not to completely erase US businesses' reliance on foreign-made chips.

What's more, efforts to develop and foster the US semiconductor industry could help protect America's supply chains from geopolitical events, even if some US businesses continue to source chips from Taiwan.

Do you work in the US semiconductor industry? Reach out to this reporter at jzinkula@businessinsider.com.

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Check out the Rolex wrist candy Mark Zuckerberg rocked at UFC this weekend

Mark Zuckerberg came to the UFC event in Las Vegas blinged out in a solid gold Rolex Daytona watch. Chris Unger/Zuffa LLC Mark Zuckerbe...