DoD Investing Heavily in Technology Companies to Spur Growth of Artificial Intelligence

Financialnewsmedia.com News Commentary

PALM BEACH, Florida, Nov. 7, 2019 /PRNewswire/ -- Artificial intelligence (AI) is a key growth investment area for DoD, with nearly $1 billion allocated for 2020, according to Breaking Defence.com. It pointed out that the Pentagon is figuring ways to harness AI for advantages as far flung as battlespace autonomy, intelligence analysis, record tracking, predictive maintenance and military medicine. AI is a key growth investment area for DoD, with nearly $1 billion allocated in the 2020 budget. The Defense Department's Joint Artificial Intelligence Center (JAIC) will see its budget double to over $208 million, with significant increases likely in 2021 and beyond. JAIC seeks to coordinate all military service and defense agency artificial intelligence activity over a $15 million benchmark. The military is currently seeking to integrate AI into weapon systems development, augment human operators with AI-driven robotic maneuver on the battlefield and enhance the precision of military fires.  The White House Fiscal Year 2020 Federal Budget stated: "The rapid advancement and proliferation of new technologies is changing the character of war… To prevent the erosion of the U.S. competitive military advantage, DOD is investing in new technologies to compete, deter, and if necessary, fight and win the wars of the future."  Active companies in the markets this week include Hawkeye Systems, Inc. (OTCQB: HWKE), Kratos Defense & Security Solutions, Inc. (NASDAQ: KTOS), Raytheon Company (NYSE: RTN), The Boeing Company (NYSE: BA), Northrop Grumman Corporation (NYSE: NOC).

An article in Engineering.com said: "DoD's investment in AI is crucial to its continuing military advantage, ensuring the U.S. military does not lag behind rival world powers.  It said that the: "U.S. military and intelligence departments are already serviced by, if not the best, then certainly the biggest tech companies in the game."  It listed some of the deals with the biggest civilian companies: "Microsoft has been working with the U.S. Army for 30 years. In 2016, it won a major $927 million information technology and consulting contract from the DoD and followed it up with a deal to provide Azure Cloud services to the major U.S. intelligence agencies in 2018. This January, Microsoft was also awarded a $1.76 billion for IT consulting and support services to branches of the DoD.

Hawkeye Systems, Inc. (OTCQB: HWKE) NEWS:  Hawkeye, a next-generation imaging technology company, recently announced that it has entered into a Cooperative Research and Development Agreement (CRADA) with the Department of Defense (DOD).

The CRADA agreement marks a pivotal milestone for Hawkeye to work collaboratively with the DOD within their various departments to streamline process and further build upon their technology capabilities. Hawkeye will work exclusively to provide technologies and systems that meet DOD capability gaps.

Hawkeye Systems is tasked with developing innovative technologies, materials, components, material combinations, software, modeling, simulations and systems for various DOD applications. The goal is to provide an enhanced operational capability to DOD assets through the development of novel solutions and technologies. Through the interaction and cooperation authorized by this CRADA, the DOD and Hawkeye Systems will develop technologies tailored for Department of Defense needs.

"The CRADA is a true testament to the work and capabilities of our core technology and systems, and we're excited to be collaborating with the DOD," said Corby Marshall, founder and Chief Executive Officer of Hawkeye Systems. "At Hawkeye, we have the ability to create sustaining products that will not only help improve DOD operations, but also can make a difference for the different components of the DOD that benefit from our unique technologies."

Hawkeye Systems will also add U.S. Navy Consultant, Shawn Petre, as a principal consultant focusing on all issues related to the Department of Defense. Mr. Petre has served in the U.S. Navy and will bring over 22 years of experience as a Naval Aviator.

"Hawkeye's cutting-edge technology has received high praise from the U.S. military, which is extremely encouraging. The military needs their technology capabilities to assist military operations regarding ground and airborne surveillance and reconnaissance," said Shawn Petre. "Having worked with the best teams in the Department of Defense, I understand the current needs that exist for Hawkeye's technology and the gaps we can fill. I look forward to securing more contracts and opportunities for our company."  Read this full press release here

Other recent developments in the markets this week include:

Kratos Defense & Security Solutions, Inc. (NASDAQ: KTOS) a leading National Security Solutions provider, recently announced that it has recently received $5.1 million in Command, Control, Communication, Computing, Combat, Intelligence, Surveillance and Reconnaissance System (C5ISR) program related production awards. Kratos is a leading provider of products in support of C5ISR programs and systems including, unmanned systems, missile defense, high power directed energy, radar, and surface combatants. Contract awards will be performed at secure Kratos manufacturing facilities. Due to customer related, competitive and other considerations, no additional information will be provided related to these contract awards.

Raytheon Company (NYSE: RTN) has delivered the Wide Area Augmentation System Geosynchronous Earth Orbiting 6 satellite navigation payload to the Federal Aviation Administration to broadcast the WAAS message, which corrects errors in GPS satellite signals, provides expanded coverage, improves accuracy, and increases reliability. The WAAS GEO 6 payload is now operational and fully integrated into the WAAS network, working with two other WAAS satellite payloads already in orbit.

Developed and installed by Raytheon for the FAA, WAAS is a North American satellite-based augmentation system that increases GPS satellite signal accuracy for precision approach at 200 feet altitude to meet strict air navigation performance and safety requirements for all classes of aircraft in all phases of flight.

The Boeing Company (NYSE: BA) and Air Premia recently announced the Korean startup airline plans to buy five 787-9 Dreamliner airplanes, following an agreement to lease three 787-9 jets from Air Lease Corporation earlier this year. Air Premia, which plans to launch operations in 2020 is poised to become South Korea's second Dreamliner operator.  The commitment, valued at $1.4 billion at list prices, will be reflected on Boeing's Orders & Deliveries website when it is finalized.

"This is an exciting decision for Air Premia as we look to deliver a world-class experience to our customers, while also operating the most fuel efficient fleet," said Peter Sim, CEO of Air Premia. "With the 787-9's superior fuel efficiency and range capabilities, this investment fits perfectly with our unique business model and will position Air Premia for sustainable long-term growth."  

Northrop Grumman Corporation (NYSE: NOC) will participate in Baird's 2019 Global Industrial Conference on Wednesday, Nov. 6. Kathy Warden, chairman, chief executive officer and president, and Ken Bedingfield, corporate vice president and chief financial officer, will present beginning at 9:30 a.m. Eastern time. The presentation will be webcast live at www.northropgrumman.com.

Northrop Grumman is a leading global security company providing innovative systems, products and solutions in autonomous systems, cyber, C4ISR, space, strike, and logistics and modernization to customers worldwide.

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