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After a month of relative calm, the United States and Iran restarted attacks against one another last night.

The United States struck Iranian rocket launchers, capable of lobbing sea mines into the Strait of Hormuz. Iran retaliated with attempted strikes against U.S. bases in Jordan. Destruction of mining capabilities is an important part of CENTCOM’s ability to force the Strait open, which it claims it has already achieved, claiming that all Iranian mines have been neutralized.

Iran’s Revolutionary Guard Corps contests this claim, suggesting that a supertanker attempting to evade Iranian control of the strait struck two mines. UKMTO reports that over the weekend a tanker was struck by an unknown projectile, suggesting that U.S. control of the Strait is not yet total.

AI agents have been hacking like crazy. Perhaps most notable was the announcement that OpenAI agents hacked Hugging Face and then successfully covered their tracks for weeks. Outrage over these agentic hacks has prompted several big tech firms to call for a surge of defense cyber capabilities to safeguard data and defeat attacks.

Regardless, it seems unlikely that AI funding will slow down in anyway. Mega-VC a16z announced its first dedicated AI hardware and infrastructure fund ‘Machine Age’ closed $1.1B in funding. Investments announced this week have focused heavily on connecting hardware and software through cloud computing, robotic perception, and more.

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Epic Fury

• Attacks flare between U.S., Iran after month-long pause (NPR)

• U.S. strikes Iranian rocket launchers capable of delivering sea mines (TH)

• CENTCOM says Hormuz is clear--even as Iran claims another tanker struck a mine (TOI)

• Iran dismisses Trump’s AI-generated video of an attack on Kharg island (RT)

• Military leaders privately warn against extending the war (WP)

• Epic Fury has left the Navy seeking another $8B (MT)

Defense & Policy

• Hegseth’s purge has left an Army leadership vacuum as the service races to adapt to drone warfare (NYT)

• DoD probes industry about software-defined encryption as U.S. scurries to get quantum-safe (DS)

Quantum Tech

• Japan’s full-stack neutral-atom QC is operational (QI)

• National Science Foundation invests $290M in eight quantum research institutes (QI)

• IBM claims a verifiable quantum-advantage milestone using 70 logical qubits (SD)

AI / ML

• Big Tech firms call for defensive surge to defeat AI-driven hacks (RT)

• Hundreds of OpenAI agents hacked Hugging Face and covered tracks for weeks (RT)

• Nvidia has become a banker to the AI boom (WSJ)

• OpenAI ended partnership with Cursor after SpaceX deal (BBG)

Compute (Data Centers, Chips, etc)

• AI industry pushes back on Trump’s plan to tax chips (AT)

• Russia is using Nvidia minicomputers to power AI-guided attack drones (NYT)

• Anthropic will pay Nscale $45B for AI computing power (BBG)

• Data center backlash is slowing industry growth (BBG)

• Germany running short of AI compute capacity, Digital Minister says (BBG)

Augmented & Extended Reality

• Indra announces ‘transparent armor’ using AR solution for tanks (DIE)

Digital Engineering / M&S

• Space Force adopts digital engineering tool for nuclear command and control satellite program (ASF)

• Army awards $45.3M IDIQ to Sandtable for AI-powered M&S, planning tools (TD)

Deal Flow

Funds

• a16z raised $1.1B for Machine Age, its first dedicated AI hardware infrastructure fund (TC)

• OpenAI launched a second $400M VC fund to invest its own capital (TFN)

VC

• Chinese AI startup DeepSeek is set to raise $7.4B in a new funding round at a $74B valuation from Monolith, Shixiang Capital, CATL, and others (WSJ)

• Nvidia-backed AI cloud-computing provider Lambda is in talks to raise a $3B pre-IPO round (TFN)

• General Intuition, which uses gameplay data to train spatial-temporal models for robots and drones, is raising at a $6B valuation from Valor Equity Partners, Point72 Ventures, and Seven Seven Six (TC)

• Generalist AI, founded by former DeepMind and Boston Dynamics researchers , raised $200M led by 8VC, for models that teach robots new tasks from seconds of video (TC)

• Emerald AI raised a $150M Series A led by Energize Capital and DCVC at a $1.05B valuation for its platform to interface between power grids and data centers (BW)

• Alice (fka ActiveFence), an AI trust, safety and security company, raised a $140M funding round led by Apax Digital (PU)

• U.K. AI image generation startup Stability AI raised a $76M Series B from Universal Music, Sony Music, Warner Music, Electronic Arts, AMD Ventures, and others (TC)

• Deep Cogito, a post-training and reinforcement-learning research platform for frontier AI, raised a $43M Series A led by TQ Ventures (BW)

• Quintessent, a provider of AI data center optical interconnect products, raised a $40M Series A led by Cycle Capital (SA)

• Celera Semiconductor raised $30M from Maverick Silicon to accelerate development of custom analog and mixed-signal chips using AI (PRN)

• Keenable raised $26M led by Accel for independent, on-premises web-search infrastructure with historical web reconstruction for AI agents (SA)

• Perceptron raised $21M led by Bessemer Venture Partners for an open-weigh model combining visual understanding, embodied reasoning, and robot control(TC)

• Agentrys, a startup focused on agentic design automation for chip design, raised $24.5M comprising a $19M seed round led by Etna Labs and a $5.5M pre-seed led by MediaTek (BW)

M&A / Strategic Transactions

• Nvidia agreed to buy AI developer platform Hugging Face for $12.9B (CNBC)

• Anthropic abandoned a $7B bid for MatX -- but still wants the chip startup’s custom silicon (RT)

• nVent Electric will acquire data center equipment maker ​Maverick Power for $1.75B (RT)

Exciting Opportunities

• The Pentagon is looking for information on commercially available software-only cryptographic solutions to protect data in a post-quantum environment (SAM)

Editor’s Picks

• Bill Gates isn’t onboard with AI and he published a 6,000 word essay on why.

• Y Combinator founder Paul Graham and Anduril founder Palmer Luckey went at it on the topic of hiring foreign vs American people for tech jobs. Palmer has been debating the topic with high-profile figures to keyboard warrior randos all weekend. All on the timeline.

  • Update: there’s more.

  • Lobbyist group @USTechWorkers also chimed in with an essay on the debate at hand.

• Jacob Robbins at Pitchbook describes how a16z‘s new $1.1B fund is an admission that hardware is back to eating software and the world.

Lighter Side

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Ravi Penmetsa, Ph.D., founded SPDE LLC after more than a decade at the Air Force Research Laboratory, where he held several operational experimentation leadership roles, including Deputy Director of the Strategic Development Planning and Experimentation Office and of the Transformational Capabilities Office. He is a graduate of the Air War College.

The views expressed here are the author’s own, developed and written in his personal capacity and on his own time. They do not represent the views of any employer, agency, or the United States Government.

Last weekend at Tailhook, the Navy pulled the wrapper off the AIM-424 Malice, a two-stage, long-range air-to-air missile that reportedly reaches past 250 nautical miles and fits inside an F-35C’s weapons bay. By any engineering standard it is an achievement. Raytheon built it quietly and built it well, and it out-sticks every Chinese air-to-air weapon we publicly assess.

I left the Department of the Air Force two years ago. I have watched from the sidelines since, and Malice is exactly the kind of program that should reassure me. It doesn’t. Not because the missile is bad, but because of what it tells us about the fight we still think we are going to have.

Malice gives an American fighter a shot beyond 250 nmi. But China already fields the PL-17 with nearly as good of a range and is developing the PL-21 which is theorized to have a comparable or better range. Those missiles are only one part of a much larger counter-intervention architecture that includes persistent sensing, KJ-series command-and-control aircraft, long-range fighters, hypersonic anti-ship weapons, and even concepts for delivering attack drones by hypersonic missiles. To employ Malice against the aircraft that make that architecture work--the KJs, tankers, and Chinese fighters--the F-35C or F/A-18E/F may still have to operate inside the Chinese weapons engagement zones (WEZ).

Malice is a superb answer to the question how do we shoot farther from a manned fighter? That question presumes the fighter gets there, the tanker survives, the carrier stays inside its operating box, and the forward base is still generating sorties on day three or maybe day thirty. Those are the assumptions our adversary has spent twenty years and a national industrial strategy working to break. We keep buying better answers to a question they have already stopped asking.

Three words

I have been asking myself where are we challenged, and how? The answer comes down to three words: distance, domain, cost.

Distance: Long-range, high-speed, multi-mode seeker weapons now hold both air and maritime assets at risk from ranges that push our launch platforms outside their own effective envelopes. Distance is not just a weapons problem. It breaks our logistics: the fuel, the munitions, the maintenance, the airfields.

Domain: Global, persistent, multi-spectral sensing means the air, ground, and maritime assets we plan to hide are increasingly not hidden. Stealth was a bet on a particular physics and a particular processing budget. Both have moved.

Cost: Access to state-controlled, low-cost manufacturing lets an adversary amass capability at a rate we cannot match dollar for dollar. This is the one we most want to wish away. We cannot. A magazine of exquisite interceptors, however capable each round is, loses to a magazine that is ten times deeper and one-tenth the price and the arithmetic does not care about exquisite engineering marvel.

The low-end distraction

As a small business owner who helps other small businesses bring technology forward, I hear constantly about the low-end fight and the urgent need to energize the defense industrial base around UAS and counter-UAS.

That work matters and we should do it. But we should be honest about what it is. Cheap drones are not a technological miracle. Ukraine has produced dozens of iterations of the same basic capability, and our adversaries have demonstrated that volume production of small autonomous systems is a funding and direction problem, not a physics problem. Get it done. Do not mistake it for the next generation of military dominance, and do not let it absorb the share of American industrial imagination that ought to be pointed at something harder.

Because the harder question is the one nobody wants to sit with: Why have we arrived at a place where our ability to project power anywhere, anytime, can be challenged at all? And what will it take to get that back?

What we need is an imagineer

Not a program. Not another portfolio review. An imagineer, someone or a team with complementary skills chartered to define a future state that we define and we control, one that negates the adversary’s existing investments and puts them on the catch-up side of the problem.

That is the inversion we are missing. Today we design against the threat as it exists. We need to design toward a future in which the adversary wakes up and realizes that the capabilities they spent two decades and a trillion yuan fielding no longer produce their intended effects. Interoperability, battle management, command and control, 24/7 intelligence, and precision targeting are all necessary. None of them substitutes for that inversion. And no amount of squeezing a manned stealth fleet gets us there in a fight that challenges the basic assumptions of stealth and holds carriers and forward bases at risk across thousands of miles.

There are a select few inside the Department of War who understand this problem at that depth. That is the bench, and it is thin. What we do not have and what I never encountered in my time in the Air Force is an organization chartered to put the Nation’s innovators inside that discussion, immersed in the threat deeply enough to help redefine the future rather than compete for a slice of the present.

Four steps, and the fourth is the one that kills you

One: Assemble a team that lives and breathes the problem from the adversary’s perspective, and let them redefine the future state.

Two: Map the system-of-systems capabilities required for mission success in that state, not this one.

Three: Energize and incentivize America’s non-traditional industrial base against that map. This is where our real asymmetric advantage lives, and it is largely unspent.

Four: Decide what to defund to fund it, while retaining enough capability to handle the near-term threat.

Step four is where every version of this has died. It is also the only step that proves the first three were serious. For example, can we cap the tail end of the manned fighter buy at the number already on contract and move the outyear dollars to uncrewed platforms and the munitions they carry? Can we stop recapitalizing non-survivable enablers one for one, when the large-body tanker and the manned airborne ISR fleets are the very assumptions Malice depends on, and buying more of them at the same size and signature only buys more targets? Can we take military construction out of the bases we already know are ranged and put it into dispersal, hardening, and prepositioning across more places we can operate from? Can we close the exquisite interceptor lines whose per-round cost exceeds the cost of what they kill, when cost exchange is the entire argument?

None of these steps is hard to describe. What makes them hard to execute is personalities. This is an entirely personality-dependent workflow, the right leader, the right team, the right attitude, and, most importantly, the arrogance to believe they can change the world. We have historically been very good at producing that combination. We have recently been very good at organizing it out of existence.

What keeps me up

I sleep well knowing that our warfighters are the best and the brightest, and that they will overcome technological limitations through operational and tactical brilliance and keep us safe. They always have.

What worries me is the price we pay for that when brilliance is all we give them. What worries me is the price we pay for that when brilliance is all we give them. A nation that spends a trillion dollars a year on defense is fully capable of putting better tools in their hands. We should build the AIM-424 Malice. We should field it quickly, produce it at meaningful scale, and give American aviators every possible advantage. But we should not confuse restoring reach to the force with designing the force that the next war will require. Malice may make today’s fleet more lethal. It cannot, by itself, make that fleet survivable or sustainable. Our failure to design such a future force is not a question of capacity. It is a question of whether we are willing to stop paying for the last fight to win the next one..

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Epic Fury

• Early in war, Iranian F-5s reportedly bombed U.S. base in Kuwait (TWZ)

• Qatari PM to visit Tehran to pursue mediation efforts (RT)

• White House silent on Iran-Oman Hormuz plan that Tehran says would ban U.S. warships (FX)

News Headlines

• Rescue operations suspended as threat of new flooding rises in Nepal; at least 480 dead (NYT)

• Norway’s King Harald V dies at 89, Haakon VIII ascends the throne (AP)

• Swedish military seeks to take over Russian-owned estate near naval base (BBC)

• Fed-favored PCE inflation rose 3.7% YoY (CNBC)

• As Army Secretary considers stepping down, SecDef Hegseth considers pushing for Pentagon spokesperson Sean Parnell’s nomination for the role (TH)

• President Trump to declare U.K.-based protest group Palestine Action a global terror group (POL)

• N. Korea-Russia road bridge nears completion symbolizing new era of military cooperation (DN)

• China removes ex-top general Zhang Youxia from Central Military Commission (UAN)

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Defense & Dual-Use Technologies 

• The DoD will host an unmanned ground vehicle demo in October (DS)

• U.S. plans nuclear-powered merchant fleet to challenge China shipbuilding (MI)

• The Pentagon is employing MAGA influencers as ‘special government employees’ (TH)

• Army advances on-base microreactor push, tapping five firms to build them (DN)

• Navy establishes Office of Defense Industrial Base to lead effort bolstering supply chains and accelerating dual-use tech deliveries (DS)

• Navy unveiled AIM-424 ‘long rang’ (250nmi) air-to-air missile; Air Force closely following (ASF)

• Navy’s new anti-submarine torpedo will be a glide weapon (MT)

• Submarine maintenance delays cost 15,000 operational days and $3.4B: GAO (BBG)

Threat Tech

• Study: China can only meet 60% of wartime drone demand (IE)

• China’s J-16 fighter jet gets rare chance to face Rafales in Egyptian exercise (BBG)

• U.S. government lab is probing Chinese LiDAR for security vulnerabilities (TC)

• New installations emerge on islet as China accelerates militarization of South China Sea (RT)

• Chinese drone makers are betting that cheap, 3D-printed interceptors will be country’s next big export (FT)

• Russia is using Nvidia minicomputers to power AI-guided attack drones (NYT)

• Russia developed metal-cutting drone to attack Ukraine’s power grid (TDP)

• Putin sends relics of Grand Prince Dmitry Donskoy to Ukraine front to boost soldier morale and maybe get a magical advantage (TT)

Foreign Defense Tech

• Bangladesh nears $2.3B deal for Chinese J-10 fighter jets (TDP)

• Brazil lacks processing capacity and commercialization capabilities needed to loosen China’s magnet grip before 2032 (MP)

• Canada bolsters its defense industry as U.S. relations fray (AP)

• Dutch navy to equip fleet with Destinus C-UAS interceptor drones (DN)

• Patria to join with Ukraine’s General Cherry to make drones in Finland (DN)

• India wants in on France’s sixth-gen fighter program (DN)

• Japan approves mass production of 3D-printed interceptor drones (DN)

• Four countries sign framework to buy Polish made man-portable air defense system (DN)

• Taiwan president pushes $6.6B military drone bill ahead of crucial vote (RT)

• U.K. PM Burnham to hand long-range missile blueprints as he visits Kyiv (NPR)

• Ukraine hosted world’s first military drone parade as part of Independence Day celebrations (NN)

• Ukraine seeks ways to neutralize Russian drones to allow maneuver with its Western-provided armor (NYT)

• Ukraine’s newest ballistic missiles will be combat-ready by end of September (DN)

• Ukraine has emerged as a leader in Defense Technologies; its Delta software that orchestrates its drone army is one of the most advanced defense techs built (NYT)

Defense Industry

• Boeing inexplicably continues to win massive contracts including up to $131.2B for F-15 program (RT)

• Saab unveils stealthy supersonic ‘fighter drone’ concept (TWZ)

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Autonomous Systems 

• One year in, America’s counter-drone task force still has ‘a ton of work to do’ (DS)

Finance & Deal Flow

Funds

• Temasek-backed Singapore PE firm Azalea raised over $1B across three PE funds (BT)

VC

• Regent Craft raised a $240M Series B led by Mare Liberum and AE Ventures to bring its Seaglider manufacturing facility online (PU)

• CivilGrid, an underground infrastructure data platform, raised a $26M Series A led by Spark Capital (BW)

• Mantel, a carbon-capture company for heavy industry, raised an $18 million strategic investment led by Constellation Technology Ventures and Azimut Investments (PU)

• Autonomous trucking startup Gatik raised a $200M Series D led by QIA and Koch Disruptive Technologies (TC)

PE / M&A / Exits / Other

• Franco-German tank maker KNDS is set to restart investor meetings for a IPO this year which could secure a $15B valuation (BBG)

• Solstice Advanced Materials and Element Solutions mutually terminated their $14.5B merger (PRN)

• Apollo, IFM Investors, and KKR are the final bidders for a 64% stake in Canada’s CPPIB and OMERS-owned U.K. port operator Associated British Ports, which could fetch a $14B valuation (BBG)

• WRAP Technologies raised $12M in a direct placement to fund growth of its defense platform (TDP)

• The United States is in talks with Venezuela to take a major stake in oil fields (WSJ)

• Japanese insurer Tokio Marine Holdings is close to finalizing Australia’s Suncorp Group as an acquisition target after reviewing Suncorp, Insurance Australia Group and Canada’s Intact Financial Corp. (BBG)

• South Korea denied a report that the U.S. had proposed Korea acquire a stake in nuclear firm Westinghouse Electric (BBG)

Debt

• Italy has requested $9.3B in loans from the E.U. SAFE defense funding program (DN)

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Exciting Opportunities

• The Army is looking for 8,000 new short-range missiles similar to the Hellfire and the JAGM, per year (SAM)

Editor’s Picks

• Valerie Insinna of Breaking Defense outlines 13 key issues that Congress must resolve as it looks to pass the FY27 defense budget.

Lighter Side

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China has handed the United States an opportunity to score a massive win in the space race.

Hours before scheduled launch, China postponed the launch of its Chang’e-7 Lunar mission until at least 2027. Chinese officials attributed the decision to the need for “absolute success,” although they have offered few details about what caused the delay.

Chang’e-7 is an extraordinarily ambitious mission. Its orbiter, lander, rover, and specialized hopping probe are intended to explore the Moon’s south pole, including permanently shadowed craters where water ice may be accessible.

The south polar region remains largely unexplored. India’s Chandrayaan-3 became the first spacecraft to achieve a soft landing in the broader region only three years ago, while subsequent American commercial missions have demonstrated just how difficult landing there remains.

The region may also hold the Moon’s most readily accessible deposits of water ice—although how much usable ice actually exists remains uncertain.

That uncertainty makes exploration urgent.

China intends to use Chang’e-7 and the subsequent Chang’e-8 mission to prepare for an International Lunar Research Station in the 2030s. There is unquestionably a first-mover advantage in surveying the most valuable sites, emplacing communications and navigation infrastructure, establishing operating norms, and developing the practical ability to reach and use lunar resources.

China’s delay has created an opening—but a perilously narrow one.

Astrobotic’s Griffin-1 mission is currently expected to launch no earlier than November and deliver more than 1,100 pounds of cargo, including multiple rovers, to the Nobile region near the lunar south pole. If it launches on time and lands successfully, Griffin could place meaningful American mobility and infrastructure on the surface before Chang’e-7 arrives.

But Griffin has already slipped repeatedly, and Astrobotic has yet to complete a successful lunar landing. Blue Origin’s first Blue Moon Mark 1 mission now appears to have slipped into early 2027. NASA’s VIPER rover—cancelled in 2024 and subsequently revived through a still-contingent Blue Origin delivery—is not expected to arrive until late that year.

NASA Administrator Jared Isaacman should treat Griffin-1, Blue Moon Mark 1, IM-4, and VIPER as elements of a single south-pole campaign. He should protect their funding, remove unnecessary requirements, accelerate decisions, and give industry permission to accept prudent risk in pursuit of schedule.

The objective should be larger than beating Chang’e-7 to another landing. America and its partners should use this window to demonstrate mobility, survey valuable sites, deploy communications and navigation infrastructure, and establish the practical conditions for open access to the lunar south pole.

There are a lot of moving pieces, and lunar missions fail frequently. Acceleration will carry real risk.

But the greater risk is allowing a temporary Chinese setback to pass without taking advantage of it.

Taking some risk now could help ensure peaceful, open, and allied access to the Moon’s south pole for decades. We simply need to accept the gift we have been handed.

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Epic Fury

• Iran predicts ‘another defeat’ for U.S. after Washington’s new sanctions (F24)

• Treasury secretary Scott Bessent says secondary sanctions would ‘blow up the global financial system’ (TA)

• Iran, Oman agree on new temporary route in Hormuz (AlJ)

• China pushes back on Trump’s ‘economic D-Day’ Iran sanctions (AP)

• Secret Service aware of Iranian state media video threatening Barron Trump’s life (AP)

News Headlines

• CIA director John Ratcliffe traveled to Moscow for unannounced talks that last <2 hours (CBS)

• Forbes 30u30 founder Randall Lane was fired for wrongful $6M gift (WSJ)

• Lutnick’s intervention in Canada talks draws praise and blame (BBG)

• Trump admin proposes new $103,265 fee for H-1B visas including workers already in the U.S. (BBG)

• Canada sees long trade war with U.S. that may last beyond midterms (BBG)

• Trump approval falls to 33%, lowest of his presidency (RT)

• U.N. Secretary General: Superpowers are discovering their limits (FT)

• Kremlin advisor threatens attacks on U.K. drone factories (AlJ)

• Trump has submitted a civil nuclear agreement with Saudi Arabia to Congress for review (AP)

Satellites

Launches

Upcoming Launches

Space News

• Astronomers use rare ultra-magnetic star to prove ‘vacuum birefringence’ where a perfect vacuum alters the behavior of light (UT)

• AI finds six ways to print rocket-grade alloy on commercial 3D printers (PHYS)

• Chance discovery of new dwarf-planet 2017 OF201 beyond Pluto suggests possibility of hundreds more hidden objects in space (SD)

U.S. Federal Space News

• Golden Dome Caucus chair struggles to build support in Congress for program (DO)

• Space Force gets significant funding increase for missile defense (FNN)

• New space transportation policy focuses on increased launch rates (SN)

• NASA tests first-of-its-kind spacecraft navigation system that works without GPS (IE)

Commercial Space News

• Space startups raised $11.3B in the first half of 2026--more than during all of 2025 (PB)

• Aerospace demonstrates DiskSats in LEO (SN)

• CesiumAstro plans first Element satellite launch in October (SN)

• SpaceX is racking up big wins in D.C. (WSJ)

• SpaceX is planning a $100B ‘Starbase’ launch site in Louisiana (BBG)

• Trump has been daytrading SpaceX stock from the Oval Office--along with thousands of other trades (RT)

• SpaceWERX selects 11 firms for STRATFI award to scale tech for military space (SN)

Foreign Space News

• Europe cancels planned upgrades for Ariane 6 rocket (AT)

• China delays Chang’e-7 Lunar mission to 2027, due to need for ‘absolute success’ (AT)

• China’s reusable rocket breakthrough increases the resilience of its space enabled kill chains (MP)

• Germany’s Aerospace Center is designing a rocket designed to be nearly twice as efficient as SpaceX‘s Starship (BGR)

Electromagnetic Warfare

• Ukraine training shows NATO partner EW matters again (BI)

• Army publishes roadmaps for getting commercial EW tech into soldiers’ hands (BD)

• America’s newest EW aircraft deployed against Russian forces in Kaliningrad (MWM)

• Defense tech startup Regent tests EW payloads on its Squire seaglider in drills (TDP)

• CACI‘s new 61,000 sq ft manufacturing hub powers 300% surge in software-defined EW systems (IE)

• Valkyrie CCA demonstrates beyond-line-of-sight control and electronic warfare (MES)

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Deal Flow 

Funds

• Aussie VC Blackbird raised $715M for a targeted $900M sixth fund (PU)

VC

• Satellite startup Muon Space raised a $250 Series C led Eclipse Capital (SA)

• Starcloud, an orbital data center and in-orbit AI inference startup, raised a $250M Series A extension at a $2.3B valuation led by Manhattan West (BW)

• Japan-based Letara raised a $16M round led by Headline Asia, JIC Venture Growth Investment, and Incubate Fund to develop large hybrid propulsion rocket systems (TC)

• Light Links, an optical wireless communication company, raised a $6M pre-seed round led by Outlander (BW)

• Chinese RF intelligence startup StarRF raised an undisclosed Pre-A+ funding round led by state-owned investor Luxin Venture Capital to advance its constellation of satellites for detecting and geolocating RF emissions from orbit, following more than $100M in recent international awards (SN)

PE / M&A / Exits

• Ursa Major to go public in $2.3B SPAC deal with Bleichroeder Acquisition Corp. III (PRN)

Exciting Opportunities

• The Defense Logistics Agency is looking for material or process substitutes or drop-in replacements that relieve supply-chain single points of failure including for national security space systems (SAM)

• The U.K. MoD is looking for industry support to create Alt-PNT capabilities through ‘satellite signals of opportunity’--the opportunistic use of existing satellite signals not designed for navigation (JO)

Editor’s Picks

• breaks down the differences between passive and active radar.

• U.S.-China space competition expert explains China’s strategic plan for space superiority and what that entails.

Lighter Side

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America is changing its tactics in dealing with Iran.

Faced with mounting casualties, potentially critical shortages in munitions, and little domestic support for a protracted war, President Trump is returning to an instrument the United States has employed against Tehran for decades: economic warfare.

America has changed tactics in dealing with Iran. With mounting casualties, potentially critical shortages in munitions, and low domestic support for the war, President Trump is returning to economic warfare. Iran has endured years of sanctions, which have unquestionably imposed heavy financial and political costs. Nevertheless, these sanctions have so far failed to force Iran’s regime to truly change course.

Sanctions have proven effective at containing Iranian ambitions but far less effective at compelling the country.

Today, the administration is expected to dramatically intensify that pressure through what President Trump has referred to as ‘Economic D-Day.’ The centerpiece appears to be an expansion of secondary sanctions designed to force third-party governments and companies to choose between commerce with Iran and access to the dollar-based financial system.

The most important target may be China.

China conducts billions of dollars of trade annually with Iran and is Iran’s largest oil customer, importing millions of barrels of oil, per day. Those purchases have fallen sharply under the American blockade, down nearly 2/3rds, but they continue to provide Tehran with an indispensable economic lifeline.

Beijing has already warned that it will take whatever measures necessary to protect its ‘economic rights’ in the face of the U.S. threat. This warning raises the prospect of significant horizontal escalation: an economic offensive intended to isolate Iran could expand into a much larger confrontation between the United States and China over oil, shipping, and access to the international financial system.

Meanwhile, it’s important to note that traffic in the strategic chokepoint of the Strait of Hormuz remains approximately 90% below pre-war levels. Fewer than 20 commodity vessels transited the strategic chokepoint over the weekend, despite President Trump’s recent assertions that he now considers the strait to be a U.S. territory.

Returning to the idea of escalation, President Trump suggested another potentially significant escalation. After Treasury Secretary Scott Bessent unexpectedly doubled planned bond repurchases, President Trump was asked whether he had discussed additional interventions. His extraordinary response? ‘The ultimate intervention is our military. And if we have to use that, we will.”

The charitable explanation is that the octogenarian politician misunderstood the question or confused the bond market with the confrontation over Iran. A more disturbing possibility is that he was sincerely suggesting the U.S. could use military coercion against foreign governments whose Treasury sales threaten American borrowing costs. We expect it was the former but the comment was sufficiently incoherent that we cannot rule out the latter.

Finally, Washington’s economic confrontation is spreading north.

Trade negotiations with Canada broke down late last week, leading to a non-official declaration of a trade war as the United States is poised to impose 50% tariffs on our neighbor. Canadian Prime Minister Mark Carney has pledged ‘dollar-for-dollar’ reciprocity. It’s fair to say they’re effective at containing Iranian ambitions but ineffective at forcing true change—at least, so far.

Economic power can provide an alternative to military escalation. The indiscriminate use of it, however, risks multiplying the number of fronts on which the United States is competing.

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Epic Fury

• More than 750 U.S. troops wounding in Iran war, nearly half since July (TP)

• Trump says he views Strait of Hormuz as ‘American territory’ (TG)

• Israel did not give U.S. warning ahead of recent Syria air strike (AP)

• Iran warns states joining U.S. sanctions will be considered enemies (F24)

• China vows to protect its rights and interests as U.S. readies Iran sanctions (RT)

• Iranian parliament advances plans for Hormuz service fees (AlJ)

• Iran threatens 45 tankers with fines, confiscation in Hormuz escalation (RT)

• Saudi oil logistics roiled again by Houthis’ Red Sea threat (BBG)

• Uganda, Burundi military officials visit Israel to discuss Gaza troop deployment (AP)

News Headlines

• Russia tests readiness for new round of military mobilization (WSJ)

• U.S. imposes 50% tariffs and Canada prepares retaliatory tariffs as neighbors edge towards trade ware (ABC)

• Trump threatens to use the military on bond markets (YN)

• Trump alleges he did not direct Bessent to intervene in bond market (RT)

• N. Korea preparing further Russia troop deployments, no sign move imminent: Seoul (RT)

Quantum Tech

• Quantum sensors made from diamond defects that map electromagnetic fields could be integrated into existing microelectronic systems (IE)

• 98-qubit trapped ion quantum computer performs computations impossible on largest supercomputers (ZME)

• Study identifies 11 user types for QC (QI)

• China is testing quantum sensing, comms, and computing in its power grid (QI)

• Researchers explore quantum gravity sensing for mapping underground mineral deposits (IE)

AI / ML

• SOCOM commander: AI-enabled deception threatens future operations, raises chances of large conflict (DO)

• Army cyber chief reveals AI task force building agents to ‘hunt’ in the DOD network (DS)

• AI-guided drone killed three Ukrainians (NYT)

• OpenAI revenue grew only 18% in Q2 while Anthropic doubled (WSJ)

• Anthropic is preparing supervoting power for founders ahead of IPO (RT)

• OpenAI unveils ChatGPT for teens with stronger guardrails and parental controls (RT)

Compute

• Pennsylvania became latest states to regulate data center construction (WSJ)

• Data centers increasingly using wastewater for cooling, validating Jason Kelce’s humorous commercial for Liquid Death and Garage Beer (TC)

• U.S. CFTC seeks comment on AI compute futures contracts (BBG)

• Chinese AI firms are accessing advanced Nvidia chips through data centers in Southeast Asia, skirting U.S. export controls (CNBC)

Digital Engineering / M&S

• MIT researchers develop AI models that learn physics more efficiently (SCW)

• Babcock, Dassault join forces to accelerate digital engineering (EME)

• Digital tools, modeling are improving rail tunnel construction (JCB)

• AI tool upscales satellite imagery for M&S (HD)

• Researchers propose QC-driven digital twins for simulating complex, large networks in IoT applications (N)

Deal Flow

VC

• Perplexity is in talks to raise funding from Nvidia at an over $30B valuation (RT)

• AI chip startup Etched raised a $700M Series D at a $21B valuation led by Jane Street (GNW)

• AI chip startup Fractile is in advanced talks to raise a $600M round at a $6.5B valuation led by Lightspeed and Redpoint (BBG)

• Velaura AI, a semiconductor company commercializing ultra-low-power computing for AI, raised a $110M Series A at a $1B valuation led by Seligman Ventures (BW)

• Veeda AI, a startup building world models for physical AI, raised a $90M seed round led by Khosla Ventures and Radical Ventures (SA)

• Relativity Networks, a hollow-core fiber startup, raised $22M in SAFE note funding from Rhapsody Venture Partners, Bell Ventures, Faster Than Glass, and others (PRN)

• Astromech, an evolutionary biology AI company, raised $20M at a $3.8B valuation led by biotech investor Bob Nelsen (PU)

• Anything AI, a startup building AI agents and a no-code app-building platform, raised an $11M round at a $100M valuation backed by Footwork, Uncork Capital, Bessemer Venture Partners, and M13 (BZ)

• Synthefy, a structured data foundation-model company, raised a $6.5M seed round led by Wing Venture Capital (PRN)

PE / M&A / Exits

• SpaceX reportedly approached AI coding startup Cognition about an acquisition; the startup is in funding talks for a $40B valuation (BBG)

• Semiconductor firm Marvell Technology agreed to give Google rights to buy $12.2B of shares in exchange for purchasing chips (RT)

• Nvidia will acqui-hire AI startup Poolside for $6B and also invest $1B at a $12B pre-money valuation (BBG)

• Thai construction firm Stecon Group plans to bid for three data-center construction projects worth a combined $1.5B (BBG)

• 8090 Industries-backed AI infra company Nscale is looking to raise up to $3B in its U.S. IPO (BBG)

• Mark Cuban-backed physical AI firm Fort Robotics will merge with Newbury Street II Acquisition Corp. at a $557M enterprise valuation (PRN)

• Nvidia is in early talks to acquire Korean AI chip designer Rebellions (DCD)

Exciting Opportunities

• DARPA is looking for new computational methods for modeling fluid motion under extreme-scale hydrodynamic conditions (SAM)

• The Army is looking for agentic AI to automate cyber defense activities (SAM)

• The Air Force is looking for an AI-driven solution to automate classification and declassification of data for JADC2 (SAM)

Editor’s Picks

• Harvard Kennedy School Intelligence Project’s director of research Calder Walton offers a new approach for addressing Chinese research espionage.

Lighter Side

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This week, U.S. debt surpassed $40T for the first time.

This number should trouble you.

We’re borrowing money at a pace that we cannot match with economic growth, even as interest compounds. To make matters worse, our political leaders (and some of our tech leaders) keep promising that prosperity will make the math work.

Treasury Secretary Scott Bessent has claimed that there’s ‘nothing magic’ about the $40T threshold. He’s also claimed that we can just ‘outgrow’ the debt.

We cannot.

To be certain, growth is a critical part of solving this debt trap we’re in, but it’s not going to do it on its own.

The Congressional Budget Office (CBO) estimates that our federal deficit will hit 5.8% of GDP this year. With debt standing at 101% of GDP, we’d have to grow the nominal GDP by at least 5.7% annually, just to keep the debt burden from rising more.

The Fed targets 2% annual inflation, meaning that the real GDP growth needs to be roughly 3.7% annually—more than twice what the CBO predicts from 2027 through 2036.

So yes, improving economic growth will improve the situation, but it won’t allow us to outrun the debt. Faster growth improves tax revenues and improves the denominator in calculating the debt-to-GDP ratio. But, it doesn’t accommodate the widening deficits unless growth reaches levels that would be absolutely staggering for a mature, aging economy like ours—and then remain there for decades.

You may recall the President cheered inflation earlier this summer.

That’s because inflation creates an appearance of success.

Current-dollar GDP grew at a whopping 7.9% annualized rate in Q2 of this year. Real growth, though, was only 1.5%. The difference came largely from rising prices, with average hourly wages failing to keep pace over the past year.

So, inflation offers a path of temporary relief by shrinking the value of the existing fixed-rate debt relative to the nominal GDP. It also forces investors to demand higher yields as that debt gets refinanced. Interest costs then grow, the deficit gets bigger, and the supposed ‘solution’ just exacerbates the underlying problem.

This is the debt death spiral.

Debt is a National Security Constraint

America’s military power rests on our productive capacity and our ability to pay for action during crises.

The CBO projects net interest costs will rise from ~$1T this year to $2.1T by 2036 (and as we’re seeing acceleration in the debt, it will likely be sooner and higher). By then, interest will nearly equal all federal discretionary spending. Every additional dollar we pay to service our debt is a dollar that could have gone to shipyards, munitions, space architecture, AI, infrastructure, or to the next black swan event.

We are at serious risk of a budgetary crowding out.

Wars are unpredictable, but one thing is almost certain. They will be expensive. Historically, we’ve financed them through debt.

If our finances are already strained, we will struggle to mobilize industry, absorb the economic shocks, assist allies, or otherwise sustain a protracted conflict.

China and Russia have been watching our performance over the past six months in Iran and they fully understand our constraints. Even Iran figured it out quickly. That’s why they moved to impose costs while dragging out the conflict, waiting for us to exhaust critically short resources and domestic patience.

What’s more, U.S. Treasury securities anchor the global financial system. The yields from these bills, notes, bonds, and TIPS influence costs around the world. As our financial position weakens, investors demand greater compensation for the risk, meaning that financing becomes more expensive globally.

And, at some point, confidence gets shaken too deeply. When that happens, the consequences will travel through reserve holdings, exchange rates, investment flows, and other economies.

The world has a vested interest in America addressing its debt deliberately because a disorderly ‘deleveraging’ will lead to a global crisis.

Everything, All at Once

Despite political talking points, there is no single-policy escape from this debt death spiral.

And, as we’ve pointed out before, AI won’t save us either.

Yes, we must continue to pursue real economic growth through productivity, investment, energy abundance, improved infrastructure, and techmaxxing.

But we must also cut government spending.

That realistically will require addressing mandatory spending like Social Security and Medicare. These and other benefit programs can’t remain sacred cows, outside the conversation when the constitute the largest and some of the fastest-growing portions of the budget. We can and must phase-in reforms and ensure we protect the most vulnerable Americans. But, delaying reform will only make the eventual adjustment more painful.

Discretionary spending must also face scrutiny. And that absolutely includes defense. National security does not require writing blank checks to the Pentagon. It requires deliberate prioritization of capabilities, capacity, and manpower that actually generate military power while simultaneously moving money away from obsolete structures and programs.

And there’s one more critical lever that we must pull to solve this debt problem: taxes and government revenue.

Spending cuts that are sufficiently large to fix the deficit without increased revenues risk damaging the productive capacity and national power we desperately must preserve.

Taxes, therefore, must be part of any real solution.

Of course, not every tax increase makes sense. California’s proposed one-time 5% wealth tax illustrates how aggressive and poorly designed policies can encourage capital flight, even before enaction.

But there’s also a persistent myth that cutting taxes will produce sufficient growth to replace the lost revenue. The CBO estimates that the 2025 reconciliation act (the One Big Beautiful Bill) increased economic output while still adding ~$4.7T to projected deficits.

America needs tax policies that preserve incentives for investment, entrepreneurship, and innovation while generating sufficient revenue to finance the government. That could include broader tax bases, fewer loopholes, more consistent treatment of different types of income, and targeted rate increases.

We’ve historically had some of our most prosperous periods in American history with significantly higher tax rates than today.

This chart above depicts GDP growth by quarter. The 1950s saw an incredibly fast-growing American economy. Tax rates also remained highly elevated with the top federal income tax rate remaining above 70% and up to 90%. Today, the top federal income tax rate is around 40%. Similarly, individual capital gains taxes in the 1950s hovered around 25-26%, about a quarter higher than today.

In other words, it is more than possible to have sensible, capitalistic tax policies that reduce the deficit and still allow strong economic growth.

There’s also a political imperative here, too. Cutting benefits for working- and middle-class Americans while preserving every tax advantage available for our wealthiest delegitimizes our country. It’s already leading to an acceleration of socialistic sentiment. Failing to address underlying concerns of disaffected voters doesn’t erase the concerns. It calcifies them. Fiscal consolidation must be credible AND broadly seen as being ‘fair.’

The only path out of this economic mess is a coordinated one that combines sustained real growth, fiscal discipline, expanded revenues, and interest costs that grow more slowly than the economy.

This is a ‘beautiful deleveraging’ and provides the only real ‘soft landing’ for our economy and our government.

It’s critical for our national security and for continued global prosperity.

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Epic Fury

• Trump declares ‘economic D-Day’ against Iran (AP)

• U.S. urges allies, China to join economic pressure campaign against Iran (F24)

• U.A.E. suspends trade with Iran after coming under renewed missile fire (AP)

• Iran threatened to strike U.S. bases in Europe if Trump escalates war (FT)

• Israeli strikes hit an air base hours after a Turkish delegation visit, Syrian officials say (AP)

• Israeli military launches criminal probes into killings of Gaza Palestinians (AP)

• U.S. aircraft carrier arrives in Middle East, relieving beleaguered U.S.S. Lincoln (AP)

• U.S. destroyed a lost Reaper drone after crash landing in Middle East (TP)

News Headlines

• U.S. national debt breaks $40T threshold in first (AP)

• PACOM left without aircraft carrier as U.S.S. George Washington joins CENTCOM for Iran fight (NIK)

• Bessent warns of further bond market interventions (RT)

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Defense & Dual-Use Technologies 

• New NatSec S&T Strategy clarifies military tech priorities: undersea, outer space, and AI (BD)

• Drone companies, admin leaders meet for first White House ‘Drone Dominance’ meeting (BD)

• DIU expands Bridge Program to speed tech adoption and strengthen industrial capacity (DIE)

• Navy investigates 4-day power failure on destroyer in South China Sea (TP)

• Navy mulls renaming aircraft carrier after Trump instead of heroic black sailor (NBC)

Threat Tech

• Top Beijing economic planning agency official urges militarization of Chinese maritime militia (IE)

• U.S. military funding propelled China’s robot dogs (RT)

• Russia is expanding its long-range strike drone network (TWZ)

• Russia tests missiles in and around Japan’s Northern Territories (TG)

• Emboldened North Korea launches dozens of ballistic missiles, after Trump cuts joint military exercises with South Korea (AP)

Foreign Defense Tech

• German drone maker Helsing enlists Rakuten to broker Japan military deal (BBG)

• Germany opens new drone research center (DW)

• Germany’s first F-35A completes final assembly (TDP)

• India now forms a key part of Israel’s weapons supply chain (TG)

• U.S. approves possible $4.5B sale of KC-46A tankers, equipment to Qatar (MT)

• South Korea’s highly mobile 155mm artillery system wins U.S. Army howitzer contract (TWZ)

• Switzerland seeks additional $1.2B for air defense in 2026 budget (DN)

• Taiwan floats record defense budget sending message to U.S. and China (WSJ)

• Audit reveals Taiwan drone defenses fall short against PLA’s evolving tech (MP)

• Ukraine’s homegrown Equalizer glide bomb provides affordable air-launched standoff (TWZ)

Defense Industry

• Navy awards $22.9B contract to Raytheon to boost Tomahawk production (RT)

• Women at L3Harris shared concerns about CEO years before firing (WSJ)

• State Department to partner with Palantir, Anduril on free speech initiative (FP)

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Autonomous Systems 

• DARPA came close to finding a drone that can lift 4x its weight (DN)

• Army will shut down European unit focused on learning drone warfare (AP)

Finance & Deal Flow

VC

• Castelion raised a $1B Series C at a $13B valuation led by Carlyle, JPMorgan‘s Strategic Investment Group, and a16z (WSJ)

• Smack Technologies raised a $61M Series B led by Costanoa Ventures and First In to deploy its tactical AI platform (PRN)

• Nigerian startup Terra Industries raised a $52M seed round with participation from 8VC, Silent Ventures, and Nova Global to build defense infrastructure for the global south (TC)

PE / M&A / Exits / Other

• U.S.-backed consortium Orion CMC is in talks to invest $500M for a minority stake in Kabanga Nickel, a large nickel project in Tanzania (BBG)

• Defense tech firm Lyntris fell 14% in its trading debut after raising $297M for a $1.6B market cap in a downsized IPO (BBG)

• Drone firm Ondas will acquire Aran Defense for $33M (JP)

Debt

• French defense company Thales sold a $1.2B bond to help fund its acquisition of maritime robotics firm Exail Technologies (BBG)

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Exciting Opportunities

• The Air Force is looking for target drones that can mimic stealth jets (SAM)

Lighter Side

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Thirty-two years ago, Soundgarden predicted it with their summer smash from the album Superunknown.

This week, astronomers actually found it: a black hole sun.

These black hole stars are supermassive stars that produce energy comparable to what a black hole produces. Essentially, in the early universe, massive and dense clouds of gas—larger than our entire solar system—formed around black holes. These are incredibly powerful mashups bringing all of the power of both a massive star and black hole.

Closer to earth, concerns continue to grow over space debris.

A U.S. Air Force flight to Antarctica was forced abandon its flight and return to New Zealand. While the exact cause remains unconfirmed, it appears that the most likely culprit leading to the flight’s abandonment was concerns of space debris.

The government is paying attention.

The Defense Innovation Unit and Space Development Agency awarded contracts to three firms to design and test capabilities to deorbit expended satellites under a ‘deorbit-as-a-service’ model. The three firms are D-Orbit, Firefly Aerospace, and Katalyst Space.

While this is a critical step, it does not solve the full-scope of challenges facing us in orbit and particularly the challenge posed by small debris. There are more than 140 million pieces of debris from 1mm to 10cm, nearly all of it smaller than 1cm. This small debris is still capable of causing serious damage to spacecraft. In November, debris struck the Chinese Shenzhou-20 space capsule, effectively stranding three taikonauts in space longer than expected.

Speaking of China, they’re preparing to launch their Chang’e-7 robotic lunar probe this weekend.

The probe’s mission is to search for ice and water at the Lunar south pole.

If the mission is successful, China will be the first to find water on the Moon and will notch a significant achievement in the growing space competition with the United States.

Anyway, take a moment and watch the video of this absolute banger from 1994, and then get back to work and keep building!

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Epic Fury

• U.S.-Iran talks collapse (again) as U.A.E. suspends trade with Tehran (F24)

• Iran’s attacks on ships in Hormuz mount, testing U.S. military restraint (WSJ)

• Netanyahu, Kushner agree U.S. general to verify Hamas disarmament before Israel withdraws from Gaza (F24)

• Houthi threat to Red Sea shipping rises (WSJ)

• Trump threatens to bomb Oman (WSJ)

News Headlines

• Trump defends his move to cut back on U.S., South Korean military exercises (WP)

• South Korea hopes for talks between U.S. and North Korea after Trump downsizes military exercises (AP)

• Dept. of Justice probes VC firm a16z over antitrust concerns related to board director seats (BBG)

• L3Harris ousts CEO Chris Kubasik over unspecified ‘conduct’ (WSJ)

• Pentagon threatens to cut funding to 30 universities over foreign academic partnerships (TG)

Satellites

Launches

Upcoming Launches

Space News

• Astronomers discover a brand-new type of astrophysical object: a black hole star (MIT)

• Panelists points to cost, production as key challenges for space nuclear power and propulsion (AA)

U.S. Federal Space News

• SPACECOM Deputy: U.S. must fuse missile warning and defense to defeat future threats (TWZ)

• Iran war reveals protection of space assets on bases has to ‘evolve’ (DO)

• The Pentagon is getting a ‘satellite sweeper’ that can roam three orbits (TDP)

• Space Force, Japan launch sensor to bolster space surveillance above Indo-Pacific (MT)

• Suspected space debris forces U.S. Air Force to abandon flight to Antarctica (NZH)

• DoD expands R&D on clearing expired satellites from orbit (BD)

Commercial Space News

• Satellite operators panic over worsening launch crunch (AT)

• Space-based interceptor contractors passed first Golden Dome milestone: Guetlein (BD)

• Astranis unveils geostationary surveillance satellite (SN)

• HEO to use Planet Labs satellites for non-Earth imaging (AVW)

• Northrop, Aeronix launch partnership to develop cryptographic systems for space-based defense platforms and satellite networks (IE)

• FCC retracts 7 million U.S. Starlink subscriber figure (PCM)

• SpaceX now exceeds 11,000 satellites in LEO (SFN)

Foreign Space News

• Japan prepares a mission to the Martian moons (JT)

• China’s space program is about to give the U.S. a wakeup call (AT)

• China’s LandSpace lands rocket booster; joins SpaceX, Blue Origin with reusable tech (RT)

• Kyiv faces missile barrage after Ukraine strikes on Russian satellite network (TG)

Electromagnetic Warfare

• New U.S. Space Force EW unit pairs multiple weapon systems in a first (ASF)

• Nigeria tests ‘all-in-one’ EW capability against rogue drones (TDP)

• U.S. Army leaders draft ‘guiding document’ to ask industry for new intelligence, electromagnetic spectrum operations capabilities (BD)

• Australia deploys new MC-55 EW jet for first time, heads to South China Sea (TWZ)

• Japan looks toward drone-mounted stand-in jammers (AMR)

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Deal Flow 

Funds

• GD1 made a first close of $33.5M ($NZ60M) for GD1 Core Fund II, a new fund focused on early-stage companies including in space tech (PU)

VC

• Stoke Space is raising a $1B Series E, following its $860M Series D which closed in February, to fund its Nova fully-reusable rocket (BBG)

• NeoGeo, an Indian geospatial technology startup, raised a $20M Series A led by Neev II Fund and Aavishkaar Capital (ISN)

• Princeton Critical Minerals, a clean technology startup accelerating lithium production from brine sources, raised an $11M Series A led by SOSV HAX (DR)

PE / M&A / Exits

• SpaceX completed it previously announced $60B acquisition of AI company Cursor (BBG)

• U.S. rocket company Astra ‌Space is seeking to raise $250M at a $1B valuation in a fresh funding haul (RT)

• CesiumAstro buys semiconductor specialist Jariet Technologies to boost constellation plans (SN)

Debt

• ULA inks $1.5B private bonds--triple the original planned size (BBG)

• Canadian satellite operator Telesat raised a $120M term loan this month as it prepares to deal with $2B of debt coming due (BBG)

Editor’s Picks

• wonders if Hughes‘ filing for Chapter 11 bankruptcy could increase the risk that SpaceX runs afoul of antitrust law.

• Former DIU Director Doug Beck explores why America’s defense tech revolution hasn’t won the tech race, yet.

• offers a step-by-step look at how reflected electromagnetic energy becomes range, velocity, direction, and a targetable track.

Lighter Side

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America’s young men didn’t start drifting away from work when ChatGPT appeared. Yet, a new New York Post article places AI at the center of an alarming story: labor-force participation among men ages 16 to 24 has fallen from 69% in 2000 to 56.1% today, leaving a generation vulnerable to disaffection and further technological displacement.

However, the New York Post places too much weight on AI for this decline, which actually began more than two decades before generative AI emerged.

In fact, the latest Bureau of Labor Statistics report doesn’t show a sudden AI-driven exodus. Participation among young men was slightly higher in July than a year earlier, while their unemployment rate was lower. The alarming reality only comes into focus when we zoom out and observe a 25-year trend that began long before generative AI exploded in late 2022. The BLS data also mixes students with workers: a person who is in school and not seeking a job is outside the labor force, but he has not necessarily dropped out of productive life. And a person who is not looking for work is not ‘unemployed’ under the BLS definition; instead, he is outside the labor force, skewing the numbers.

A more careful analysis by the American Institute for Boys and Men makes the picture both less sensational and more troubling. Much of the participation decline reflects longer schooling and delayed workforce entry. The share of young men neither working nor in education or training rose only modestly, from 10% in 1990 to 12% in 2025. But the share who are not in school, not employed, and most importantly not seeking work doubled from 4% to 8%. That is not wholesale withdrawal, but it does represent a growing core of deep detachment.

AI Arrived Late to This Crisis

AI may eventually eliminate entry-level tasks, compress white-collar hiring, and accelerate job churn. Young people certainly believe it will: a recent CNBC–Generation Lab poll found that 45% expect AI to hurt their careers, while only 10% expect it to help. Perception matters politically, even before causation is established.

But the older forces are better documented. Import competition, earlier waves of automation, and declining demand for noncollege male labor weakened the jobs that once offered a ladder from adolescence to stability. Recent employment growth has concentrated in health care and social assistance, fields in which men remain underrepresented. College is more expensive, a degree feels less certain, housing is harder to attain, and the milestones of adulthood arrive later—or not at all.

The current cost squeeze compounds that frustration. Consumer prices rose 3.4% over the year ending in July, slightly faster than the 3.2% growth in average hourly earnings, while energy prices rose 14.7%. Gasoline was roughly $4.08 a gallon when President Trump told Americans to accept higher prices as the cost of his deeply unpopular Iran war. Whatever the strategic argument, the political message lacked empathy for households already struggling. Economic pain becomes combustible when leaders appear unable—or unwilling—to recognize it.

Disaffection Does Not Choose an Ideology

While the correlation between unemployment and radicalization is well documented, unemployment alone does not manufacture extremists. Research linking youth unemployment to domestic terrorism finds that the relationship depends on conditions such as corruption, ineffective government, and weak rule of law. A broad review of radicalization research likewise finds that simple demographic factors are weaker than alienation, social networks, attitudes toward legitimacy, and prior antisocial behavior.

History offers the same warning. Economic distress helped turn the French monarchy’s fiscal crisis into revolution, and mass unemployment shattered the Weimar political center. Yet Germany’s unemployed did not move uniformly toward Hitler; many backed the Communists, while austerity and middle-class insecurity also drove Nazi support. Hardship only creates political availability that other forces mobilize toward a specific destination.

That mobilization is what should concern us now.

Gallup found that 45% of men ages 18 to 29 who often or always feel lonely said political violence can sometimes be acceptable. Income itself showed no relationship. Social isolation, heavy social-media use, exclusion, and weak national identity mattered more. A man without work is not inherently dangerous. A man without work, status, community, or a believable future is easier for a movement to recruit.

For better or worse, the destination is not predetermined. The CNBC poll found 46% of Americans ages 18 to 34 viewed democratic socialism favorably. Meanwhile, a large Tufts survey found young men moving left and right in nearly equal shares. Their common condition is not ideology. It is the search for an order that appears capable of acting.

We must reject both socialism and authoritarian populism. They are not identical, but they offer equally inadequate answers to disaffection. Socialism concentrates economic power in the state, while authoritarian populism concentrates political power in a leader and movement. Neither addresses the core grievances drawing people toward these movements and neither creates the shared identity or agency that a free society requires.

Build a Stake in America

America is allowing increasing numbers of young men to detach from productive life while its shipyards, factories, energy projects, and defense suppliers plead for welders, machinists, technicians, and engineers. We have both a social deficit and an industrial labor shortage. We can—and should—address them together.

Washington, employers, educators, and states should treat young Americans’ attachment to work and community as national-resilience infrastructure.

Congress and the administration should create a national pathways compact built around paid apprenticeships in shipbuilding, munitions, advanced manufacturing, energy, construction, cyber, and other strategic sectors. Companies receiving defense contracts, industrial subsidies, or major tax incentives should make measurable commitments to train and hire early-career workers. Schools and community colleges should receive funding based on durable employment outcomes, not enrollment alone.

The country should also establish a voluntary national-service program with military and civilian tracks. Civilian participants could serve for one year in disaster response, conservation, infrastructure, care work, or cyber defense. Participants should earn wages, portable credentials, and education or housing benefits, while serving in deliberately mixed cohorts from across the country. This would build skills, but its deeper purpose would be common identity: a renewed experience of citizenship among people who increasingly encounter one another only through algorithms.

This crisis didn’t come from AI. It has gradually developed as institutions allowed work, independence, and belonging to slip beyond the reach of increasing numbers of Americans.

The liberal-democratic center will not survive on lectures about extremism.

It will survive only if we give young people a stake worth defending.

We must build that stake now, before movements offering an enemy, an ideology, or an escape become more compelling than the country itself.

Keep building,
Andrew Glenn
Founding Editor, Building Our Future

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Epic Fury

• Iran has put out a $30,000 bounty on U.S. soldiers (F24)

• U.S.-Iran ceasefire set to expire with talks at a standstill (POL)

• Trump says record-setting carrier deployment ‘not nearly long enough’ (TME)

• Israeli strikes kill eleven in southern Lebanon (BBC)

• Israeli hardliner Ben-Gvir advocates killing ‘30 to 40’ people in Gaza nightly (AP)

• Jared Kushner to hold talks with Netanyahu after meeting Hamas leader (TH)

News Headlines

• Depleted strategic oil reserve nears level that raises concerns about damage to caverns, operations (CNBC)

• Trump orders Pentagon to scale back joint exercises with S. Korea, citing good relationship with Kim Jong Un and S. Korea’s unwillingness to attack Iran (AP)

• Deputy Nat’l Security Advisor Andy Baker to leave White House (TH)

• Sen. John Fetterman (D-PA) warns against socialism’s insidious rise in Democratic Party (TH)

Quantum Tech

• Enterprise users spent $300M on quantum in 2025, outspending research labs and governments combined (WSJ)

• World’s first superconducting quantum heat engine could help unlock massive quantum computers (SD)

• Oracle, Quantinuum partner to bring QC to cloud (RT)

• DARPA funds advancements in quantum networking through Qunnect (NG)

• Canada establishes quantum hub for future defense technologies (TDP)

• Saab, Aquark Technologies complete world-first Quantum Timing radar trial (DJ)

AI / ML

• U.S. Navy tests AI-powered submarine hunter (MT)

• Report: Air Force should regard AI as readiness issue across critical career fields (MT)

• DIA’s AI chief envisions ‘agent-to-agent’ interactions that support military operations (DS)

• Open-weight AI won’t crimp demand for picks and shovels (WSJ)

• Hyperscaler AI borrowing binge shakes up foreign credit markets (FT)

• Improving RAG outcomes starts with deciding what never reaches the LLM (VB)

• DeepSeek‘s top ranked V4 Flash stumbles on real agent tasks as its prices surge (VB)

• AI is driving up treasury yields (BBG)

Semiconductors / Chips

• Wall Street giants bet Nvidia’s AI chips will defy the laws of finance (FT)

• U.S. urges Apple not to buy Chinese memory chips (WSJ)

• Chinese national pleads guilty to trying to export U.S. military hardware to China (MP)

Deal Flow

Funds

• S. Korea to launch $3.5B chip fund, speed development of semiconductor hubs (RT)

• Thrive Holdings, the OpenAI-backed firm AI roll-up investment firm, raised $2B in new funding at a $12B valuation from SoftBank, D1 Capital Partners, and Altimeter Capital (TC)

• AI-focused 224 Ventures launched with $100M and plans to raise over $80M for its early-stage core fund; Meta’s ex-chief AI scientist Yann LeCun joined the firm (BBG)

VC

• OpenAI bought back $7B worth of employee shares at an $852B valuation (TC)

• Databricks raised a $5B Series M at a $190B valuation led by Coatue (RT)

• River AI, the 2-month old personal AI startup of xAI co-founder Igor Babuschkin, raised $1.1B led by General Catalyst ​and AMP (TC)

• AI video generation startup Higgsfield raised a $450M round at a $5.4B valuation from DST Global, Goldman Sachs, Intel, and others (PRN)

• Swedish AI vibe-coding startup Lovable raised a $400M round at a $13.3B valuation led by Menlo Ventures and the Scaleup Europe Fund (TC)

• Vals AI, a model-evaluation startup, raised a $40M Series A at a $400M valuation led by a16z (PU)

• Trajectory, an AI research lab, raised a $40M round at a $300M post-money valuation led by Sequoia (TI)

• AGent Energy, an AI-driven distributed power plants developer, raised an $11M seed round co-led by Spero Ventures and MassMutual Ventures (PU)

PE / M&A / Exits

• Anthropic investors expect the startup to IPO at a $2T valuation (WSJ)

• Nvidia will invest up to $3B for a 30% stake in Blackstone-backed ​power infrastructure developer Lancium (QZ)

• Nvidia is in talks to invest $3B in SB Energy, a SoftBank subsidiary developing ‌an Ohio data center project for OpenAI (TI)

• Chip packaging firm Amkor Technology is considering a sale of its China business which could fetch $1B-$1.5B (BBG)

• Anthropic is in talks to acquire real-world AI startup Decart for $6B (BBG)

Debt

• Nvidia halved its OpenAI data center backing from $250B to $120B (WSJ)

• AMD is seeking to raise $4B-$5B in a bond sale (RT)

• AI infrastructure company CoreWeave raised a $2.6B DDTL (BW)

Exciting Opportunities

• The Army is looking for commercially available, accredited cross-domain solutions for data movement across unclassified, secret, and top secret networks (SAM)

• DARPA is looking for photonic-based computing and signal-processing algorithms (SAM)

Editor’s Picks

• Pax VC‘s explores the valuation trap that has made its way to the deeptech space.

• National Security reporters from the New York Times worry about America’s haphazard approach to AI in defense, as our adversaries charge ahead.

• Anthropic CEO Dario Amodei tried to bury his wife’s somewhat sordid history, the Wall Street Journal uncovered it.

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Jordan Blashek is a deep tech, defense, and space ventures investor, operator, author, and Marine Corps veteran. He is a general partner at Overmatch Ventures, the chairman of Endless Frontiers, and co-author of Union: A Democrat, A Republican, and a Search for Common Ground. Follow him on LinkedIn or X.

Hundreds of billions of dollars have poured into defense tech over the past several years. As a result, new defense-tech companies are launching every day. Whenever that much capital chases a single sector, you create the conditions for a bubble.

And as many have commented, that’s exactly what’s happening right now.

You have defense-tech startups raising Series A rounds at $300 million or $400 million valuations with no recurring revenue, no meaningful long-term contracts, and, in many cases, little more than a vision. Case in point, last month Reuters reported that four former DOGE staffers had raised $160M at a $1.4B valuation for a pre-product company. The plan? Maybe to acquire a data center that could be used for AI cyber operations.

Those valuations are built on speculation about what we all hope the market could become rather than what it is. The problem is that the defense market itself isn’t nearly as large as people assume. Yes, the U.S. defense budget is enormous. But that headline number is doing a lot of work in pitch decks right now.

The Real Market Size for Defense-Tech

The Trump Administration’s 2027 budget request is $1.5 trillion. But that is not the defense-tech market. The actual funding lines to buy new technology come only from procurement and RDT&E dollars, which the FY27 request puts at roughly $760 billion combined (and more than a third of that depends on a $280 billion reconciliation package Congress hasn’t passed yet). The durable base is closer to $480 billion. Everything else, including pay and benefits, operations and maintenance, healthcare, facilities, is off the table.

Within the $480 billion, most modernization dollars are already spoken for. Shipbuilding, munitions, aircraft, and nuclear modernization flow through programs of record that are sole-sourced or effectively closed to new entrants. The five legacy primes still capture the vast majority of these obligations.

So for the genuinely contestable slice of the pie (i.e., autonomy, drones, software, sensing, space), the FY27 request carves out roughly $54 billion for autonomous systems and $39 billion for drone procurement. That is real money. But those are requests, not appropriations, and even appropriated dollars will likely flow mostly to established players.

If we look backwards, we can see how this plays out.

In FY25, federal obligations to all VC and PE-backed national-security companies totaled $4.3 billion. At the same time, nearly $50 billion of venture capital invested in the sector last year. More than ten dollars went in for every dollar of government revenue that came out.

So the honest sizing isn’t $1.5 trillion. For new entrants, funded, scalable program revenue is a single-digit-billion market today that might reach the low tens of billions by decade’s end. Now divide that market across hundreds of venture-backed startups.

The math simply doesn’t support the sky-high valuations today.

There’s another reality investors often underestimate: the government doesn’t want to manage hundreds of niche vendors. It prefers working with a relatively small number of trusted, reliable prime contractors and systems integrators with experience on the battlefield. That’s how procurement works.

So as capital pours into defense tech, more and more founders are launching companies to chase a market that, in reality, is much smaller than their valuations can justify.

Eventually, there will be a reckoning. And my bet is that it’s coming in the next 18 months.

Many of these companies won’t make it beyond Series B. They’ll struggle to raise follow-on rounds because they have already priced themselves too aggressively, and the next investors won’t support those valuations. The capital simply won’t be there.

When that happens, founders will have one real option: consolidation.

What Consolidation Will Look Like

The rumblings are already starting. Several companies in the past year have made the leap into the public markets via SPACs or microcap-IPOs (see Merlin Labs, Elroy Air, and Swarmer). Others are testing the waters with peers and investors about M&A. The Primes and Neo-Primes have been making significant acquisitions with M&A activity up 40% in 2025, and 166% in Q1 2026.

Here is what I think the consolidation wave will look like:

• At the top of the market, there will be mergers of mutual convenience among well-positioned peers. This will look like two or more venture-backed companies combining complementary technology and contract bases to reach production scale neither could hit alone. These conversations are already happening, and the best companies are initiating them from positions of strength.

• Next, recapitalizations driven by excessive valuations. Companies with real technology but broken cap tables will take structured rounds or outright recaps that reset valuations and wash out preference stacks so new capital can come in clean. While painful for earlier investors, these may be the only path to survival for companies that pushed valuations up too high too fast.

• Then acquisitions by the primes and by the new mega-startups. These giants will function as acquirers of last resort for high quality teams, technology, and contracts, which have no other options.

• Then the rollups. Several private-equity firms are already assembling capital to build platforms around scaled anchor companies, which can then tuck-in niche vendors for component parts, test infrastructure, sustainment, and software. Expect much more of this as prices fall (see Carlyle, Capital Meridien, and Advent).

The companies that survive won’t necessarily be the ones with the biggest valuations today. They’ll be the ones that reach a meaningful scale. And increasingly, the fastest path to scale won’t be organic growth — it will be mergers.

A Test For Who Survives

Here are five questions that I would be asking:

• Do you have real revenue? The color of money matters here. Startups that have a funded program of record, an appropriated line, or production orders with follow-on demand behind them count are in a good position. A pilot, SBIR, prototype OTA, or strategic partnership may be useful, but it is not the same thing. Most defense startups can show that the government likes their product. Far fewer can show that the government has made room in the budget to buy it at scale.

• Do you own your customer relationships? A company with its own prime contract has leverage and a path to expand. A subcontractor that depends on another company to carry its product into the program is in a precarious position. That intermediary can squeeze margins, replace the technology, or bring the capability in-house. If your product reaches the warfighter through someone else’s contract, you may have revenue, but you do not control it.

• Does your technology work reliably in the field? Defense-tech has to deliver in the harshest conditions reliably for the warfighter. Demonstrations are a good step, but your tech has to be deployed in the field with proven results to be relevant.

• Do your unit economics scale? Venture capital can subsidize early units and make weak economics look better than they are. Fixed-price production removes that cushion. It exposes the true cost of labor, materials, rework, supplier risk, and working capital. The test is whether the fiftieth system arrives on time, carries a real margin, and comes from a supply chain you can rely on.

• Do you have enough runway? Good businesses get stranded by bad structures. If the company is priced too high to fund and too encumbered to merge, operating progress may not be enough to save it.

Four or five yeses, and you’re in a great position to scale. Two or three, and you should be looking to take aggressive action now, and potentially to merge from strength. Fewer than two, you’re selling a story, and that story is likely to be repriced by the market sooner than later.

Experienced founders already understand this. They recognize that today’s window isn’t about maximizing valuation; it’s about building something durable. They’re taking action now, before the market forces the issue. Because eventually, many of today’s venture-backed defense startups won’t disappear. They’ll simply be recapped, merged, and absorbed into a much smaller number of companies.

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Epic Fury

• Tehran says Strait of Hormuz ‘under Iran’s control’ after Trump threatens U.S. might ‘keep it’ (CBS)

• Israeli military says it targeted a Hamas commander planning attacks in Gaza (RT)

• CIA had ‘low confidence’ in Iranian threat to Air Force One, but it being better safe than sorry, Trump switched planes (WP)

• New aircraft carrier heads to Middle East after reports of issues on long-deployed Lincoln (AP)

• U.S. has lost 25% of its Reaper drone fleet in Iran war (WP)

News Headlines

• Karoline Leavitt to step down as White House press secretary this month (AX)

• India says border peace critical for ties with China amid reports of military tensions (RT)

• Trump is considering calls for capital gains tax cuts (BBG)

• Inflation ticked up with the CPI rising to 3.4% (CNBC)

• Turkey lays out plans for defense pact with Pakistan and Saudi Arabia (RT)

• Putin visits disputed Kuril Islands, adding pressure on Japan (WSJ)

• U.S. presses allies on ideological loyalty ahead of troop cuts (BBG)

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Defense & Dual-Use Technologies 

• Pentagon gives industry 21 days to submit plans for ‘significantly faster’ weapons production (MT)

• Th government is recruiting tech companies to help fight its cyber battles (POL)

• DARPA developing hypersonic cruise missile to evade enemy air defenses (MT)

• Trump orders Navy to return to steam catapult for launching jets off aircraft carriers (AP)

• U.S.S. Theodore Roosevelt becomes first carrier with built-in unmanned air warfare center (DN)

• Ukrainian drones wipe out entire U.S. tank brigade in live war game (AT)

• POTUS signs orders to overhaul America’s shipbuilding industrial base (NI)

Threat Tech

• Drones are suddenly appearing around America’s Indian Ocean Diego Garcia base (TWZ)

• Russia’s recent Pacific Fleet exercise provides insights on supersonic P-800 anti-ship cruise missile (MWM)

• Germany military chief warns that NATO defenses are facing Russian drone test (SS)

• Chinese scientists claim to have created an unbreakable crystal using carbon nanotubes (MP)

Foreign Defense Tech

• Europe’s faltering defense stocks rally is tipped to reignite (BBG)

• Australia to buy sophisticated U.S. air-to-air AIM-260 JATM missiles (DN)

• German industry’s resilient streak continues despite lingering uncertainty with productivity rising (WSJ)

• Vietnam starts building largest homemade anti-submarine warship (RT)

Defense Industry

• BAE Systems to pay $36M fine after 104 violations of U.S. arms export regulations (TG)

• BMNT to power the human engine of SOCOM’s rapid acquisition consortium (PRN)

• Boeing, Northrop unveil low-cost intercept tech (BD)

• Flock announces changes amid backlash over its license plate reader network (AP)

• Palantir is winning contracts without having to bid, and their pipeline is growing (NG)

• Raytheon wins $745M contract for SM-3 IIA interceptors (NN)

• Raytheon pursues long-range, low-cost UUV with HADALUS vehicle in partnership with CET (TDP)

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Autonomous Systems 

• U.S. to impose tariffs on drone imports (RT)

• U.S. Soldiers, Marines test explosive drones in S. Korea (MT)

• U.S. Army explores 50mm chain gun for counter-UAS (AVW)

• Marine Corps to get ‘production-ready’ microwave drone swarm killer (DN)

Finance & Deal Flow

Funds

• Layer Global, the VC firm of ex-General Atlantic president Anton Levy, raised $1.1B for its debut fund (TI)

• Industrial PE firm Continuim Equity Partners raised $550M for its third fund in just 32 days (PBR)

VC

• UK low-cost drone startup Cambridge Aerospace raised a $300M Series C at a $3.4B valuation led by DFJ Growth (AX)

• Neros Technologies, a defense technology company, raised $250M in new funding at a $2.5B valuation led by Sequoia (BBG)

• Riven Systems, an early-stage critical minerals processing startup, raised $7.9M led by Cerberus Ventures (AX)

PE / M&A / Exits / Other

• Korea’s Hanwha Aerospace made a preliminary offer to acquire Australian shipbuilder Austal‘s US operations for $1.2B (BD)

• Teledyne Technologies to buy Varex Imaging for $1.1B (WSJ)

• Trive Capital-backed Sensor technology company Lyntris is seeking to raise $530M at a $2.5B valuation in an IPO (PRN)

• AEVEX has agreed to acquire BlackSea Technologies for up to $250M in cash and $350M in stock to expand their multidomain autonomous systems offering (BW)

• Archer Aviation will acquire the Wisk, SkyGrid, and Insitu units, which develop technology for flying taxis and drones, from Boeing in exchange for a 20% stake (RT)

• Air taxi firm Joby acquired defense tech firm Resonant ​Sciences for $500M (AX)

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Exciting Opportunities

• DON’T MISS: A dual-use VC is nearing its final close for its Fund II. Fund I was a top decile fund for its vintage, with 39% Net IRR. They’re holding space for a few select family offices and institutional investors. Reply to this email for more information!

• The Army is looking for a VTOL UAS with 5+ hour endurance for battalion-level reconnaissance missions (SAM)

• The Strategic Capabilities Office is seeking partners to help it detect adversary cognitive domain operations and generate counter narratives (SAM)

Editor’s Picks

• Watch: Maxionomics’ Phil Andrews explains why socialism fails using the single best case study ever.

• Epirus and CX2 cofounder @Nathan Mintz predicts a looming consolidation in defense tech.

• @BMNT president Brian Miller explains how SOCOM’s consortium, through the SOF RACER effort, kills the consortium tax and broadens the pool of innovation.

• CSIS staffers Alek Jovovic and Katy Buda welcome the recent pivot in investments going to undersea technologies as recognition of growing importance and threat of that domain.

Lighter Side

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Only months after raising a whopping $729M Series D++, iSpace has announced a $148M first tranche of its Series E. Space Star Technology raised $297M, led by HongShan (formerly Sequoia China). And Orienspace raised hundreds of millions of Yuan.

This latest surge in space financing signals more than investor enthusiasm for the sector.

Beijing is mobilizing capital across launch, reusability, production, and orbital infrastructure to build a deeper and more resilient space-industrial base alongside its traditional state-owned champions, like CASC.

That China suffered a launch failure of a Long March-7A doesn’t really threaten the broader trajectory; instead, it helps illustrate why China is funding multiple pathways to orbit before any single failure can constrain its ambitions.

To be blunt: China is treating space competition as an industrial-mobilization problem, while the West still too often treats it as a series of programs, demos, and best on individual champions.

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Epic Fury

• Trump pivots back to sanctions for Iran as other strategies to end war fizzle (AP)

• Former IRGC commander Mohsen Rezaei appointed as Iran’s security chief (AlJ)

• Strait of Hormuz traffic falls to new low as Iran-backed Houthis kill 6 in Red Sea (CBS)

• Hopes of any Iran deal are fading (BBG)

News Headlines

• Another nuclear power plant disabled--this time by jellyfish swarm (BBG)

• Congressional Budget Office warns U.S. debt service payments reach $3B per day! (FTN)

• Russia releases former U.S. Marine, held in detention for more than 4 years (NPR)

• Norway’s $2T SWF says entire value could disappear in market collapse (RT)

• Resilient Europe turns into a winning bet for investors (BBG)

• Former Biden Secretary of Air Force Frank Kendall to sue administration over security clearance revocation (TH)

• European drought is hindering Germany’s economic recovery (DW)

• Moderate Democrat keeps socialism in check in Wisconsin gubernatorial primary (NYT)

Satellites

Launches

Upcoming Launches

Space News

• Research team creates synthetic quasar data to train AI algorithm on gravitational lensing (UT)

• Scientists have released the biggest two-dimensional map of the universe, which took 263,407 photos to make (NSF)

• Most detailed images ever taken of sun’s surface are also revealed (NASA)

U.S. Federal Space News

• Bipartisan Senate bill would sharpen Space Force training for conflict with China (SN)

• The U.S. Senate confirmed Douglas Schiess as the next Chief of Space Operations (AFT)

Commercial Space News

• Blue Origin narrowing in on root cause of catastrophic rocket accident (AT)

• Firefly pushes debut of Alpha Block 2 rocket to Q4 (SFN)

• ICBM killer passes two key tests ahead of design review, Lockheed claims (DO)

• Northrop CEO says Sentinel backlog rose by $7.6B, with first integrated flight planned for 2027 (DIE)

• Redwire has booked SpaceX Starfall’s first dedicated mission (AVW)

• Environmental groups challenge FCC approval of Reflect Orbital‘s plan to beam on-demand sunlight from space (NBC)

• Rocket Lab unveils GHOST, its rapidly deployable, responsive launch system (SP)

• SpaceX increasing footprint in missile defense (SN)

• SpaceX declines Ukrainian request for Starlink support to deep strikes in Russia (U24)

Foreign Space News

• Chinese Long March-7A rocket explodes during comms satellite launch (BBG)

• A Chinese satellite captured video of SpaceX rocket debris crashing into the moon (MP)

• Kyiv warns Russia is rolling out Rassvet, its Starlink-style network faster than expected (RT)

• Russia’s space program is highly dependent on Chinese hardware (TR)

• Ukrainian strikes on Russian space enabling infrastructure are weakening Russia’s space program (UP)

Electromagnetic Warfare

• Chinese scientists use AI and metasurfaces to rewrite what radar sees (EA)

• Australian firm develops handheld device that reads the electromagnetic battlefield (TDP)

• Ukraine strikes Russia’s newest $1.5M Starlink-jamming EW system near Black Sea Cost (KP)

• Parsons wins $40M EW national security contract (EB)

• China’s transport aircraft can play combat roles, turn into electromagnetic warfare platform (IE)

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Deal Flow 

Funds

• VC firm Accel raised $3.5B across four funds for global early-stage investments (YF)

• David Sacks’s Craft Ventures is seeking to raise $1B for its first fund since leaving the Trump administration (TI)

VC

• China-based Space Star Technology raised a $297M Series D led by Sequoia China to expand its TT&C and ground in-o0rbit service offerings (DR)

• Chinese reusable launch company iSpace raised the first $148M of its planned larger Series E round, less than six months after its massive, $729M Series D++ round (SN)

• Chinese space startup Orienspace announced a pre-Series C round worth several multiples of $15M, as it prepares for IPO (SN)

• Endeavor Optical Networks emerged from stealth, having raised a $10.8M seed round co-led by General Catalyst and a16z to build a constellation of optical communications satellites in MEO (TC)

PE / M&A / Exits

• Blackstar Orbital Technologies, a company developing a reusable spacecraft platform, will merge with Pono Capital Four at a $380M valuation (ST)

• Indian space startup GalaxEye acquires StarOps to strengthen satellite engineering with in-house production and two launches scheduled in next two years (ISN)

• ETL Systems acquired Amphinicy Technologies to expand SatCom opportunities, in an undisclosed transaction (SE)

Debt

• ULA is reportedly planning a $500M private placement to refinance its debt (YF)

Exciting Opportunities

• Air Force Research Laboratory is looking for information on potential solutions to enhance Rocket-Based Combined Cycle propulsion technologies (SAM)

• DARPA is looking for micro-scale inertial sensing architectures for GPS-denied navigation (SAM)

• The Naval Research Laboratory is looking for end-to-end IT and scientific-computing support for its Space Science Division (SAM)

Editor’s Picks

• FPRI president Aaron Stein explores Russia’s approach to ASATs and why they’re willing to risk LEO for everyone.

Lighter Side

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Epic Fury

• Iran denies any direct talks with U.S. on opening Strait of Hormuz (CNBC)

• Iran issues warning to Gulf states: U.S. must desist or you’ll be hit hard (RT)

• Trump denies key munition shortage in war with Iran after reports (TG)

• Yemeni Houthis increase attacks against Saudi targets (AP)

• Israeli PM Netanyahu outright rejects Trump’s Hamas disarmament plan (AP)

• Trump apparently thinks Netanyahu is just playing ‘reelection games’ but secretly supports the deal (TOI)

• Oil prices climb as Iranian demands cloud outlook for Strait of Hormuz (AlJ)

News Headlines

• Leipzig drone bomb was found near Ukrainian plane carrying ammunition, say police (TG)

• U.S. productivity rose faster than expected in Q2 (RT)

• Avocado Wars: Mexico deployed 1,500+ troops to secure avocado heartlands (AP)

• Turkey’s Erdogan continues his decade-long power grab, this time using new, sweeping cyber laws (FT)

• Romania extends nuclear power plant output by 9 days following explosive blasts to increase Danube flow (BBG)

• SecDef Hegseth strips former SecAF Frank Kendall of his security clearance for alleged leaks over Air Force One program (WSJ)

• STDs surge in Europe (TE)

Quantum Tech

• Amazon researcher claims quantum algorithm could challenge PQC foundations (QI)

• Engineers build world’s first portable diamond-powered quantum computer (LS)

AI / ML

• New ‘adversarial’ pattern can prevent surveillance cameras from detecting (TC)

• Pentagon appoints new Maven Smart System program director in fresh push for C2 integration (DS)

• OpenAI, Anthropic AI agents implicated in new security breaches (RT)

• Pentagon exploring AI to monitor military inmates’ phone calls (DS)

• Jamie Dimon is leading a new cross-industry effort to tackle AI risks (RT)

• ByteDance founder told staff to avoid AI distillation (RT)

• OpenAI is seeking to dismiss of Apple's trade secrets lawsuit (RT)

• Meta AI model hacked another company during testing (RT)

Semiconductors / Chips

• A 0.42-nanometer breakthrough could push transistors beyond silicon (SD)

• Anthropic is hiring an AI chip design team (TC)

• Musk’s massive Terafab chip-making facility starts to take shape (THW)

Deal Flow

VC

• Source Foundry raised a $400M round from embattled Situational Awareness to make chip manufacturing cheaper and faster (TC)

• U.K. AI chip start-up Olix raised a $312M Series B at a $3.3B post-money valuation led by Fundomo (DCD)

• Volta Infra Holdings, a UK Nvidia-backed AI infrastructure company, raised a $300M round at a $2.4B post-money valuation led by a16z and Altimeter (BW)

• Chinese optical connectivity firm Adtek Technology is close to raising $300M in a pre-IPO round from Singapore SWF Temasek, Morgan Stanley‘s PE arm, and Asian investment firm CPE (BBG)

• Acrab, an agentic AI compute infrastructure company, raised a $130M Series B with continued support from Vertex Ventures SEA & India (FSME)

• Discovery Loop, an AI startup focused on automating scientific discovery, raised a $100M seed round co-led by Radical Ventures and Khosla Ventures (TC)

• AI security startup Obsidian Security raised an $85M Series D at a $1.1B valuation led by Crescent Cove ​Advisors (RT)

• WindBorne Systems, a weather intelligence company building an atmospheric sensing network and AI forecasting models, raised a $37M Series B co-led by Khosla Ventures and Galvanize (PU)

• ETH Zurich spin-out ZuriQ raised a $25.5M seed round led by Quantonation to scale 2D trapped-ion quantum processors (QI)

PE / M&A / Exits

• Musk’s SpaceX and Musk’s Tesla will invest $17B to build Musk’s Terafab, an advanced AI semiconductor complex in Texas (RT)

• Google is in talks to acquihire AI coding startup Mechanize for $1.5B; the startup raised a seed round just four months ago (SA)

• Swiss PE firm Partners Group agreed to buy a majority stake in AVK Power Solutions, a UK-based power solutions supplier for data centers, starting with an initial $1B investment (BBG)

• U.K.-based AI cloud firm Nscale is planning a U.S. IPO for September; the startup was last valued at $15B (BBG)

Lighter Side

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From reports that the U.S. has burned through most of its long-range precision inventory during the Iran fight, to plans to dramatically expand Patriot and THAAD production, Lockheed hunting for domestic critical mineral supplies, and persistent jet-engine manufacturing problems, we’re realizing that the limiting factor of American power is whether we can produce, sustain, and replenish equipment and munitions at scale.

At the same time, China is pushing AI deeper into operational systems, North Korea is reportedly deploying missile units directly into Russia’s war, Japan and Australia are accelerating force modernization, and Ukraine continues building alternatives to scarce Western capabilities.

Tech still matters (clearly). But, the countries, companies, and alliances that manufacture, finance, integrate, and replace capability fast…

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China is accelerating the militarization of AI, with Xi Jinping pushing for ever increasing intelligentization through the adoption and use of AI/ML and autonomous systems. Efforts to curb Chinese company access to advance chips continues to fail, as it was revealed this week that Moonshot AI’s Kimi model has used more than 20,000 advanced Nvidia chips through Alibaba and plans to rely even more hea…

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It’s just another day in the space office.

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It is nearly 100: the number of American service members injured since hostilities resumed two weeks ago. Four more service members have been killed in the days since the ceasefire collapsed.

Those figures do not capture the full human cost of the war’s first phase, from February through May, when the Pentagon recorded hundreds more injuries and 14 prior deaths. They do, however, describe the character of this renewed phase with uncomfortable clarity: this is not a brief aftershock to a war already won.

It is a live conflict in which American forces are again absorbing casualties, Iran is still able to strike regional bases and commercial shipping, and the United States has conducted more than a week of consecutive strikes. And there is little evidence that the trend is reversing.

Nevertheless, the administration continues to present Epic Fury as little more than a punitive operation: force applied to restore…

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