Core Insights - GE Aerospace and Shield AI have entered into a collaboration to develop propulsion technologies for Shield AI's X-BAT vehicle program, utilizing the F110-GE-129 engine with advanced Axisymmetric Vectoring Exhaust Nozzle (AVEN) [1][2] - The partnership aims to accelerate the integration of advanced propulsion technologies into autonomous systems, enhancing the capabilities of the X-BAT, which is designed for contested environments [2][3] - GE Aerospace's F110 engine has a proven track record with over 11 million flight hours and is recognized for its reliability and thrust capabilities, making it suitable for the VTOL design of the X-BAT [4] Company Overview - GE Aerospace is a leader in aerospace propulsion and services, with an installed base of approximately 49,000 commercial and 29,000 military aircraft engines, and a workforce of around 53,000 employees [6] - Shield AI, founded in 2015, focuses on developing intelligent systems to protect service members and civilians, with products including the V-BAT and X-BAT aircraft [6]

Core Insights - Stack Capital Group Inc. reported its financial results for Q3 2025, highlighting a strong capital position and ongoing investments in high-growth technology companies [1][2]. Financial Summary - Book Value per Share ("BVpS") was $14.26 as of September 30, 2025, down from $14.34 at June 30, 2025 [4]. - Total Book Value reached $188.7 million [4]. - The company raised $35 million through a private placement during the quarter [4]. Portfolio Company Highlights - Stack Capital made significant investments in technology companies, including: - OpenAI: Invested US$8.0 million, focusing on generative AI and enterprise AI deployment [3]. - Databricks: Invested US$2.1 million in a unified cloud-based platform for data and AI workloads [9]. - PsiQuantum: Invested US$0.5 million in developing a silicon photonic quantum computer [9]. - Valuation of SpaceX increased from US$350 billion to US$400 billion during the quarter [4]. - Canva's valuation rose from US$32 billion to US$42 billion [4]. Management Commentary - The CEO of Stack Capital noted a robust IPO environment and strong momentum in private markets, particularly in AI, defense, and robotics, indicating attractive investment opportunities [5]. Breakdown of Book Value per Share - The detailed breakdown of Book Value per Share as of September 30, 2025, includes: - CoreWeave, Inc. (AI hyper-scaler): $2.37 - SpaceX: $2.28 - Canva, Inc.: $1.30 - Other notable investments include Locus Robotics, Omio, Hopper, and OpenAI, contributing to the overall Book Value per Share of $14.26 [5][6].

Core Insights - HII and Shield AI have successfully completed the first major test of their integrated autonomy solution aboard HII's ROMULUS unmanned surface vessel, marking a significant step towards operational deployment of the AI-enabled ROMULUS fleet [1][2][3] Group 1: Test Details - The three-day test, conducted in late October in Virginia Beach, Virginia, integrated Shield AI's Hivemind autonomy software with HII's Odyssey autonomy suite onboard a ROMULUS 20 USV [2] - This test represents the first maritime deployment of Hivemind, which enables AI-powered mission autonomy across various domains [2][8] - The successful integration was achieved in less than six weeks after the partnership announcement, showcasing rapid adaptability and strong collaboration between the two companies [3][4] Group 2: Technology and Capabilities - ROMULUS is a modular, high-performance USV line designed for fast production and operational flexibility, with the lead vessel, ROMULUS 190, currently under construction [7] - ROMULUS 190 is designed to exceed 25 knots and operate up to 2,500 nautical miles, carrying four 40-foot ISO containers and featuring both Odyssey and Hivemind for next-generation autonomous performance [7] - Hivemind enables unmanned systems to perform complex missions in GPS- and communications-denied environments, expanding its capabilities into the maritime domain through this partnership [8][10] Group 3: Strategic Importance - The integration of Hivemind and Odyssey into the ROMULUS fleet aims to enhance multi-agent autonomy and intelligent operations, allowing seamless operation alongside crewed strike groups [8][10] - Delivering autonomy across domains is crucial for maintaining a credible deterrent posture in today's complex geopolitical environment [9] - The collaboration between HII and Shield AI is expected to accelerate the development of advanced autonomous solutions, leveraging HII's maritime expertise and Shield AI's autonomy technology [10][12]

Core Insights - Shield AI has developed a pilotless fighter jet equipped with the Hivemind system, showcasing superior performance in air combat compared to human pilots [1][5] - The AI fighter jet can withstand 9G overload without any adverse effects, operates without the need for rest, and processes data at millisecond speeds, significantly outpacing human reaction times [1][5] - The aircraft features vertical takeoff and landing capabilities, allowing it to operate from unconventional locations such as cargo ships and remote islands, enhancing its strategic deployment [1][3] Technical Capabilities - The AI fighter jet has a combat radius of 2000 nautical miles, equivalent to a round trip from Beijing to Hainan, indicating strong endurance [3] - It is designed to operate effectively in electronic warfare environments, with the ability to continue functioning even when disconnected from networks, utilizing multiple backup algorithms for problem-solving [5] - The aircraft is equipped with advanced sensors, including radar and infrared, to create a comprehensive battlefield picture, surpassing human visual capabilities [5] Operational Considerations - The AI's authority to engage in combat is limited; it can perform reconnaissance and evasive maneuvers but requires human confirmation to fire, addressing concerns over autonomous decision-making in combat scenarios [7] - The introduction of this AI fighter jet has sparked significant interest in the military sector, as it offers a cost-effective alternative to traditional manned aircraft, which are expensive to train and maintain [7] - Countries like the US, China, and those in Europe are in a competitive race to develop similar technologies, with initiatives like the US "Skynet" program and Europe's "Future Combat Air System" advancing rapidly [7] Ethical and Regulatory Challenges - The deployment of AI in military applications has raised ethical concerns, prompting discussions at the United Nations about establishing regulations to prevent potential misuse [9] - The debate surrounding the use of AI in warfare reflects broader societal concerns about technology, balancing innovation with safety and ethical considerations [9] - The emergence of AI-driven combat systems may lead to a future where human pilots transition to roles as AI commanders, fundamentally changing the landscape of aerial warfare [9]

Westin: This is the third story in our series on where artificial intelligence is already making a difference. Last week, it was teachers using AI in the classroom. This week is the effect it's having on the huge bureaucracy that is the U.S. military, where it's not so much what is already deployed as it is changing the entire theory of warfare and how to prepare for it.-The future of war is going to come when you take that very large quantity of vehicles and robotic systems and marry it with an intelligenc ...

Core Insights - L3Harris Technologies, Inc. is recognized as one of the top defense contractor stocks to invest in [1] Group 1: AI-Enabled Drone Detection System - On September 22, 2025, L3Harris Technologies successfully demonstrated an AI-enabled drone detection system at the Department of War's Technology Readiness Experimentation event [2] - The system showcased the ability to detect hostile drones more quickly and at longer ranges compared to existing systems, even when drones are partially obscured by buildings or clouds [3] - The drones utilize L3Harris's WESCAM MX-Series electro-optical/infrared sensors, integrated with Shield AI's Tracker counter-UAS software, enhancing targeting systems with autonomy and passive detection capabilities [4] Group 2: Company Overview - L3Harris Technologies provides end-to-end technology solutions that connect various domains including space, air, land, sea, and cyber to meet global national security needs [5]

Core Insights - HII and Shield AI have announced a partnership to enhance modular, cross-domain mission autonomy, aiming to combine their respective technologies for advanced autonomous solutions [1][2][3] Company Overview - HII is the largest military shipbuilder in the U.S. with over 135 years of experience in advancing national security, providing capabilities from ships to unmanned systems and AI/ML technologies [8][9] - Shield AI, founded in 2015, focuses on defense technology with a mission to protect service members and civilians through intelligent systems, operating globally with multiple offices [9] Partnership Details - The collaboration integrates Shield AI's Hivemind mission autonomy software with HII's Odyssey suite, targeting the development of next-generation autonomous solutions for U.S. and allied forces [2][3] - Hivemind software is designed for unmanned systems to perform complex missions reliably in challenging environments, with initial applications focusing on unmanned surface vehicles (USVs) and expanding to unmanned undersea vehicles (UUVs) [6] - HII's Odyssey software supports operations across unmanned aerial vehicles (UAVs), USVs, and UUVs, allowing for rapid integration of various technologies and enhancing operational capabilities [7] Strategic Goals - The partnership aims to accelerate the future of autonomous operations, providing U.S. and allied forces with enhanced speed, flexibility, and resilience in various environments [3][6] - Both companies view this collaboration as a significant step towards redefining maritime operations and advancing autonomous capabilities at scale [6]

Group 1 - OpenAI's ChatGPT has generated $2 billion in revenue since its mobile app launch in May 2023, which is 30 times more than all its competitors combined [1] - As of now, ChatGPT's mobile app has earned $1.35 billion in 2023, a 673% increase compared to $174 million in the same period of 2024 [1] - The average monthly revenue for the ChatGPT app is approximately $193 million, up from $25 million last year [1] Group 2 - ChatGPT has been installed approximately 690 million times globally, with an average monthly download rate of about 45 million, representing a 180% increase from the 16 million downloads in the first half of 2024 [4] - Cohere, a company focused on B2B enterprise AI, recently raised $500 million at a valuation of $6.8 billion, with an annual recurring revenue (ARR) of only $100 million [4] - Cohere emphasizes security and privacy in its AI offerings, which it claims are not met by current consumer-focused large models [4][6] Group 3 - Cohere's latest product, North, is an AI platform for private environment deployment, allowing companies to scale AI agents and automation tools securely [6] - North integrates advanced generative and search models with customizable agents and built-in workflow automation, enabling employees to complete tasks more efficiently [6] - Cohere has recently appointed new executives, including Joelle Pineau as Chief AI Officer and Francois Chadwick as CFO [6] Group 4 - The online drawing game "Draw A Fish" has gained popularity, allowing users to draw fish and release them into a virtual tank, incorporating social and competitive elements [9] - A fishing app developed by two individuals achieved an ARR of $500,000 within two months without external funding, utilizing familiar game mechanics [9]

Industry Rating - The report maintains an investment rating of "Outperform" for the industry [1]. Core Insights - The future battlefield will be centered around data, algorithms, and computing power, with fully AI-enabled human-machine integrated forces being essential for gaining the upper hand in future conflicts [2][8]. - The global military drone market is experiencing rapid growth, projected to exceed $50 billion by 2032, with a compound annual growth rate (CAGR) of 13.15% from 2024 to 2032, driven by advancements in AI-enabled drone technology [2][45]. Summary by Sections Military AI and Drone Technology - The integration of AI and unmanned technologies is transforming modern warfare, as evidenced by the significant potential demonstrated in the Russia-Ukraine conflict [3]. - Companies like Palantir and Anduril Industries are leading the charge in military AI innovation, with plans to form a commercial consortium to capture a larger share of the $850 billion annual U.S. defense budget [3][39]. - The military drone market is expected to grow from $16.07 billion in 2024 to $47.16 billion by 2032, with North America being the largest market [45][44]. Unmanned Combat Operations - Unmanned combat operations are categorized into reconnaissance, harassment, precision strikes, saturation attacks, and support enhancements, marking a shift towards a drone-centric combat paradigm [29]. - The report highlights the effectiveness of drones in the Russia-Ukraine conflict, where drones accounted for 42.47% of vehicle strikes, surpassing traditional artillery [33]. AI-Driven Decision Making - The concept of "human-machine integration" is crucial, where human commanders will still play a central role in decision-making, while machines will assist through data processing and real-time analysis [7]. - AI technologies are enhancing military capabilities by providing real-time data processing and autonomous decision-making, significantly improving operational efficiency [8][39]. Key Companies to Watch - The report suggests focusing on key players in military AI chips and data analytics, including KST, Fudan Microelectronics, and others [4]. - Companies like Palantir and Anduril are highlighted for their innovative approaches in AI and unmanned systems, with significant contracts and partnerships in the defense sector [85][97].

Core Viewpoint - Point72 Asset Management, led by billionaire Steve Cohen, is raising its first venture capital fund, the "Deterrence Fund," targeting $400 million to invest in defense technology startups due to the urgent demand in this sector [1][2]. Group 1: Fund Details - The "Deterrence Fund" will focus on seed and Series A funding for startups in defense, aerospace, energy, and security [1]. - Cohen plans to personally invest at least $100 million into the fund, which is expected to close fundraising in the first half of next year [1][2]. - The fund will charge a 2% management fee on committed capital during the investment period and a 2% fee on net invested capital afterward, along with a 20% performance fee [3]. Group 2: Market Context - The need for innovative defense technologies is emphasized, as startups can provide more promising solutions compared to large, bureaucratic companies [1]. - Global conflicts, such as the Russia-Ukraine war and tensions in the Middle East, have led to increased defense spending by various countries [1]. - NATO leaders agreed to boost defense spending earlier this year in response to criticisms regarding insufficient contributions from European allies [1]. Group 3: Investment Strategy - Point72 has met with nearly 900 defense tech startups over the past five years and has invested in 18 of them, including Shield AI, Stoke, and Saronic [3]. - The fund's individual investments will range from $1 million to $30 million [3]. - Point72 Ventures, established in 2016, has invested $1.4 billion in over 170 startups to date [2].