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1、TMCRITICALEMBEDDED SYSTEMSwww.VITA.com2024 State of the VITA Technology IndustryJuly 2024Disclaimer:The views expressed here are solely those of the author in his private capacity and do not in any way represent the views of VITA.1 State of the VITA Technology IndustryJuly 2024Copyright 2024 VITA.Al

2、l rights reserved.Permission for reuse is granted with attribution.VME,Critical Embedded Systems,VPX,OpenVPX,VPX REDI,VXS,FMC,FMC+,XMC,XMC+,VNX,VNX+,and Reliability Community logos are trademarks or registered trademarks of VITA.Other names and brands may be claimed as the property of others.State o

3、f the VITA Technology IndustryJuly 2024by:Ray Alderman,Chairman of the Board,VITAContentsIntroduction .1Economic Conditions .1Technology.4Military.8Mergers and Acquisitions 10Summary .11This report provides the reader with updates on the state of the VITA Technology industry in particular and of the

4、 board and system industry in general,from the perspective of Ray Alderman,the Chairman of the Board of VITA.VITA is the trade association dedicated to fostering American National Standards Institute(ANSI)accredited,open system architectures in critical embedded system applications.The complete seri

5、es of reports can be found at Market Reports.(www.VITA.com/VITA_Technology_Industry)IntroductionEconomic conditions are still rattling around and the companies with weak business models are failing.That includes the electric vehicle(EV)market.Artificial Intelligence(AI)has displaced all the other te

6、chnologies in the news.We are seeing AI taking over segments in the entertainment industry and spreading across many military platforms.High interest rates and slow GDP growth has put a damper on M&A activity.And there are some new doomsday scenarios you need to know about.Economic ConditionsThe glo

7、bal economy is predicted to grow at 3%in 2024,up from 2.8%in 2023.Global debt has risen to$315 trillion.1 Global unemployment is expected to fall from 5%to 4.9%in 2024.2In the U.S.,Q1 inflation came in at 3.5%,up from 3.4%at the end of the previous quarter.3 U.S.GDP came in at 1.3%growth in Q1,down

8、from 3.4%growth in Q4 2023.Unemployment for Q1 rose to 3.9%,up from 3.8%previously,and the job market is slowing.The Federal Reserve interest rate is 5.25%to 5.5%,with the objective of reducing inflation.But consumer spending increased by 2.5%in Q1.April inflation came in at 3.4%,but that is the fir

9、st estimate and could be revised.1 Nessa Anwar,Global debt has grown to$315 trillion this year heres how we got here,CNBC,May 29,2024,https:/ Matteo Allievi,Global unemployment to slightly fall in 2024,UN labour body says,Reuters,May 29,2024,https:/ Current US Inflation Rates:2000-2024,US Inflation

10、Calculator,https:/ State of the VITA Technology IndustryJuly 2024While the Feds high interest rates try to slow inflation and GDP growth,Congress passed a$1.2 trillion government spending bill pushing more money into the economy.The 2024 defense budget is$824 billion,up$27 billion from 2023.4 So,it

11、looks like the Fed and Congress are at cross-purposes.Forecasts for multiple interest rate reductions in 2024 are off the table for now.The Fed will hold rates high,or possibly raise them again in the near future,if inflation stays steady or rises.What might be happening is“stagflation”:falling GDP

12、growth and rising inflation.That happened in the 1970s(14%inflation,sporadic GDP growth)and that scares the pants off the financial wizards at the Fed.They can raise interest rates(to slow the economy)or reduce interest rates(to boost the economy).And the Fed can buy government bonds from banks(to i

13、ncrease the money supply and create growth)or sell bonds(to decrease the money supply and slow growth).These moves also affect imports and exports.If you want to understand how all this is supposed to work,read Charles Wheelans book,“Naked Money.”What we are seeing here is a bunch of government empl

14、oyees trying to solve a complex multivariate equation.Europe barely eked-out 0.5%growth in Q1.5 The big winners were Spain(2.4%growth)and Lithuania(2.9%growth).These countries are not exactly economic powerhouses.Germany turned-in yet another lackluster quarter of negative GDP growth(-0.2%).Ireland,

15、Austria,and Sweden also saw negative numbers.Inflation across the Eurozone was about 2.5%.6 Turkey leads the pack with 68.6%inflation with Lithuania seeing 0.4%at the bottom.There are 9 EU countries with inflation over 4%.The ECB(European Central Bank)interest rate is 4.5%,and the EU unemployment ra

16、te is 6.5%,led by Spain and Greece(both above 10%).Turkey raised interest rates to 50%to slow their inflation.Japan is forecasting-0.3%GDP growth in Q1.The EU may have a plan to increase their GDP growth substantially:penalize U.S.-based technology companies for violating a flurry of new EU laws(con

17、cerning data collection and transfer,digital services,and artificial intelligence algorithms).They just whacked Apple,Microsoft,and Meta(Facebook)with infractions and possible fines in the billions of dollars.7 Additionally,theres the CBAM(Carbon Border Adjustment Mechanism)initiative.They levy a fe

18、e on any products imported into the EU based on how much carbon was emitted into the atmosphere while making the 4 Tami Luhby and Katie Lobosco,Whats in the$1.2 trillion government funding package,CNN,March 21,2024,https:/ GDP up by 0.3%in both the euro area and the EU,Eurostat,https:/ec.europa.eu/e

19、urostat/web/products-euro-indicators/w/2-30042024-bp6 Olan McEvoy,Harmonized index of consumer prices(HICP)inflation rate in Europe in March 2024,by country,Statista,July 4,2024,https:/ Foo Yun Chee,Apple hit with$2 billion EU antitrust fine in Spotify case,Reuters,March 4,2024,https:/ State of the

20、VITA Technology IndustryJuly 2024products,no matter where they were made.This fee covers cement,aluminum,electricity,fertilizer,hydrogen,iron,and steel at this point.Expect this list to expand when the EU needs more money to keep their game going.8UK GDP grew by 0.1%in February,after growing 0.3%in

21、January.Their inflation rate was 4.7%in March,their unemployment was at 4.2%,and the Bank of England interest rate was 5.25%.The UK has been digging out of a mild recession and negative GDP growth in previous months.China grew at 5.2%in Q1,their interest rate is 3.45%,their unemployment is at 5.2%,a

22、nd their inflation rate is about 1%.But things do not look good going forward.9 Their plan for future growth is to concentrate on 3 basic industries:electric vehicles,solar panels,and lithium-ion batteries.The Biden administration just levied big tariff increases on these products,to protect U.S.ind

23、ustries.Russias GDP grew at 3.2%in Q1,their interest rate is 16%,their unemployment rate is below 3%,and their inflation rate is at 7.4%.Due to the war in Ukraine,their military spending is now about 7%of their total GDP and 30%of their government spending.Irans inflation rate is 46%,their interest

24、rate is 16%,their unemployment rate is about 11%,but their GDP is growing at about 2.5%.Now,let us look at my favorite spectator sport:watching business models blow up,starting with the auto industry.The wheels are falling off the electric vehicle push(EVs)after hundreds of billions of dollars have

25、been invested in vehicles,batteries,manufacturing lines,and charging infrastructure.In Q1,Ford sold about 10,000 EVs and their electric vehicle division lost$1.3 billion.That turns out to be a loss of$132,000 per vehicle sold.10 GM lost$106 million in their China division.Fisker(an EV maker)went ban

26、krupt.Rivian announced in early May that they lost about$38,000 on each EV they sold in Q1.Ford,and Stellantis have started layoffs.Tesla is laying off 10%of their workforce(about 14,000 people),including the staff in their division that makes chargers(no need to be aggressive about installing more

27、chargers when people are not buying EVs).11EV inventory is piling-up on the lots(with few buyers),so dealerships are discounting and having sales to move them.EV makers are playing all kinds of games to gain more revenue,like charging a fee to enable the heated seats in the cars.Tesla will unlock an

28、 extra 50-60 miles of range on your car for a fee of$1,500-$2,000.12 Hertz is selling off 20,000 of their EVs because they cannot get parts to fix them,charging issues,and customers not wanting to rent them.13 Apple shut-down their electric car division.All EV makers are cutting production volumes a

29、nd designing new hybrid cars(with onboard gasoline engines to charge the batteries).14 So,go get the popcorn and watch the best horror movie you will ever see as the world auto industry is disemboweled by the razor-sharp teeth and massive jaws of the reality monster.Electric vehicles,so far,look lik

30、e the biggest misallocation of scarce financial and engineering resources since the telecom equipment industry blew up.8 Elise Hansen,A big boost to Europes climate-change goals,Knowable Magazine,February 29,2024,https:/ Joe Cash and Kevin Yao,Chinas economy grew faster than expected in the March qu

31、arter,Reuters,April 16,2024,https:/ Jenny Goldsberry,Ford reports loss on every EV sold in first quarter,Washington Examiner,April 28,2024,https:/ Grace Kay,Tesla sends out another wave of layoff notices as employees enter 4th week of job cuts,Business Insider,May 6,2024,https:/ Ana Altchek,Elon Mus

32、k wants Tesla Model Y drivers to pay to unlock more range,Business Insider,May 6,2024,https:/ Jonathan Gitlin,EV bargains to be found as Hertz sells off some of its electric cars,ARS Technica,March 29,2024,https:/ Michael Barone,The Electric Car Fiasco,Townhall,March 22,2024,https:/ vehicles,so far,

33、look like the biggest misallocation of scarce financial and engineering resources since the telecom equipment industry blew up.”4 State of the VITA Technology IndustryJuly 2024On the retail side,Family Dollar will close 1,000 stores and 99 Cent Only stores went bankrupt.Dollar Tree is closing about

34、six hundred stores.If a store has“dollar”or“99 cents”in their name,they are probably closing.About 3,200 retail stores have closed so far in 2024.15 Red Lobster restaurants went bankrupt in May,for selling“all you can eat shrimp too cheap.16 And,Republic First bank in Pennsylvania failed in April,th

35、e first bank to go belly-up in 2024.They were losing deposits and their loans in real estate dropped in value.This is the next big horror movie to watch,the collapse of the commercial real estate market.About$929 billion of commercial real estate loans come due over the next year.Much of that is in

36、office buildings with high vacancy rates,in cities where employees are working from home now(like San Francisco and New York).A number of those loans will default,taking down the banks and lenders holding those mortgages.17 Things are so squirrelly in the real estate market that lenders have foreclo

37、sed on Elvis Presleys Graceland estate but some parties are trying to save it.18 Here is the big picture.Inflation,high interest rates,and dumb management are killing the business models in the auto industry,commercial real estate,retail,and the restaurant business.Some of those industries will blow

38、 up(like commercial real estate)and some will slowly burn down(like the auto industry).The only industry showing amazing growth and opportunities.is the defense industry.Countries across Europe(driven by Russias antics)and the Pacific(driven by Chinas antics)are buying weapons and ammo like crazy.As

39、 Thomas Jefferson once said,“Peace is that brief glorious moment in history when everybody stands around reloading.TechnologyThe semiconductor industry is getting lots of money from governments these days.In the U.S.,the Biden administration is giving$52 billion to the industry(The Chips Act).The EU

40、 government is spending$47 billion(The EU Chips Act).South Korea is spending$7.3 billion on their industry(The South Korea Chips Act).China is investing$146 billion in their semiconductor industry(The China Chips Act).19 Obviously,theres a“chip war”going on.TSMC is now exploring using rectangular wa

41、ters(about 510mm by 515mm),to replace the present 300mm round wafers,to get more chips per wafer.20What is driving these investments are the engines that run the artificial intelligence algorithms:AI processors.While Nvidia is the market leader with their GPUs,there are twenty-three companies design

42、ing and making AI chips today.21 According to DataHorizon Research,the AI chip market was$51.9 billion in 2023,growing to$1.114 trillion by 2032(a compound annual growth rate of 40.6%).22 All the big tech names have announced new AI data centers,and this is where many of these new chips will go.Trad

43、itional data centers,using generic CPUs,are terrible at managing the AI workloads(machine learning,natural language processing,context awareness,computer vision,and predictive analytics).15 Aimee Picchi,Store closures are surging this year.Here are the retailers shuttering the most locations.,CBS Ne

44、ws,May 13,2024,https:/ Dietrich Knauth,Red Lobster probes endless shrimp losses after bankruptcy filing,Reuters,May 20,2024,https:/ Megan Henney,Commercial real estate trouble could trigger systemic credit crash,fund managers say,Fox Business,February 19,2024,https:/ Michael Dorgan,Elviss Graceland

45、mansion reportedly up for foreclosure auction,but family claims fraud:Its a scam,Fox Business,May 21,2024,https:/ Natan Ponieman,Chinas Semiconductor Spending Tops US With$142B Commitment:Global Chip Race Heats Up,Yahoo!Finance,May 13,2024,https:/ Brian Wang,Growing Size of AI Chips forces TSMC to W

46、ork on Tripling the Size of Wafers.Next Big Future,June 22,2024,https:/ Torbjrn Flensted,Top 23 AI Chip Makers of 2024-Statistics&Facts,SEO.AI,April 24,2024,https:/seo.ai/blog/ai-chip-makers22 AI Chip Market Report By DataHorizzon Research.CAGR 40.6%By 2032,Yahoo!Finance,April 24,2024,https:/ State

47、of the VITA Technology IndustryJuly 2024As for the algorithms,there are two competing philosophies:open source versus closed models.OpenAI started as an open-source AI algorithm supplier,but when Microsoft invested$4 billion in the company,one starts to question their objectives.There are more than

48、twenty-six companies who say they are open source based,and that list should expand.23The rest of the companies are developing closed(proprietary)models from what I can tell.According to one source,there are 67,200 companies working on some type of AI product.24 AI can be trained for specific applic

49、ations like pharmaceutical research,energy production and distribution,aircraft design,ship design,building design,or writing code for computers.Or they can be trained to become a search engine(Copilot AI was just added to the Bing search engine).There are thousands of application segments where the

50、 algorithm just needs to be trained on a focused data set(i.e.,it does not need to understand anything about Elizabethan poetry).Recently,an AI-powered robot solved Rubiks Cube in 0.305 seconds.25It is expensive to collect the proper training data sets,and very power-consuming to train the algorithm

51、s.This is why we are seeing a surge in new AI data centers,selling those services to developers.And it can also be legally expensive if you use copyrighted data to train your algorithm.The New York Times sued Microsoft and OpenAI for learning from 23 Unveiling Top 26 Open-Source AI Software Firms,In

52、ven,https:/www.inven.ai/company-lists/top-26-open-source-ai-software-companies#:text=Ais&text=AIS%20is%20an%20IT%20services,based%20on%20natural%20language%20descriptions24 Fabio Duarte,How Many AI Companies Are There?,Exploding Topics,January 19,2024,https:/ Alex Mitchell,Robot breaks Guinness Worl

53、d Record for solving Rubiks Cube 10 times faster than any human,New York Post,June 3,2024,https:/ State of the VITA Technology IndustryJuly 2024their copyrighted articles on the web without permission.Nvidia is also being sued by some authors.26 And generally speaking,the U.S.Patent and Trademark Of

54、fice says that things created by AI algorithms cannot receive a patent or a copyright.unless it passes the test for novelty,non-obviousness,utility,and enablement.27 So,this area is getting legally murky.Some of the big AI companies are paying fees to copyright holders,to use their data for training

55、.Smaller companies may not have the money to buy data access,so expect to see mergers or companies dropping out of the game.Just scraping the web for training data is now a risky proposition.Looking at this information on AI has revealed yet another business model that blew-up:the Metaverse.28 But I

56、 might be wrong about this.Even though the Metaverse has been eclipsed by AI in the news,one of the latest market research reports(from Precedence Research)says the Metaverse market was$92.46 billion in 2023,growing to$2.370 trillion by 2033(CAGR of 38.31%).29 So,maybe the AI market is contributing

57、to(or merging with)the Metaverse market somehow?If I see avatar lawyers roaming around in the AI-driven Metaverse,handling out lawsuits for copyright infringement,then my observation about AI and the Metaverse merging will be accurate.In March,the EU passed an Artificial Intelligence Act.This new la

58、w classifies AI algorithms by risk and bans those that might be harmful in some way,with hefty financial penalties for any violations of these obscure definitions.The U.S.Senate is drafting new regulations for AI and that project has attracted a host of lobbyists from AI companies,to keep that legis

59、lation from thwarting future development.30 The governments in the U.S.and the EU are becoming bureaucratic beavers:they are getting in the middle of a free-flowing stream of innovation and damming it up.Eventually,what I think we might see is the formation of an AI Regulatory Commission(much like t

60、he Nuclear Regularity Commission),where AI companies will need a license to operate(much like nuclear power stations need licenses).The fears about a rogue AI algorithm taking over the world and killing all the humans are just like the fears about radioactive materials spreading across the world.Man

61、y states have already created over 500 AI regulations,to ensure that they do not cause harm or hurt someones feelings.31 I dont see AI being a major threat to humanity at this point,but I do see government bureaucracies getting involved in technology as a deadly combination that could end the human

62、race.There is a new algorithm released that can change any celebritys picture into a Shrek character.32 Theres a new“Miss AI”beauty pageant where you can generate your own artificial babe and compete with other image developers AI babes.33 Soul Machines has created an AI-generated version of Marilyn

63、 Monroe who can talk to you,smile,and express emotions.34 And,theres another algorithm(SUNO)that can write the music and lyrics for songs from simple 26 Navigating AI Copyright Presents Challenges for Industry,PYMNTS,March 13,2024,https:/ Robert Plotkin,Can AI Prompts Be Patented?Dont Be Too Quick t

64、o Dismiss this Question,Watchdog,January 2,2024,https:/ George Lawton,Is the metaverse dead?Heres what happened and whats next,Tech Target,March 7,2024,https:/ Metaverse Market Size and Growth 2023 to 2032,Precedence Research,https:/ Brendan Bordelon,In DC,a new wave of AI lobbyists gains the upper

65、hand,Politico,May 12,2024,https:/ Ronald Bailey,AI Regulators Are More Likely To Run Amok Than Is AI,Reason,May 3,2024,https:/ Sarah Aspier,I Turned 15 Celebrities Into Shrek Because WHY NOT You Can Use Our Generator To Make Em Too,Buzzfeed,May 9,2024,https:/ Alana Mastrangelo,First Artificial Intel

66、ligence Beauty Pageant Miss AI Coming in May,Breitbart,April 17,2024,https:/ Dawn Chmielewski,Some Like It Bot:Realistic digital Marilyn Monroe to make debut at tech conference,Reuters,March 8,2024,https:/ dont see AI being a major threat to humanity at this point,but I do see government bureaucraci

67、es getting involved in technology as a deadly combination that could end the human race.”7 State of the VITA Technology IndustryJuly 2024prompts.35 Then,theres SORO,a new algorithm that can create 1-minute high-quality videos from simple prompts.36 Dudesy released a new AI-generated comedy special f

68、eaturing comedian George Carlin,even though he died in 2008.37 And scientists recently used an AI algorithm to explore new antibiotics that can kill antibiotic-resistant germ strains.38The Swiss ambassador submitted a proposal to the United Nations,that we need to saturate our atmosphere with sulfur

69、 dioxide particles,to reduce the sunlight and heat hitting the earth,to reduce global warming.In other words,we need to dim the sun.39 Meanwhile,the folks at the University of Chicago have proposed that we saturate Mars atmosphere with metallic nanorods,to create a rapid greenhouse effect,to warm-up

70、 the planet for plant growth and mining operations to recover rare elements and metals and bring them back to earth.40 That reminds me of the bumper sticker:Earth First:Well strip-mine the other planets later”.Climeworks(a Swedish company)has fired-up their Mammoth DAC machine(direct air capture)in

71、Iceland.It is a huge structure,with lots of fans,which blow air over special filters that extract carbon dioxide from the atmosphere.This machine can extract 36,000 tons of CO2 per year.They plan to sell the CO2 to soft drink bottlers and to greenhouse operators(who grow tasteless tomatoes in Europe

72、 during the winter).41 If youve watched as many sci-fi movies as me,you know that these ideas and machines are more than geo-engineering.They are“atmospheric processors,”that extract harmful stuff from the air and insert oxygen and water vapor into a planets atmosphere,to make it habitable for human

73、s and plants(terraforming).We could see thousands of these atmospheric processors running on earth to cool the planet in the future.As a byproduct,all the soft drinks in the world will get much fizzier(that is where all the captured CO2 will go).Along with these developments,AI is being applied to w

74、eather forecasting.Weather is very dynamic,but algorithms trained on historical weather patterns are showing promise and might be better than the present forecasting models.42In previous reports,I made you aware of governments approving insects as food(crickets and mealworms).43 Well,the gene-splici

75、ng biologists have been busy too.They are about to revive the woolly mammoth by splicing recovered DNA from frozen mammoth remains with an elephant.44 In another 10 years or so,we could be eating“mammoth burgers”at fast food restaurants.Another group in South Korea have spliced beef cells into rice

76、plants,creating a pink beef-flavored rice.45 This beef-rice will replace cattle as a protein source.And another group in Idaho has created a replacement for your LED light bulbs.They spliced some genes from a bioluminescent mushroom into a petunia and 35 Sabrina Ortiz,What is Suno?The ChatGPT for mu

77、sic generates songs in seconds,ZDNet,March 19,2024,https:/ Lucas Nolan,ChatGPT Developer OpenAI Unveils AI Tool to Generate Video Clips,Breitbart,February 16,2024,https:/ George Carlin Estate Sues over Fake Comedy Special Purportedly Generated by AI,Breitbart,January 26,2024,https:/ Eric Berger,AI u

78、sed to predict potential new antibiotics in groundbreaking study,The Guardian,June 5,2024,https:/ Jonathan Watts,Switzerland calls on UN to explore possibility of solar geoengineering,The Guardian,February 22,2024,https:/ Brian Wang,Warming Mars by 10 Degrees Celsius by 2050,Next Big Future,January

79、25,2024,https:/ Justine Calma,The worlds largest carbon removal plant is here,and bigger ones are on the way,The Verge,May 8,2024,https:/ Eric Berger,No physics?No problem.AI weather forecasting is already making huge strides.ARS Technica,June 3,2024,https:/ Leah Sarnoff,Should people eat insects in

80、stead of meat?Experts explain the benefits of bugs,ABC News,June 5,2024,https:/ Nathan Stone,Scientists Resurrecting The Woolly Mammoth Are Crazy,Not Cool,The Dederalist,February 19,2024,https:/ Hyun Young,South Korea scientists tout beef rice as source of protein for the future,Reuters,March 14,202

81、4,https:/ State of the VITA Technology IndustryJuly 2024created a light-emitting plant.46 The Department of Agriculture approved the Firefly Petunia back in 2023,and you can buy one online.Get several of themthey are not very bright.For thousands of years,the earths rotation was slowing down.So,the

82、official timekeepers had to add leap-seconds to clocks at the end of the year.Now,the earths rotation is speeding up,so we will lose a second by the end of this year.47 While this is going on,NASA and the European Space Agency are creating a Lunar Time Zone.48 Clocks on the moon run about 56 microse

83、conds faster each day than on earth.And one moon day is about 29.5 earth days,so timekeepers are busy.Next,we will need a Mars Time Zone and clock.A day on Mars(a Sol)is about 40 minutes longer than an earth day(24 hours,39 minutes,35 seconds).Remember the pictures of international newsrooms,with cl

84、ocks on the wall,with the times in each major city(New York,Paris,London,Tokyo,Moscow,etc.)?Look for moon and Mars clocks to show up on those walls soon.And one more jab at EVs.If you are charging-up your EV in the summer,and the cable and connector plug gets hot(from the sunshine or from heavy curr

85、ent draw),the sensors in the charging cable will detect the heat and slow the charging rate,to cool things down.If you wrap a damp rag over the cable and the plug,the evaporation will cool things down and increase the charging rate.49 The cable and connection should be waterproof,so the risk of gett

86、ing zapped is low.If you drive an EV,always carry a bottle of water and a towel in your car,to cut your charging time in the summer.Finally,one of the problems with battery-powered drones like quadcopters is they cannot fly for a long time without recharging their batteries.A company has solved that

87、 problem:When their batteries get low,they look for power lines.They fly up to them,clamp on the power line,and inductively charge up their batteries-for free.50 Imagine what this can do for military drones,for continuous surveillance operations in hostile areas.That takes us to the Military Section

88、MilitaryLet us start at the top.Back in April,SIPRI(Stockholm International Peace Research Institute)released their report on worldwide military spending for 2023.51 Spending for weapons,ammunition,and platforms increased 6.8%over 2022,driven by the war in Ukraine,in Gaza,around Yemen,in Lebanon,alo

89、ng with Chinas shenanigans in the Pacific,and North Koreas antics.They also released a report on military imports and exports by country(who is buying and who is selling).52 Many countries have been sending weapons,platforms,and ammunition to Ukraine,and to Israel,which gives the donors the incentiv

90、e to build new advanced replacement platforms and weapons.53 These documents will give you a demand-side view of the MIL markets.The next big report will come out in a month or so:the Top 100 Defense Contractors report for 2023.That will give us a supply-side view.46 Elissaveta Brandon,Glow-in-the-d

91、ark petunias are just the beginning,Fast Company,April 3,2024,https:/ Leah Sarnoff,Melting polar ice is changing the Earths rotation and affecting how we measure time:Study,ABC News,March 28,2024,https:/ Marcia Dunn,What time is it on moon?Europe pushing for lunar time zone,AP News,February 28,2023,

92、https:/ Beverly Braga,The Wet Towel Trick Is a Low-Tech Attempt To Increase Tesla Charging Speed,The Drive,May 12,2024,https:/ Kris Holt,Drones that charge on power lines may not be the best idea,Engadget,April 8,2024,https:/ Global military spending surges amid war,rising tensions and insecurity,SI

93、PRI,April 22,2024,https:/www.sipri.org/media/press-release/2024/global-military-spending-surges-amid-war-rising-tensions-and-insecurity52 SIPRI Fact Sheet,March 2024,https:/www.sipri.org/sites/default/files/2024-03/fs_2403_at_2023.pdf53 Mitchell Labiak,War will drive a decade of arms restocking,says

94、 firm,BBC,June 4,2024,https:/ State of the VITA Technology IndustryJuly 2024I wrote an article back in 2021,about the AI algorithms being used in the Armys“Project Convergence”exercises in the Arizona desert,54 as they develop the DIKW(data,information,knowledge,wisdom)Kill Web model.55 Those algori

95、thms(Rainmaker,Prometheus,Firestorm,and SHOT)execute the 5F model:Find(identify),Fix(track),Fire,Finish,and Feedback.Maybe parts of these AI algorithms were used to find terrorist targets and the bombing in Iraq and Syria back in February.56Israel has been using three new AI algorithms in the Gaza w

96、ar:Gospel,Lavender,and“Wheres Daddy?”.Gospel integrates data from drones and ground sensors that monitor human and vehicle traffic around buildings,identifies them as terrorist hideouts,and rates them for destruction by artillery,missiles,and bombs.Lavender does the same thing with people.It tracks

97、their cellphone usage,their movements,and their social media presence and then rates them for elimination.“Wheres Daddy”seems to be the algorithm that receives the tracking data on identified targets and fires the missiles,artillery,or drops bombs on their known location in minutes.57These AI applic

98、ations collect intelligence,analyze it,and do targeting,but there are other algorithms in development and use.The big picture application is“Project Maven,”which is turning into the Maven Smart System under the CJADC2(Combined Joint All Domain Command and Control)program.This algorithm will integrat

99、e data from all collections platforms,from all the services across the world,and create a COP(Common Operating Picture),available to all military commands worldwide in real time.58 Eventually,our allies will have some level of classified access to this picture.AI is being integrated into strategic i

100、ntelligence operations,which can use OSINT(open-source intelligence:newspapers and TV/Radio broadcasts)and information from spies,to understand each countrys social,economic,and political conditions.Then,it could use predictive analytics,to suggest internal power struggles,potential changes in leade

101、rship,financial difficulties,and social unrest.59 This will come in handy since we missed the signs for the Arab Spring,the attack on Gaza by Hamas,and the Houthi attacks on shipping in the Red Sea.AI algorithms are also being added to different existing platforms and systems.The French Navy is usin

102、g new algorithms and acoustic sensors in their passive sonar systems,to discover and interpret weak signals in the noise in the water.So far,the algorithms can find targets at longer ranges,identify the type of ship(military or commercial),the type of propulsion system,the propeller speed,and the nu

103、mber of blades on the propeller.60DARPA(Defense Advanced Research Projects Agency)is developing AI algorithms to track all satellites in space,to identify enemy spy satellites and weapons that might hide near commercial satellites.61 In radar,the Pentagon is working with a company to create an algor

104、ithm than can track 10,000 drones at once(a drone swarm),and pass individual targets to the weapons to take them out.6254 Ray Alderman,How Rainmaker,Prometheus,FIRESTORM,and SHOT AI algorithms enable the Kill Web,Military Embedded Systems,Dec 23,2023,https:/ Maj.Michael Dunn,Goldilocks Kill Chains a

105、nd the Just Right Data,Army University Press,May 2024,https:/www.armyupress.army.mil/Journals/Military-Review/English-Edition-Archives/May-June-2024/MJ-24-Dunn/56 Lucas Ropek,U.S.Is Reportedly Using AI to Decide Where to Drop Bombs,Gizmodo,February 26,2024,https:/ Peter Singer,The AI revolution is a

106、lready here,Defense One,April 14,2024,https:/ Sydney Freedberg,New contract expands Maven AIs users from hundreds to thousands worldwide,Palantir says,Breaking Defense,May 30,2024,https:/ Global Security Review,https:/ Rudy Ruitenberg,France turns to AI for signals analysis in underwater acoustics w

107、ar,C$ISR Net,May 17,2024,https:/ Courtney Albon,DARPA project uses AI to flag space weapons,spy satellites,C4ISR Net,June 5,2024,https:/ Kris Osborn,New Radar Counters Drone Swarm Attacks-Tracks 10,000 Targets at Once,Warrior Maven,May 29,2024,https:/ State of the VITA Technology IndustryJuly 2024Th

108、en,theres CEW(Cognitive Electronic Warfare).Our enemies will use software-defined radio tools,to change their wave forms,pulse rates,power levels,and frequencies in their communications,radar,and jamming systems.New AI algorithms will allow our EW systems to detect,analyze,and counter those enemy sy

109、stems more rapidly than we can today.63Probably,the most interesting area is the integration of AI algorithms and robotic soldiers.We could see thousands(or millions)of these robots on the battlefields of the future.A bipedal(2-legged)robot just ran at 9 MPH(an average(human can run at about 8 MPH).

110、A four-legged robot(that looks like a dog)ran at 28.3 MPH(about the same speed that the world record holder,Usain Bolt,ran the 100-meter dash).Some 4-legged robots have been outfitted with rifles,anti-tank rocket launchers,and flame throwers for testing.AI algorithms are also being used to design fu

111、ture hypersonic 7G fighter aircraft,missiles,new ship designs,and cargo planes.And they are being used in predictive maintenance and logistics planning(anticipating where supplies and ammunition are needed by troops at remote locations).AI is being researched or implemented in just about every milit

112、ary platform and weapon that exists today,to solve some specific problem.In March,the AARO(All-domain Anomaly Resolution Office)at the Pentagon released their second UFO report.They studied all the UFO sightings in their files since WWII and said that there is no evidence that aliens have ever visit

113、ed earth.64 After you read this article,go read Col.Phillip Corsos book(“The Day After Roswell”).He is the guy who was responsible for the debris recovered from the alien spaceship crash in Roswell,NM in 1947,and took it to companies to reverse-engineer.That is how we got night vision goggles,integr

114、ated circuits,fiber optics,lasers-and maybe chicken nuggets.Something I ran across in my reading is the U.S.Armys classified plan to build a military base on the moon from 1959:Project Horizon.65 The base,with 12-20 soldiers,was to be operational by 1965 and deter the Russians with our nuclear weapo

115、ns sitting on the moon during the Cold War.This plan never went forward because the National Aeronautics and Space Act of 1958 transferred the space program to NASA(a civilian organization),which pledged to keep space and the moon demilitarized.It is an interesting old document to read and look at t

116、he technology they were using in 1960.There is much more going on in the military realm,more than I can put here.AI has replaced stealth as the primary technology focus of the services.It is being tested or used across the services and in weapons platforms in all domains(land,sea,air,space,cyberspac

117、e).In fact,AI-powered drones are now threatening to eliminate the NGAD(next generation air dominance)manned 6G fighter plane program and the B-21 manned stealth bomber program.Mergers and AcquisitionsIn Q1 2024,there were 46 merger and acquisition deals in the military and aerospace market.They were

118、 all small except for Lockheed buying Terran Orbital for$600 million.In Q1,BAE Systems bought Bell Aerospace for$5.5 billion.In June,we saw Frances Safran buy AI start-up Preligens for$235 million.What we are seeing in the commercial AI segment is partnerships and investments,not mergers and acquisi

119、tions.Microsoft invested$10 billion in Open AI.Elon Musk invested$6 billion in xAI in April.66 Meta(Facebook)has invested$35 billion in their AI offering.Amazon invested$4 billion and Google invested$2 billion in Anthropic.63 Colin Demarest Anduril touts Pulsar jammers that rapidly adapt to changing

120、 threats,C4ISR Net,May 6,2024,https:/ Pentagon UFO report says most sightings ordinary objects and phenomena,Reuters,March 8,2024,https:/ U.S.Army,Project Horizon,https:/history.army.mil/faq/horizon/Horizon_V1.pdf66 Lucas Nolan,xAI,Elon Musks AI Venture,Raises$6 Billion to Take on OpenAI,Breitbart,A

121、pril 27,2024,https:/ State of the VITA Technology IndustryJuly 2024Cross-border M&A in Europe is tougher.Buyers cannot shut down factories in other countries or lay off many people in the purchased company.In the U.S.,the FTC and DOJ are not too excited about big tech buying-up competitors.And the P

122、entagon wants more military contractors,not consolidation,so that puts a damper on deals.This is especially true in the developing AI segment.In the 1990s,there were fifty-one prime military contractors in the U.S.Today,there are five who can build ships,warplanes,tanks,and missiles.And thousands of

123、 small businesses have left the MIL market supply chain.Merger and acquisition activity might be slow for the remainder of the year.But we may see some small deals here and there.In our corner of the universe we saw the following activity in the past months.Kontron AG agreed to acquire around 60%of

124、the shares in the listed company KATEK SE.The buyer is the wholly owned German subsidiary Kontron Acquisition GmbH,which is acquiring the shares from the previous Katek majority shareholder PRIMEPULSE SE.The purchase price per share is EUR 15.00 for a total of 8,587,138 shares.Subject to conditions

125、precedent(antitrust law),the transaction is expected to be completed by March 2024.Kontron expects the acquisition to significantly strengthen its own portfolio of renewable“green”energy solutions and the aerospace segment.67SummaryLet us look at what we have discovered here.The BEV(battery electric

126、 vehicle)craze is about over and has severely damaged the business models of the auto makers and their dealerships.They are rushing to get hybrid cars designed and into production or adding new gas-powered models.The fast-food and restaurant business model is under severe pressure with many outlets

127、closing.The retail business model collapsed when the shopping malls went under.The commercial office building business model is teetering on the brink.Some of this was caused by inflation,some by technology(online shopping),some by new laws(like the minimum wage increases)and labor shortages,and som

128、e by societal shifts(like working from home instead of an office).Many of these changes started when we all stayed home during COVID.Many businesses just could not recover in spite of the$9 trillion governments pushed into the world economy for COVID relief.If you are looking for a reason we have in

129、flation in the world today,you cannot drop$9 trillion into the markets without prices going up.The definition of inflation is”too much money chasing too few goods”The geopolitical situation is still shaky with the wars in Ukraine and Gaza(and possibly a new front in Lebanon).China and North Korea ke

130、ep playing games in the Pacific.Financially,the world is awash in debt(both government and consumer debt).As of May,it is at$315 trillion,a new record high.Companies are automating everything they can.And thousands of companies are now using AI products,to eliminate the high cost of people.Companies

131、 need three inputs to operate:capital,raw materials,and labor.Capital is expensive(with high interest rates).Raw material costs are high(rising prices due to inflation),and the cost of labor has risen(salaries,benefits).Those conditions will not change by much in the near future.And it is an electio

132、n year(both here and in Europe).That multiplies the uncertainty instead of adding to it.One last look at AI and where we are.There are over 20 LLMs(large language models)like ChatGPT in the market today.There are more than twenty image-generating AI models on the web like Midjourney(that can create

133、pictures from prompts).There are more than fifteen music-generating AI models in the market.There are more than fifteen voice cloning AI models on the web(that can copy any voice with just a few minutes of audio).There are more than fifteen video-generating AI models on the web(that can generate sho

134、rt movies from text prompts).In the military section,I exposed you to eight AI models being used in the military(Rainmaker,Prometheus,Firestorm,SHOT,and Maven in the U.S.;Gospel,Lavender,and“Wheres Daddy?”in Israel).They are used for image analysis(IMINT),signals 67 Kontron,Kontron acquires majority

135、 stake in Katek SE and expands leading position in the IoT market,January 18,2024,https:/ State of the VITA Technology IndustryJuly 2024analysis(SIGINT,ELINT),and weapons targeting.Others are being used in administrative tasks,logistics,and equipment maintenance by the services.One thing stands out

136、here:why have commercial AI models focused on the arts?AI can write articles,stories,and poems like writers and journalists.AI can create images and artworks like painters and photographers.AI can create music and lyrics like musicians and songwriters.AI can copy any voice and reproduce it realistic

137、ally.AI can create short movies and videos like Hollywood studios.The entertainment industry is where AI has gained a big foothold.It is no surprise that AI got its foothold in the military in intelligence analysis and weapons targeting.That is where they needed more speed and accuracy in battle.Whe

138、re does it go next?My bet is anticipation and prediction of enemy tactics and strategies in battle:predictive analytics.Ukraine and Gaza have been a treasure trove of data about how the terrorists(Hamas,Hezbollah,Houthis)and the Russians fight.The more our enemies do,the more our AI algorithms learn

139、 about how to defeat them.Maven is a strategic planning algorithm.The others are tactical.Tie them together and you have a“Kill Web”that operates in seconds.Before we close this report,let me leave you with a more disturbing thought:an update on all the doomsday predictions in case you do not keep u

140、p with them.The environmentalists say we will all be dead in 12 years from the effects of climate change.The AI community says we will all be killed by super-intelligent AI in 2 years.68 Every month or so,an asteroid about the size of Texas flies close to earth.The astronomers say there are hundreds

141、 of them out there in space,and some day we will get hit by one,but they did not give a timeframe.The earths poles are about to flip,so all the birds will die when they fly north for the winter instead of what was south.69 The earths rotation is slowing,so our days will get longer until we are roast

142、ed to a crispy golden brown by the sun(like Venus,that rotates once every 243 earth-days).70 The WHO(World Health Organization)says that a deadly rampant disease(Disease-X,much worse than COVID)will develop and kill us all,but they were hesitant to put a timeline on it.The atomic scientists say that

143、 the doomsday clock just moved to 90 seconds before midnight,meaning that world conditions have deteriorated,and we could all be killed in a nuclear war.Finally,the advanced extraterrestrial civilization that crashed the spaceship at Roswell in 1947 will come back to earth to recover their ship and

144、retrieve their people(the military refers to alien lifeforms as extraterrestrial biological entities(EBE).There were five EBEs recovered at the crash site at Roswell according to Corsos book.Three were dead and two were still alive.These aliens may not be a happy and peaceful species when they get h

145、ere.I suggest you read Isaac Asimovs non-fiction book,“Extraterrestrial Civilizations,”for a better understanding.So,pick your favorite doomsday scenario and move on with your life.I am going with the extraterrestrials coming back to earth.That sounds like more fun than the other disasters.68 Lucas

146、Nolan,AI Expert Claims Rebellious Self-Aware Machines Could End Humanity in 2 Years,Breitbart,February 19,2024,https:/ Marcus Chown,Earths magnetic field is overdue a flip.Should we be worried?,BBC Science Focus,May 7,2024,https:/ Dr Alastair Gunn,The Earths rotation is changing speed:should we be w

147、orried?BBC Science Focus,https:/ your favorite doomsday scenario and move on with your life.I am going with the extraterrestrials coming back to earth.That sounds more fun than the other disasters.”State of the VITA Technology IndustryJuly 202413 Copyright 2024 VITA.All rights reserved.Permission for reuse is granted with attribution.VME,Critical Embedded Systems,VPX,OpenVPX,VPX REDI,VXS,FMC,FMC+,XMC,XMC+,VNX,VNX+,QMC,and Reliability Community logos are trademarks or registered trademarks of VITA.Other names and brands may be claimed as the property of others.