Leidos acquires Kudu Dynamics for $300M to enhance AI-driven offensive cyber, EW

WASHINGTON — Defense and information technology company Leidos announced today it acquired Kudu Dynamics, a cybersecurity and networks company, for $300 million in an effort to beef up its artificial intelligence-enabled offensive cyber and electronic warfare capabilities. 

Roy Stevens, president of Leidos National Security Sector, told Breaking Defense ahead of today’s announcement that AI has been an area of strength for the company for “a long time.” Leidos’ expertise coupled with Kudu’s strength in vulnerability research and exploit development — the practice of finding weak points in an adversary’s cyber or electronic warfare structure and then finding a way in — is a “really good match,” he said. 

“That was the strength of theirs, where we felt like we have capabilities, but their capabilities are stronger,” Stevens said regarding Kudu Dynamic’s vulnerability research. “You take that capability and our AI capability, and you merge them together, and now you get what you want in an acquisition — the one plus one equals four.”

Stevens said that Leidos could have gone the route of developing an AI-enabled cyber offensive capability on its own as that would likely be the cheapest way, but having a partner that’s at “the next level” will allow them to develop such capabilities much faster. 

“We feel like this acquisition moves us in some certain sub-elements of offensive cyber about 18 months forward on what we would have been able to do with our organic investment,” he said. 

Stevens explained that both companies’ AI, mixed with Kudu’s ability to find vulnerabilities and produce exploits, will speed up the process of infiltrating adversarial networks because exploits traditionally take a long time to develop, and they can’t be recycled due to their identifiable signatures. 

“With AI you can change a few variables [of the exploit] very quickly and automate that. So instead of generating one [then] using it, generating another [then] using it, you can very quickly develop many.

“The second piece of what you can do is you can think about where are places that you can hide through obfuscation. AI enables you to do that in unique ways, versus in ways that are much more manual and labor intensive, and this allows you to deliver much quicker,” he said. Obfuscation refers to the process of making data unclear so it’s more difficult to reverse engineer it.

The acquisition of Kudu comes as lawmakers have called for an increase in offensive cyber capabilities, namely the $150 billion in additional defense spending in the House and Senate Armed Services Committees’ reconciliation package that included $1 billion for offensive cyber operations in Indo-Pacific Command. 

And earlier this month, Ashley Manning, the defense secretary’s chief cyber advisor, told an audience at TechNet Cyber that the Pentagon is using offensive cyber capabilities to bolster security at the southern border and disrupt the “illicit” behavior of transnational criminal organizations. 

However, Stevens said the timing of the acquisition was not tied to the current administration or recent moves in Congress. Rather, it was brought on by a year-long process of “deep strategic thinking” where the company found that the need for offensive cyber capabilities is significantly growing. 

“It is more about where the state of warfighting is going, and where current operations are, and where the threat environment is taking us,” Stevens said. “This is what the department and the intel agencies are saying their need is and where their need is.” 

The acquisition of Kudu, a company with around 170 employees that was founded in 2013, marks the first Leidos acquisition in two and a half years, according to a Leidos press release. Headquartered in Chantilly, Va., with smaller offices stationed across the country, Kudu was previously awarded a $17 million contract for software development for the Defense Advanced Research Projects Agency and over $49 million to develop Tactical Proficiency Synthesis software and hardware prototypes for the US Air Force. 

“We’re excited to deliver the next level of capabilities to our customers as we bring together the highly innovative cyber professionals and disruptive technologies of Kudu with the scale, resources and experience of Leidos,” Kudu Dynamics Founder and CEO Mike Frantzen, said in a press release. “In Leidos, we’ve found a partner who shares our ethic of purposeful innovation in support of our nation’s most critical missions.”