17 - 2020 INTEGRATED REPORT VISION AND STRATEGY (1) Source: Gartner August 2019. (2) Tractica Analysis - Artificial Intelligence Market Forecasts 2019. Mobile connectivity and multiplication of cyber threats Increase in the impact of artificial intelligence (AI) CHALLENGE: TO DEVELOP CONTINUOUS, SAFE AND SECURE CONNECTIVITY The number of connected objects could be multiplied by 48 by 2025, according to the Green IT Institute. Their efficiency and reliability depend on near-continuous access to the global grid. In addition, whether for work or leisure, the people of the world want access to a high- performance mobile connection at all times. The ongoing development of 5G not only meets this demand but also leads to a multiplication of uses. In this context, the ability to ensure a safe and secure connection becomes an essential issue, whether on the train or the underground, in an aeroplane or a car, whether in the city or a rural area. At the space level, low- and medium-altitude communication satellite constellations and new, more flexible and high-performance satellite platforms are changing the game by offering unprecedented broadcasting capacity. But this permanent connectivity cannot work without the simultaneous development of security solutions, capable of guaranteeing the reliability of the growing number of critical applications that now depend on these networks. OUR RESPONSE In avionics, Thales connected systems offer airlines and passengers an unrivalled degree of connectivity allowing fluid and continuous connections between the aircraft and the ground. They are shaping the future of air travel in terms of passenger experience, safety and flight efficiency. CHALLENGE: TO ENHANCE THE ATTRACTIVENESS OF COMPANIES Due to the sustained growth in R&D investment and its internationalisation, profiles in electronics, cybersecurity or artificial intelligence are rare on the labour market and sought after by many players. The implementation of policies 8x the AI market in 2025 compared to 2019 (2) . +63% growth in revenues from 5G in 2021 (1) . 1,000 billion connected objects in 2035. it used to take 5 to 10 years. Now a computer developper’s knowledge is estimated to be obsolete in 18 months, 60% of companies lack cybersecurity expertise internally. Around Worldwide, the number of unfilled positions in cybersecurity has risen 50% to attract talent is therefore a major challenge for companies. There can be significant consequences on the capacity for innovation or business development. Potential candidates are increasingly aware of the companies’ economic and societal role within Society. Implementing social responsibility, integrity and inclusion policies is becoming an increasingly prevalent competitive advantage. Similarly, gender diversity in scientific and technical careers is an important issue for the future development of innovative companies. OUR RESPONSE Thales has long sought to reflect the diversity of the world in which it operates through a proactive policy on diversity and inclusion. Today, Thales is recognised in many countries as one of the best employers, especially for young engineers. Global competition for talent since 2015. CHALLENGE: TO SET UP A TRUSTED, EXPLAINABLE, CERTIFIABLE AND SUSTAINABLE AI The rapid increase in the processing power of processors and in data storage capacity has enabled artificial intelligence to take flight. This concept, which combines many different technologies, is attracting increasing interest from governments and companies. In the course of a few years, over $15bn have been invested in startups specialising in the field of artificial intelligence, in order to harness this breakthrough innovation. However, in years to come, this expansion could collide with the growing concerns expressed by citizens about these technologies, even if they are sometimes revealed to be irrational. It would therefore seem crucial to integrate into artificial intelligence development strategies answers to these legitimate questions on the ethical and societal challenges posed by the digital transformation of Society. OUR RESPONSE Thales isworking on the development of responsible artificial intelligence, i.e. one that helps to make the best decisions while ensuring permanent human control and responsibility for actions taken. But it is also a frugal artificial intelligence in terms of data and energy, as performance should not be detrimental to the environment. These challenges are at the origin of the “Manifesto on AI for Industry”, initiated by Thales and implemented as part of the framework of the AI for Humanity initiative.