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Tuesday was JPMorgan Chase’s confab on national security, a sector that has become an investment pillar for the banking giant. While the event encompassed other areas like energy and supply chain infrastructure, defense tech was really the star of the show. Venture and private equity investors packed the room to hear about the booming field of dual-use startups, which sell to both commercial and government clients. It’s an area that not too long ago drew skepticism from much of Silicon Valley. #Topic of War #The Most Important Thing
The defense sector and Silicon Valley aren’t strangers to each other. The modern U.S. tech industry arguably owes its existence to the military’s decades-old investments in semiconductors and early internet efforts. Still, the venture industry has had limited success breaking into the insular world of defense contracting, long dominated by names like Lockheed Martin, Booz Allen and RTX (formerly Raytheon)—until the last few years, at least.
Outside the #Artificial Intelligence labs, the buzziest Silicon Valley companies are actually clustered in places like Southern California and Texas, where startups like Anduril, Saronic Technologies and Shield AI are turning defense-spending paradigms on their head. Palantir, which went public in 2020, has already dwarfed the market cap of its more venerable defense competitors.
The shift in power from lumbering contractors to startups backed by venture capital and private equity was on clear display at the off-the-record JPMorgan event last week. Investors mingled with operators between sessions featuring firms like In-Q-Tel, an independent venture firm created by the CIA, as well as a panel hosted by John China, JPMorgan’s head of innovation economy, on the corporate venture strategy of Lockheed Martin, Booz Allen and RTX. (Even the incumbents are coming to the private capital party.)
Everyone had dollar signs flashing in their eyes. The event was convened to celebrate the new edition of the NatSec100, a list of the top private national security companies created by the nonprofit Silicon Valley Defense Group and now in its fourth edition.
The report detailed a sea change in defense spending under the administration of President Donald Trump. Changes in the complex rules around how government agencies dole out contracts, as well as the dire need for new supplies created by the U.S.’s ballooning wars, have created the ideal environment for relative newcomers like Anduril, whose valuation has spiked to over $60 billion. Companies on the list saw a 2.5 times increase in federal spending commitments from 2023 to 2025, though that still represents just 0.5% of spending from the Department of War’s total budget, showing the vast expanse of green space that lies ahead.
The money is showing up in force. A total of nearly $40 billion in investments poured into the NatSec100 companies in 2025 (excluding OpenAI, which appears in 12th place on the list). But will that trend last?
Not too long ago, many venture firms stayed away from companies like Anduril. For some, their distaste stemmed from ideological concerns about funding war machines. For others, it was because they were skittish about financing companies with such a fickle customer base. As Trump agencies announce one multibillion-dollar contract after another for tech companies, Silicon Valley is returning to its defense roots. Now investors have to hope the government gravy train lasts beyond the next two years.
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