Silicon Valley venture capital blowing up the US defense industry

Story from Asian Times: For most new AI products, civilian or otherwise, some form of venture capital funding is often involved, especially if the AI venture in question might prove to be too risky to be funded through bank loans or other financial instrument…
Lolita Steuber · 10 days ago · 1 minute read

Defense Investments Reshape the Venture Capital Landscape

Venture Capital's Embrace of Defense Technologies

The world of venture capital, once dominated by civilian innovations, is undergoing a paradigm shift as the defense sector attracts massive investments.

In the past, venture capital primarily fueled Silicon Valley startups, resulting in lucrative returns for investors. However, as commercial opportunities diminish, investors seek new frontiers to expand their portfolios.

Enter the defense industry. With its expanding market and substantial return potential, venture capital firms are pouring billions of dollars into military technologies.

"It's no surprise that in the past five years, VC investment in defense has soared," said expert analyst RossCWilliams. "From 2019 to 2022, US venture capital funding for military technology startups has doubled, and since 2021, the sector has seen a staggering $130 billion in VC money."

"Grab a Bigger Share of the Pie"

Some industry insiders speculate that this investment surge could be driven by a desire among tech giants to secure a larger piece of the growing defense market.

"Perhaps Musk et al are not so much interested in cutting spending as grabbing a bigger share of the pie," suggested Williams.