Revealing the dangerous alliance of techno-fascists with finance capital and the military industrial complex.
Swearing-in ceremony for the US Army’s Detachment 201—the so-called Army Executive Innovation Corps—with lieutenant colonels from four tech companies, including Shyam Sankar, chief technology officer (CTO) for Palantir; Andrew Bosworth, CTO for Meta; Kevin Weil, chief product officer of OpenAI; and Bob McGrew, adviser at Thinking Machines Lab and former chief research officer for OpenAI, on June 13, 2025.( Leroy Council / Army Multimedia and Visual Information Division)
When Smedley Butler said, “War is a racket,” he couldn’t have imagined that a sitting US president would time announcements about major military operations in order to manipulate the stock market. But as the US economy has been increasingly financialized, so too has the nature of war profiteering, increasingly driven by insider trading, oil speculators, and the portfolio earnings of venture capital (VC) investors, tech billionaires, and private-equity fund managers. Of course, finance has always played a role in US war-making: JPMorgan was investigated by the Nye Committee inquiry into World War I profiteering, and private capital flooded into Silicon Valley on the heels of DOD investment into early microwave weapons and semiconductors. But facing a new era of high interest rates, fallout from a decade of bad lending based on fictional credit documentation, and a liquidity crisis driven by fewer IPOs, private capital is increasingly desperate to restore its previous era of high returns. The surest avenue for this restoration is the capture of the Pentagon budget, recently proposed by Trump at $1.5 trillion.
To access this giant slush fund, private capital has launched an unprecedented effort to capture key posts in the military establishment, rewrite the Pentagon’s vast regulatory and development bureaucracy, and embed its priorities within the military branches themselves.
At the level of personnel, the presence of VC and private equity (PE) is dramatic. The new chairman of the Joint Chiefs of Staff—the highest-ranking military officer in the United States—is Dan Caine, a long-term investor who became a venture capitalist and adviser for Shield Capital and Thrive Capital, two funds with substantial investments in weapons start-ups. Stephen Feinberg, the US deputy secretary of defense, is the cofounder of Cerberus Capital, a $70 billion global investment firm that launched a VC arm in 2024 which is currently headed by an alum of In-Q-Tel, the CIA’s venture capital arm. Dan Driscoll, the secretary of the Army had a career in private equity and venture capital before his appointment and has vowed to apply the Silicon Valley model to the Army. Michael Obadal, the under-secretary of the Army, is a former senior director at Anduril, which was launched by venture capital investment. John Phelan, a prominent private-equity investor and former CEO of MSD Capital, briefly served as secretary of the Navy before being forced out during the ongoing Naval blockade of Iran. Two officials in Trump’s Office of Management & Budget with direct influence over military spending have substantial interests in VC-backed weapons firm Anduril and have characterized their roles as promoting the inclusion of military tech into the DOD. The new appointees to the President’s Council of Advisors on Science and Technology, which the White House hailed as “luminaries in science and technology,” is populated by a list of billionaires and their hangers-on, including co-chairs David Sacks and Michael Kratsios (Peter Thiel’s former chief of staff) and tech tycoons like Marc Andreesen, Larry Ellison, and Jensen Huang. The Trump administration has also invited in as advisers on military priorities longtime investors like Joe Lonsdale (cofounder of Palantir and 8VC, a venture capital firm focused on military tech) and Trae Stephens, the chairman of Anduril and partner in Peter Thiel’s VC firm Founders Fund, which is also heavily focused on investments in military tech. This is not to mention the direct involvement of Trump’s family, including his sons and son-in-law as advisers and partners in military start-ups and private-equity funds.
But personnel is only part of this equation: There has also been a massive expansion of bureaucratic infrastructure designed to incorporate VC and PE priorities into the military establishment. Key among these are initiatives like Trump’s Economic Defense Unit, the Biden-era Office of Strategic Capital (OSC) and Small Business Investment Company Critical Technologies Initiative (SBICCT)—a joint initiative of the OSC and the Small Business Administration—and DARPA’s Commercial Strategy Office, launched in 2019. In late 2024 the OSC distributed $2.8 billion to a number of private funds investing in military technologies.
As of December 2024, those loan recipients included America’s Frontier Fund, backed by Peter Thiel and former Google CEO (and drone investor) Eric Schmidt; Moonshots Capital (founded by Kelly Perdew, winner of Season 2 of The Apprentice and former executive vice president at the Trump Organization); Snowpoint Ventures (founded and managed by a number of Palantir alums); and RidgeLine Ventures, part of Anthony Blinken’s firm WestExec. Then in 2025, after Trump was inaugurated, OSC made a number of additional investments (not all of which have been disclosed). Funds get access to up to $150 million in Pentagon cash, but must raise an additional $120 million from private sources.
In addition to the provision of loans and high-ranking Pentagon posts, the broader DOD bureaucracy and the individual service branches are getting a private-finance makeover with the addition and expansion of VC units and tech incubators. The DOD’s Defense Innovation Unit was the earliest such initiative, formed in 2015 in Mountain View California and designed to bridge the gap between Silicon Valley’s commercial tech industry and DOD weapons development priorities; it was elevated in 2023 with direct report access to the secretary of defense. Since then there has been a barrage of additional access points created within the DOD: There’s the National Geospatial-Intelligence Agency’s Outpost Valley; the US Army’s OnPoint Technologies, Venture Capital Corporation, Executive Innovation Corps, and ArmyFuze, a partnership with Silicon Valley’s biggest incubator Y Combinator; the Department of Homeland Security’s Silicon Valley Innovation Program; the Navy’s NavalX Tech Bridge (an international network of tech hubs); the Crucible Accelerator, designed to help start-ups “cultivate strategic partnerships in the Department of Defense ecosystem”; the Air Force’s AFWERX, and the Marine Innovation Unit (a reserve unit for “tech whizzes and CEOs”). There’s also the Chief Digital & Artificial Intelligence Office, announced in 2022, which has since awarded hundreds of millions in contracts to Anthropic, Google, OpenAI, and xAI “to develop agentic AI workflows across a variety of mission areas” and “provid[e] access to many of the latest generative AI (GenAI) models for general purpose use to Combatant Commands.” These new initiatives combine with a range of VC and industry-funded nonprofits and lobbying groups, as well as fellowships and training programs designed to create new networks that bring together emerging tech and investor priorities with military personnel. Some key organizations include the Silicon Valley Defense Group, the Creative Defense Foundation, and the Special Competitive Studies Project, as well as initiatives funded by individual billionaires like Eric Schmidt’s Schmidt Futures foundation, which has leveraged existing government personnel exchange programs to place at least two dozen allies in key positions in government.
However, capitalizing on this special-interest infrastructure also means transforming the way the Pentagon does business. A 2023 white paper produced by Andreesen-Horowitz—one of the largest and most influential VC firms—outlined how this process would require “reengineering the Pentagon’s DNA for a new era” to focus on building an arsenal that provides a “reduction in operational complexity, driv[es] lower costs through commoditization” with “modular modern production” that uses “just-in-time” manufacturing techniques like 3D printing to cut latency” allowing for “decentralizing a military’s industrial footprint.” The DOD eagerly adopted these aims, and issues of commercialization, commoditization, decentralized production, and cheap “attritable systems” became central features of procurement regulations and strategy papers. This extensive retooling of regulatory structures fast-tracks the inclusion of VC-backed military-tech start-ups into the Pentagon’s arsenal. Contracting tools like “other transaction authority” (OTA) have become the default procurement vehicle under the Trump Admin, liberating start-ups from the rules and regulations that typically govern procurement, like the Truthful Cost and Pricing Data Act, the Competition in Contracting Act, and the Cost Accounting Standards (among any others). These alternative procurement tools have been expanded alongside the shrinking of other procurement initiatives designed to provide access to native or minority-owned businesses that Defense Secretary Hegseth has characterized as “wasteful DEI projects that don’t help us win wars.” There is also what’s known as the Commercial Solutions Openings (CSO) track, which was dramatically expanded under Trump’s 2025 National Defense Authorization Act. CSO similarly strips out compliance standards and allows for sole-source follow-on contracts. Watchdog groups say these nontraditional mechanisms open up serious risk for fraud and abuse. CSO and OTA are the procurement vehicles used for the DOD’s Drone Dominance program, which has been plagued by equipment failures in testing and in Ukraine, including many related to Anduril’s software and hardware products.
The November 2025 Acquisition Transformation Strategy from Hegseth’s office lays out how critical private capital is to this new contracting landscape, stating “The Department will regularly collaborate with leading private equity and venture capital firms to communicate operational challenges, demand signals, critical issues, and opportunities for strategic investments.… [t]his increased engagement with the financial community will seek to incentivize increased private capital investments focused on warfighting priorities while providing the Department with greater insights into market intelligence and current and emerging industry offerings.” The document also lays out “industry-focused training to military and civilian personnel focused on topics such as venture capital and commercial practices that drive speed and agility to accelerate capability delivery to the warfighter and overmatch adversaries.”
Just as private capital has re-written the Pentagon rulebook, it also transformed Silicon Valley from a center of scientific innovation to a military-tech outpost. The role of military spending in the early years of Silicon Valley is well documented, but during the height of US forever-war fatigue and pressure from rank-and-file employees, some tech firms eschewed military contracts. But hyper-accumulation and the influence of private finance have grown in tandem with the militarization of technological development: For most of the early 2000s, advances in tech like smartphones, tablets, cloud computing, and streaming services brought useful products and services to ordinary people. But the 2007 financial crisis and Covid prompted a period of zero-interest rate policy and loose capital markets that transformed the tech industry into a giant piggy bank for billionaires and asset managers, who gained increasing control over the direction of technological development within the industry itself. Since then, much of the market growth in tech has come from products laying somewhere along a spectrum between outright scams and Rube Goldberg machines. Some of these storied boondoggles include the metaverse, theranos, crypto, NFTs (non-fungible tokens), wearable tech that everyone hated, subscription services for smart tech in everything from mattresses to gym equipment, and of course, “autonomous” systems that are actually remotely piloted by someone in a “digital sweatshop” in Manilla or Nairobi.
As monetary supply dried up, so did the flow of investor cash into consumer software start-ups. The war in Ukraine and the rise of China’s high-tech industry put hardware—specifically military hardware—back at the center of tech development and investment patterns. Between 2020 and 2024, at least $125 billion of venture capital went into military-tech start-ups, up from only $43 billion in the prior four years. Gifted engineers that may initially work on civilian or consumer projects often “pivot” into designing military tech because they’re eager to work in a start-up flush with investor cash so they can continue their research. The developers who created popular gaming apps like Smurfs Village and Pokemon Go! are now working to develop large geospatial models that will allow for navigation without GPS or prior mapping, enabling military drones and other unmanned weapons systems to avoid the GPS-jamming technology used to great strategic effect by Russia in its war with Ukraine.
Because capitalist firms must continue to achieve valuations or dividend payouts at an ever-increasing rate, merely generating profits isn’t enough, and such firms will be targeted for sell-offs or takeovers. It doesn’t matter if you make a good product at a good price; in fact, it’s not even necessary to have a real product. Many start-ups with huge valuations had completely fabricated products (theranos), illegal products (YieldStar), products based largely on insider trading (prediction markets), pump-and-dump scams (meme coins), or unworkable business models that require years of massive subsidies to put market competitors out of business so they can achieve monopoly status and jack up prices (Uber, AirBnb).
From illegal war on Iran to an inhumane fuel blockade of Cuba, from AI weapons to crypto corruption, this is a time of staggering chaos, cruelty, and violence.
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The end of this “free money” era sent tech firms and investors in search of other pools of easy money, which they found in the Pentagon, whose budget functions as a giant slush fund with a history of coddling massive conglomerates, granting endless timeline extensions and guaranteeing large profit margins for even faulty equipment. In short order, tech executives and their venture capital partners transformed themselves from software engineers to military strategists (or recruited off-the-shelf experts from the burgeoning ranks of under-employed military veterans). In addition to traditional lobbying, hundreds of expos, expert roundtables, lecture tours, podcasts, op-eds, conferences, and even happy hours are organized by tech execs and investors to convince both the public and the Pentagon that Silicon Valley is key to restoring US global hegemony and salvaging the US military’s reputation in the wake of humiliating defeats across the Middle East. This is precisely the language that investors and tech executives repeat endlessly in their substantial public platforms: restoring American supremacy, unleashing American dynamism, dominating peer competitors, and safeguarding Western/Judeo-Christian civilization.
Despite their (delusional) predictions about the imminent restoration of US hegemony, the revolutionary weapons promised by investors and tech oligarchs have failed to materialize. The best example of this is the Pentagon’s “Replicator” initiative to develop drone swarm capabilities—basically the capacity to field literally thousands (even tens of thousands) of drones simultaneously to overwhelm enemy defenses. This requires that each individual drone unit be very cheap, easy to field, and very fast to deploy, because, as soon as it’s knocked out of the sky, it must be replaced by two more. However, the only “cheap” drone on the horizon—The Low-Cost Uncrewed Combat Attack System—is a reverse-engineered model based on Iranian Shahed drones recovered from the battlefield in Ukraine. Similarly, a much-hyped American production site for “cheap” ($4,000 each) MK-80 series bombs that opened in a decommissioned General Dynamics facility Texas in 2025 is in fact a fully owned subsidiary of a Turkish military producer, and the majority of the Pentagon’s approved list of US commercial drone suppliers meant to enable drone “swarming” operations depend on cameras, motors, chips or batteries from Chinese suppliers.
Despite its label, private capital very much depends on public markets and the state—particularly in their militarized variants—to back-stop its investment outlays. The very first venture capital firm in the US, American Research and Development Corporation, was founded to profit from the new technologies developed for use in World War II. The so-called “legacy” weapons contractors like Lockheed Martin have long had corporate venture capital arms that invest in start-up firms and acquire smaller tech firms to integrate their products into existing weapons platforms. The rapid proliferation of new private-equity firms and VC funds solely focused on weapons and intelligence firms, however, is a more recent innovation. Veritas Capital, Civitas Group, Arlington Capital Partners, Behrman Capital, Paladin Capital (and hundreds more) specialize in funding military start-ups, while long-established marquee funds that control hundreds of billions of private investment, like Sequoia Capital, Andreesen Horowitz, and General Catalyst, have built out units exclusively focused on military-tech investments.
Such funds combine the government contacts of high-ranking military and national security retirees with investment bankers and their rolodexes of wealthy clients to raise capital for new funds designed to invest in military enterprises. This partnership is reflected in the growing number of military and national security retirees that somehow headline their own funds despite no experience in finance or banking. The truly global nature of capital (which, unlike humans, has zero barriers to cross-border movement) has spawned transnational relationships between capital and weapons that defy even the stated priorities of great power governments. Financing from giant US investment firms continues to flow into Chinese firms with potential military applications because the imperatives of capital supersede even the grandest geopolitical rivalries. Wars feed into the growth of weapons firms’ stock prices as well as the expansion of private markets: The confrontation between Russia and the United States over Ukraine damaged public markets and public investment, driving global wealth further into private markets. More recently, the US-Israeli War on Iran has driven up bond yields (and therefore borrowing costs for governments) and accelerated flight from the US dollar. The cycle of militarization, violence, public austerity and private accumulation is self-reinforcing.
Militarized accumulation and financialization, combined with an interventionist US foreign policy establishment, has produced an emphasis on militarized innovation in other parts of the economy and a financial sector that’s both eager to capitalize on weapons expansion and increasingly influential in our political economy. Venture capitalists are grafting their model of hype cycles, fictional valuations, and extremely condensed timelines onto the military industrial sector to secure continued hyper returns to capital. Their goal is to (in their own words) “exit through the state”: to find start-ups with weaponizable tech, raise funds for prototyping, secure huge valuations, and land lucrative Pentagon contracts so the firms in their portfolios can either go public or raise more investor cash through private markets.
Either route promises massive payouts, but this pathway had to be intentionally engineered. Historically, venture capital returns when commercial/consumer digital technology firms went public have been huge—10 or 15 times the initial investment. The returns for defense tech start-ups were very small—one or two times the initial investment—because typically the large prime contractors like Lockheed acquired small producers very early on, at low prices. Because the arms industry is consolidated with high entry barriers, there may be only one potential contractor that can use the new tech developed by start-ups, and industry collaboration also worked to keep those acquisition costs low. Because the legacy contractors are traded on public markets, they often get dinged by Wall Street if they’re frequently shelling out cash to acquire start-ups. What Wall Street wants isn’t expansion of product lines, hiring, or innovation: They want the firm to use its capital for stock buybacks to drive up shareholder payouts.
Transforming this existing model of weapons development necessitated an extensive and lengthy campaign of influence operations. Tech executives and their investor partners had to change how militaries think of provisioning war, defining what types of weapons are needed, and who the enemies are. Equally important, they needed a compelling and totalizing narrative about how investors, software engineers, and tech executives constitute the alliance necessary to arrest US imperial decline, restore the country’s manufacturing base, secure the raw materials and rare-earth minerals necessary for high-tech weapons systems, and safeguard Western civilization from both the woke mob and alternative power centers in the Global South.
This means not only incorporating the investor class into civilian posts in the Pentagon but likewise anointing tech execs as military officers and expanding private-sector initiatives intended to facilitate the incorporation of the tech industry into the US war machine. This process of incorporation is also visible in the unholy union of corporate and military jargon, engendering new phrases like “targeting workflow,” “forward-deployed engineers,” and “cost-effective kill chains.” The convergence between technological development and global finance capital is poised to drive not only intensified militarization of the global economy but also the wars that it supplies. The extraordinary surplus accumulation at the very top of the income spectrum generates not only a crisis for capital, which must maintain constant circulation and ever-increasing returns, but also a crisis for labor, increasingly proletarianized, subjected to growing levels of militarization and dependent on a fragile ecosystem under constant assault. The alliance of techno-fascists with finance capital and the military industrial complex is a death cult of the highest order, both a reflection of US empire’s history and a bleak glimpse of our possible dystopian future.
Shana MarshallShana Marshall is associate director of the Institute for Middle East Studies and assistant research faculty member at the George Washington University’s Elliott School of International Affairs. Her work has been published by Middle East Report, the International Journal of Middle East Studies, Middle East Policy, Jadaliyya, the Carnegie Middle East Center, and various edited volumes.