Technology Investment Benefits

The Gulf crisis just created the biggest startup opportunity in a decade. Five things Silicon Valley leaders need to understand right now: 𝗗𝗮𝘁𝗮 𝗰𝗲𝗻𝘁𝗲𝗿𝘀 𝗮𝗿𝗲 𝗻𝗼𝘄 𝗺𝗶𝗹𝗶𝘁𝗮𝗿𝘆 𝘁𝗮𝗿𝗴𝗲𝘁𝘀. Iranian drones hit three AWS facilities. The Strait of Hormuz and Red Sea both data chokepoints are closed. The security frameworks behind the Gulf’s AI partnerships were built for chip export control, not for protecting buildings during a war. 𝗧𝗵𝗲 𝗱𝗲𝗳𝗲𝗻𝘀𝗲-𝘁𝗲𝗰𝗵 𝘁𝗵𝗲𝘀𝗶𝘀 𝗶𝘀 𝗮𝗰𝗰𝗲𝗹𝗲𝗿𝗮𝘁𝗶𝗻𝗴. The Pentagon set a $13.4B AI budget for FY2026 which is the largest in U.S. defense history. $130B+ in VC has flowed into defense-tech startups since 2021. → Palantir’s Maven system ran intelligence across five combatant commands → Anduril ($30.5B valuation) — Lattice OS selected as the Army’s fire control platform, Arsenal-1 factory producing autonomous systems at scale, OpenAI partnership for counter-drone AI → Shield AI ($5.3B) — Hivemind autonomous piloting completed AI vs. manned F-16 combat maneuvers → Epirus ($1.5B) — directed-energy counter-drone systems integrated with Anduril’s Lattice, directly relevant to Gulf drone defense → Saronic ($1.5B) — autonomous naval vessels applicable to Strait of Hormuz patrol → Hermeus ($1B+) — hypersonic aircraft for ISR and rapid strike → Ares Industries — Y Combinator’s first weapons company, building low-cost anti-ship missiles → Ursa Major ($2.5B) — rocket propulsion for supply chain independence Early-stage investors in this space are looking at generational returns. 𝗧𝗵𝗲 𝗿𝗲𝘀𝗶𝗹𝗶𝗲𝗻𝗰𝗲 𝘀𝘁𝗮𝗿𝘁𝘂𝗽 𝘄𝗮𝘃𝗲 𝗶𝘀 𝗵𝗲𝗿𝗲. Every hyperscaler is now rethinking geographic risk. That creates massive demand for: → Sovereign cloud infrastructure (hardened, government-grade, physically defensible) → Multi-region failover and edge computing platforms → Satellite backup connectivity (Aetherflux, Astranis) → Underground and modular data center designs → Cybersecurity for critical infrastructure against nation-state actors → Alternative compute capacity for displaced AI workloads (CoreWeave, Vultr) Startups solving resilience at the infrastructure layer will command premium pricing from both governments and hyperscalers. This is the next $100B+ category. 𝗚𝘂𝗹𝗳 𝗰𝗮𝗽𝗶𝘁𝗮𝗹 𝗶𝘀 𝗽𝗮𝘂𝘀𝗶𝗻𝗴 𝗯𝘂𝘁 𝗻𝗼𝘁 𝗱𝗶𝘀𝗮𝗽𝗽𝗲𝗮𝗿𝗶𝗻𝗴. Sovereign wealth funds holding $2T+ in U.S. assets are reviewing commitments. The Stargate UAE mega-campus, Amazon’s $5.3B Saudi cloud all in limbo. But post-conflict, these governments will double down on tech diversification away from oil. Startups that maintain Gulf relationships now while diversifying their own risk will be first in line when capital flows resume. The Gulf’s structural advantages with sovereign capital, energy, ambition haven’t disappeared. But the risk has permanently shifted. Rapid de-risking without full retreat.

Over and over I've met innovators, founders, investors, and consultants who are genuinely interested in defence. Many are motivated by the urgency of the moment. Many see the scale of investment. Many see Ukraine and think: drones, AI, LLM, this is where everything is going. And they are not wrong. What is often missing is the deeper understanding of what defence and warfare actually mean in practice. Not in headlines, pitch decks or conference panels. In reality. Warfare is not “using drones”. It is operating under constant pressure, degradation, uncertainty, political constraints, legacy systems, human fatigue, and irreversible consequences. Ukraine has shown this brutally clearly not just how fast technology evolves, but how fragile most solutions are once they meet real contested environments. This gap between perception and reality is now creating growing frustration on all sides. Innovators and investors feel that things are moving too slowly. They expect rapid adoption to unlock scale, good technology will speak for itself. On the other side, defence organisations are under enormous pressure to adapt while operating inside systems, doctrines, policies, infrastructures that were never designed for rapid change. This is hard. Transformation is slow by nature. On top of that come political will, policy enablement, budget cycles, institutional constraints. None of this fits startup timelines or typical investment/PE models. At the core of everything sits something even more fundamental: trust and competence. In defence, trust is personal. It is built over years of presence, consistency, and understanding. Not through hype or buzzword bingo or PR or “we’ll pivot if this doesn’t work”. Defence looks for partners who will still be there in ten or fifteen years not those who walk away when returns take longer than expected. Because here, failure has consequences that last decades. Warfare means lives. Soldiers. Commanders. Civilians. Families. Societies. That reality shapes everything. It is why solutions must be survivable, not just impressive. Why modularity and scalability are key. Why legacy systems cannot be ignored. Why data governance, security, integration are as important as algorithms. Why senior advisors who understand institutions, doctrines, and politics are not “nice to have”, but essential. It is also why investors need to ask different questions in this domain. Not just “what is the market?” but “what problem is this really solving, who will adopt it, how, under what constraints, over what timeframe?” We need to meet in the middle, with honesty, realism, patience and collaboration. This article is part of that effort: to make the realities visible, to challenge comfortable assumptions, to help all sides succeed. True deterrence is collaboration. Collaboration is built slowly on understanding, trust, and long-term commitment. #DefenceInnovation #EuropeanSecurity #NATO #SecurityPolicy #Resilience #Leadership

Let’s talk “frothy” defense tech valuations. I’ve gotten a number of calls and texts from defense tech founders and other VCs about recently announced Anduril and Saronic rounds. On balance, I’m deeply encouraged. Here’s why: Defense tech has a double bottom line purpose: civilizational preservation and financial return. The round sizes and associated valuations show a collective National Seriousness we have not seen in ages. This Seriousness cuts across Government, Private Capital, and the Career Choices of Exceptional Talent. Government is giving meaningful, long-term contracts to new capabilities and business models. Private Capital is voluntarily investing generational wealth in national defense. Exceptional Talent is moving their life's work from apps to aerospace. That remarkable intersection creates Strategic Doubt in our adversaries. Increased Doubt increases the probability of deterring catastrophic wars. If deterrence fails, Serious investment in Serious capabilities enhances the chances of winning. Obviously, defense tech startups alone are not the only factor in Deterrence. Their capabilities are built upon a strong foundation of decades of time and Trillions of dollars already spent on existing capabilities and personnel. But single percentage points of probability on the margins can drive a “go / no-go” invasion decision. When the wealthiest and most talented members of our society shift their attention to national security, adversaries take notice. The Gray Zone is as much about messaging and national mindset as objective, physical capability. It’s possible Anduril and Saronic will not justify their valuations (although with generational founders in each, I wouldn’t bet against either). But even in the downside investment scenario, that timing occurs at the end of the Davidson window [the highest probability timeframe in which China might attack Taiwan]. If war hasn’t broken out and they do happen to fall short of expectations, we’ve traded private capital losses for increased deterrent probability (and possibly a total avoidance of war). This is a bet with huge asymmetric upside for our society, with private capital bearing the cost. Companies, Capital, and Combatants are making credible and Serious investments in areas many of us have been clamoring for across the past decade. Let them cook. This is how we Win.

Why global investors are starting to take Ukraine’s defense-tech ecosystem seriously — and what it means for the market and the future of warfare. I had a privilege along great investors and founders to talk with the United24 Media as it dives into the forces shaping Ukraine’s rapidly scaling defense-tech industry. It’s worth founders and investors attention. Some of the insights that stood out: 📈 Investments are accelerating — not slowing down. From roughly $5M in 2023 to over $105M in 2025, Ukraine’s defense-tech startups now capture a meaningful share of early-stage capital in Europe. 🧪 Battlefield validation reduces risk. Unlike many Western startups still chasing potential, Ukrainian technologies have already proven themselves under fire. This real-world testing — with immediate feedback from soldiers — removes much of the ambiguity investors typically avoid. 🌍 Global players are now present on the ground. German, U.S., Dutch, and other foreign funds/companies are opening local offices, acquiring stakes, and partnering with Ukrainian firms — signaling not just exposure but strategic integration into the ecosystem. 🧰 Structural reforms are unlocking capital flows. New legal frameworks — like investor-friendly tools from Diia City coming into Ukrainian law — will help keep investment inside the country and support larger deals locally, rather than forcing founders to register abroad. 📍 Long-term value goes beyond wartime demand. Investors interviewed emphasize that this isn’t just wartime necessity — it’s a shift in global defense procurement where autonomous systems, drones, EW, and dual-use platforms will define future capabilities and export markets. 🔑 The key takeaway: Ukraine’s defense-tech growth is not accidental — it is market-driven, validated by combat, and increasingly tied to global demand and capital. Worth reading the full analysis — link in the comments. Daniel Kosoy Deborah Fairlamb Roman Sulzhyk Taras Semeniuk

The UK has just published its most comprehensive defence review in 25 years, and it reveals a military on the cusp of its biggest technological transformation since the Second World War. The review's most striking finding isn't about threats or spending—it's about how warfare itself is being fundamentally redefined by technology. As the document starkly notes, drones now kill more people than traditional artillery in Ukraine, and military advantage increasingly comes from speed of innovation rather than size of forces. The technological revolution outlined is comprehensive: Artificial Intelligence becomes central to everything. The review calls for a protected Defence AI Investment Fund and a digital targeting web by 2027 that connects sensors, decision-makers, and weapons across all domains in real-time. Data and digital systems are no longer optional extras—they're foundational to every military capability. Autonomous systems transform the battlefield equation. The UK will establish a Defence Uncrewed Systems Centre by February 2026, moving toward a high-low mix where 20% crewed platforms control 40% reusable autonomous systems and 40% single-use effectors like attack drones. This isn't just about adding drones—it's about completely reimagining how forces operate. Space and cyber become contested battlegrounds. A new CyberEM Command launches by end-2025 to coordinate operations in cyberspace—the only domain under daily attack. Meanwhile, space capabilities become critical as China and Russia's combined satellite fleets grew 70% in recent years, with quantum technologies promising to revolutionise both encryption and navigation. Innovation cycles accelerate dramatically. Defence procurement must shift from 6.5-year contract cycles to three-month rapid commercial exploitation, with a new UK Defence Innovation organisation receiving a ringfenced £400 million annual budget to harness commercial breakthroughs. Advanced weapons reshape deterrence calculations. From hypersonic missiles travelling five times the speed of sound to directed energy weapons like the UK's DragonFire system, the review highlights how precision, range, and speed are transforming military mathematics. This isn't just military modernisation—it's recognition that the character of warfare has changed more in the past decade than in the previous century. The question for defence industries and tech companies is clear: are you ready for this transformation? #DefenceTech #Innovation #AI #AutonomousSystems #DefenceReview #UKDefence

🔍 The “Dual-Use” Myth Let’s set the record straight: Most of the top-tier defense tech companies didn’t start as dual-use. They won by solving complex, mission-critical military problems first, not by chasing commercial TAM slides. Yet these are the companies investors compare startups to. 📍 Palantir (founded in 2003) landed its first commercial customer (JPMorgan) in 2010, 7 years after founding 📍 Anduril (founded in 2017) is still focused almost entirely on military use cases 📍 SpaceX (founded in 2002) didn’t launch its first commercial payload until 2009 and didn’t truly enter dual-use until Starlink went commercial in late 2020 💡 The truth? Dual-use is not a business model. It’s a phase one that may come later, if the core defense tech proves itself under pressure. 🛡️ Defense-First Is Not a Limitation—It’s a Strategy Yes, working with the Department of Defense (DoD) is challenging. It’s slow. Bureaucratic. But if you can win there, you’ve proven your tech works under real-world, no-fail conditions. That’s the bar. Building for the warfighter forces clarity, discipline, and technical rigor. It's where meaningful innovation happens. ⚔️ Most Military Tech Has No Civilian Analog—And That’s Okay Not everything needs a commercial spin: -F-35s: No airline needs stealth or supermaneuverability -Javelins: No civilian use case for anti-tank missiles -EW tools, RF jammers, targeting sensors: You won’t see them at Home Depot The most valuable military systems exist because there’s no commercial equivalent. That’s not a flaw—it’s a feature. 💸 Why VCs Push Dual-Use (and Why It’s a Trap) VCs love dual-use because it: ✅ Grows the TAM ✅ Accelerates revenue ✅ De-risks from defense budgets However, this pressure can prompt startups to pursue a hypothetical commercial pivot before they’ve proven value to the warfighter. ✅ The Right Strategy for Founders? Solve for Defense First If you want to build in this space: 1.) Nail the defense use case 2.) Prove mission relevance 3.) Win with the operator 4.) Then maybe explore dual-use if it makes sense History shows: that’s the path that works.

Always meaningful dialogue going on at Liberty Ventures Network 🙌 I was asked whether defense will continue to be an investable sector. Super valid question, and I think most of us who invest in defense get this question a lot. A couple of my thoughts here: The US DoD budget tells a clear story of sustained and growing commitment. Last year's enacted DoD topline was around $860 billion. This year's President's FY2026 budget request jumps to $961.6 billion for DoD alone, and when combined with national defense totals, the overall request crosses $1.01 trillion for the first time in U.S. history. That's a roughly 13%+ increase year-over-year, driven by priorities like rebuilding readiness, modernizing the force, and initiatives such as the "Golden Dome" missile defense shield. The DoW is experiencing a structural shift. We're entering an era where the defense budget has officially entered trillion-dollar territory, reflecting heightened global threats, great-power competition (especially with China), and the need to revitalize the industrial base. ‼️ The only piece that matters to me: technological advancement in defense directly saves lives and deters conflict ‼️ - Precision-guided munitions, drones, advanced sensors, and autonomous systems have dramatically reduced casualties among U.S. warfighters and civilians in recent conflicts compared to past wars. - Historically, when we invest heavily in tech, whether in healthcare (think robotic surgery, AI diagnostics, or minimally invasive procedures) or manufacturing (automation in hazardous environments like mining or chemical plants), costs eventually come down while outcomes improve. We spend more upfront on innovation to spend less long-term on human risk and inefficiency. - The private sector follows the same playbook: in dangerous jobs (oil rigs, logging, construction at height), companies increasingly replace humans with machines and robots to hedge against injury, liability, and downtime. Why? Because technology scales safety and efficiency better than throwing more people at the problem, and risking human lives. The same principle applies to national security: the most effective way to win wars, and more importantly to prevent them, is through overwhelming technological superiority and credible deterrence. Under-investing risks emboldening adversaries and forcing costlier, bloodier conflicts later. Bottom line: with budgets hitting record highs, rapid tech integration, and a strategic focus on deterrence through strength, defense isn't just investable. It's one of the most structurally supported sectors out there right now. The dollars are flowing, the mission is clear, and the upside (both in security and innovation spillovers) is massive. 🇺🇸

The factory floor is the new frontline and Silicon Valley just got called up. Last week, the White House issued a sweeping Executive Order to modernize how the U.S. acquires defense tech. The message was clear: if we want to stay ahead, we need to move fast—and bring the builders with us. Historically, the Pentagon has been its own ecosystem: long timelines, rigid processes, and an allergic reaction to risk. But modern conflict doesn’t move on 10-year procurement cycles. Neither should our military. This EO flips the model:  → Prioritizes speed and adaptability  → Encourages commercial-first solutions  → Empowers the DoD to take risks and innovate And here's where it gets interesting for tech:  Silicon Valley has already shown what’s possible when speed meets scale. Whether it’s AI agents, robotic autonomy, cybersecurity, or space tech—the edge is being built here. Startups like Anduril, Shield AI, and Epirus have proven that high-growth, VC-backed defense companies can succeed where legacy vendors have stalled. The U.S. military isn’t just looking for suppliers anymore. They’re looking for partners who can ship, iterate, and deliver outcomes—fast. This is a moment: → For founders: Defense isn’t just patriotic, it’s a massive business opportunity.  → For investors: Dual-use (commercial and defense) tech has moved from niche to strategic. → For operators: Defense tech just got 10x more interesting. The battlefield may still be overseas. But the future of national security? It’s being prototyped in garages and scaled in the cloud. Let’s build.

🇺🇸 It's (always) a good time to be in defense tech. Depending on how you define the sector, somewhere between $8.7B and $49.1B flowed into defense and dual-use startups in 2025. A few years ago that number was in the hundreds of millions. The range matters. Narrow the aperture to pure-play defense startups and funding grew 3.2x from $2.7B in 2022 to $8.7B in 2025 (New Market Pitch). Widen it to include dual-use companies and CB Insights puts U.S. equity funding alone at $17.9B, nearly triple the prior year. PitchBook, using the broadest lens, counted $49.1B in total deal value across 966 transactions. Pick your definition. The trendline is the same in all of them. The number of VC firms actively investing in defense jumped 41% in a single year. Mainstream funds that five years ago wouldn't touch a company with a DoW logo on the pitch deck are now standing up dedicated practices. The whole sector went from pariah to portfolio allocation in about four years. And that speed should make everyone pay attention. In 2018, Google walked away from Project Maven after a few thousand employees signed a letter. That single moment froze Silicon Valley's willingness to work with the Pentagon for years. LP pressure, employee backlash, and reputational risk kept billions on the sideline. The capital accelerated anyway. Ukraine gave investors something no pitch deck ever could: real-time combat validation of venture-backed technology at scale. Product cycles compressed from years to months. Drones, autonomous ground vehicles, electronic warfare systems, all iterated on the frontline and fed back into production. Ukraine's top three defense market segments grew from $2.8B to $6.8B in a single year. The ethical objections that paralyzed the sector post-Maven got overtaken by a live proof point that software-defined warfare works, and that startups can deliver it faster than primes. But the underlying vulnerability remains. Defense tech is still funded disproportionately by a small number of firms making concentrated bets. Anduril alone captured roughly a third of all defense tech funding over the last four years. The top three companies took 46%. If the geopolitical narrative shifts, if a new administration deprioritizes, the capital could thin out faster than anyone currently models. The founders who will survive that correction are the ones building companies with real revenue, real contracts, and dual-use business models that don't depend on defense sentiment staying hot forever. Dual-use is the hedge.

Marc Andreessen just joined the Pentagon's Defense Policy Board, one of thirteen new members. The seat matters less than the signal. Defense tech is no longer a fringe bet. For seventy years, defense worked one way. A prime like Lockheed or Raytheon won a cost-plus contract, built to spec, and billed the taxpayer for costs plus margin. The incentive was to spend more and take a decade doing it. A new class flipped it. Anduril, Saronic, Shield AI, Mach. They build with private capital first, then sell the finished product to the government. That's the venture model applied to defense, and it's working. Funding hit $49 billion in 2025, nearly double the year before. Q1 2026 alone brought in almost $20 billion. Worth naming the obvious. Andreessen's own firm is invested across this sector, and the disclosure rules for his seat aren't public yet. The shift creates a real problem, though. The government learned to buy from four primes. It has no idea how to buy from five hundred startups, or how to certify a two-year-old company for the battlefield fast enough to matter. That gap is what people like Andreessen are there to close. We back dual-use startups ourselves, and the procurement rails are finally catching up. The irony? The government used to build this technology. GPS, the internet. Now it mostly buys it.