The Pentagon is getting into investing. Yesterday, Secretary of Defense Lloyd Austin established a new Office of Strategic Capital (OSC), which aims to give the DoD the ability to work more closely with private capital.
Why get into capital markets?
Right now, the DoD’s mechanisms for helping new, important technologies hop the “valley of death” between development and commercial viability are acquisition-based.
The OSC, on the other hand, would allow the Pentagon to use loans and loan guarantees to help young tech companies meet their capital needs.
“America’s strategic competitors are working to influence U.S. technological innovation to their advantage,” Under Secretary of Defense for Research and Engineering Heidi Shyu said in a statement. “OSC is part of a broader administration-wide effort to ‘crowd-in’ private capital in areas where our efforts can boost our future security and prosperity.”
The Pentagon is hoping to begin closing deals by early 2023.