The US Army has enlisted Wall Street’s top private equity firms, including Apollo, Carlyle, KKR and Cerberus, to help fund a $150 billion modernisation of ageing equipment and bring Silicon Valley-style innovation to boost military readiness.
The outreach marks an attempt to bring private investors into the heart of America’s national security plans.
Army secretary Daniel Driscoll and treasury secretary Scott Bessent last week convened about 15 top buyout firms, including Apollo, Carlyle, KKR, Advent International and Cerberus, to discuss potential “meaty” strategic projects, the Financial Times reported.
Driscoll said he urged the groups to identify “clever” or “unique” financing models to bridge the funding gap. “We are in a hole that we are not going to be able to dig out of without creative solutions coming in from outside parties,” he told the newspaper.
The initiative reflects US President Donald Trump administration’s push to align the $13 trillion private capital industry with US defence and technology goals.
Driscoll, a former investment banker, said he has $15bn budgeted for infrastructure over the next decade, which accounts for just a fraction of what is needed.
The projects under consideration could include data centres, rare earth processing facilities and other critical assets, potentially involving land swaps or payments in computer processing power. “Instead of paying us with cash for the land, you pay us in compute,” Driscoll said.
Executives at the meeting discussed allowing private firms to build data centres on army bases under lease agreements to speed up construction and lower costs.
Driscoll said the army expected detailed pitches and would carry out due diligence before meeting investors again in New York, with multiple deals targeted for completion by year-end.
Cerberus founder Steve Feinberg, now deputy defence secretary, and Carlyle, both major investors in defence industries, were among the attendees. Driscoll’s Army Transformation Initiative aims to revamp ageing equipment and adopt Silicon Valley-style innovation to boost military readiness.
The Pentagon has already invested $400 million to become the largest shareholder in rare earth producer MP Materials, and Driscoll indicated the army may take similar equity stakes in strategic firms or stockpile critical minerals amid tensions with China.
According to one attendee, the talks were “serious and very wide ranging”, with a clear message that both the Treasury and the Army are intent on deeper collaboration with private capital to secure America’s technological and defence future.
