The US army has begun exploring deals with major private equity groups — including Apollo, KKR, Carlyle, and Cerberus — to help fund a $150 billion overhaul of its infrastructure. Army Secretary Daniel Driscoll and Treasury Secretary Scott Bessent met with 15 leading buyout firms in Washington last week, urging them to propose large-scale, creative projects that could modernise ageing bases and supply chains, the Financial Times reported.
A $150 billion gap and a new approach to funding
Driscoll said the army’s existing $15 billion budget for infrastructure is insufficient to cover its decade-long needs. To fill that $135 billion shortfall, he invited private firms to suggest unconventional financing models. “We actually just want meaty projects,” Driscoll said, describing the meeting as an open call for investment ideas that could include data centres, rare earth processing plants, and new technology hubs.
‘Pay us in compute’ — how the model would work
One idea floated was for investors to build facilities on army land under long-term leases, reducing upfront costs for the government. Driscoll even proposed that companies could “pay us in compute” — exchanging access to land for data processing capacity or output from mineral plants instead of cash. Attendees described the session as a serious effort to identify cost-efficient ways to finance upgrades to bases, depots, and supply networks.
Part of Trump’s wider embrace of private capital
The initiative reflects the Trump administration’s growing collaboration with the $13 trillion private equity sector. It follows an August executive order allowing US retirement plans to invest in private assets — a major boost for the industry. The move also continues the administration’s strategy of linking defence, energy, and finance to strengthen national resilience against China, particularly in critical minerals.
National security meets private profit
The army’s modernisation push could see Wall Street firms play a direct role in defence infrastructure for the first time. Projects under consideration include data centres on bases, rare earth processing facilities, and supply-chain investments that could be financed through long-term leases or asset-backed deals. “We are in a hole we cannot dig out of without creative solutions from outside parties,” Driscoll said.
From rare earths to Silicon Valley partnerships
Driscoll’s “Army Transformation Initiative” also involves investing in technology and critical materials. The Pentagon recently took a $400 million stake in MP Materials, a leading US rare earth producer. Driscoll suggested the army might take similar equity stakes or even build a mineral stockpile to reduce dependence on Chinese exports. “All of those options are on the table,” he told the Financial Times.
Who’s involved and what’s next
Alongside Apollo, KKR, and Carlyle, other attendees included Advent International, BDT & MSD Partners, and several large family offices. Cerberus — founded by Trump’s deputy defence secretary Steve Feinberg — also participated and has already set up a $65 billion “strategic supply chain” fund. The army plans to review investor proposals and finalise several deals by the end of the year.
The bottom line
By turning to private equity, the US army is rewriting the playbook for defence financing — blending national security with Wall Street innovation. If successful, it could accelerate modernisation across bases and supply chains; if not, it risks deepening the ties between profit motives and the nation’s military mission.
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