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👇️ Todays’ Feature: Trump Eyes Government Stakes In Defense AI Boom

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TECH IN THE NEWS

Wall Street Skeptical — 44% of S&P 500 companies have raised revenue forecasts, yet investor skepticism remains due to high valuations and labor concerns. Despite potential rate cuts, elevated buybacks and inflation worries temper enthusiasm.

Fed Under Fire — President Trump pressures the Federal Reserve to remove Governor Lisa Cook. With an 87% probability of a September rate cut, internal Fed dissent grows amid rising unemployment and high debt costs.

Tech Trade Tensions — President Trump plans to impose tariffs and export restrictions on countries with digital regulations targeting American tech companies. He criticizes the EU's Digital Services Act and vows action on it.

Intel's New Guardrails — The U.S. government secures a warrant to acquire 5% of Intel if its foundry ownership falls below 51%, prioritizing domestic chip production amid Intel's financial struggles, signaling a policy shift in the sector.

TransUnion Breach — TransUnion has suffered a data breach affecting over 4.4 million customers. Hackers accessed personal data, including names and Social Security numbers, through a third-party application. No credit info compromised.

Meta's AI PAC— Meta is set to invest tens of millions in a super PAC supporting California candidates favoring lenient AI regulations. This move aims to sway the 2026 governor's race and counteract restrictive AI legislation.

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Defense Tech Startups Attract Increased VC and Military Interest

Vivien Wang

This past week, the US and computer chipmaker Intel made a deal in which the government will obtain a 10% share in the company, investing $5.7B. However, US Commerce Secretary Howard Lutnick also suggested on CNBC on Tuesday that the government is considering arrangements similar to the one with Intel in the defense sector and other industries that can benefit from government policies. This unusual move ties into the broader surge in investment being seen across the defense tech sector. Startups in AI, autonomous systems, and space tech have seen massive spikes in funding and valuations, fueled by venture capital firms and military contracts. The militaristic potential that these innovations bring could be immense, but also raise questions about the implications of deeper state involvement in a growing military industrial complex.

The Growth of Defense Tech Funding

Over the past few years, venture capital funding into defense tech startups has shown consistent growth, even as VC momentum was slowing down in other industries. From 2021 to 2023, VCs reportedly invested almost $100B into defense tech, a leap of 40% from the previous seven years combined. In 2024, US-based defense startups raised $3B across 102 deals, an 11% increase y-o-y, and the number of investors in defense tech is expected to increase by 34% in 2025. Notable funding rounds like Anduril’s $1.5B Series F further signal deepening investor engagement from high-profile firms like Andreessen Horowitz and General Catalyst, driven by rising geopolitical instability and innovations highly applicable to defense. 

Traditional tech investors seem to be moving past ethical hesitations, as demonstrated by a16z’s $600M American Dynamism fund dedicated to supporting startups that align with US national interests. Supporting this move are government initiatives like President Trump’s proposed US sovereign wealth fund, designed to funnel government capital into tech critical to national security and fill market gaps where private capital is insufficient or too risk averse. However, critics of the fund argue the risks of political interference and market distortions. 

AI Innovation Built for the Military

Cutting-edge AI startups are at the heart of this defense tech surge. On Tuesday, Blue Water Autonomy announced a $50M Series A led by Google Ventures to develop unmanned ships for the US Navy. Blue Water exemplifies the potential that unmanned ships could hold in the military; with its team of Navy veterans and robotics entrepreneurs, the startup aims to revolutionize mine-hunting and open-ocean patrol with AI-powered, crewless vessels prepared for rapid deployment in strike groups. Blue Water competitor and leader in autonomy Saronic, which builds maritime drones of various sizes and purposes, raised a $600M Series C earlier this year. Last week, the US Navy formalized a $392M Other Transaction Agreement (OTA) with Saronic to deliver autonomous surface vessels within the next six years. 

Scale AI announced last week that it had scored a five year, $99.5M US Army contract for research and development services focused on annotated datasets, model training, and AI deployment solutions through 2030. The startup previously secured a similar $90.8M Army contract in September 2020. Scale is also a prime contractor in the DoD’s Thunderforge initiative, a program developing AI agents for military planning, modeling, simulation, and decision support operations across combatant commands. This effort is considered pivotal for moving defense towards real-time, data-informed, AI-driven warfare, with significant implications for US military agility and operational readiness. 

The Implications

The blending of state capitalism and the defense sector evokes mixed reactions, with some warning that heavy government intervention could distort market incentives and foster dependence on a few, well-connected players, raising concerns about accountability and efficiency.

Others argue that such measures are vital for national security, particularly amid rising competition and tension with China and its state capitalist centralized military. Also, the reality is that the government has a huge stake, and often is a major funder of these defense companies, so it doesn’t seem an absurd idea that it should gain some degree of stake, if not effective control. In fact it could be seen by the Trump admin as a way to rein in a seemingly uncontrollable military Industrial complex.

China’s advancements in space tech, particularly regarding tech with applications to defense like its Guowang military megaconstellation – a planned 13,000-satellite broadband network – demonstrates its consistent ability to keep up with the US in space-based communication and targeting. Chinese satellite launches have ramped up, and the mega-constellations are projected to enable low-latency communications, advanced sensing, and potentially new forms of military coordination, leading US officials to view counter-space capabilities as essential to match China and neutralize potential threats. 

Defense tech seems to be at a crossroads with policymakers and investors facing tough choices of balancing economic freedoms with national security priorities. Still, innovation and investor appetite don’t seem to be slowing down. The coming years will likely see the results of the overlap between state-led investment, technological innovation, VC funding, and the evolving global order. 

COMPANIES TO WATCH

Nvidia's Mixed Bag — Nvidia beats on Q2 revenue of $46.74B. Stock dipped on a data center revenue miss. Projects $54B for Q3, & $3-4T AI infra spend by 2030. Huang eyes $50B opportunity in China's AI chip market, projects 50% growth p/a.

Apple — Weighing acquisitions of Mistral and Perplexity amid debates on AI strategy. The urgency is driven by risks to the lucrative Google search deal as rivals advance in AI. Goldman predicts 5% revenue growth for iPhones in 2025.

Meta — Plans a $50B investment in the Hyperion Data Center in Louisiana, envisioned as the world's largest AI facility. This move underscores Meta's aggressive push in AI development, with multiple similar projects underway.

Polymarket — Donald Trump Jr.'s VC firm, 1789 Capital, invested millions in this predictions market valued at over $1B. Trump Jr. joins the advisory board as Polymarket plans U.S. expansion after securing a CFTC license, despite NFL concerns.

Lovable — This Swedish vibe-coding startup has rapidly surpassed $100M ARR, with 10M+ projects on its platform. Valued at over $4B after a $200M funding round,it is gaining significant investor interest despite not actively seeking funding.

Klarna — The Swedish buy-now-pay-later giant plans a U.S. IPO next month, targeting a $13-14B valuation. It aims to raise ~$1B, with shares priced at $34-36. Q2 revenue rose 20% to $823M, with active customers up 31% to 111M.

Framer — A no-code website builder boasting 500,000+ monthly active users, has reached a $2B valuation after a $100M Series D. With $50M ARR, Framer is enhancing enterprise offerings and aims to double ARR to $100M next year via B2B.

Commonwealth Fusion Systems — The MA-based fusion power company secured $863M from investors like Nvidia and Google. This aims to advance its Sparc prototype reactor, targeting scientific breakeven by 2027.

Cambricon Technologies — The Chinese chip maker reported 4,000% revenue growth, yet remains small compared to giants like Nvidia. China plans to triple its AI chip production in 2025, to reduce dependency on Nvidia.

SignalPulse — Read the Top signals, Startups + Deals From Last Week

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BUZZY TOOLS

Buzzy Tech Tools To Watch & Use

Apple V68 — First foldable iPhone with four cameras, Touch ID, no SIM slot, 2026.

Google Finance — Expanding U.S. access via Search Labs for immediate UX.

Anthropic — Claude AI agent for Chrome with safety measures and permissions.

Samsung — Galaxy S25/AI tablets multimodal AI for enhanced productivity, Sept 4.

Plaud AI Pro — $179 notetaker with screen, 30-hour recording, 600 free mins.

MathGPT AI — AI platform promotes critical thinking, expanding to 50 schools.

BUZZY TECH

The Latest Deep Technology & Trends To Watch

AI Deadbots — Ethical concerns over avatars of deceased used for advertising.

Hyundai Plant-Based Leather — Grain-based leather alt to automotive leather.

Light-Based AI Image Gen — Uses light for low-power 1 step image creation.

Broad-Spectrum Antiviral — Synth carbohydrate molecules block infections.

PromptLock AI Ransomware — Local AI generates scripts, exfiltrates data offline.

CRYPTO WATCH

U.S. Onchain Data — The U.S. government plans to release economic data onchain including economic statistics, GDP figures. Aims to enhance accessibility and security, to extend to all government data. No details on specific blockchain and timeline.

Google Cloud Universal Ledger — Google's permissioned Layer 1 blockchain, GCUL, claims a neutral platform for financial institutions, uses Python-based smart contracts for tokenization and payments. It aims to distinguish from Circle and Stripe.

Kalshi's Crypto Expansion — Kalshi appoints John Wang as head of crypto to boost its onchain presence and market ecosystem. Partnering with Robinhood for sports betting, Kalshi faces criticism over past controversies.

Polymarket — Donald Trump Jr.'s VC firm, 1789 Capital, invested millions in this predictions market valued over $1B. Trump Jr. joins advisory board as it plans U.S. expansion after securing a CFTC license, despite concerns over unregulated betting.

KindlyMD's Bold Move — KindlyMD has filed for a $5B equity offering to bolster its bitcoin treasury and operations post-merger with Nakamoto Holdings. The company plans flexible stock issuance amid a 12% stock drop.

SPACE_RACE

Arecibo Wow!_Magnetar flare likely explains 1977's Wow! Signal, not aliens.

SpaceX Starship_Successful splashdown & satellite deployed, major advance.

Google AI Weather Model_Predicted Hurricane Erin using historical data.

Guowang Satellite Network_China's SatNet megaconstellation boosts military.

WISPIT 2b_1st gas giant in multi-ring disk reveals planet formation insights.

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