National Security

U.S. Senators Warren and Reed are urging investigations into World Liberty Financial (WLF), a crypto firm with Trump family ties, citing potential links to illicit actors in North Korea and Russia. Concerns stem from a report alleging WLF’s tokens were sold to entities connected to sanctioned groups. Senators highlight the Trump family’s significant financial stake in WLF, raising conflict of interest concerns and questioning the adequacy of WLF’s anti-money laundering controls and its expansions. Congress has been asked for enforcement actions by December 1st.

Concerns are rising within the cybersecurity community about declining US cyber defense capabilities, particularly with the rise of AI-powered attacks. Budget cuts to key agencies like CISA and the lapse of information-sharing legislation are hindering preparedness. Experts cite a lack of federal leadership, stalled appointments, and a shift of responsibility to under-resourced private entities. The rollback of software security regulations and fragmented industry coordination exacerbate vulnerabilities. Experts warn of a “death by a thousand papercuts” and emphasize the need for stronger government support and coordination.

The U.S. Commerce Department denies reports of negotiating equity stakes in quantum computing firms like IonQ, Rigetti, and D-Wave in exchange for federal funding, despite market reactions to the initial Wall Street Journal report. The denial follows earlier government investments in strategic sectors like semiconductors and rare earth mining, fueling debates about government involvement in private enterprise. Potential applications span various industries, while military implications drive further interest. The sector faces challenges including revenue generation, long development cycles, and a skilled labor shortage. Nonetheless, advancements like Google’s “quantum advantage” attract investment.

Reports of imminent government equity stakes in quantum computing companies like IonQ, Rigetti, and D-Wave have spurred market speculation, though the Commerce Department downplays immediate acquisitions. While acknowledging ongoing funding discussions, particularly regarding national security, companies remain mostly silent. Potential support contrasts with recent semiconductor deals, as quantum firms lack substantial revenue and face intense competition from hyperscalers like Google and IBM. The structure of government intervention, balancing national security needs with taxpayer risk and private investment, remains critical.

The U.S. government is reportedly exploring equity stakes in quantum computing firms in exchange for federal funding, signaling a strategic push to secure leadership in this critical technology. While denied by the Commerce Department, the initial report spurred market gains for companies like IonQ, D-Wave, and Rigetti. This potential move aligns with Washington’s trend of acquiring stakes in companies deemed vital to national security, reflecting concerns about technological competition, particularly with China, and the need to bolster domestic capabilities in strategic sectors like rare earths and semiconductors.

Govini, an AI-driven defense tech startup, has surpassed $100 million in ARR, fueled by demand for innovative solutions in the defense industry. Backed by a $150 million investment from Bain Capital, Govini aims to expand its team and product suite, addressing escalating security demands. CEO Tara Murphy Dougherty emphasizes data-driven insights for optimized resource allocation, highlighting their AI-powered Ark software for modernizing the defense tech supply chain. Govini competes with both legacy defense giants and emerging disruptors amid rising global tensions.

Firefly Aerospace (FLY) stock rose 12% after announcing the acquisition of defense contractor SciTec for $855 million in cash and stock. The purchase aims to boost Firefly’s national security capabilities, integrating SciTec’s software for advanced missile warning and autonomous control. This follows a recent stock dip after a rocket test explosion. Firefly, which went public earlier this year, also has secured significant NASA and Northrop Grumman contracts. SciTec will operate as a Firefly subsidiary post-acquisition, providing immediate access to defense technologies.

Firefly Aerospace will acquire SciTec for $855M, comprising $300M cash and $555M in shares. SciTec’s revenue for the trailing twelve months ending June 30, 2025, was $164M, and the company was awarded a $259M Space Force contract in 2025. The acquisition expands Firefly’s capabilities in software, data analytics, and national security solutions, with an expected closing by year-end 2025, pending regulatory approvals. SciTec will operate as a subsidiary of Firefly.

Silicon Valley’s defense tech sector is booming, attracting billions in venture capital and challenging traditional defense contractors. Startups, dubbed “neoprimes,” like Anduril Industries, are disrupting the industry with agile, software-first approaches and dual-use technologies. Venture funding has surged, driven by the need for advanced technologies in areas like hypersonics, AI, and cybersecurity to address great power competition. Investment syndicate MilVet Angels highlights the importance of combining technological expertise with military insight to create deterrents and maintain stability.