National Security

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.

The U.S. is in talks with Taiwan to shift towards a “50-50” split in semiconductor production, aiming to mitigate reliance on Taiwan’s dominance (over 90%) in the global market and bolster domestic chip manufacturing. Citing national security and supply chain resilience, the U.S. seeks to produce roughly half its semiconductor needs domestically, requiring substantial investment (>$500B). While Taiwan’s TSMC, a key player, invests in the US, the move challenges the “Silicon Shield” theory and reflects concerns about geopolitical tensions and potential vulnerabilities.

Donald Trump publicly urged Microsoft to fire Lisa Monaco, citing unsubstantiated security risks and her past role as Deputy Attorney General under Biden. Trump alleges Monaco is a threat to U.S. National Security due to Microsoft’s government contracts, claiming she lacks security clearances. Previously, Microsoft pledged $3.1B in cloud cost savings for government agencies. Trump’s demand highlights the politicization of tech, raises questions about former officials’ influence, and underscores Microsoft’s critical role in national security through its cloud services.

China’s silence following Trump’s tentative approval of a deal to preserve TikTok’s U.S. operations fuels uncertainty. Despite Trump’s claim of Xi’s approval, Beijing has offered no official confirmation. State media has been restrained, and ByteDance remains silent. Reports of a potential two-entity structure for TikTok’s U.S. operations add complexity. Concerns remain about algorithmic control and whether the proposed deal addresses U.S. national security risks, particularly given TikTok’s growing influence as a news source. The deal’s fate hinges on Beijing’s endorsement and satisfying both countries’ interests.

A proposed deal to keep TikTok operational in the U.S. is gaining traction, with former President Trump approving a transaction valuing the U.S. TikTok business at $14 billion. The agreement aims to address national security concerns by requiring ByteDance to divest its U.S. operations to a new joint venture, retaining a minority stake. Oracle, Silver Lake, and MGX are expected to control approximately 45% of the venture. While ByteDance hasn’t formally acknowledged the deal, it needs Chinese regulatory approval. Oracle will oversee security. The deal aims to ensure American operation.

President Trump extended ByteDance’s deadline to divest its U.S. TikTok operations to December 16th, marking the fourth extension. The deal, involving Oracle and Silver Lake, aims to address U.S. national security concerns. Treasury Secretary Bessent indicated a “framework deal” was reached, averting a potential TikTok ban. The proposed structure involves an investor consortium controlling 80% of TikTok’s U.S. business, possibly migrating users to a new application. Trump and Xi are scheduled to discuss the deal, emphasizing its high-level significance. Completion is anticipated within 30-45 days.

U.S. Treasury Secretary Scott Bessent stated President Trump’s threat to ban TikTok significantly influenced reaching a framework agreement with China. Trump’s willingness to “let TikTok go dark” underscored the prioritization of national security. While ByteDance faces a September 17 deadline to divest its U.S. operations, negotiations stalled after new tariffs were imposed. The emerging TikTok deal, focused on curtailing potentially risky activities, may signal a turning point in strained U.S.-China relations, with discussions between Trump and Xi Jinping anticipated to finalize the agreement.

A potential resolution for TikTok in the U.S. is emerging, as former President Trump hinted at a possible deal with China. Concerns about national security and data privacy, specifically the potential for Chinese government access through ByteDance, fueled previous attempts to force a sale or shut down the app. Congress has even legislated against TikTok’s distribution. Trump intends to discuss the deal with President Xi Jinping. While specifics are undisclosed, it likely involves data security measures and content control to address U.S. concerns. This resolution may signal a shift in U.S.-China tech relations.

Rocket Lab is expanding its U.S. semiconductor manufacturing with a $23.9 million award from the Department of Commerce. This investment will double compound semiconductor and space-grade solar cell production, enhancing domestic access to these technologies for spacecraft manufacturers and improving its capacity to quickly deliver integrated spacecraft systems for national security. This initiative is projected to create economic growth across multiple states and fortify the American semiconductor industrial base.