Submission + - Silicon Valley venture capital blowing up the US defense industry (asiatimes.com)
For most new AI products, civilian or otherwise, some form of venture capital funding is often involved, especially if the AI venture in question might prove to be too risky to be funded through bank loans or other financial instruments. Venture capital is willing to take bets on innovation that other funders would be unwilling, or unable to take.
In the past two decades, this type of funding has primarily focused on Silicon Valley products for the civilian market, where the dynamics have allowed for extraordinary gains to be made for investors.
But as the defense market is growing, and the opportunities for extraordinary venture capital returns in the commercial spheres wane, those with large amounts of capital to invest see a new opportunity for huge gains in defense within their grasp.
It is unsurprising, then, that in the past five years, venture capital investment in defense technologies has surged. From 2019 to 2022, US venture capital funding for military technology startups has doubled, and since 2021, the defense technology sector has seen an injection of $130 billion in VC money.
Perhaps Musk et al are not so much interested in cutting spending as grabbing a bigger share of the pie