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The Information's TITV · 3 min · Oct 16, 2026
Pentagon financing targets supply-chain gaps
Emil Michael lists microelectronics, drone components, batteries, critical minerals and space as targets for defense financing.
In this episode
Full analysis- 29:53CoreWeave’s debt is layered around customer contracts6 min
- 58:29Michael objects to giving AI models authority over commandersPro pick 2 min
- 1:09:59Michael favors American open-source AI but flags China risksPro pick 4 min
- 11:29Palo Alto uses a harness to measure AI-assisted development4 min
- 41:10Power access favors experienced data center operators3 min
- 18:33Modal sees software as its advantage over neoclouds3 min
- 47:58Pentagon AI use grew from 80,000 to 1.7 million3 min
- 1:20:33Pentagon financing targets supply-chain gaps3 min
“And the warrants sort of give the taxpayer some upside. And so it's, you know, in the high 90s in terms of loans.”
Takeaways
- Priorities include microelectronics, drone parts, batteries and critical minerals.
- Michael says financing is in the high 90s loans.
- Warrants can give taxpayers upside as part of financing.
About this segment
Emil Michael lists microelectronics, drone components, batteries, critical minerals and space as targets for defense financing. He says most financing is loans, with warrants sometimes giving taxpayers upside.
Akash Pasricha, Host · Host, TITV
Led The Information's Pro subscription and co-wrote its flagship newsletter, The Briefing.
From “The Pentagon’s CTO Explains the Anthropic Rift and Superintelligence Task Force”, Oct 16, 2026. Watch the full episode
Thanks. We'll look at and fix what's off.
Transcript
Transcribed by machine (Whisper) from the episode’s audio, so a word may be off here and there.
- 1:20:38
Yeah, well, I wanted to ask about, you had mentioned the equity opportunities or grants that you explored. Obviously, the loans coming out of the Office of Strategic Capital. Can you preview any other sectors you're looking at now, drones or any other industries, companies that might be getting loans or equity stakes from the Department of War in the near future? Yeah, we're looking at microelectronics companies, things that are, you know, companies that are doing different parts of the supply chain, you know, that are currently by, you know, only done by ASML and TSMC.
- 1:21:15
We're looking at drone parts because sort of certain drone parts that we're dependent on adversary nations for, like brushless motors and batteries. You know, we're very dependent on foreign nations for our battery supply right now. Critical minerals, as I mentioned, you'll see companies doing space, you know, a lot of different space stuff that we think is critical. So I think you'll see like a steady drumbeat of continued deals from us.
- 1:21:47
Some of them will seem esoteric. There'll be some cathode manufacturer or some precursor to pharmaceuticals or something that's specific and has high utility in the War Department. But you'll see a wide range of deals from us over the next 12 months. And what's the breakdown between loans and taking equity stakes there? How do you think about those two options and what do you think they will be in this case?
- 1:22:13
They're primarily loans. You know, I think when we take equity stakes, the primary options, like a warrant, if you will, they're not like us putting cash in. And the warrants sort of give the taxpayer some upside. And so it's, you know, in the high 90s in terms of loans. But, you know, the thing I remind people all the time who are like, oh, you know, equities, you know, every president, almost every president has done some equities.
- 1:22:42
People just forget about it. But we've been doing it in cases where we actually have some grants to give. We can give someone a grant, which is free money, and the taxpayer gets nothing. Or we give them a loan, and we get some equity for it. And you're like, well, that sounds like a good trade for the taxpayer. So we're not out there as a VC just running around trying to do equity deals. They're always in combination with a defense mission or a war mission.
- 1:23:10
and they're usually in combination with we would otherwise give a grant. So instead of that, we're doing some other form of financing. And given your venture and tech background,