The U.S. Army is looking to tap private equity to help overhaul its aging infrastructure, which requires an estimated $150 billion in upgrades—far exceeding its $15 billion budget, according to a Financial Times report.
Groups including Apollo, Carlyle, KKR and Cerberus were invited to pitch “meaty” strategic projects during a forum hosted by Army Secretary Daniel Driscoll and Treasury Secretary Scott Bessent. Driscoll, who has a background in investment banking, said the Army cannot close the funding gap without “creative solutions coming in from outside parties.”
He noted that the Army controls a variety of underutilized assets that investors could leverage in ways that both benefit national security and deliver financial returns. Potential projects could include building data centers or rare earth processing facilities on Army bases, with the government potentially exchanging land for computing power or materials output, the report said.
Driscoll also suggested the Army could take equity stakes in companies, citing the Pentagon’s plan to spend $400 million to become the largest shareholder in MP Materials, a rare earth producer. The Army is particularly interested in developing a stockpile of critical minerals.
The proposed partnerships mark another sign of growing government support for private capital. Earlier this year, President Trump signed an executive order allowing employer-sponsored retirement plans to invest in alternative assets.
According to one of more than a dozen forum attendees, discussions included refurbishing real estate, raising financing against Army-owned properties, and exploring innovative supply chain funding tools.
Driscoll, a vocal proponent of the “Army Transformation” initiative, has emphasized collaboration with Big Tech and defense start-ups. “I can say unequivocally that the Silicon Valley approach is absolutely ideal for the Army,” he said during a recent address to the Association of the United States Army.
Proposals from the forum will undergo due diligence in the coming weeks, with follow-up meetings expected later this year. Driscoll said he hopes to have multiple deals finalized by year-end.
Cerberus and Carlyle already are major investors in the defense sector. Other groups that attended the forum included Advent International, BDT & MSD, and several large family offices.
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