Trump considers Defence-Tech investors for key Pentagon post

Two financiers are competing for the role of deputy secretary of defence, with the race pitting a publicity-shy private equity investor against an outspoken venture capitalist.

Trae Stephens, a partner at Peter Thiel’s Founders Fund, is reportedly under consideration by President-elect Donald Trump for the position, according to sources familiar with the transition, Caliber.Az reports via foreign media.

Stephen Feinberg, a billionaire investor who led the president’s intelligence advisory board during Trump’s first administration, is also said to be a contender.

The appointment of either financier could be seen as a positive development for the growing number of defence startups that have entered the military market in recent years. Feinberg, who is a staunch Trump supporter, is co-CEO of Cerberus Capital Management, which has invested in various defence companies. Meanwhile, Stephens co-founded Anduril Industries, a notable player in the burgeoning defence-tech sector.

Feinberg’s spokesman stated that no job offer had been extended, while Stephens and a spokeswoman for Founders Fund declined to comment. Spokespeople for Trump have not responded to requests for comment.

The deputy secretary of defence is the Pentagon's second-highest-ranking civilian, overseeing daily operations, including the defence budget. Trump has nominated former Fox News commentator Pete Hegseth for the top role, though he is facing allegations of sexual assault, which he denies. No charges have been filed.

Thus, the potential appointment of a defence-tech investor to a senior Pentagon position comes at a time when new defence-tech firms are struggling to gain traction, despite substantial investment from venture capital and private equity. Many of these startups continue to survive on smaller awards while traditional defence suppliers dominate military spending.

“It's pretty clear to everybody that the Defence Department is challenged by commercial technology and sabotaged by the procurement system,” said Steve Blank, founding member of the Gordian Knot Centre for National Security Innovation at Stanford University.

He added that these candidates represent “a radical change with a fresh perspective not beholden to the status quo.”

By Aghakazim Guliyev