U.S. Department of Defense Office of Strategic Capital Fiscal Year Investment Strategy

Key Chapter Title List

1. Preface
2. Executive Summary
3. Office of Strategic Capital Overview and Mission
4. Priority Setting Methodology
5. National Security Impact Prioritization
6. Conclusion
7. Appendix A: Office of Strategic Capital Credit Program Initial Product – Equipment Financing
8. Appendix B: SBIC Critical Technologies Program Focus Industry Areas
9. Appendix C: Research Methodology

Document Introduction

The current international security environment is in its most challenging and dangerous phase since World War II. China and Russia are expanding their global influence by integrating military, diplomatic, and industrial power through hybrid economic and military means, making the global capital market a key arena for national security competition. In this context, the U.S. Department of Defense established the Office of Strategic Capital (OSC) in December 2022, with the core mission of attracting and scaling private capital investment in technologies critical to national security, thereby building a lasting competitive advantage for the United States and its allies.

This strategy, as the second investment strategy released by the Office of Strategic Capital, incorporates new authorities granted by the Fiscal Year 2024 National Defense Authorization Act, clarifies the core arenas of strategic competition, establishes a framework for optimizing capital allocation, and identifies key investment areas. Through credit-based financial products such as direct loans and loan guarantees, the Office of Strategic Capital works closely with the federal government, the private sector, and international partners to promote the scaling and commercialization of critical technologies, adhering to market competition principles.

The report divides national security impact into three core time dimensions and arenas: short-term (0-3 years) controlling key nodes in economic networks, medium-term (2-7 years) dominating key industries, and long-term (5-15+ years) winning the core technology race. To achieve this, the Office of Strategic Capital employs a combined quantitative and qualitative analytical approach, integrating best practices from the commercial sector with U.S. government data resources. It systematically evaluates 31 statutorily covered technology categories and ultimately identifies 15 key industry sub-sectors for focus, including advanced bulk materials, advanced manufacturing, autonomous mobile robots, battery storage, and synthetic biology.

The Office of Strategic Capital has launched two core financial products: the Small Business Investment Company (SBIC) Critical Technologies Program initiated in Fall 2023 (in partnership with the U.S. Small Business Administration), and the Equipment Financing Direct Loan Program announced in September 2024 (with an authorization of $984 million). The former focuses on the early-stage commercialization of critical technologies, while the latter supports the construction, expansion, and modernization of commercial equipment within the United States, forming a full-cycle investment support system from "seed stage to GDP contribution."

This strategy will serve as a guiding framework for the Office of Strategic Capital's investment decisions in Fiscal Year 2025 and beyond, ensuring it fulfills its broad mission while providing transparent strategic guidance to stakeholders. The report also invites investors and companies to participate in relevant programs, aiming to strengthen the defense ecosystem, economic strength, and technological leadership of the United States and its allies through collaborative investment.