Three months after Trump’s son bought shares, this startup received $620 million in funding support from the Pentagon.
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A startup backed by the venture capital firm of Donald Trump Jr., son of former President Donald Trump, received massive financing from the Pentagon just three months after his investment.
At the heart of the story is Vulcan Elements, a rare earth startup with only about 30 employees. Last month, the company secured a loan commitment of up to $620 million from the U.S. Department of Defense to expand the supply of industrial magnets with its partner, ReElement Technologies. This move makes Vulcan Elements another business case related to Trump's son that has benefited from contracts or regulatory relief from the current administration.
This loan is the largest ever issued by the Pentagon’s Office of Strategic Capital. The total financing agreement is worth $140 million, and also includes over $550 million in private financing and other federal incentives. The deal has immediately sparked outside concerns about potential conflicts of interest. Kedric Payne, general counsel of the ethics watchdog “Campaign Legal Center,” said:
“People expect the president to avoid even the appearance of using the office to obtain financial benefits for themselves or their family.”
He added, “While we’re not sure whether or how the president influenced the loan, it is shrouded by longstanding concerns about conflicts of interest in this administration.”
Government Contracts and Investment Landscape
Vulcan Elements is not alone. According to analysis by the Financial Times, since Trump’s son joined venture capital firm 1789 Capital in 2024, at least four companies in the fund’s portfolio have won government contracts totaling more than $735 million this year. 1789 Capital was founded in 2023 by Trump-supporting donors, with Trump’s son now a partner in the eight-person firm.
According to PitchBook data, since Trump’s son joined, 1789 Capital has invested in 22 companies. According to sources cited by the media, the fund’s assets under management now exceed $1 billion. Its investment scope has expanded from an initial focus on companies opposed to “woke culture” (such as Tucker Carlson’s media company) to industries subject to Trump administration regulation and likely to benefit from it. The fund’s portfolio also includes major government contractors such as Anduril and Elon Musk’s SpaceX.
Other government contract recipients backed by 1789 Capital include: rocket propulsion startup Firehawk Aerospace and quantum computing company PsiQuantum, each of which received more than $10 million from the U.S. Air Force; AI group Cerebras Systems signed a $45 million agreement with the Pentagon.
All Parties Deny Political Influence
Despite the sensitive timing of the deals, all parties involved deny any political intervention. John Maslin, CEO of Vulcan Elements, told the Financial Times that he has had “zero contact” with the president’s son, emphasizing that their stake is “very small” with no board seat or observer rights. Maslin insisted:
“This isn’t about political favors, it’s purely a value-based process.”
A Pentagon spokesperson said neither Trump’s son nor 1789 Capital “participated in any phase of conditional loan agreement discussions between Vulcan and the government.” A spokesperson for Trump’s son also said he did not represent 1789 Capital portfolio companies in any government negotiations.
However, Trump’s son said in February that he is “deeply involved in the strategic decisions about where we deploy resources” at 1789 Capital.
Decoding the $620 Million Financing
The financing for Vulcan Elements is structurally complex and strategically significant. If conditions are met, the $620 million loan will be the largest ever issued by the Pentagon’s Office of Strategic Capital since its establishment under the Biden administration. The funds aim to support Vulcan Elements in producing critical materials—rare earth magnets—for a variety of defense equipment including drones and nuclear submarines.
He stated that his company will help strengthen America’s domestic magnet supply chain, benefiting the U.S. military.
As part of this complex deal, the U.S. Department of Commerce will receive $50 million worth of Vulcan’s equity, and the Pentagon will also receive warrants for Vulcan Elements and its partner ReElement Technologies. A Commerce official said the arrangement, which could yield potential taxpayer benefits, is “perfectly reasonable.” According to Vulcan’s spokesperson, the company expects its staff size to reach 50 by the end of this year.
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