JPMorgan Chase Deploys $5 Billion in First Year of Security and Defense Initiative

Todd Combs, portfolio manager at Berkshire Hathaway Inc., waits for the start of the “Berkshire Hathaway Invest In Yourself 5K” race presented by Brooks Sports, a Berkshire Hathaway Inc. company, on the sidelines of the Berkshire Hathaway shareholders meeting in Omaha, Nebraska, U.S., on Sunday, May 4, 2014.

Daniel Acker / Bloomberg / Getty Images

JPMorgan Chase has deployed $5 billion in startup investments during the first year of its U.S. security and resiliency initiative, the company announced Monday. This rapid pace of capital deployment highlights abundant opportunities in emerging defense, manufacturing, and supply chain technologies.

The bank, which initially pledged to deploy $10 billion into startups over ten years last year, may expand the program beyond this target, JPMorgan co-president Doug Petno told CNBC in an interview.

Todd Combs, the former Berkshire Hathaway executive who leads the JPMorgan group in charge of making startup investments, has “hit the ground running,” Petno said. “He’s done a great job and put us in some really interesting companies,” Petno added.

While most of these investments remain undisclosed, two prominent stakes illustrate the initiative’s core mission: bolstering critical industries in an increasingly turbulent geopolitical landscape. JPMorgan Chase, the largest bank in the U.S. by assets, has taken direct positions in defense-focused startups Hadrian and Castelion.

Escalating conflicts in Ukraine and the Middle East, alongside ongoing trade disputes with China, have highlighted vulnerabilities in the flow of energy and critical components. These geopolitical pressures spurred JPMorgan CEO Jamie Dimon to launch the initiative a year ago.

Dimon appointed Petno, widely regarded as a top potential successor to lead the bank, to oversee the overall investment project. Combs, a former board member, reports directly to Dimon on the initiative’s progress.

The initiative’s scope extends beyond supply chains, defense, and manufacturing to encompass frontier technologies, pharmaceuticals, and health-tech industries.

Co-CEOs of Commercial & Investment Bank at JPMorgan Chase, Troy Rohrbaugh and Douglas Petno.

Courtesy: JPMorgan Chase

“There are numerous innovative companies working to solve these critical challenges,” Petno noted.

These early venture-stage, advanced manufacturing firms are building essential capabilities domestically, reducing reliance on overseas trading partners, he explained.

In August, JPMorgan led a $1.4 billion funding round for Hadrian, a startup building highly automated factories for defense, aerospace, and maritime parts. According to its founder, Hadrian’s California facility operates with ten robots for every human employee.

During the same month, the bank participated in a $1 billion funding round for Castelion. Founded in late 2022 by former SpaceX engineers, Castelion’s flagship product is Blackbeard, a cost-effective hypersonic missile.

“Our strategy is to identify generational companies and partner with them for the long term,” Combs stated.

“Putting more than $5 billion to work in our first year demonstrates the sheer number of exceptional businesses strengthening critical supply chains,” Combs added.

Risky business?

Making direct, multi-billion-dollar investments in early-stage companies represents a significant shift for JPMorgan, which traditionally operates as a lender and advisor. Prior to this defense initiative, the bank had distanced itself from taking risky stakes in startups with unproven technologies, having spun off its private equity arm, One Equity Partners, over a decade ago.

In its traditional capacity, JPMorgan has facilitated and financed over $230 billion for industries supporting American national interests. This facet of the security and resiliency project, aiming to reach $1.5 trillion over ten years, is led by Jay Horine, a former co-head of investment banking.

To support these efforts, JPMorgan assembled a team of approximately three dozen bankers, supported by hundreds of firm-wide employees, as the initiative expanded into Europe and Canada. According to Petno, these bankers are mapping supply and distribution lines for critical products—ranging from submarines and missiles to aircraft—to identify suppliers that may lack the capital or capacity to meet rising demand. The bank maintains regular communication with the U.S. Department of Defense and Department of Commerce to align with national security needs.

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