The Pentagon is reportedly in talks to lend around $5 billion to artificial intelligence cloud-computing firm Fluidstack, potentially bringing the U.S. military into AI infrastructure funding amid national security concerns.
The funds would be deployed by the Pentagon's Office of Strategic Capital, which provides loans to companies working in areas deemed critical to U.S. national security, The Wall Street Journal reported late Thursday, citing people familiar with the matter.
In August, President Trump issued an executive order declaring a national emergency over the United States' reliance on foreign-made electrical equipment, including equipment used in AI data centers.
Notably, the reported $5 billion amount would be the Office of Strategic Capital's largest loan to date by a wide margin. The deal has not been finalized, and details could still change, the people said. "The Department does not comment on transactions that are either pending or in the middle of negotiations until the press release comes out," a Pentagon spokesman told the WSJ.
Fluidstack would use the funds to build up supply chain and manufacturing capacity for data center components, rather than funding a new AI facility outright, one of the people said.
The firm has reportedly been working to secure the loan for several months, with its application advised by the tech- and defense-focused, newly chartered national bank, Erebor Bank, founded by entrepreneur Palmer Luckey.
AI infrastructure shift
Founded in London in 2017 as a marketplace for unused bandwidth, Fluidstack shifted its focus to U.S. AI infrastructure last year, relocating its headquarters to New York and securing multiyear data center leases across several states.
In July, Fluidstack raised $830 million in a round led by Leopold Aschenbrenner's Situational Awareness, followed by a $1.5 billion raise in a round led by Jane Street at an $18 billion valuation, one of the people said.
Much of Fluidstack's demand comes through a partnership with Google and Anthropic that provides access to Google's AI chips, with Google also backing its data center leases.