JPMorgan Sets Up $10B Fund for Direct Investment in National Security Companies, Targeting $1.5T Financing by 2035
Alina Collins
JPMorgan launched its "Security & Resiliency Initiative," committing $10 billion in proprietary capital to direct equity stakes in defense and economic-self-sufficiency companies, with a $1.5 trillion traditional-financing target by 2035 — the largest U.S. bank is reviving the merchant-banking model to fund the defense-industrial base directly.
What exactly does this fund do?
JPMorgan is deploying $10 billion of its own capital into a direct-investment fund targeting national-security and economic-self-sufficiency companies — not lending, but taking equity stakes.
This means → the bank is no longer just a middleman collecting interest; it shares risk and upside like a shareholder.
The fund is run by Todd Combs, the star portfolio manager from Berkshire Hathaway. CEO Jamie Dimon says the plan is to scale it to $20 billion or more.
Two deals are already done: a gold mine in Idaho and a combat-drone maker in San Diego that uses AI-driven autonomy.
Why is a bank suddenly investing directly in defense?
The trigger was specific: Dimon visited a missile factory in Huntsville, Alabama, last fall. L3Harris CFO Ken Bedingfield explained the problem face-to-face.
In plain terms = defense contractors need rocket motors for Tomahawk missiles and THAAD — a terminal missile-defense system that intercepts ballistic missiles in their final arc — but federal procurement funding arrives unpredictably, so companies cannot stockpile parts on their own.
This reflects a structural gap: the money in the defense supply chain is trapped inside the government budget process. Traditional bank loans cannot solve a "dare we stockpile?" problem — only equity capital can absorb that uncertainty.
What is "merchant banking," and why can it come back now?
Merchant banking is an old Wall Street tradition. In the Gilded Age, banks held direct equity in Edison, U.S. Steel, and other industrial giants, actively shaping the industrial landscape.
In plain terms = banks didn't just lend to companies — they owned pieces of them and shared the outcome.
Regulators later shut this down, linking banks' proprietary equity bets to the Great Depression and the 2008 financial crisis. Restrictions tightened for decades.
Recent deregulation has reopened the window. This means → JPMorgan's move is not a one-off experiment; it rides a policy opening.
How deep are the ties to Washington and Bezos?
The team holds weekly meetings with officials at the Pentagon, the Department of Energy, and the Department of Commerce to coordinate direction.
The initiative aligns closely with the Trump administration's push to rebuild the defense-industrial base — Trump last week summoned senior Pentagon officials and top defense contractors to the White House to discuss accelerating ammunition production.
JPMorgan is also in talks to join Jeff Bezos's $100 billion U.S. manufacturing-revival plan, which would acquire manufacturers and introduce AI automation. Bezos sits on JPMorgan's national-security advisory board.
How should we read the $1.5 trillion financing framework?
Beyond the $10 billion equity fund, JPMorgan has set a target to provide $1.5 trillion in traditional loans and financing to defense and national-security industries by 2035.
In plain terms = the $10 billion is the high-conviction equity bet; the $1.5 trillion covers everyday lending, bond underwriting, and standard financial services — two parallel tracks.
JPMorgan ultimately did not inject equity into L3Harris, but the relationship has been folded into the $1.5 trillion framework.
This means → whether the $10 billion fund can produce a replicable commercial model in defense technology is the key variable for judging the strategy's real impact.
Content is for reference only, not financial advice.