(MENAFN- Live Mint) The US Army has invited major private equity groups, including Apollo, Carlyle, KKR, and Cerberus, to pitch strategic projects to support a $150bn overhaul of its infrastructure, according to the Financial Times.

US Army Secretary Daniel Driscoll and Treasury Secretary Scott Bessent convened a forum with about 15 of Wall Street's top buyout firms last Monday to discuss potential deals.

Driscoll told the British news outlet,“Hey, here are all the assets we have in our arsenals and our depots that we are underutilising... What are those types of deals where we can work with you and invite you in?”

He also urged the investors to propose“clever financing models or unique financing models” to help meet the Army's infrastructure requirements, emphasizing,“We actually just want meaty projects.”

Potential projects

Driscoll as per the news report suggested projects could include data centers and rare earth processing facilities, potentially involving creative government-private arrangements.“Instead of paying us with cash for the land, you pay us in compute,” he said, referring to computer processing power.

One forum attendee noted, the report stated, that ideas included building data centers on army bases and entering lease agreements with the government to accelerate construction and reduce capital costs.

Conflict of interest and Cerberus

Cerberus, founded by Steve Feinberg-Trump's deputy secretary of defense-attended the meeting. Feinberg pledged to divest his interests in the firm after assuming his government role, the report said.

Funding gap and Army transformation initiative

Driscoll, with a background in investment banking, explained that the Army faces a massive funding gap.“We are in a hole that we are not going to be able to dig out of without creative solutions coming in from outside parties,” he told the news publication.

While the Army's budget for infrastructure over the next decade is $15bn, Driscoll is aiming for $150bn to modernize equipment and facilities.

While a participant described the forum as“serious and very wide ranging, involving ways to find cost-efficient capital for the army's supply chain.” Another reportedly noted,“It was pretty clear Bessent and Driscoll are serious about working with private capital.”

The initiative, dubbed the Army Transformation Initiative, seeks to integrate new technologies and encourages partnerships with Big Tech and defense start-ups.“I can say unequivocally that the Silicon Valley approach is absolutely ideal for the army,” Driscoll was quoted as saying in a speech to the Association of the United States Army.

Equity and critical minerals

The Army is also exploring the possibility of taking equity stakes in companies and developing a stockpile of critical minerals. Driscoll noted that such measures are partly motivated by China's restrictions on rare earth exports.“Should we hold them and then sell them to our suppliers to use and then sell back to us for the final product? All of those options are on the table,” he was quoted as saying.

Driscoll said the Army expects submissions for possible investments and will conduct due diligence in the coming weeks, planning to finalize multiple deals by the end of the year.

Other participants at the forum included Advent International, BDT & MSD, and several large family offices. Firms including Apollo, Advent, BDT & MSD, Carlyle, Cerberus, and KKR declined to comment, Financial Times said.

Also Read | Trump-Putin Budapest summit put on hold, no meeting in 'immediate future' Key Takeaways:

Army seeks private equity support: US Army invited Apollo, Carlyle, KKR, Cerberus, and others to pitch projects for a $150bn infrastructure overhaul.

Funding gap: Current budget $15bn; Army aims for $150bn through creative financing and partnerships.

Potential projects: Data centers, rare earth processing, and other tech-focused initiatives.

Creative financing: Suggestions include government-private arrangements, e.g., paying with computing power instead of cash.

Army Transformation Initiative: Focus on modernization, Big Tech and defense start-up partnerships.

Equity & critical minerals: Army exploring stakes in companies and stockpiling rare earths amid China export restrictions.

Timeline: Submissions expected soon; multiple deals to be finalized by year-end.

Conflict of interest: Cerberus founder Steve Feinberg pledged to divest after joining government.

Other participants: Advent International, BDT & MSD, large family offices; several firms declined to comment.

Also Read | Trump-Putin Budapest summit put on hold, no meeting in 'immediate future'

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