Hegseth stripped weapons-buying safeguards while the Pentagon’s biggest contractors doubled their revenue.
Now, I’m just a simple man, but when a mechanic walks in and tells you the last guy was ripping you off, then charges you twice as much for the same work with fewer bolts torqued to spec, you know what happened. You got sold the same job at a higher price with less safety margin. That is the shape of Defense Secretary Pete Hegseth’s startup revolution.
He called the big defense contractors slow and bloated. He rewrote the rules that had governed weapons purchases for decades. He eliminated the requirements process. He suspended cybersecurity requirements. He gave junior officers the power to buy what they wanted. Then the Pentagon’s traditional primes, the very companies he publicly disparaged, doubled their take to $372 billion. The startups he championed got less than one percent of total contractor dollars. Tripling from a rounding error is still a rounding error. The direction tells you where the money is going, even if the absolute share tells you where it is now. The revolution left the old guard richer than before.
As Bacevich wrote in Washington Rules, the postwar security establishment runs on bipartisan rules that survive every reformer’s promise to break them. Maintain global military preeminence. Lead everywhere. Be present everywhere. Intervene when the moment calls for it. Every dollar follows those rules. The acquisition bureaucracy exists to serve them. When a defense secretary promises to disrupt the system, the system does what it has always done. It absorbs the language of disruption and keeps the money flowing where it has always flowed.
Eisenhower warned of this. In his 1961 farewell address, he named the “potential for the disastrous rise of misplaced power” from what he called the military-industrial complex. He did not say the complex was evil. He said the influence it wielded could become unwarranted, whether sought or unsought. The influence has found a new vocabulary. It calls itself disruption. It calls itself innovation. It calls itself the PC era of war. The money still goes where Eisenhower said it would go.
The venture-capital flood tells you who this is actually for. Defense and aerospace startups pulled in $16.8 billion in the first half of this year alone, exceeding any prior full-year total. Valuations have gone vertical. Anduril Industries doubled its valuation from $30.5 billion to $61 billion in May. That is not a weapons company’s valuation. That is a venture exit play. Trae Stephens, Anduril’s co-founder and a partner at Founders Fund, said on a podcast that prices are “untethered from reality.” When the man selling the weapons tells you the prices are untethered from reality, you are looking at a bubble.
And bubbles pop. More than 400 drone companies now operate in the United States. The market will not sustain them. As one startup co-founder put it, in five years there will be ten or fifteen. The rest will fail or be absorbed, and the venture capital that funded them will have extracted its returns on the way out. The taxpayer takes the downside. The defense-tech investor takes the upside. That is not disruption. That is the oldest deal in the book. None of which means every dollar is wasted. Some of those ten thousand new companies will build something the old primes did not. But the way the money moves today — venture exit timing disconnected from weapons-fielding timelines — guarantees the waste comes first and the payoff comes later, if at all.
The Iran war makes the gap plain. The United States has brought to bear few weapons systems less than fifteen years old. The new systems include attack drones re-engineered from Iranian designs and drone boats from a startup called Saronic. Everything else is decades old and expensive. Iran’s smaller, lower-cost arsenal has denied the U.S. military total victory. The startup revolution has not yet produced a weapon that changes the fight. What it has produced is a financial ecosystem that rewards founders and funders while the soldier in the field carries the same equipment his predecessor carried ten years ago.
The concentration tells you the rest. CSIS counted roughly ten thousand new defense companies entering the market in the past two years. Nontraditional companies received over $122 billion in the prior fiscal year, double the amount from a decade prior. But Anduril and Saronic alone accounted for about a quarter of all Pentagon contract spending to the startup cohort. The rest of those ten thousand companies are fighting over scraps while a handful of well-connected firms capture the growth. Other startups have filed lawsuits accusing the military of playing favorites. The system Hegseth promised to break is reproducing itself in miniature, with the same winner-take-all dynamics and the same access advantages, just at a smaller scale and with flashier pitch decks.
And Congress is starting to notice. Bipartisan resistance is building against Hegseth’s $1.5 trillion budget request. Elected officials from both parties are demanding scrutiny of Pentagon spending on loans and equity stakes in startups, many backed by venture capitalists including Donald Trump Jr. The same political class that funds the wars is now questioning who profits from them — not because they oppose the spending in principle, but because the map of who gets what has become too visible to ignore.
From where I sat in the gunner’s seat in Iraq, the weapons we had were the weapons we were given. We did not get to choose. The men who made those decisions were not in the turret. The new system promises to put buying power closer to the soldier. That is the right idea. But giving junior officers the power to buy weapons while suspending the cybersecurity requirements and eliminating the safeguards that ensured those weapons actually worked is not reform. It is deregulation with a flag on it. The constitution of good procurement would require that safeguards exist, that competition is real not performative, and that the soldier who carries the weapon has a voice in what he is handed. None of that is what Hegseth built.
Eisenhower’s warning was not that the military-industrial complex would be obvious. It was that the influence would be unwarranted, whether sought or unsought. A defense secretary who calls the old guard bloated while doubling their revenue has not broken the complex. He has given it a new sales pitch. The venture capitalists will get what they came for. The soldiers will still get what the system decides they should get.