The $212 Billion Bet on America's Tech Future
Why dual-use startups hold the key to reclaiming our innovation edge
The Opportunity Hiding in Plain Sight
Here's a number that should wake us up. Twenty years ago, America led the world in 60 out of 64 foundational technologies. Today, we lead in just seven. China has taken the lead in 52.
That's not a typo. That's not fake news. That's the raw data from serious researchers who spend their days measuring technological leadership across nations. And yes, it stings.
But here's what the doom-and-gloom crowd misses. This isn't the end of the American innovation story—it's the setup for one of the greatest comeback narratives in business history.
Meet the dual-use company. These aren't your typical defense contractors grinding out cost-plus contracts in windowless buildings. These are brilliant teams who cracked a code that eluded an entire generation of entrepreneurs. They figured out how to build technology platforms that serve both national security and commercial markets simultaneously.
Take a company like Palantir. Instead of positioning themselves as "defense tech," they built a data analytics platform that happens to be useful for both tracking terrorists and optimizing supply chains. Same core technology, radically different market opportunities.
The financial mechanics are fascinating. Traditional defense companies get acquired at 1-2x revenue by prime contractors. Commercial tech companies command 10-15x revenue multiples from strategic buyers. Dual-use companies that launch with government validation can exit into commercial markets at these higher multiples. The math is compelling and a motivator for an increasing number of founders.
The strategic advantage lies in the fact that these companies ride complementary business cycles. When commercial markets freeze up or hit road bumps, government contracts provide steady revenue. When defense budgets tighten, commercial applications keep growth alive. It's risk management through diversification, executed at the highest level.
The landscape has fundamentally shifted since the 1960s. Government R&D spending dropped from 80% to 20% of total innovation investment. Private capital now drives the majority of breakthrough research, supported by flexible programs that accelerate adoption without crushing equity stakes.
This creates a rare moment where exceptional financial returns align perfectly with strengthening America's technological position. The entrepreneurs building tomorrow's critical infrastructure need partners who understand both opportunities.
The comeback starts now and we at New North Ventures are committed to leading the way.
Signals and Sensors Showcase | 11 June, 2-3PM ET
Join us for a one-hour showcase of three dual-use startups building AI decision advantage systems. HavocAI, Clara Copilot, and Code19 Racing will present alongside AI investor Rob May.
These companies represent exactly what we've been discussing—startups working at the intersection of commercial applications and national security needs. They're building the decision architectures that could define America's competitive edge in sensing and AI.
If you're tracking emerging defense innovation or thinking about dual-use scalability, this is worth your time. The most interesting technologies often emerge when startups solve problems governments didn't even know they had.
NatSecEDGE Conference: Securing America’s Technological Advantage
A Quick Reminder
NatSecEDGE Conference kicks off Thursday in Austin—two days from now. If you're in the dual-use space or thinking about it, this is where the serious conversations happen. AI, quantum, space, critical infrastructure. The whole frontier.
New North Ventures is supporting this event because it brings together the community we are building here and proud to be a part of. The founders building dual-use platforms, the investors backing them, the government partners who understand the stakes.
Quick heads up for our readers—mention "New North Ventures" when you register and you'll get 50% off. That discount disappears when registration closes, which is soon.
If you're going, find us there. Always good to connect with people who understand why this work matters.
The AI revolution isn't coming—it's here, moving faster than any technology shift in history. ChatGPT hit 800 million weekly users in just 17 months, while it took Google 11 years to reach similar search volume. What's really remarkable is that we're witnessing the emergence of an entirely new computing stack where intelligence becomes infrastructure.
The numbers tell the story. Big Tech just dropped $212 billion on AI CapEx—up 63% year-over-year—while companies like CoreWeave are scaling from zero to $2 billion revenue faster than anyone thought possible. Meanwhile, China isn't sitting idle. DeepSeek's latest models are matching GPT performance at a fraction of the training cost, and suddenly the "AI gap" has shrunk from years to months.
What excites us the most? The shift from horizontal AI platforms to vertically-integrated AI stacks that create true decision advantages. While everyone chases general-purpose models, the real value is emerging in companies building AI-native solutions for specific high-stakes environments—from autonomous systems processing sensor fusion in real-time to cybersecurity platforms that can identify and counter nation-state operations faster than human analysts. These aren't just AI features bolted onto existing products; they're fundamentally reimagined technology stacks where intelligence is baked into every layer, creating moats that horizontal players simply can't replicate.
For founders, the opportunity is unprecedented. AI inference costs have plummeted 99.7% in two years, open-source models are closing the performance gap with proprietary systems, and developers are building applications we couldn't imagine 18 months ago. The question isn't whether AI will reshape your industry—it's whether you'll lead that transformation or be left behind.
More links to explore:
Founded: 2024
Key People: CEO Julian-Benedikt Scholle
Elevator Pitch: Developer of a program generation platform designed to automate the creation of robot programs through streamlined programming processes. The company's platform handles workflow sequencing, collision-free path generation, control-based multi-criteria optimization, and offline programming capabilities, enabling robot programmers to develop sophisticated robotic applications efficiently and with reduced manual coding requirements.
Funding: The company raised EUR 1.3 million of seed funding from bmp Ventures on 3 June 2025.
In this episode of the 'Securing Our Future' podcast, hosted by New North Ventures, Jeremy interviews Veronica Daigle about her journey from Wall Street to the federal government, including her roles at the Office of Management and Budget (OMB) and the Pentagon. Veronica now leads the Defense Ventures group at Red Cell Partners, a venture firm focused on building and incubating companies with dual-use applications.
