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OSC unveils FY 2025 strategy

By Jeremiah Cushman |

The OSC's FY 2025 investment strategy builds on the FY 2024 strategy, with a focus on new credit authorities provided by Congress. (Department of Defense)

The Department of Defense (DoD) published its second investment strategy for the Office of Strategic Capital (OSC) on 2 January. The OSC was established in December 2022 to attract private capital into critical technologies for US national security. In December 2023 Congress formally authorised the office, expanded its mission, and empowered it to “provide loans, loan guarantees, and technical assistance to companies, funds, and other entities within 31 ‘Covered Technology Categories'”, the document said. Congress authorised USD984 million in funding for this lending.

The fiscal year (FY) 2025 investment strategy identifies priority investment areas for OSC credit-based financial products and provides a framework categorising national security effects of investments aligned with “key arenas of strategic competition”. These include “near-term control over chokepoints in economic networks, medium-term leadership within key industries, [and] long-term development of critical technologies”, according to the strategy.

Priority industry segments include advanced bulk materials, advanced manufacturing, autonomous mobile robots, battery storage, biochemicals, bioenergetics, biomass, hydrogen generation and storage, microelectronics assembly, testing, and packaging, microelectronics manufacturing equipment, microelectronics materials, nanomaterials and metamaterials, sensor hardware, spacecraft, and synthetic biology.

Understanding strategic competition

In September 2024, the OSC launched its second financial product, direct loans to finance the procurement of equipment, with the initial loans slated to roll out this year. The product complements the Small Business Investment Company Critical Technology (SBICCT) Initiative, launched in collaboration with the Small Business Administration in the boreal fall of 2023, “by providing pathways for growth from commercialisation to production”, the strategy said. The two initiatives are intended to increase investment with the goal of scaling critical technology.

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