US Defense Department weighs $5b loan for AI startup Fluidstack

The US Department of Defense is discussing a $5 billion loan to Fluidstack, an AI infrastructure startup, the Wall Street Journal reported Thursday (local time).

The department is directly stepping in with large-scale financing to strengthen the supply chain for AI data centers, with the funds to be channeled through its Office of Strategic Capital (OSC).

If finalized, the $5 billion loan would be by far the largest single loan OSC has issued since its launch.

Citing people familiar with the matter, the Journal said Fluidstack is considering using the loan not to build new AI data centers directly. Instead, the company would use it to strengthen the domestic supply chain and manufacturing capacity for specific components that data centers require.

The move aims to bolster the US manufacturing base for key AI infrastructure components that currently depend heavily on foreign suppliers. It also signals the US government's growing view that AI computing power falls within the scope of national security. That view now extends to the power grids and data center supply chains that support it.

Fluidstack has spent months working through the process to secure the loan. Sources said the company is pursuing the loan application with guidance from Erebor Bank, a newly chartered federal bank whose main clients include defense and technology startups.

President Donald Trump issued an executive order late last month tightening regulations on foreign-made large-scale power grid equipment, citing potential national security risks.

At the time, the Trump administration also emphasized the importance of a stable power supply amid the expansion of AI data centers.

Fluidstack co-founder and CEO Gary Wu said late last year that "computing power is a strategic national asset."

However, the loan agreement between the Defense Department and Fluidstack has not been finalized. Specific terms, including the interest rate Fluidstack would pay, could still change during negotiations.

A Defense Department spokesperson said, "The department does not comment on pending or ongoing negotiations until an official press release is issued."

According to a June report from JPMorgan cited by the Journal, lenders are expected to supply $4.1 trillion in AI infrastructure-related financing by 2030.

The report forecast that AI infrastructure-related companies would tap every available capital market to raise the funds needed for growth.

OSC was launched in 2022 under the Biden administration. Under Trump's second term, the so-called One Big Beautiful Bill Act expanded the program. The expansion gave the office authority to provide more than $200 billion in financial support over the coming years.

The office has extended loans to rare earth suppliers and drone manufacturers, among others. It is also involved in the Trump administration's plan to secure a stake in Venezuelan oil production.

Fluidstack is an AI cloud platform startup specializing in high-performance GPU clusters for AI training and inference. Founded in the UK in 2017, it moved its global headquarters to New York in December 2025.

All 700 of the company's employees are now based in the United States.

The company has shifted its business focus toward building AI infrastructure in the US and has signed multiyear leases for data center sites in New York, Indiana, Louisiana and Texas.