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The US government gave a three year old startup a $620 million loan, the largest Pentagon loan of its kind ever and the president's son had already invested in that same company months before the check was signed.
The company is called Vulcan Elements, and their goal is actually legitimate. They want to build the largest rareearth magnet factory outside of China, right in Johnston County, North Carolina. These magnets are inside everything that matters, fighter jets, drones, nuclear submarines, iPhones, electric vehicles. And right now, China controls somewhere between 94–98% of the global supply. That is a real problem and a real national security risk.
So the Pentagon stepped in with a $620 million loan, the Commerce Department added $50 million and took an ownership stake in the company, and the government got the option to buy Vulcan stock in the future. The total deal comes out to $1.4 billion in government commitments.
Here is the problem. Donald Trump Jr. is a partner at a venture capital firm called 1789 Capital. That firm invested in Vulcan Elements in August 2025, just a few months before the Pentagon announced its record breaking loan. So taxpayer money flowed into a company that also happens to benefit the president's son financially.
And it is not an isolated case. At least four companies in 1789 Capital's portfolio have won government contracts since Trump took office, totaling over $735 million combined. The firm also holds stakes in SpaceX, Anduril, and xAI, all companies doing business with the federal government. Trump Jr. and his team call this "patriotic capitalism" they say they are just backing American companies that compete with China. Vulcan's CEO says Trump Jr. had nothing to do with winning the contract.
The deeper tension here is that even some Republicans are squirming over this. Traditionally, conservatives have pushed back hard on the government picking private winners with taxpayer money, they called it socialism when Obama did it with green energy companies. Now the same model is happening, just with defense aligned companies connected to the MAGA orbit, and the ideological discomfort is real even if nobody is saying it loudly.
Three Democratic senators have already sent a letter to Defense Secretary Pete Hegseth demanding answers on whether political connections influenced who got the money. The national security argument for Vulcan's factory is strong and genuinely hard to argue against, 1,000 jobs, domestic rare earth production, less reliance on China. The question nobody can cleanly answer is whether this specific company should have gotten a record government loan, or whether the deal was always going to land wherever the president's family had already placed their bet.
