The Office of Strategic Capital Signs $820 Million Conditional Loan Commitment with Performance Drone Works to Expand Domestic Drone Component Manufacturing
The U.S. Department of War’s Office of Strategic Capital committed up to $820 million to Performance Drone Works to expand domestic drone component manufacturing, addressing supply-chain vulnerabilities in unmanned systems.
The U.S. Department of War’s Office of Strategic Capital (OSC) announced a conditional loan commitment of up to $820 million to Performance Drone Works (PDW) to fund high-volume domestic production of critical drone components. The financing, combined with private capital, aims to create a new domestic source of components for Group 1 and Group 2 unmanned aircraft, reducing reliance on foreign suppliers. The project targets multiple manufacturers and platforms, expanding production capacity across the U.S. drone industrial base. OSC stated the initiative aligns with President Trump’s Executive Order 14307, which seeks to enhance domestic drone manufacturing and supply-chain resilience.
OSC Director David A. Lorch emphasized that the loan supports broader ecosystem growth and supply-chain stability, noting PDW will join other domestic producers receiving OSC commitments under the executive order. James R. Shanahan, OSC Senior Managing Director, highlighted the focus on eliminating bottlenecks in drone and autonomous systems supply chains. The conditional loan requires PDW to meet financial, legal, technical, and other due diligence milestones before finalizing the agreement.
Emil Michael, Under Secretary of War for Research and Engineering, framed the investment as part of Secretary Hegseth’s mandate to secure a domestic industrial base for drone dominance. The OSC stated the financing will enable PDW to construct new manufacturing facilities, strengthening the supply chain for components used by American manufacturers. The department described the move as critical to ensuring warfighters have access to domestically produced components.
The conditional loan commitment outlines standard procedural steps PDW must complete, including due diligence reviews, before financial closure. The OSC did not disclose additional financial or operational details beyond the $820 million commitment and its alignment with broader defense industrial priorities. The announcement follows prior OSC investments in domestic manufacturing to reduce supply-chain vulnerabilities in defense-related sectors.