---
title: "JPMorgan put $5 billion into defense startups, and one, Castelion, is challenging Lockheed's missile"
description: "JPMorgan put $5 billion of equity into defense and manufacturing startups in the first year of its security-and-resiliency initiative, and one disclosed stake, Castelion, is in the five-firm contest to build the Army's next long-range missile. The number it can move is the missile incumbents' premium."
publisher: "The Inference"
section: "Money"
published: 2026-10-19T19:38:22.680Z
modified: 2026-10-19T19:38:22.680Z
canonical: https://theinference.org/article/jpmorgan-put-5-billion-into-defense-startups-and-one-castelion-is-challenging-lockheed-s-missile
language: en
keywords: "Defense Tech, Banking, Private Equity, Missiles, National Security"
---

# JPMorgan put $5 billion into defense startups, and one, Castelion, is challenging Lockheed's missile

> JPMorgan put $5 billion of equity into defense and manufacturing startups in the first year of its security-and-resiliency initiative, and one disclosed stake, Castelion, is in the five-firm contest to build the Army's next long-range missile. The number it can move is the missile incumbents' premium.

JPMorgan, the biggest U.S. bank, has put $5 billion of its own equity into defense and manufacturing startups in the first year of its security and resiliency initiative, half its ten-year goal, and co-president Doug Petno says the bank may go past it. [1] The initiative also financed and facilitated $230 billion in transactions; the equity is the part that touches other people's prices. [1]

One stake, picked by Todd Combs, the former [Berkshire Hathaway](https://theinference.org/markets/companies/berkshire-hathaway) portfolio manager who now leads the bank's startup-investing group, is [Castelion](https://theinference.org/markets/companies/castelion), a missile maker founded in late 2022 by former [SpaceX](https://theinference.org/markets/companies/spacex) engineers. [1] In September [the Army named Castelion one of five firms prototyping the fourth increment of its Precision Strike Missile (PrSM) program](https://www.army.mil/article-amp/295791/five_defense_companies_selected_to_develop_precision_strike_missile_increment_4_prototypes), alongside [Lockheed Martin](https://theinference.org/markets/companies/lockheed-martin), which builds the missile in service today. [2][3]

## The bank's equity is buying factory capacity

Hadrian, the other disclosed holding, builds automated factories for aerospace and defense parts, and one California line runs ten robots for every employee. [1] Castelion raised [a $1 billion round in August that JPMorgan helped lead](https://techcrunch.com/2026/08/20/castelion-hits-13b-valuation-to-mass-produce-hypersonic-missiles/). [4] The round valued it at $13 billion. [4] The Navy has since moved Blackbeard, its low-cost hypersonic missile, from prototypes into [a production order worth up to $200 million](https://finance.yahoo.com/technology/articles/castelion-moves-blackbeard-production-u-231800325.html). [5]

What the equity buys is factory capacity, the link that decides this competition. Blackbeard was, in the company's words, "engineered from inception for industrial-rate output, commercial unit cost," and cheap volume production is what makes a startup a credible bidder against an established prime contractor. [5] That is an equity bet, and a departure for a bank that spun off its private-equity arm more than a decade ago. [1]

## Lockheed's franchise is opening from both ends

Lockheed's baseline keeps compounding: [a $1.2 billion production award in September](https://theinference.org/article/the-army-paid-lockheed-1-2-billion-then-put-its-next-missile-up-for-bid) and a stated plan to quadruple PrSM output. [6] A March order worth about $539 million never appeared in the Pentagon's daily contract summaries, because it sat inside an existing multi-year contract with Lockheed. [7] Stocks ran down after the missile's first combat use, against Iran, this year. [3]

![An M142 HIMARS launcher fires a rocket in a desert during Operation Epic Fury](https://storage.googleapis.com/theinference-public/img/36a6fcc5782ec31f.jpg)

*An M142 HIMARS launcher conducts a live-fire mission during Operation Epic Fury in the U.S. Central Command area of responsibility. PrSM stocks drew down after the missile's first combat use, against Iran, this year. (U.S. Department of Defense)*

*Chart: **Lockheed's named PrSM orders dwarf Castelion's first Navy order** Bar chart comparing two named Lockheed Martin PrSM orders with Castelion's first Navy production order for Blackbeard, in dollars*

*Lockheed Martin's $1.2 billion September PrSM production award and its March order of about $539 million, against Castelion's first Navy order for Blackbeard, a different missile, worth up to $200 million. The March order sat inside an existing Lockheed multi-year contract. All figures in dollars. [5][6][7]*

At the same time, the Army has opened the franchise to competition from both ends. Five firms won prototype agreements for PrSM Increment 4, a missile fired from HIMARS truck-mounted rocket launchers at moving ships and relocatable land targets at 1,000 kilometers or more: Lockheed Martin; [RTX](https://theinference.org/markets/companies/rtx), Raytheon's parent and another prime contractor; [Anduril](https://theinference.org/markets/companies/anduril), the defense-tech company; Castelion; and [Mach Industries](https://theinference.org/markets/companies/mach-industries). [2] [A competitive fly-off and down-select follow in fiscal 2027](https://theinference.org/article/the-army-s-five-way-missile-fly-off-pits-13-billion-castelion-against-lockheed-and-rtx-for-a-1-000-km-round). [2]

![A Precision Strike Missile launches from White Sands Missile Range in a test firing](https://storage.googleapis.com/theinference-public/img/743e680bc4d0dead.jpg)

*A Precision Strike Missile launches from White Sands Missile Range on December 10, 2019, in the program's first test firing. (U.S. Army)*

## The Army asks who else can build the missile in service

And on October 14 the Army asked who else could build the missile in service today; [the notice says the service holds technical data down to the line-replaceable units](https://www.armyrecognition.com/news/army-news/2026/u-s-army-seeks-new-himars-prsm-increment-1-missile-producers-to-expand-long-range-strike-stocks), and no second producer has been chosen. [3] Anduril, meanwhile, is running [a share sale for current and former employees that would value it at about $90 billion](https://www.bloomberg.com/news/videos/2026-10-15/anduril-to-sell-insider-shares-at-90-billion-valuation-video), a private mark beside the public market values of the established missile makers. [8] Orders that once arrived without a contest now have named rivals.

*Chart: **Anduril's private mark now sits beside Lockheed's public market cap** Bar chart comparing RTX, Lockheed Martin, Anduril and Castelion by market capitalization or private valuation in billions of dollars*

*Public market caps in October 2026 for the listed prime contractors, latest private marks for the two startups. Four of the five firms prototyping PrSM Increment 4; Mach Industries, also selected, is not shown. [3][4][7][8][10][11]*

## The number to watch is the incumbents' premium

For [JPMorgan](https://theinference.org/markets/companies/jpmorgan-chase) the equity is a rounding error against a $4 trillion balance sheet. [9] Jamie Dimon, the bank's chief executive, who created the initiative, names the binding constraint himself: "A lot of those vendors need help, and often it's not capital," he says, pointing to trained workers and permitting. [1][9]

The capital arrived this year; the people and the permits have not. Whoever staffs and certifies those robot lines is doing the work that should earn the return. [1]

## The bank is on both sides of the program

Two things to watch: the fiscal 2027 fly-off, and the bank's dual position. Its bankers map distribution lines for submarines, missiles and aircraft to find suppliers short of capital or capacity, and the bank separately says it stays in regular contact with the Defense and Commerce Departments. [1] Its equity book holds at least one bidder in the same program, and most of its stakes are undisclosed; the overlap is documented, and none of the sources alleges favoritism. [1]

The incumbency premium at Lockheed Martin and RTX is the number still priced for the old world. [10][11]

## Takeaway

JPMorgan put $5 billion of equity into defense and manufacturing startups in the first year of its security-and-resiliency initiative, and its disclosed stake in Castelion puts a startup in the five-firm contest to build the Army's next long-range missile. The number still in play is the incumbency premium at Lockheed Martin and RTX.

## Sources

1. [CNBC, Robot factories and hypersonic missiles: JPMorgan Chase's first $5 billion of defense investments, 19 October 2026](https://www.cnbc.com/2026/10/19/jpmorgan-security-defense-investments.html)
2. [U.S. Army (army.mil), Darrell Ames, Five Defense Companies Selected to Develop Precision Strike Missile Increment 4 Prototypes, 29 September 2026](https://www.army.mil/article-amp/295791/five_defense_companies_selected_to_develop_precision_strike_missile_increment_4_prototypes)
3. [Army Recognition, Erwan Halna du Fretay, U.S. Army Seeks New HIMARS PrSM Increment 1 Missile Producers to Expand Long-Range Strike Stocks, 19 October 2026](https://www.armyrecognition.com/news/army-news/2026/u-s-army-seeks-new-himars-prsm-increment-1-missile-producers-to-expand-long-range-strike-stocks)
4. [TechCrunch, Marina Temkin, Castelion hits $13B valuation to mass-produce hypersonic missiles, 20 August 2026](https://techcrunch.com/2026/08/20/castelion-hits-13b-valuation-to-mass-produce-hypersonic-missiles/)
5. [Castelion press release via PR Newswire (Yahoo Finance), Castelion Moves Blackbeard into Production with U.S. Navy Order Valued Up to $200 Million, 14 September 2026](https://finance.yahoo.com/technology/articles/castelion-moves-blackbeard-production-u-231800325.html)
6. [Defense News, Michael Peck, US Army awards Lockheed Martin $1.2B PrSM contract, 22 September 2026](https://www.defensenews.com/industry/2026/09/22/us-army-awards-lockheed-martin-12b-prsm-contract/)
7. [Izvestia, The United States ordered PrSM missiles for almost $550 million without a separate message from the Pentagon, 19 October 2026](https://iz.ru/en/node/2186473)
8. [Bloomberg, Anduril to Sell Insider Shares at $90 Billion Valuation, 15 October 2026](https://www.bloomberg.com/news/videos/2026-10-15/anduril-to-sell-insider-shares-at-90-billion-valuation-video)
9. [The Wall Street Journal via MSN, Alexander Saeedy, Jamie Dimon's national-security pledge finances $230 billion in first year, 19 October 2026](https://www.msn.com/en-us/money/other/jamie-dimon-s-national-security-pledge-finances-230-billion-in-first-year/ar-AA2fzaMr)
10. [CompaniesMarketCap, Lockheed Martin (LMT) market capitalization, October 2026](https://companiesmarketcap.com/lockheed-martin/marketcap/)
11. [CompaniesMarketCap, RTX market capitalization, October 2026](https://companiesmarketcap.com/raytheon-technologies/marketcap/)


---

JPMorgan put $5 billion into defense startups, and one, Castelion, is challenging Lockheed's missile — The Inference. Canonical: https://theinference.org/article/jpmorgan-put-5-billion-into-defense-startups-and-one-castelion-is-challenging-lockheed-s-missile