DOD gave $620M loan to startup backed by Donald Trump Jr.'s venture capital firm

Rumors circulated online in December 2025 that a startup company backed by Donald Trump Jr.'s venture capital firm was granted a $620 million loan from the U.S. Department of Defense (DOD). 

Users on social media platforms like X (archived) and Facebook (archive) spread the purported news. Some users suggested the Trump administration was "the most corrupt administration in the history of America" due to the apparent conflict of interest of such a deal.

‼️‼️ Donald Trump Jr's VC Firm is involved with company that received $620 million government contract from Trump administration. 

This is the most corrupt administration in the history of America. pic.twitter.com/V26KciIUEn

— Maine (@TheMaineWonk) December 4, 2025

The claim that a company backed by Trump Jr.'s investment firm, 1789 Capital, secured a $620 million loan from the DOD was true.

Vulcan Elements, a startup self-described as "committed to improving U.S. and allied security by producing the rare earth magnets that are critical to economic and national security," announced the news on its website on Nov. 3, 2025. 

Rare earth magnets produce strong magnetic fields, widely used in everyday items like computers, electric vehicles and power tools, but also defense-related applications such as smart bombs, guided missiles and aerospace technology. 

"Vulcan Elements' expansion to 10,000 tonnes of production capacity will be financed by a $620 million Direct Loan from the Department of War's Office of Strategic Capital (OSC)," the company wrote, referring to the DOD as the Trump administration's preferred nomenclature. 

The company stated it would also receive "$50 million of federal incentives from the Department of Commerce under the CHIPS and Science Act, and $550 million in private capital."

A statement released by the DOD on Nov. 21, 2025, confirmed the news and stated, "The OSC commitment includes two separate loans, one to Vulcan for $620 million and one to ReElement for $80 million." ReElement was another company focused on "purification and separation technology" to refine rare earth elements. The DOD statement continued, "These loans will directly support the production of advanced rare earth element separation, metallization, and magnet manufacturing capabilities in the United States."

Emil Michael, credited in the DOD statement as the "Under Secretary of War for Research and Engineering," said the loans would aid the effort to create a supply chain for "chip manufacturing, drones, electric vehicles, fighter jets, industrial motors, nuclear submarines, and satellites."

On Nov. 4, 2025, Christopher Buskirk, founder and chief investment officer of the firm 1789 Capital, posted to X (archived), "We backed @VulcanElements & @_JohnMaslin with an investment from @1789Capital in their last round & are doing so again in the current round. Critical elements & battery manufacture are essential to American security & prosperity."  

Donald Trump Jr. is a partner at 1789 Capital, according to its website. His involvement appeared to lead to the assertion from many online that Trump Jr.'s involvement helped the company secure the DOD loan, given his father is the president, and stands to benefit financially. 

A Pentagon official told Snopes via email, "Mr. Donald Trump Jr. was not involved in any aspect of the conditional loan commitment discussions between OSC and Vulcan."

Snopes reached out to multiple experts to shed light on whether there were potential legal or ethical conflicts of interest involved in such a scenario and will update this article when we learn more. 

We also reached out to 1789 Capital and Vulcan Elements for comment and will update this article if we receive a response.