Newsletter 070

Happy Tuesday to Per Aspera readers new and old. We’ll start in our second tongue and say: semper fi, as we wish a very happy birthday to the United States Marine Corps, who turn a spry 251 today.

Fitting, then, that this special Veterans Day edition starts with a Marine and a long journey home. Keep reading for a personal, bracing essay from our own Dan Goldin, Bringing Chance Home, in which the honcho argues that as machines do more and more of the fighting, a human being must still answer for every young American we send into harm’s way.

Then we ask John Serafini, a West Point grad, former Ranger-qualified Army officer, and founder/CEO of HawkEye 360, a question that’s long fascinated the PA partnership:

Why do so many veterans end up building hard tech?

To our spouses, our friends, the thousands of you in our community who have served, and the families who served alongside you: this one’s for y’all!

Forwarded this email? Join the club today.

There’s a movie I still can’t talk about without getting choked up. It’s Taking Chance, the 2009 HBO film with Kevin Bacon, based on the journal of Lt. Col. Mike Strobl, the Marine officer who volunteered to escort the body of Chance Phelps, a young man from Wyoming killed in Iraq in April 2004, all the way home. At every step, Chance was treated with respect.

This Veterans Day, I’d ask us to begin with Chance, and with the families who carry the anguish of war while the world goes on. Then let's think about the young people we will send into the next war. We are building machines that can do more and more of the fighting. That can never become an excuse to take human command out of the decision to send young soldiers into battle and potential death.

I came to that view over a lifetime.

It started on my block in the South Bronx during the Korean War. My friends' older brothers volunteered and shipped out. We didn't have much money, but my mother bought each boy who was leaving a modest shaving kit from the local drugstore, so he knew we cared. When their letters came, they were read aloud to us. Most of those young men came home. Some did not.

By Vietnam, war came to my family. My cousin Howie volunteered to walk point with the Green Berets. He was shot four times and exposed to Agent Orange. My Aunt Pauline flew to Hawaii four times during that war, to support her son during his R&R. By no small miracle, the thing we prayed for each evening came true: Howie made it home.

I wanted to serve, too. In 1962, my senior year at City College of New York, I volunteered for the Air Force to become a fighter pilot. The doctor started laughing during the physical. With glasses as thick as the bottom of a Coke bottle, I was too nearsighted to fly, too nearsighted for OCS, too blind, in fact, for the Air Force. So I did the next best thing. I went to NASA to help beat the Soviet Union in the space race, and later into the defense industry, building the tools our armed forces needed to protect Americans from the then-belligerent Soviets.

My work put me on a lot of airplanes. Flying coach to California, I’d sometimes find a third of the plane filled with very young soldiers heading west to train for Vietnam, full of piss and vinegar. On the way home I'd fly with young men, still teenagers, home on leave or done with their service. They were not the same people who had gone out. Those flights were very quiet.

War is not like the movies. It takes a piece of people’s souls.

I never went to war myself. But I proudly built the tools of war, putting weapons in the hands of young men who put their lives on the line for all of us. I had a responsibility to them, and it didn't end when the equipment shipped.

Today, the defense industry talks about effectiveness, efficiency, business, and AI. We need to spend more time talking and thinking about the human beings who might die or experience major damage to their bodies. And don’t get me wrong: I am not against building weapons to protect the American people, nor against sending young Americans into battle with proper review and chain of command. Our troops deserve the best tools we can give them to win. New machines may let us fight with fewer young Americans in harm's way. But war is not a business, and we can never forget the people tied to the machines.

Now AI hands us a new way to fight war and, if we are not careful, dodge responsibility: let the machine decide, for the sake of expediency or reaction time. Some in the industry argue that China will beat us if we impose controls. We damn well better have appropriate human oversight and controls on machines that assure accountability, because people may die.

An AI agent can’t be held accountable. A president can. So can a general, a captain, a private. Whenever death and destruction are involved, a human being must be held accountable. And for an act of war, no AI agent should ever stand between the president and that fateful decision.

Some will say decisions now have to be made in three seconds. To knock down an incoming missile, maybe so. But remember the Cuban Missile Crisis: President Kennedy spent 13 days thinking through every option before he acted. I’m reminded of Admiral Hyman Rickover’s remarks on responsibility:

Howie is 79 now. For decades, he and his fellow patriots have raised money to send hospital equipment, wheelchairs, and school supplies to Vietnam, for people still suffering from the Agent Orange we never fully cleaned up, now into the third and fourth generation. War doesn’t end when the shooting stops.

This Veterans Day, let’s give thanks for the people who gave their lives, who came home wounded, or changed by what they saw. And let's think about the veterans of the future.

A Marine brought Chance Phelps home. Whoever sends the next young American into harm’s way has to be a human being who will answer for it. Never a machine.

Have a story about a veteran in your life, or a thought on this piece? Write to Dan. He reads every note.

Why do so many veterans end up building hard tech? It’s a question the PA partnership has long been fascinated with, so Jeff and Ryan recently asked John Serafini for his take. John is a case in point: a West Point grad and former Army infantry officer (Ranger-qualified) who served with the 82nd Airborne, and went on to found HawkEye 360, a SIGINT company that flies RF-sensing satellites and went public on the NYSE in May. (Crusey led their Series D back in 2021.)

In the 20 years since leaving the Army, John tells us he’s seen a striking number of the industry’s best founders, investors, and operators also come out of uniform. He says it ultimately comes down to the people:

"What's been constant throughout those 20 years and what has propelled so many of our industry's winning companies has been exceptional management teams. And while I won't generalize by saying veterans make up the majority of these founders and managers in defense tech, so many of them have been veterans."

The traits that make a great founder, he writes, "are often the very characteristics forged in uniform," starting with "the selflessness to put ‘we’ before ‘me’, and the willingness to wake up every morning ready to run through walls to accomplish the mission."

And it doesn't stop when the uniform comes off: "you never get the need to serve out of your heart, out of your blood... It's constantly in the back of your mind, the voice asking, 'am I still contributing?'"

John's full answer is well worth the read. We thank him for his perspective, and for his service to our nation.

001 // EAST VS. WEST, EXPORT CONTROL EDITION… You’re probably already up to date on the East vs. West espionage storyline currently dominating the news, so why don’t we just focus on export controls here? Today was supposed to be the day the U.S.-China export-control truce ran out. (Last fall, both sides agreed to holster their biggest weapons, with China pausing its toughest rare-earth export controls, and Washington pausing a rule that would have widened its blacklist of Chinese companies.) Neither side wants that fight back just yet, so last week Washington extended its pause, and yesterday Beijing matched it, with the new deadline falling on Jan. 10. But this truce, as it were, never fully covered one of China’s greatest levers. Since April 2025, every export of seven mostly heavy rare earths (dysprosium, terbium, yttrium… see #023) has needed a Beijing license stamped on it, and that rule still stands. China still refines something like 90% of the world’s rare earths. Washington complained last week that Beijing isn't keeping its promise to keep them flowing, and yttrium in particular is already running short outside China. A separate pause, on China's ban on selling gallium, germanium, and antimony to the U.S., runs out Nov. 27 and wasn't part of yesterday’s extension. Watch this space (or just keep reading PA, we can do it for you).

002 // LET THERE BE LIGHT… On Nov. 2, Marvell agreed to buy laser maker Lumentum in an all-stock deal worth $115B including debt. It’s the year’s biggest deal by equity value and a nice vindication of our photonics thesis: AI clusters are less limited by the math than by moving data between chips, and copper is approaching its physical limits for that job. Lumentum makes the lasers on the optical side, grown on indium phosphide wafers. Its CEO says the crunch in that material is worse than DRAM’s, with new fabs not due until year after next. And guess who refines 70% of the world’s indium? (Hint: they refine most of everything and starred in the preceding passage.) That same country’s antitrust regulator has to sign off before the deal closes, which isn’t expected until 2028. At present, we’d put the deal at roughly coin-flip closing odds.

003 // EUROPE PICKS UP THE TAB… In 2014, Lithuania spent 0.88% of its GDP on defense. This year it's on track for 5.33%, per NATO's latest numbers. Estonia (5.10%), Latvia (4.92%) and Poland (4.68%) aren't far behind. In fact, every ally with armed forces except Slovenia (1.61%) now clears the old 2% bar. Taken together, European allies and Canada have gone from $279B of core defense spending in 2014 to an estimated $634B this year (2021 dollars), and five allies are already projected to hit the 3.5% core-defense bar in NATO's Hague target, nine years early. The one big member moving the other way as a share of GDP is the U.S., down from 3.71% to 3.17%, even as its spending grew in dollars.

“NATO’s Defense Buildout is a Private Capital Opportunity.” Apollo chief economist Torsten Slok charted this on Sunday under the quoted headline. About four-fifths of Apollo’s $1T+ in AUM is credit, and last week it launched a €10B+ European lending platform pitched at the continent's energy, defense, and digital-infrastructure buildout. So, yes, he’s talking his book… but he ain’t wrong: Europe's rearmament, and renewed focus on defense/space sovereignty, will run in large part on debt. Over on the equity side, American dollars are already flowing across the Atlantic: U.S. investors now supply nearly half of European defense tech funding, up from 12% in 2020. We’re seeing American funds all over the European defense tech megarounds announced this year… which raises the question: Could one of the most attractive markets for American financiers be across the Atlantic, on Allied turf?

Tomorrow, Nov. 11, we celebrate Veterans Day.

The holiday started out as Armistice Day, after the guns on the Western Front went quiet at 11 a.m. on the 11th day of the 11th month of 1918. Congress expanded the holiday in 1954 to cover everyone who’s worn the uniform. This includes a great deal of you all, who have worked in and out of uniform to keep our country strong.

So thank you, to you and to the families who did their own kind of serving back home. We said it last year (#025) and we’ll keep saying it: the mission never really ends, and we're proud to be building alongside y’all.

With that, we will see you back here next week.