Pentagon Lends Sila $1.4 Billion to Scale Silicon-Anode Batteries and Break the 'Foreign Stranglehold'

The U.S. Defense Department's Office of Strategic Capital signed a $1.4 billion conditional loan commitment with Sila Nanotechnologies to expand silicon-carbon anode production at its Moses Lake, Washington plant and build a new lithium-ion cell facility — part of a push to onshore critical battery supply chains for defense, AI and energy storage.

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Defense Department's Office of Strategic Capital signed a $1.4 billion conditional loan commitment with Sila Nanotechnologies to expand silicon-carbon anode production at its Moses Lake, Washington plant and build a new lithium-ion cell facility — part of a push to onshore critical battery supply chains for defense, AI and energy storage.

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The U.S. Department of War's Office of Strategic Capital (OSC) has signed a conditional loan commitment of up to $1.4 billion with Sila Nanotechnologies, the California-based battery materials maker, to expand production of silicon-carbon (Si/C) battery anodes and build a new lithium-ion battery cell facility.

The commitment, announced Friday, would support expanded production at Sila's Moses Lake, Washington plant and the construction of a cell manufacturing facility for specialty applications such as industrial, agricultural and military use. In a statement, the OSC said the project would strengthen domestic supply chains for energy storage, AI, data centers and defense while reducing reliance on foreign sources for critical battery components — materials used in satellites, unmanned aerial systems and munitions.

"This commitment has the potential to transform the domestic battery supply chain," said Asad Akram, OSC managing director and co-head of critical minerals. Fellow managing director Peter Zuckerman said the transaction "could help end the foreign stranglehold over the battery supply chain."

The loan is the latest salvo in Washington's push to onshore critical materials — a push that has become increasingly explicit under the Trump administration, which has made battery self-sufficiency a defense priority. Sila's technology replaces graphite, the dominant anode material, with silicon, which can store significantly more lithium ions and promises higher energy density. The company's silicon anodes already power some commercial products, and Sila has previously said the material could cut battery costs and charging times.

The deal is a milestone for the OSC, which was created to channel government capital into strategic industries. In fiscal year 2026 the office has committed over $8.4 billion in debt financing and mobilized more than $17.8 billion in total capital, according to the War Department. The loan remains conditional: Sila must satisfy financial, legal, technical and diligence requirements before reaching financial close.

The announcement comes as demand for batteries surges across sectors — from EVs to grid storage and military systems — and as the U.S. races to catch up with China, which dominates global production of anodes and other battery components.