Army Secretary Dan Driscoll resigned this week after clashing with Defense Secretary Pete Hegseth, removing a prominent Pentagon advocate for defense technology as the sector attracts record venture funding. The departure followed Hegseth’s firing of Gen. Randy George, the Army’s chief of staff, along with other forced departures across most military services. The Army is now without its top two Senate-confirmed leaders amid the ongoing Iran conflict. Driscoll, who previously spent several years as COO of venture firm Flex Capital, had promised to bring a "Silicon Valley" ethos to military procurement and deployment. He and George backed the Army Transformation Initiative, which would have eliminated certain costly, high-profile weapons on the view that drones had fundamentally changed warfare. Investors told Axios that Driscoll was highly respected but said his departure would not alter the sector’s underlying trajectory. U.S. defense-tech companies have raised $51.1 billion so far this year, compared with $52.4 billion across all of 2025 and less than $7 billion in 2016, according to PitchBook. Some in the sector believe Driscoll could return to the Department of Defense, potentially as secretary, if Vice President JD Vance becomes president. Driscoll and Vance are close friends and former Yale Law School classmates, a relationship that may have contributed to Hegseth’s reported "suspicious and paranoid" attitude toward his Army chief. Investors say continued capital flows will depend largely on robust Department of Defense budgets, even if the policy environment becomes more difficult.