Eric Trump-Backed Military Robot Maker Foundation Misses Payroll After CEO's $4.6 Million Loan

The missed payroll comes as chief executive and co-founder Sankaet Pathak is trying to raise hundreds of millions of dollars at a $3 billion valuation. He has been seeking that money since at least January. Insiders fear the company could fold without new funding, according to the report. The case also tests the defence-tech start-ups that have pitched humanoid robots for battlefield use. Foundation has said it is close to unveiling a weapons-ready robot to help the US compete with Chinese rivals.

Part of the anger inside the company concerns a $4.6 million loan Pathak took from Foundation last year to buy a home, money the people said could have paid staff. Public records cited by CNBC show that an LLC naming Pathak as its sole principal bought a $4.6 million property in Sausalito, California, in October 2025. Pathak called the loan short-term at the time, the people said, and existing investors know about it through the company's financial disclosures.

Pathak is Foundation's only board member and owns most of its shares, the people said, a structure that has worried prospective investors. "This is what happens in a company with no governance," one of them told CNBC. A spokesman for Pathak acknowledged receiving a list of the story's main points but did not respond to requests for comment.

This is not the first cash shortfall. Foundation also ran out of money for payroll in August, the people said, though staff waited only about two days after an existing investor provided a bridge loan. Pathak told employees in a memo this week that he was working to find money for back wages.

The Pentagon Contracts Claim

Interviews and articles about Foundation have repeatedly said it won $24 million in Pentagon contracts. According to a person with knowledge of the matter, Foundation itself did not win those contracts. The figure refers to government research awards won by Boardwalk Robotics, a Florida company Foundation acquired in late 2024. Boardwalk's robot Alex became the basis for Foundation's first robot, the Phantom MK-1, the person said. A separate person said performance milestones in the Boardwalk deal have not been met.

Eric Trump was introduced as an investor and chief strategy adviser in an April television interview. The size of his stake is unclear. Senator Elizabeth Warren responded by asking whether Foundation had won defence contracts through nepotism. Eric Trump did not respond to CNBC. His spokesperson recently told the Financial Times that he had "no involvement in Foundation's management, operations, strategic decisions or commercial activities," including government contracting. A July Washington Post investigation found that start-ups backed by investment vehicles linked to Eric Trump and Donald Trump Jr. had secured at least $3.2 billion in government business.

Pathak's previous company, the fintech middleman Synapse, collapsed in 2024 and left thousands of Americans unable to reach their savings. In 2024, CNBC reported that Foundation's letters to prospective investors had cited an imminent investment and a $300 million purchase order from General Motors, claims the carmaker rejected. Co-founder Mike LeBlanc said then that he was "embarrassed" by the materials.

Foundation was founded in April 2024 by Pathak, Tribe Capital chief executive Arjun Sethi and LeBlanc, a co-founder of Cobalt Robotics. It has hired dozens of robotics and AI engineers, including some from Tesla and Zoox. Whether it can raise money to cover back pay before staff leave is now the immediate question.