Last Week in ConTech - 22 December 2025
Will US contractors stop using Chinese suppliers?
Note: Last Week in ConTech will pause for the next 2 weeks over the holiday period and will return on Monday January 12th. Wishing you a merry christmas and happy new year!
Deep Insight: Will US contractors stop using Chinese suppliers?
This week Hensel Phelps, Brasfield & Gorrie and the Bechtel Corporation received letters from the US government. As major contractors, US senators were inquiring about their use of Chinese made DJI drones on government construction projects and at sensitive facilities
The inquiry followed findings from the GSA Office of Inspector General, which identified multiple cases of contractors using prohibited DJI drones on federal projects, including use on a land port of entry project in San Luis, Arizona.
Drones have become standard tools for construction monitoring, progress verification and reality capture. In the cited case, the contractor was required to photograph project progress from multiple vantage points to demonstrate completed work and used DJI drones to do it.
DJI is the world’s largest civilian drone maker and dominates the US commercial market, accounting for over 50% of sales. However, they are part of a US Department of Defense list for allegedly working with the Chinese military.
The letters explicitly called out their use stating:
The U.S. government considers the use of Chinese-made drones generally — and DJI drones specifically — a threat to national security and prohibits their use by federal agencies or contractors.
The contractors must disclose by January 15th:
How many DJI drones they own
Whether they have received waivers for use of the drones at government facilities
Details on drone data
This trend is likely to continue to affect procurement in federal projects with contractors likely to face growing pressure to scrutinize:
Hardware origin
Embedded software and firmware
Data capture, storage, and transmission pathways
Who can access the data, and under what legal jurisdiction
This means that compliance is moving upstream. It is not enough to secure data operationally if the underlying vendor is disallowed. In sensitive environments, “where it was made” becomes a proxy for “who might get access.”
While the focus is currently on defense and federal infrastructure, government dictates can spread towards critical infrastructure such as energy, healthcare, transportation, and eventually private commercial projects.
And now with the emergence of autonomous equipment and physical AI solutions, favoring domestic or allied technology may become critical for winning large public infrastructure and national security adjacent projects.
In this issue there are:
6 Startup Fundings
3 Startups Emerged from Stealth
13 Policy and Regulatory Changes
4 New National Infrastructure Projects & Priorities
0 New investment funds
1 Acquisitions
5 News articles
52 new jobs posted - view here
Reading time: 12 mins
Startup Funding
Design
Endra, a Swedish startup, raised $20m in Seed funding. They are building a generative, AI platform for MEP design which imports architect’s 3D models to automatically generate all core MEP systems from outlets, switches and lighting to fire alarms, cabling and ventilation and then outputs code compliant and clash free models together with the required documentation and calculations. More here.
Notes:
Endra raised €3m in Pre-Seed funding in May.
3 weeks ago, the founder, Niklas Lindgren, posted that they had a record week of sign ups due to AECOM buying their competitor, Consigli.
The chart shared shows a literal hockey stick inflection in demand, suggesting customers are actively looking for alternatives post acquisition.
This round is the largest Seed round for a Swedish startup, and the valuation and round size were likely influenced by the AECOM transaction.
Looking ahead, the acquisition provides a clearer exit signal for generative design startups, which may accelerate VC interest in the category as strategic buyers become more visible.
Modelling
vyzn, a Swiss startup, raised Seed funding. They have developed software that converts architectural models into fully simulatable 3D models and is able to generate precise assessments of CO2 emissions, energy efficiency, circularity and costs as well as optimization recommendations. More here.
Green Materials
ABSORA, a German startup, raised €1.25m in funding. They have developed an industrial microperforation material that is extremely lightweight and high strength, absorbs sounds and vibrations and reduces flow resistance, offering a more sustainable alternative to insulation materials such as rock wool or foam, being used in applications such as walling and ceiling tiles. More here.
Alusid, a UK startup, raised £500k in funding. They are developing sustainable ceramic wall and floor tiles and architectural surfaces using a proprietary low carbon tile manufacturing technology which eliminates spray drying and uses more than 95% recycled materials. More here.
HR
Bluworks, an Egyptian startup, raised $1m in Seed funding. They are building a HR platform for blue collar workers, adopting a mobile first interface and supporting activities such as scheduling, attendance tracking, leave management, payroll and more. More here.
Notes:
There are an estimated 120 million blue-collar workers across MENA, with Egypt alone accounting for over 20 million.
Other
Last Energy, a Texas startup, raised $100m in Series C funding from investors including The Haskell Company. They develop small modular nuclear reactors (SMR) which are compact nuclear power plants that can be mass-manufactured to reduce costs. More here.
Notes:
This funding round is notable as The Haskell Company, which is a design-build and EPC firm, invested.
In their press release, Haskell emphasized that Last Energy is operating at the forefront of new nuclear deployment, advancing projects through both U.S. and UK regulatory pathways.
They highlighted that Last Energy was selected for the U.S. Department of Energy’s Reactor Pilot Program and is the only developer to have completed a Preliminary Design Review in the UK.
Nuclear energy has regained strong political and public support globally over the past few years, reflected in headlines such as:
Given the risk, regulatory complexity, and capital intensity of nuclear deployment, only a small number of contractors globally have relevant delivery expertise.
Small Modular Reactors are a new emerging technology gaining significant international support.
If SMRs prove commercially and technically viable, the 2030s could see rapid global deployment.
Haskell’s investment likely serves two purposes:
Gaining direct exposure to SMR deployment lessons.
Positioning itself to provide engineering and delivery support.
As SMR interest accelerates, Haskell could be well positioned as one of the few firms with hands-on experience in successful SMR project delivery.
Out of Stealth
Tx2CAD, a London startup, emerged from stealth. They are building an AI copilot for CAD allowing engineers to use natural language prompting to generate designs. View the website here.
MirageDoodle, a Michigan startup, emerged from stealth. They are building a solution to accelerate municipal site plan review through AI agents that handle QA/QC, zoning, and code compliance. View the website here.
PangeAI, a Californian startup, emerged from stealth. They are developing a geospatial intelligence platform that turns natural language queries into geospatial outputs. View the website here.
Notes:
This is valuable for infrastructure planning and asset management as it allows analysis to be completed without requiring GIS resources.
Policy and Regulatory Changes
US
House passes permitting reform bill with anti-offshore wind amendment
The U.S. House of Representatives passed permitting reform legislation, the SPEED Act, with an amendment that prevents the bill from applying to offshore wind projects.
The SPEED Act would amend the National Environmental Policy Act to ease and speed the permitting of energy projects.
It introduces new deadlines for opposition to projects such as opponents having to make a claim against a project no later than 150 days after final agency action is made public.
It also mandates that 30 days after completing an environmental impact statement or an environmental assessment for the proposed agency action, the lead agency, and any cooperating agency, shall issue a final agency action.
Senators want US construction firms to detail use of DJI drones in government contracts
Two U.S senators on Thursday asked several U.S. construction companies to detail the use of Chinese-made DJI drones in government contracts and at sensitive national security facilities.
Democratic senators sent letters to Hensel Phelps, Brasfield & Gorrie, and the Bechtel Corporation.
The senators want the CEOs to disclose how many DJI drones they own, whether they have received waivers for use of the drones at government facilities and details on drone data.
Notes:
DJI sells more than half of U.S. commercial drones.
Senators Investigate Role of A.I. Data Centers in Rising Electricity Costs
Three Democratic senators said they are investigating whether and how the operations of technology companies are driving up residential electricity bills.
The lawmakers said the energy needs of data centers used for artificial intelligence were forcing utilities to spend billions of dollars to upgrade the power grid.
Energy companies typically recoup the money they invest in equipment through the rates they charge all users of electricity.
The senators said they were concerned that customers other than the tech companies would be stuck footing the bill, especially if the A.I. boom ended.
Federal Judge Blocks FEMA From Canceling Climate Resiliency Grants
A federal judge ruled that the Trump administration could not unilaterally cancel a Federal Emergency Management Agency grant program that states used for disaster preparation.
The grant program began in 2020 as a way for state and local governments to take proactive steps such as building flood walls, elevating buildings or developing evacuation plans.
The states argued that the ~$4.5 billion the program had invested in extreme weather resiliency projects along with similar programs had prevented $150 billion in disaster damage.
Trump’s $7.6 Billion Energy Project Cuts Draw Federal Probe
The Trump administration’s move to cut $7.6 billion in grants to California and other Democratic-led states has prompted a probe by a federal watchdog.
The Energy Department’s inspector general said it will audit the decision to slash the funding, responding to a request from congressional Democrats.
Lawmakers push bill showing fusion’s bipartisan appeal
A bill is being introduced that would codify a new fusion office at the Energy Department.
It’s a concrete sign it’s emerging as a bipartisan energy solution in U.S. politics.
EU
EU closes deal to slash green rules in major win for von der Leyen’s deregulation drive
More than 80 percent of Europe’s companies will be freed from environmental reporting obligations.
The new law will massively reduce the scope of corporate sustainability disclosure rules introduced in the last political term.
The aim of the red tape cuts is to boost the competitiveness of European businesses and drive economic growth.
Notes:
The rules originally required businesses large and small to collect and publish data on their greenhouse gas emissions.
This included how much water they use, the impact of rising temperatures on working conditions, chemical leakages and whether their suppliers respect human rights and labor laws.
Now the reporting rules will only apply to companies with more than 1,000 employees and €450 million in net turnover.
Only the largest companies with 5,000 employees and at least €1.5 billion in net turnover are covered by supply chain due diligence obligations.
They also don’t have to adopt transition plans, with details on how they intend to adapt their business model to reach targets for reducing greenhouse gas emissions.
India
India’s Nuclear Bill Spares Suppliers from Accident Liability
India’s new nuclear energy bill will spare equipment suppliers from liability in case of incidents.
The proposed law confines liability to plant operators, limiting their legal options to individuals who may have intentionally caused damage.
The bill introduces liability limits depending on the size of the reactors, with maximum liabilities ranging from 1 billion rupees to 30 billion rupees.
The existing two laws governing the industry will be repealed with the passage of the new bill.
Notes:
India currently has about 9 gigawatts of nuclear power capacity, less than 2% of the total energy mix.
The government is planning to expand its fleet more than eleven-fold to 100 gigawatts by 2047.
India’s Supreme Court strikes down ‘nuclear veto’ arbitration clauses
The Supreme Court has rejected an earlier ruling by the high court in Patna that allowed a state-owned construction company to annul the appointment of an arbitrator.
This was over a dispute over additional costs related to a major bridge construction project.
The contract stated that, in the event of a dispute, the arbitrator would be appointed by the managing director of the party that awarded the contract.
It also stated that if such appointment was not possible then the matter should not be referred to arbitration at all.
The panel ruled that the high court had erred in its interpretation, cut away the portion relating to the unilateral appointment and exclusionary condition and preserved the core agreement to arbitrate.
India Tightens Pollution Curbs in New Delhi, Halts Construction
India stepped up anti-pollution curbs in New Delhi and nearby areas after a sudden spike in airborne toxins.
The government ordered a temporary halt to non-essential construction, shut stone crushers and mining operations.
UK
DfE confirms cuts to free schools building programme
The Department of Education (DfE) has confirmed that around two-thirds of the projects planned under the free schools programme will be cut.
Only 15 of the 92 planned special and alternative provision (AP) free schools will go ahead.
28 mainstream schools and 18 special free school projects were thrown back to councils to make the final decision on whether or not to continue the projects.
Canada
Vancouver adopts temporary measures to boost homebuilding
Vancouver is temporarily cutting and deferring key development charges.
This could cut $75–$100 million off project costs and ease cash-flow pressure for more than 250 active housing applications.
Thailand
11 Key Takeaways from Thailand’s First Climate Change Act
The Cabinet approved the principles of the Climate Change Act making it Thailand’s first master law on climate governance.
It has a number of changes including a Cross-Border Carbon Adjustment Mechanism (CBAM).
This means imported goods may face carbon charges based on emissions from their countries of origin.
Additionally the Act requires national, provincial, and local adaptation plans to address climate risks such as floods, droughts, and extreme weather, supported by government resources.
Notes:
The CBAM could affect the cost of construction on material such as cement if it is imported.
National Infrastructure Projects & Priorities
US
AI Boom Threatens to Suck Resources Away From Road, Bridge Work
US states and local governments sold a record amount of debt for the second year in a row in 2025.
Municipal bond market strategists are predicting total debt sales of at least $600 billion in 2026.
Most of the money is going to infrastructure spending.
Municipal debt sales for so-called new money projects soared 14% in 2025, to top $340 billion.
Of the more than 280 state and local infrastructure measures that went before voters in 2025, 82% of them passed.
This is equivalent to more than $24 billion of spending on roads, bridges, rail transportation and other public systems.
This is colliding with the data center market, where the largest participants are expected to invest as much as $4 trillion into AI infrastructure through 2030.
Notes:
As data center projects are larger, activities such as road repairs, bridge reconstructions and sewer overhauls are at risk of getting delayed as contractors prioritise the former.
China
China’s AI Power Play: Cheap Electricity From World’s Biggest Grid
China now has the biggest power grid the world has ever seen.
Between 2010 and 2024, its power production increased by more than the rest of the world combined.
Last year, China generated more than twice as much electricity as the U.S.
Morgan Stanley forecasts that China will spend some $560 billion on grid projects in the five years through 2030.
China will have about 400 gigawatts of spare capacity while in the next three years, U.S. data centers could face an electricity shortfall of 44 gigawatts.
Germany
Germany’s construction sector expects infrastructure fund to fuel turnaround
The Central Association of the German Construction Industry (ZDB) forecasts a slight real increase in sector turnover of 0.6% this year.
This would reverse three years of decline, followed by a 2.5% surge in 2026.
Canada
Canada to Start Building Multi-Billion Dollar High-Speed Rail System By 2030
The first phase of construction will be a section of approximately 200 kilometers (124 miles) between Montreal and Ottawa.
The total cost of the approximately 1,000-kilometer project is estimated to be between C$60 billion and C$90 billion.
Acquisitions
Sysdyne Technologies, a Connecticut company, which creates a software platform which improves the business operations of concrete producers, acquired Slabstack, a New York company, that provides a CRM and sales intelligence solution designed for construction material producers. More here.
News
Dubai Municipality, Expo City Dubai sign MoU to establish a regional ConTech innovation hub
Cement producer pauses factory construction after funding pullback
Sublime Systems, a low-carbon cement manufacturer, has paused construction of its forthcoming manufacturing plant in Holyoke, Massachusetts, and laid off 10% of its staff.
The news comes after the Department of Energy canceled the company’s $87 million grant, which Sublime received under former President Joe Biden in March 2024.
The grant was slated to fund 50% of the plant’s costs.
EllisDon and Impulse Partners Announce 2025 ConTech Accelerator Winners
Why fast-tracking transmission is permitting reform’s biggest hurdle
Oracle’s $248 Billion Rent is Another AI ‘Bombshell’
If I missed anything this week, please reply and let me know! I’ll make sure to include it next week.
We've been seeing this in the field for the past couple years well before the drone issue, which a lot of us knew would be a problem, especially after the HuaWei ban and previous DJI ban talks. We've seen large GCs and Owners prohibit manufactured in China commodity products too (think strut & accessories, chain hoists, lifting straps, even tools) due to quality, and trade issues. For many large projects we can't sell any products that are made in China. This goes well beyond contractors on federally funded jobs that need to comply with BABA.