House NDAA spotlights space priorities

The House Armed Services Committee last week advanced a sweeping defense policy bill focused on rebuilding the defense industrial base and accelerating Pentagon procurement reforms. Lawmakers in the annual NDAA markup also delivered a pointed critique of several Space Force priorities.

The committee approved its fiscal 2027 National Defense Authorization Act by a 44-12 vote and the bill is now headed to the House floor.

One consequential space provision aims to keep alive the Next-Generation Overhead Persistent Infrared Polar program, a Northrop Grumman missile-warning satellite procurement the Pentagon wants to terminate. The program was designed to place two satellites in highly elliptical orbit to monitor missile threats over the Northern Hemisphere, particularly the Arctic.

The administration argues that newer missile-warning architectures in low Earth orbit and medium Earth orbit have reduced the need for dedicated polar satellites and proposed ending the program in its 2027 budget request. But House lawmakers authorized $415 million to continue development, signaling skepticism that proliferated constellations can fully replace the capability.

Rep. Seth Moulton, the top Democrat on the strategic forces subcommittee, called the program a longstanding priority for both U.S. Northern Command and U.S. Strategic Command and argued that threats from China and Russia warrant maintaining the capability.

The committee also took aim at the Space Force’s recent procurement strategy for Protected Tactical Satcom-Global, or PTS-G, a program intended to provide secure military communications through a distributed network of satellites.

The Space Force announced in May that it awarded a combined $437.6 million to Viasat and Intelsat, now part of SES, for secure X-band and Ka-band communications satellites. Committee language notes that the procurement resulted in only two satellites — one from each company — despite earlier plans that envisioned a larger constellation.

The HASC argued that buying only two spacecraft undermines the program’s original goals of resilience, proliferation and broader industrial-base participation. The committee directed the Space Force to explain how it plans to achieve the original PTS-G objectives and to examine options for accelerating procurement of additional satellites.

GPS modernization draws scrutiny

The bill would require the Defense Department to designate a single official responsible for overseeing the Pentagon’s positioning, navigation and timing enterprise, the collection of systems centered on GPS. Lawmakers have argued that current oversight structures are fragmented and have contributed to delays in modernization efforts.

Rep. Scott DesJarlais, the chairman of the strategic forces subcommittee, said the provision is intended to eliminate duplicative bureaucracy and improve accountability for the Pentagon’s positioning and navigation strategy. Moulton described the enterprise as underprioritized despite its central role in military operations.

Beyond satellites, the committee approved several amendments with implications for the broader space sector.

One provision directs the Pentagon to examine ways to reduce congestion at major launch facilities such as Cape Canaveral by making greater use of alternative spaceports for small and medium-class launch vehicles.
Another directs the Space Force to use its Commercial Space Office to procure commercial space-based data and analytic products to support wildfire monitoring and response efforts.
Lawmakers also approved a pilot program focused on in-space nuclear propulsion, directing the Defense Department to test and reduce technical risk for both fission- and fusion-based propulsion concepts. Nuclear propulsion is viewed by some defense planners as a potential enabler for future military operations beyond Earth orbit.

Defense dollars help fuel a new crop of space unicorns

The space industry's latest crop of unicorns offers a window into how investor priorities have shifted.

A newly published SpaceNews analysis identified 30 privately held space companies valued at $1 billion or more. While unicorn valuations have always reflected expectations about future growth, today's space startups are reaching that milestone much earlier in their life cycles, often before generating substantial revenue.

The change is tied in part to a defense market that investors now view as a more reliable source of future demand. Pentagon budgets, intelligence agency spending and military modernization efforts among U.S. allies have created a stronger business case for companies developing technologies aligned with national security needs.

Among the companies that reached unicorn status the fastest are Cowboy Space, Starcloud, K2 Space, Apex, Impulse Space, True Anomaly, Aalyria, Space Pioneer, Varda Space and Relativity Space.

Investors are betting that government agencies will become major buyers. Organizations such as the Space Force, National Reconnaissance Office and other defense agencies have moved beyond encouraging commercial innovation and are beginning to write acquisition programs around commercial technologies. For investors, that creates a more credible path to revenue than existed during the space-SPAC boom earlier in the decade.

The 'Golden Dome' effect

Even before major procurement budgets have materialized, companies viewed as potential suppliers of missile-tracking systems, data transport networks, optical communications, satellite manufacturing and space mobility capabilities are attracting premium valuations. Expectations of future government demand are becoming nearly as important as existing contracts.

Not every unicorn story is rooted in defense. Cowboy Space and Starcloud are benefiting from investor enthusiasm surrounding artificial intelligence infrastructure and the prospect that future computing workloads could require large amounts of power and processing capacity in orbit.

Varda Space built much of its valuation around in-space manufacturing and pharmaceutical research, although defense applications have since become part of its growth narrative.

What distinguishes this generation of unicorns is that few are pure commercial space plays. Most sit at the intersection of defense modernization, national security space, AI infrastructure or sovereign industrial capacity. That marks a departure from the first wave of space startups, when investor excitement centered on broader visions of a future space economy.

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Report highlights China’s industrial scale as key factor in competition with U.S.

China's advances in satellites, launch systems and military space capabilities have been documented extensively in recent years. A new report from the Information Technology and Innovation Foundation argues the more important story may be what sits behind those programs: an industrial base designed to sustain competition with the United States over decades.

The June 8 report, "How Innovative Is China's Space Industry?," largely echoes previous assessments of Beijing's growing space ambitions. It also highlights China's efforts to build the manufacturing capacity, supply chains and commercial infrastructure needed to compete at scale.

The issue of industrial capacity has gained attention inside the Pentagon as the Space Force shifts toward large constellations of satellites for communications, missile warning and targeting. In those architectures, success depends not only on developing advanced spacecraft but also on the ability to build, launch and replace them quickly.

China's advantage may ultimately stem from industrial organization as much as technological innovation, says the report, pointing to a vertically integrated ecosystem of state-owned enterprises, commercial firms, research institutions and government-backed investment that allows capabilities to move from development into production with fewer barriers than in the United States.

Funding trends cited in the study suggest that China's commercial space sector is also broadening beyond launch vehicles. While reusable rockets remain a priority, satellite operators and manufacturers attracted the largest share of investment in 2024, overtaking launch startups. Launch companies raised more money than they did the previous year, but their share of total sector funding fell from 45% to 26%, according to the report.

The United States remains the global leader in space innovation, supported by reusable launch systems, advanced low Earth orbit broadband networks and leadership of the International Space Station. But maintaining that position may require more than technological superiority.

A question, the report suggests, is no longer who can build the best satellite. It is also who can sustain a space competition at industrial scale.

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