03/24/2026

The latest coverage from SATELLITE 2026: Our team is on the ground in Washington D.C. this week. Keep up with all the news on our conference page.

By Sandra Erwin

Welcome to this week's edition of SpaceNews' Military Space, your source for the latest developments at the intersection of space and national security. In this week's edition: VCs question Pentagon plan to take stakes in defense contractors and Golden Dome's cost climbs to $185 billion

If someone forwarded you this edition, sign up to receive it in your inbox every Tuesday. We welcome your feedback and suggestions. You can hit reply or DM me on Signal @SandraErwin.43.

Rocket Lab won a $190 million Pentagon contract for a block buy of 20 hypersonic test flights using its HASTE suborbital rocket. This contract is part of a program intended to build a more scalable and reusable hypersonic testing infrastructure by relying on commercial providers instead of traditional missile-based tests. A Rocket Lab HASTE recently launched a hypersonic test flight for the Defense Innovation Unit. Credit: Rocket Lab

Defense committee leaders challenge Pentagon on space policy

Top lawmakers on a House defense panel are questioning why space is absent from the administration's national security policy blueprint, raising concerns about how future funding and architecture decisions will be shaped.

At a House Armed Services subcommittee on strategic forces hearing last week, Chairman Scott DesJarlais (R-Tenn.) and Ranking Member Seth Moulton (D-Mass.) took aim at the administration's national security strategy, arguing it fails to reflect the growing role of space in military competition.

"I was disappointed that the national defense strategy had no discussion of space which doesn't seem to reflect the President's long-standing prioritization of this domain," DesJarlais told Marc Berkowitz, the Pentagon's assistant secretary of defense for space policy. Adversaries are moving quickly to counter U.S. space capabilities, said DesJarlais, adding that "I don't think the previous administration responded sufficiently."

Moulton sharpened the critique, saying both the unclassified and classified versions of the strategy "are completely silent on space." He pressed Berkowitz on "why that is and what you're doing to rectify that, given the fact that we're spending billions of dollars on something the Department can't even prioritize in the only strategy document that they have delivered to Congress thus far."

Berkowitz pushed back, calling the criticism a "mischaracterization." He said the classified national security strategy does address space. And he pointed to a December 2025 executive order titled "Ensuring American Space Superiority" as the administration's more explicit statement of intent. Berkowitz said part of that effort includes developing a new national security strategy for space security.

"We look forward to seeing it," Moulton said. "You have a subcommittee here that recognizes this is important, and would very much like to invest in capabilities. And we'd love to see the prioritization, commensurate with what we saw from previous administrations, including the first Trump administration."

Berkowitz said an interagency team is "in the process of conducting a broad range of activities to implement the President's executive order on ensuring American space superiority." A forthcoming strategy will shape architecture decisions and a technology roadmap, he said, and will be reflected in the president's next budget request.

Beyond Earth orbit

The executive order directs the Pentagon to account for threats and operations "from very low-Earth orbit through cislunar space." That includes requirements to "detect, characterize, and counter threats to United States space interests … including any placement of nuclear weapons in space."

Officials said that language is already feeding into planning inside the Department of the Air Force.

Tom Ainsworth, performing the duties of assistant secretary of the Air Force for space acquisition and integration, said the Space Force is beginning to operationalize those directives, particularly in cislunar space, a region that has seen limited military attention.

Speaking last week at the McAleese Defense Programs Conference, Ainsworth said the service is looking beyond Earth orbit as it builds out its long-term architecture. The cislunar region remains lightly monitored, creating what officials view as a potential gap in space domain awareness.

"We do need to begin integrating cislunar capability into the Space Force," Ainsworth said. "And so we are serious about that … We are going to be standing up leadership positions and integration points where we can start bringing those technologies in and actually have a plan to execute them going forward."

Pentagon's equity push draws VC backlash

The Pentagon's move to take direct equity stakes in defense companies is colliding with a core assumption underpinning the rise of venture-backed defense startups: that private capital, not government ownership, should determine which firms scale.

At issue is a planned $1 billion investment in L3Harris Technologies' missile propulsion business, structured as convertible equity. The deal would give the government a financial stake in a supplier of solid rocket motors, a part of the supply chain that has struggled to keep pace with demand.

Pentagon acquisition chief Michael Duffey has framed the approach as a way to "build resilience and reduce fragility" in the industrial base, part of a broader push by the administration to accelerate production and pressure contractors to reinvest in manufacturing rather than stock buybacks.

But the strategy is facing resistance from venture investors who have spent the past several years directing private capital into defense and space startups.

David Ulevitch, a general partner at Andreessen Horowitz, said he is skeptical that taking a stake in an established supplier will meaningfully speed production.

"I think if L3Harris wants to ramp up production, I'm not sure what the government taking a stake in that will do to accelerate it," Ulevitch said on Semafor's business podcast.

Ulevitch leads a16z's "American Dynamism" investment practice, which targets defense, aerospace and industrial companies. He is among the investors backing firms such as Anduril Industries, Skydio and Air Space Intelligence — companies positioned as alternatives to traditional defense primes.

His critique reflects a broader concern inside the venture community: that government capital directed at incumbents risks reinforcing the existing industrial structure rather than opening space for new entrants.

He suggested the Pentagon should instead expand funding for startups that are "highly motivated," arguing that increasing their share of defense spending would send a stronger signal to the market.

"Startups occupy a tiny amount of the overall defense spending today … and if you just doubled or tripled that, it would be a massive demand signal to startups who would actually take advantage of that and respond in kind with high rates of production," he said. "Giving more money to the primes is not going to help them move faster, because if that were the case, they would have been moving faster."

The disagreement goes to the heart of how the defense industrial base should be rebuilt.

From the Pentagon's perspective, expanding capacity through an established supplier is faster and carries less risk than waiting for a startup to mature.

Investors see a different constraint

Venture capitalists argue the problem is not a lack of capital, but a lack of consistent demand signals and slow procurement cycles. Clearer requirements and faster contracting, they say, would unlock private investment without the government having to take ownership stakes.

The equity approach has raised concerns on Capitol Hill. Lawmakers are questioning whether the Pentagon can remain a neutral buyer if it holds financial interests in suppliers, and are pressing for details on how those stakes would be managed and eventually unwound.

Critics warn the model begins to resemble a form of state-directed industrial policy, where the government influences which companies scale. Supporters counter that decades of consolidation and underinvestment have left critical supply chains too thin to rely on market forces alone.

"The primes are not in a high rate of production, and are getting yelled at aggressively by the Pentagon for that and by the president for that matter, for focusing on share buybacks instead of manufacturing," Ulevitch said. "It's not like the share buybacks are the reason they're not in a high rate of production. They could be in a high rate of production if they have the capability, but they don't. They don't have the capability, and they have no existential necessity."

Startups, he insisted, operate under different incentives.

"They are completely fixated and working all hours of the day," Ulevitch said. "Are they going to get to a high rate of production first? I would make that bet every single day of the week."

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Pentagon adds $10B to Golden Dome for satellites and space data network

The Pentagon has increased its cost estimate for the Golden Dome missile defense program to $185 billion over the next decade, up from $175 billion, as the effort shifts more resources toward space-based capabilities.

Gen. Michael Guetlein, who leads Golden Dome for America, said the additional $10 billion will be used to accelerate satellite procurement and build out a space-based data network.

"We were asked to procure some additional space capabilities," Guetlein said at the McAleese Defense Programs Conference.

Three space programs in focus

Guetlein pointed to three areas receiving increased funding, all tied to the program's growing reliance on space-based sensing and data transport.

AMTI sensors: Air Moving Target Indicator, or AMTI, refers to sensors designed to detect, track and characterize airborne moving objects across wide areas while maintaining continuous "target custody." In the Golden Dome context, AMTI is intended to track maneuvering threats that do not follow predictable trajectories, such as hypersonic weapons. The Space Force is expected to play a central role in developing and fielding these capabilities.

Space data network: This is a space-based communications backbone that would move data rapidly between satellites, sensors and command centers using intersatellite links, including laser communications. A sensor satellite detecting a missile, for example, could transmit targeting data across the network directly to other satellites or to ground-based fire-control systems. The architecture for this transport layer is being developed by the Space Force's Space Warfighting Analysis Center.

HBTSS tracking layer: The Hypersonic and Ballistic Tracking Space Sensor, or HBTSS, is a planned constellation designed to detect and continuously track advanced missile threats, particularly hypersonic weapons. HBTSS would provide persistent, high-fidelity tracking of maneuvering targets and feed that data into missile defense systems. The program is led by the Missile Defense Agency. L3Harris Technologies and Northrop Grumman received prototype contracts in 2021 to build demonstration satellites, though the Missile Defense Agency said only L3Harris' prototype met program objectives.

Guetlein said his office has kept the industry informed on the program, holding one-on-one meetings with more than 400 companies and establishing an industry advisory council that meets quarterly. He has also met with private equity and investment groups.

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