05/26/2026

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Space industry warns Washington that venture capital can’t replace industrial policy

The space industry’s funding environment is shifting rapidly, with the sector entering a period in which access to private capital is no longer an obstacle.

Executives at the ASCEND conference last week said they expect the forthcoming SpaceX initial public offering will help sustain investor enthusiasm. But beneath the optimism, they delivered a more cautious message about the limits of venture-backed growth.

“Getting capital into the space sector right now, I don't think that is our fundamental problem,” said Clay Mowry, chief executive of the American Institute of Aeronautics and Astronautics. “When we see the SpaceX IPO go off, and some of these other ones, I think we're going to see a rush for even more.”

Venture money, however, is concentrated around projects that can produce returns within timelines investors understand. Panelists said venture firms remain eager to back technologies with relatively near-term returns.

The concern is the slower-moving technologies, manufacturing capabilities and supply chains that national security planners increasingly view as strategically important but that often lack an attractive venture-capital profile.

Need for long-term view

Areas such as advanced materials, radiation-hardened semiconductors, directed energy and space nuclear power require sustained investment horizons that private markets are often unwilling to absorb on their own, Mowry noted. Those technologies are central not only to long-term civil ambitions such as lunar infrastructure and Mars missions, but also to military goals involving mobility, maneuverability and resilient operations in orbit.

The Pentagon is trying to attract more private capital into national security technology, but the government still has a unique role in supporting foundational research, specialized manufacturing and long-lead infrastructure, Mowry added.

"Industry is good at solving more near-term problems and building systems," he said. "I think government still needs to think about those things that are much longer term, that don't have an immediate return of capital."

David Cavossa, president of the Commercial Space Federation, argued that the government’s biggest contribution is not funding, but steady focus. He said companies repeatedly tell policymakers they need “consistency and predictability” from Washington, particularly when making investments tied to manufacturing capacity or supply-chain development.

Even within the limits of federal procurement, Cavossa said, long-term contracts and stable acquisition strategies matter because companies are less likely to commit capital if priorities are expected to shift dramatically between administrations or under new agency leadership.

“What would help industry the most right now is a little bit more consistency out of the government, long-term vision and sticking to it,” Cavossa said.

U.S. launch expansion constrained by government personnel shortages

Discussions about U.S. launch capacity have typically focused on physical infrastructure — launch pads, processing facilities and airspace access.

Another key constraint on efforts to accelerate launch cadence is that automation tools are not being adopted quickly enough to offset personnel reductions and growing workloads, executives said at the ASCEND conference in Washington. They noted that federal workforce reductions and restructurings have added strain to launch range operations just as military and commercial launch demand accelerates.

That pressure is building as the Pentagon pushes toward more responsive launch operations to support proliferated military satellite constellations, missile tracking systems and other national security missions requiring far more frequent access to orbit than in previous decades.

“We've probably all seen across the board, the federal workforce over the last year or two has been reshaped a bit,” said Laura Maginnis, vice president of New Glenn mission management at Blue Origin. She said the changes have put pressure on the personnel responsible for integrating launches and managing operational requirements at federal ranges.

Forecasts of growing demand

According to new data on launch demand, the U.S. will need not only additional launch infrastructure, but also more automated and streamlined operations to sustain higher launch tempos.

Maginnis said Space Force organizations managing the Eastern and Western ranges — Space Launch Delta 45 at Cape Canaveral and Space Launch Delta 30 at Vandenberg — are operating under strain.

“They're working as hard as they can, but the demand that has been put on them … it's basically going up 50% to 100% a year,” she said. Blue Origin is expanding payload processing capacity at Cape Canaveral under a $78 million Space Force contract intended to support both national security and commercial missions.

Launch capacity issues get high-level attention

Air Force Secretary Troy Meink told lawmakers last week the Department of the Air Force has completed a draft study concluding the U.S. likely needs another site capable of supporting heavy and super-heavy launches.

“It still shocks me a little bit that launch infrastructure seems to be the limitation right now on the nation's ability to grow our commercial launch,” Meink said during a House Armed Services Committee hearing.

Meink said another heavy-launch-capable site may be needed both for resiliency and to accommodate projected growth in national security launch missions.

Maginnis said launch operations at ranges that support both commercial and government launches remain fragmented and overly manual.

“As we continue to scale, we really need to use tools and automation to integrate our requirements together,” she said, adding that more use of AI-enabled operational tools could help improve efficiency.

Randy Kendall, vice president of launch, missiles and mobility at The Aerospace Corporation, said the industry is entering a period where projected launch demand is rising faster than the infrastructure needed to support it.

“Demand is skyrocketing,” Kendall said, pointing to the growing number of commercial constellations seeking regulatory approval, including proposed orbital data center networks that could sharply increase launch requirements if they materialize.

Kendall said both the Eastern and Western launch ranges that support most U.S. orbital launches rely on decades-old infrastructure, even as launch cadence accelerates and the Pentagon pushes for more responsive national security launch capabilities.

While the Defense Department has requested billions of dollars for launch infrastructure modernization, Kendall said it remains unclear whether or when the investments will translate into substantially faster launch operations.

“Are we investing in the right things?” he asked.

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New missions stretching Space Force faster than expected

The U.S. Space Force is preparing for its largest workforce expansions since the service was created, as Pentagon officials warn that growing launch activity and new space-defense missions are outpacing current staffing levels.

The service’s fiscal 2027 budget proposal includes plans to add 2,800 active-duty personnel and 2,000 civilian employees, part of a broader effort to nearly double the Space Force’s active-duty ranks by the end of the decade.

Gen. Chance Saltzman, chief of space operations, told lawmakers last week the service is trying to grow from roughly 10,000 active-duty Guardians today to about 20,000 by 2030 as mission demands accelerate.

“The new missions that have been given to the Space Force are going to require something on the order of about 40 new squadrons,” Saltzman said during a congressional hearing.

Taking on more responsibilities

Saltzman said the service is taking on a larger role in launch operations, missile-warning networks, military communications and so-called “space control” missions focused on protecting U.S. spacecraft and countering adversary systems if necessary.

The Pentagon’s 2027 budget proposal includes major increases for missile-tracking satellite constellations, launch infrastructure and military communications systems, all areas expected to require additional operational and acquisition personnel.

Saltzman said procurement growth alone would require 10 additional program offices to oversee acquisitions and transition new systems into operations.

Many of the new positions are expected to focus on technical specialties including cyber operations, intelligence, satellite operations, engineering and acquisitions — areas where the Space Force relies heavily on civilian expertise as well as uniformed personnel.

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