2025 Week 20 | US Government Doesn't Want to Be The Only Customer

I. Tracking

1. Co-Investment, Not Commitment: The Military’s Selective Backing of Space Innovation

The US military is once again managing expectations among commercial space investors, emphasizing that while it’s open to co-investment in emerging capabilities, it won’t act as the sole customer for every new technology. This message, though seemingly at odds with recent partnerships and soaring startup valuations (think RPO, 'combat' satellites), reflects a more measured approach rooted in shifting priorities and operational doctrine.

A recent co-investment between the Space Force and Astroscale (the US branch of the company), with $25.5 million from the government and $12 million from the company, highlights this tension. The project aims to deploy a mission-ready satellite servicing vehicle within two years, signaling a conditional endorsement of on-orbit refueling. Yet Space Force leadership remains unconvinced of its military value.

The issue isn't technical feasibility. In fact, Northrop Grumman has already proven the concept, successfully extending the life of Intelsat 901 in GEO using its Mission Extension Vehicle (MEV-1). But the Space Force’s concern lies in operational relevance. Unlike aerial refueling for aircraft, on-orbit refueling has yet to demonstrate a comparable military payoff in terms of resilience, deterrence, or force projection.

Space Force doctrine increasingly favors proliferated constellations of small, replaceable satellites in low Earth orbit. These are systems designed for rapid turnover, not repair. This undercuts the value proposition of life extension services, particularly in a fast-moving conflict scenario.

For commercial players, this creates a strategic paradox. Government co-investment offers credibility and capital, but not guarantees. The burden remains on industry to prove alignment with national defense needs. Startups and their investors face high financial risks in a landscape where interest does not always translate to procurement.

This reflects a broader evolution in the Pentagon’s approach. The DoD is shifting from traditional acquisition toward a co-investment model that prizes adaptability, cost-efficiency, and strategic utility. The Astroscale deal isn’t a contradiction, it’s a test case. The door is open, but proof of value, not just capability, is the key to stepping through it.

II. Immediate Awareness

1 The ESA and ISRO signed a joint statement of intent to collaborate on human spaceflight, focusing on low Earth orbit activities, interoperability of rendezvous and docking systems, and training, with potential future missions to India's planned space station.

2 Sophia Space has secured $3.5 million in pre-seed funding to develop modular, solar-powered orbital data centers using its TILE platform, aiming to enable low-latency, energy-efficient AI processing for applications such as geospatial intelligence and disaster management.

3. Virgin Galactic is progressing on schedule with the assembly of its new Delta-class suborbital spaceplanes, aiming to commence test flights in spring 2026 and begin commercial operations soon after.

4. SES Space & Defense is set to demonstrate its Secure Integrated Multi-Orbit Networking (SIMON) platform, a software solution designed to enable seamless, real-time management of military communications across commercial and government-owned satellites in low, medium, and geostationary orbits.

5. Despite concerns of the loss of American leadership, Norway has officially joined the Artemis Accords, becoming the 55th nation to commit to principles of peaceful and sustainable space exploration, including transparency, data sharing, and responsible resource use.

6. Eutelsat is intensifying its focus on low Earth orbit (LEO) connectivity through its OneWeb constellation, as a significant U.S. Department of Defense contract cancellation and ongoing challenges in the geostationary orbit (GEO) sector impact its business.

7. During a May 15 House Science Committee hearing, lawmakers discussed NASA's planetary defense efforts, including the NEO Surveyor mission, while expressing concern over proposed budget cuts that could hinder the agency's ability to address asteroid threats effectively.