Pentagon funds launch rivals

The U.S. Department of Defense is providing $300 million in conditional loans to two commercial launch firms while SpaceX prepares to retire its Falcon rocket line. Military officials view the planned transition as a potential risk to national security readiness. The funding aims to ensure alternative launch options remain viable even as the leading provider shifts its focus to new technology.

The Office of Strategic Capital announced a $150 million loan commitment to Stoke Space on October 26. On November 10, the Pentagon disclosed a separate $150 million loan for Rocket Lab. These two companies are the first launch providers to receive major financial backing from the office. Both firms currently compete with SpaceX in the commercial launch market.

The Office of Strategic Capital was established in 2022 to finance technologies deemed vital to national security. Its portfolio now includes hundreds of millions of dollars for businesses working on batteries, drones, and semiconductors. The office also issued a $150 million loan to LeoLabs, a commercial satellite tracking provider, to help produce and deploy radar units.

SpaceX is directing its engineering resources toward Starship, a next-generation super-heavy-lift rocket. The company has stopped accepting commercial orders for Falcon 9 missions scheduled to launch after 2028. This cutoff does not apply to government customers. NASA and the U.S. Space Force are expected to continue using Falcon 9 and Falcon Heavy rockets for a longer period.

Under its current contract, the military can order Falcon 9 and Falcon Heavy missions through 2029. Those specific launches could take place as late as 2033. This extends government use of the rockets several years beyond the end of commercial bookings. SpaceX plans to retire the Falcon program permanently after that date, provided Starship meets its performance targets.

Starship is capable of carrying national security payloads, but those missions are not the immediate priority for the vehicle. SpaceX’s near-term goal is to use Starship’s large cargo capacity to launch its own Starlink internet satellites and Starmind orbital data centers. The Pentagon’s financing for competing providers arrives while SpaceX pursues a transition that depends on Starship’s performance.