The multiday White House extravaganza welcoming Chinese President Xi Jinping to Washington featured an opulent state dinner, a private tea meeting, and fighter jet flyovers. Watching the diplomatic pageantry, one could easily forget that the United States and China are locked in a tense, existential cold war over the ultimate military high ground: Earth’s orbit.
The cordiality displayed on the South Lawn is a dangerous illusion that masks a jarring, self-inflicted American contradiction. President Donald Trump dines with Xi while the Pentagon actively starves the commercial space technology sector needed to maintain military dominance in space. Behind the friendly diplomatic smiles, our political leaders are playing nice with our primary adversary on the world stage while our own military is actively choking out the one weapon — the American free market — that can actually defeat them in orbit.
The Chinese military has aggressively warned that space is becoming a “new arena for rivalry.” According to the Space Force Space Threat Fact Sheet, Beijing is targeting an astonishing 140 orbital launches this year alone — a 52% year-over-year increase — and has deployed over 510 intelligence, surveillance, and reconnaissance satellites to track U.S. forces.
Washington’s primary vulnerability in this race is not a lack of ingenuity. It is our own bloated defense procurement bureaucracy. The Department of War must shatter the institutional “Valley of Death” that blocks commercial technology from reaching our service members before Beijing permanently seizes orbit.
From secure communications to missile warning systems, whoever controls orbit dictates the terms of terrestrial conflict. Recognizing this, the Chinese Communist Party uses a hyper-focused military-civil fusion strategy to launch mega-constellations and counter-space weapons with terrifying speed.
America possesses a vastly superior engine of innovation: the free market. Venture-backed space startups build cutting-edge capabilities such as advanced satellite communications at a fraction of the cost, measuring development cycles in months, not decades.
Traditionalists inside the Pentagon push back hard against commercial integration. They argue that national security space systems require extreme hardening against radiation and electronic warfare. They note that private systems may lack the rigorous cybersecurity standards needed for classified operations, or that a commercial vendor could go bankrupt during a crisis. Relying on the private sector also raises complex questions about whether commercial operators become legitimate military targets.
These critics miss the entire point of modern deterrence. In a major conflict, a small handful of multibillion-dollar government satellites are fragile, glittering targets. Proliferated commercial constellations — made up of hundreds of smaller, cheaper satellites — are inherently resilient. If an adversary shoots down one private satellite, dozens more instantly take its place. Furthermore, security risks are entirely manageable through smart engineering and policy. The danger of inaction is far worse. By failing to adopt commercial architectures at scale, we choose vulnerability over resilience.
When innovative companies try to sell to the Pentagon, they run into a regulatory brick wall. The defense acquisition system, built during the Cold War, is optimized for buying a small number of expensive systems from monolithic defense primes. The process requires years of paperwork and rigid, pre-determined requirements.
The result is the devastating “Valley of Death.” A startup wins a small research contract, proves its technology works, and then waits years for the Pentagon to clear bureaucratic hurdles. While a private space startup raises venture capital and iterates on a design in six months, it takes the Pentagon an average of two to three years just to move from a successful prototype to a line-item budget. For a legacy contractor, a multi-year delay is a minor inconvenience. For a nimble space startup, it is a fatal cash-flow desert.
This broken pipeline actively harms national security. The Reagan Institute’s 2026 National Security Innovation Base Report Card underscores this exact dynamic, noting that while the policy environment has technically improved, the ecosystem still struggles to scale commercial tech because of persistent structural funding and procurement hurdles. If private venture capital dries up because the government refuses to be a reliable customer, vital space companies will collapse.
Leadership at the Space Force and the Defense Innovation Unit understands the threat. They have championed initiatives, including the 2024 War Department Commercial Space Integration Strategy. Furthermore, the assistant secretary of the Air Force for space acquisition and integration operationalized a major shift by establishing the Space Technology Portfolio Executive office, a dedicated leadership role specifically tasked with bridging the Valley of Death for private industry.
But intent without a massive funding shift is just noise. Strategies mean nothing if middle-tier program managers are still incentivized to avoid risk and stick with legacy primes. Fixing this requires a radical shift in how Washington does business.
First, Congress and the Pentagon must move away from “cost-plus” contracts that reward legacy primes for delays and cost overruns. Instead, the military should buy space-based capabilities as a service. If a commercial company can provide high-resolution imagery or secure communications today, the Pentagon should buy it immediately via flexible subscription models.
Second, we must reform the budgeting process. The current system forces the military to lock in technology requirements two years before a budget is approved. In the fast-moving world of commercial space tech, a two-year-old requirement is already obsolete. Congress must grant the Space Force greater flexibility to shift funds rapidly to adopt mature commercial technologies as they emerge.
Finally, there must be a cultural overhaul. Program managers must be judged by how fast they deliver cutting-edge capability to the warfighter, not rewarded merely for following a 500-page procurement manual.
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America’s traditional defense contractors have built incredible systems that kept us safe for generations, but they no longer hold a monopoly on innovation. The next space race will not be won by the nation with the biggest bureaucracy or the flashiest diplomatic pageantry. It will be won by the nation that best harnesses the speed and creativity of the free market.
The technology to secure American dominance in space sits on the launching pads of our commercial tech hubs right now. It is time for Washington to get out of the way and let it fly.
Dr. Eric Wargotz is a geopolitical analyst and policy commentator who has held leadership roles across government and medicine. A Clinical Professor Emeritus at George Washington University and Maryland judge, he is a former U.S. Senate nominee and elected county commission president. Views are his own.
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[ H/T Washington Examiner ]
