A new guard of tech billionaires and venture capitalists is mobilizing to overhaul the Pentagon’s multi-billion dollar space acquisition process as Donald Trump begins his second term at the White House. They’re expecting to work with an administration stacked with like-minded reformers: commercial space advocates and Silicon Valley veterans, all of whom want to take on legacy defense contractors.
That could mean fewer “cost plus” contracts, where businesses are compensated for expenses incurred as well as a fee, and fewer large programs of record. Instead, they expect more fixed-price contracts aimed at commercial suppliers.
“Although we will have to wait for policy details, we expect space to once again be central to Trump’s agenda, boosting demand for both incumbent space and defense primes and new market entrants alike,” said James Bruegger, chief investment officer of the venture firm Seraphim Space.
Space initiatives were a hallmark of Trump’s first term, which included the establishment of the Artemis program, the revival of the National Space Council and the creation of the United States Space Force. These precedents suggest space will again take center stage in Trump’s policy agenda.
The escalating technological rivalry between the U.S. and China adds another dimension of urgency. Chinese space companies, backed primarily by government funds, have seen a surge in large funding rounds. Venture capital investment in Chinese space tech companies outpaced U.S. investment for the first time in the first half of 2024, Bruegger said.
“In the face of China’s increasing assertiveness, we expect the U.S. under the Trump administration to respond in kind with a more aggressive push by the U.S. government — and in particular the Department of Defense — to support the continued growth of the space tech ecosystem,” he said.
SpaceX stands to be a particular beneficiary, given the influential roles that both Elon Musk and Jared…
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